Exclusion of black contractors highlighted in public meeting

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Reggie Smith, the project director for the Winston-Salem Disparity Study, explains the initiative during a public meeting on Tuesday evening. (photo by Jordan Green)

A disparity study commissioned by the city of Winston-Salem aims to identify gaps where businesses owned by people of color and women are under-utilized when it comes to public contracting dollars.

Ghali Hasan, a senior project manager for his wife’s construction company, posed a question to a group of consultants hired by the city of Winston-Salem during a public engagement meeting on the city’s south side on Tuesday night.

“If we make up 35 percent of the city’s population, my God, why can’t we get but 5 percent of the revenue?” Hasan asked the consultants as a court reporter recorded his statement. “I think our goals need to be at least what our community represents. If you’re taking my tax dollars, but then you’re not allowing me to participate in the city’s business.”

The city’s minimum goal for participation in public contracting by minority- and women-owned business enterprises is 10 percent. That breaks down into two buckets — a 5 percent goal for businesses owned by white women, and another 5-percent goal for all businesses owned by people of color, men and women. For fiscal year 2017-18, the share of city business that went to MBEs — or minority-owned business enterprises — stood at 5.5 percent. The year before that it was 3.3 percent. And for the four preceding years, minority participation in city contracting didn’t even crack 3 percent.

In February, Winston-Salem City Council voted to hire MGT Consulting Group at a cost of $333,570 to undertake a disparity study to compare the utilization of minority- and women-owned businesses against the availability of such businesses in the regional marketplace. The consultants are examining the city’s contracting history over a five-year period, from July 1, 2013 through June 30, 2018.

“If we do find disparity,” said Reggie Smith, the project director for the study, “then we’re going to make recommendations to deal with correcting that issue.”

Vernetta Mitchell, the project manager for the study, cautioned Hasan that the disparity study will measure utilization of African-American and other non-white businesses against their share of the overall business population, not the percentage of African Americans and other people of color who live in the city. But Hasan’s point stood: If African Americans are systematically excluded from city contracting, many won’t even bother.

“Why would you encourage someone to come in and catch all of this hell?” he asked.

Hasan said black-owned businesses, which historically lack access to capital, all too often find that white prime contractors doing business with the city refuse to make timely payments, putting black subcontractors in a bind when they have to pay for materials.

“How can the city set up and watch these prime contractors walk out of there weekly with millions and millions of dollars in contracts and then won’t force him to pay the subs?” asked Hasan, who has 40 years of experience in the construction industry. “He pays the subs when he wants to. And if you make a ruckus, they say, ‘Well, I’ll fix you good. I’ll make you wait another 30 days. I’ll come up with some jive reason as to why I can’t pay you.’ But you the city sitting over here, you paying him. He’s getting his money. Why are you allowing him to not pay the subs?”

Mitchell said concern about how the city enforces the goals of the Minority- and Women-Owned Business Enterprise program has been a theme of the first two public-engagement meetings. About 18 people attended the first meeting at the Enterprise Center in southeast Winston-Salem on Monday morning, and another 10 showed up for the Tuesday evening session at the Georgia Taylor Neighborhood Center. The third meeting was scheduled for Wednesday from 6:30 to 8:30 p.m. at the Hanes Hosiery Community Center on the north side.

Another emerging theme was access to information, although Mitchell said there isn’t yet enough data to call it a trend.

Martha Gomez, who provides translation and interpretation services through Catholic Charities, said she recently went through the process of becoming an approved vendor through the city’s Minority- and Women-Owned Business Enterprise program.

“I was able to complete that process, but then I found myself saying, ‘Where do I go next?’” she said. “How do I find out about the contracts available? How do I know who needs language services? What doors do I knock on? What am I supposed to do? I find myself in a situation where I believe being on the vendor list helps me, but I don’t see how I can make use of it.”

Smith said when the disparity study is complete, it will include a detailed list of the goods and services the city is buying.

“And we’ll have percentages of what they’re spending in those different categories,” he said. “Then you can do a match: These are the firms and the services that they’re offering — that we’re offering — and here’s the city — this is what we’re buying. And then you got to try to match those two together. And where there is no match, then you’ve got to do some kind of training program to get businesses and people that are interested in going into business to match those services that are not currently being matched.”

Sherman Transou, who owns a landscaping business, said a mentor took him aside and helped him understand that he could take advantage of better opportunities by shifting from residential to commercial jobs. To make the transition, he had to learn to read blueprints and a ruler. Now he’s handling a contract for Malloy Park, a 4-acre park to honor former Councilman Nelson Malloy that was financed through the 2014 bond.

“I am creating a program that I can take any landscaper that aspires to be in this industry — I’m gonna show them how to do it,” Transou said. “I’m meeting with an architect… as well as some other contractors to take these individuals to say, ‘Here, we’re gonna help you walk yourself through this process so you can have it.’ Because the revenue is greater than what you make on the residential side.

“That’s where I’m coming from — is working with the minorities to help them achieve the — take ’em and say, ‘Yeah, you can fight the system,’ but sometimes if you fight the system, the problem is that we don’t have the people that can do the work,” Transou added.

Hasan offered a different perspective, arguing that there are plenty of African-Americans ready to work, but the city’s economic resurgence is passing them over.

“If you can’t work right here in the city with all the work that’s going on in the city — you’re not working, and you’re pouring concrete?” he said. “They’re tearing down a building it seems like on every corner. Every road’s covered up, and all these black men are standing on the corner with a 40 and a hat turned around backwards. Something’s wrong.”

After the meeting, Hasan said he’s skeptical that the city will use the disparity study to hold prime contractors accountable for opening opportunities to people of color.

“I think black people in this city have been left out so long that you may have to do some intentional things like create a black business district and let city money go directly to people that hire people in that area,” he said.

The third and final public engagement meeting for the Winston-Salem Disparity Study takes place today at Hanes Hosiery Community Center tonight from 6:30 to 8:30 p.m. To learn more, visit wsdisparity.com.