For more than 30 years, Charlotte and other municipalities have set goals to ensure their contractors hire minority- and women-owned businesses.
But a provision in the state budget approved this month ends the ability of local governments to require participation by minority- and women-owned businesses in public contracts, a change that could have far-reaching effects across North Carolina.
The budget closes the state Office of Historically Underutilized Businesses and ends state efforts to include minority- and women-owned businesses in contracts.
It goes further by repealing local laws that authorize local governments to establish or comply with minority- or women-owned business participation requirements.
The state says local governments can still establish goals for small businesses, but those goals must be race- and gender-neutral.
Local impact
The change is significant in Mecklenburg County, where local governments have made diversity and inclusion in public contracting a priority.
In Charlotte, City Council members LaWana Mayfield and James Mitchell have been among the most vocal advocates for ensuring minority-owned businesses benefit from city contracts. Council members have frequently questioned city staff about minority business participation in bids and, at times, delayed agenda items when they believed contractors had not made a sufficient good-faith effort to include them.
Charlotte operates a Business Inclusion Office that works with city departments to review procurements and set participation goals for minority-, women- and small-business enterprises on a contract-by-contract basis.
Participation by minority-, women- and small-business enterprises, commonly known as MWSBE firms, is routinely discussed during Charlotte City Council meetings.
At the council’s last meeting in June, members considered a nearly $7 million contract for a storm drainage project on Freedom Drive. The agenda outlined MWSBE goals, whether the contractor met them and the names of subcontractors, including whether they were minority- or woman-owned firms. About $430,000 of the contract was directed to MWSBE subcontractors.
Federal exception
The budget bill appears to prevent local governments from legally tracking whether businesses are minority- or women-owned, according to guidance from the UNC School of Government.
One exception remains for contracts that receive federal funding. Those projects may continue to comply with federal inclusion requirements.
That means airport and transit contracts can still be tracked under MWSBE guidelines.
The changes are not limited to Charlotte. Mecklenburg County, Charlotte-Mecklenburg Schools and many local governments across North Carolina have similar business inclusion programs that will also be affected.
