Firms owned by white men got the overwhelming share of money awarded by the Palm Beach County Solid Waste Authority for contract work from 2009 through 2013, a disparity study conducted for the authority shows.
The 284-page study, conducted by Mason Tillman Associates of California and delivered to the SWA in March, has confirmed the suspicions of some minority business owners who have long complained that they have been shut out of county contract opportunities.
The study also has been a recent point of contention among county commissioners, who serve as the SWA’s governing board. It has exposed a stark racial divide with black business owners and black elected officials supporting it, while those questioning it, or opposing it outright, have been white business owners and white elected officials.
Raising the stakes are the seven-year garbage hauling contracts worth as much as $450 million that the SWA is expected to award next year. Mason Tillman is also wrapping up an even larger, county-wide study that could help women and minority-owned businesses get some of the $810 million in project work the county is expected to undertake over the next decade with money from an increase in the county sales tax.
County Commissioner Mack Bernard, chairman of the SWA’s governing board, has joined black business owners in demanding that the authority re-establish a program to address gender and racial disparities before the hauling contracts are awarded. The bid process has already started and SWA Executive Director Mark Hammond has said delaying the selection and awarding of those contracts could hinder the ability of haulers who need time to study routes and purchase equipment before beginning their work.
After a 3½-hour meeting Thursday, commissioners agreed to delay indefinitely the deadline for companies to submit hauling contract bids. Commissioners are expected to set a new deadline for those bids when they meet on Dec. 20, when they will also discuss the possibility of re-establishing a race- and gender-based program to address contract disparities identified in the study.
For all of the debate generated by the study, its findings haven’t been fully aired.
Those findings show that the success of white male-owned firms in getting prime contracts from the SWA in recent years outstripped their presence in the marketplace and extended even to smaller contracts that women- and minority-owned firms in other areas have typically had success in winning. Prime contracts are awarded to firms responsible for the work, though they may use subcontractors.
White male-owned firms collected 98 percent of all of the money SWA paid on construction contracts from 2009 through 2013, a study of prime contracts found. The study also found that white male-owned firms got 84 percent of the dollars SWA paid on professional services contracts, 94 percent of the money paid on commodities contracts and 77 percent of the value of trade services contracts. Firms owned by white men accounted for no more than 63.2 percent of any of those marketplaces, the study found.
Mason Tillman Associates concluded that firms owned by women and minorities received disparate treatment in the awarding of SWA contracts, meaning they got fewer contracts and fewer dollars from those contracts than their presence in the marketplace suggested they should have received.
For example, black-owned firms got two of the 84 SWA prime construction contracts awarded from 2009 to 2013. Black-owned firms represented 12.5 percent of the marketplace, Mason Tillman found, but got only 2.4 percent of the contracts, which were worth a combined $104,664 — or 0.07 percent of the total value of the construction contracts awarded.
Hispanic-owned firms were 13.2 percent of the construction marketplace but got a single contract worth $141,105 — 0.09 percent of the total value of the construction contracts, the study found.
Black-owned firms were 7.5 percent of the commodities and other services marketplace, according to the study, but got only 18 of the 3,404 contracts SWA awarded in that area from 2009 to 2013. Hispanic-owned firms in that area fared better, getting 164 contracts. But they were 8.6 percent of the marketplace, the study found, and got less than 5 percent of the contracts awarded, which were worth only 1 percent of of the total value of the commodities and other services contracts awarded.
The study found fewer disparities for firms owned by white women, but there were some. In commodities and other services, firms owned by white women were 18.9 percent of the marketplace but got about 9.1 percent of the contracts.
Firms owned by white women were 20.6 percent of the trade services marketplace, the study found, but got only 11.6 percent of the contracts.
On the other hand, firms owned by white women comprised 13.8 percent of the firms bidding for construction contracts but were awarded a third of the prime construction contracts, the study found. However, those amounted to only 2.3 percent of the dollar value of construction contracts.
On Thursday, commissioners got a brief overview of Mason Tillman’s findings, which Commissioner Paulette Burdick described as “dismal.”
“They’re embarrassing,” Burdick said of the disparities Mason Tillman identified. “We should all be ashamed.”
Bernard said Friday he wants the SWA to hire a diversity officer who would report directly to the authority’s governing board. “I don’t have the confidence in the executive director and the management in terms of coming up with the right policy and moving us forward,” he said.
Efforts to reach SWA leadership Friday were unsuccessful.
A review by an attorney hired by The Associated General Contractors of America’s Florida East Coast chapter called Mason Tillman’s report “too flawed” for its recommendations to meet legal standards. The chapter’s chief executive officer, Michelle Anaya DePotter, has questioned whether the study is being undertaken as a means of making sure “various groups get what they think is their fair share of the pie.”
Governments have frequently used a finding of disparity as a legal justification to establish race- and gender-based programs aimed at making sure firms owned by women and minorities get a fair shot at contracts.
The SWA had a race- and gender-based program for 20 years until it was scrapped in 2012 in favor of a race- and gender-neutral program aimed at helping small businesses. That race- and gender-neutral program sets goals, typically at least 15 percent, for small business participation on contracts.
Joseph Anderson of JD Anderson Construction, who once sat on the advisory board of the county’s Office of Small Business Assistance, said that goal isn’t a strong enough tool.
“The county needs to be more proactive in general, not just the Solid Waste Authority,” said Anderson, who hired a lobbyist to push for a disparity study. Anderson, a black business owner, said his firm has been successful in getting county contracts through a neighborhood stabilization program, but his firm was not successful in getting the one SWA contract on which it bid.
Mason Tillman has suggested that the SWA add points in its scoring process to the bids of firms owned by women and minorities and that SWA adopt a bid discount system that would treat a higher bid from a woman- or minority-owned firm the same as a lower-cost bid from a firm owned by a white male.
White male business owners have frequently opposed such moves, likening them to reverse discrimination.
But Bernard said changes need to be made because of the authority’s failure to provide equal opportunities to women and minority-owned firms.
Bernard says Hammond and the SWA leadership impeded Mason Tillman’s study and resisted the re-establishment of a race- and gender-based program, frequently referred to as minority/women business enterprise programs, to address disparities.
“I think that there is a good ol’ boy network, business as usual,” Bernard, the only minority on the commission, told The Palm Beach Post Friday. “I’d say it’s close to racism.”
Hammond and other SWA officials could not be reached for response Friday, but SWA leadership on Thursday pushed back against any charges that they impeded the study or that the disparities Mason Tillman identified were the result of racism.
“If you look at the numbers, it looks like we’re failing,” SWA Managing Director Dan Pellowitz told commissioners when asked about the lack of success women and minorities had in getting small SWA contracts. “We’re committed to do better. I assure you the Solid Waste Authority does not oppose an M/WBE program.”
Pellowitz added, “I can assure you this is not about discrimination.”
He said the SWA’s procurement documents are complex and that some small businesses, including some owned by women and minorities, could find completing the paperwork to be “daunting.”
Hammond said part of the problem is getting women and minority-owned firms to bid for SWA contracts.
“You can’t make folks bid,” he said.