Nearly 90% of Lexington’s contracts go to white men. Here’s how city wants to change trend
The city of Lexington is looking at ways to up its minority business contracting after an analysis showed 88% of the city’s contracts went to businesses owned by white men.
The analysis by BBC Research and Consulting out of Denver looked at city contracts from 2016 to 2021. It found $405 million was spent with white owned businesses — 88% — and $55 million, or 12%, went to minority-owned businesses.
The analysis also found the city’s largest minority contract group, by far, was white women.
From 2016 to 2021:
- 8.3% white women
- 0.9% Asian American
- 1.5% Black American
- 1.2% Hispanic American
- 0.1% Native American
That means only 3.7% of the city’s money spent on contracts went to businesses owned by people of color.
BBC Research and Consulting also looked at how many minority contractors are located in the central Kentucky area.
In total, the group found $76 million in potential contracting capacity for minority-owned businesses, or roughly 15% of the total amount the city could have spent with minority-owned businesses.
The study cost $500,000 and was paid for through surplus funds.
Mayor Linda Gorton’s Commission on Racial Justice and Inequality, which released its recommendations in October 2020, recommended the city complete the study to help increase minority contracts and address economic inequality.
A group of Black faith leaders had also repeatedly asked the city, the schools and the University of Kentucky to spend more money with minority contractors.
The city’s current goal is to spend 10% of all its contracting money on minority contractors.
In 2020, city data obtained by the Lexington Herald-Leader showed the city spent 20% on minority contractors. However, the vast majority of those contractors were white veteran-owned or white-women owned businesses. Only 1% went to Black-owned businesses.
Iris McClish, a managing partner of BBC Research, told the Lexington-Fayette Urban County Council during a Tuesday work session the city could do more to make it easier for minority-owned businesses to bid on projects with the city. That could include breaking down smaller projects so smaller businesses can apply, making sure the city pays its contractors promptly, and checking that minority subcontractors are also being paid promptly by primary contractors.
On large projects of more than $1 million, other cities often have pre-bid meetings and ensure minority contractors attend those meetings and understand the bid process, she said.
Todd Slatin, director of purchasing for the city, said the city is already implementing many of the strategies McClish outlined on Tuesday.
The council agreed Tuesday to put the issue into a council committee so they could further review the findings and determine the best way to recruit and keep minority contractors. A date for that committee meeting has not been set.
This story was originally published November 16, 2022 at 10:07 AM.
