Using procurement to advance equity: Public procurement is a powerful tool for local governments to promote more equitable outcomes. Cities and counties can use the procurement process to increase the share of public dollars going to small and minority- and women-owned businesses and to address disparities in and improve the quality of public services.
Making the process efficient, inviting, and transparent: When bidding for a local government contract is time-consuming and confusing, businesses with the least resources, like many small and women- and minority-owned business enterprises (WMBE), will be less likely to participate. By surveying local vendors and mapping the procurement process, local governments can identify opportunities to make government contracts more accessible. One example is requiring pre-bid meetings for each procurement, which allow vendors to ask questions and form joint-ventures.
Integrating equity into contract outcomes: When designing a request for proposals (RFP) or contract, local governments can promote equity by setting clear goals and performance standards. For instance, localities can include standards for community engagement to ensure contractors are responsive to residents’ concerns or create incentives for WMBE participation to encourage prime contractors to work with underserved businesses. To ensure contractors achieve these outcomes, local governments can use real-time performance data to actively manage contracts.
Elevating procurement as a strategic function: Cities and counties can promote equity by reenvisioning procurement as a strategy to improve service delivery. In practice, this means engaging senior leadership to identify upcoming procurements in service areas that need improvement or are aligned with strategic goals; dedicating resources to strengthening the associated RFPs and contracts (e.g., tightening performance standards); and training staff to use procurement as a mechanism to improve service delivery going forward.
- Issue Areas
Housing and community development
- Target Population
- Key Stakeholders
Mayor or County Executive’s Office, Procurement Office, Civil Rights or Equity Office, Community Relations Office, Program Evaluation Team
What evidence supports this strategy?
While this strategy has not been subject to rigorous, independent evaluations, it is widely-recognized as a best practice among experts in the racial equity space.
How does inclusive procurement impact economic mobility?
- Confronting legacy of structural racism: By creating more inclusive procurement processes, local governments can begin to reduce the impact of decades of racist policies that excluded communities of color and denied opportunities for upward economic mobility.
- Shifting dollars to disadvantaged businesses: By conducting more business with MWBEs, cities and counties can directly improve the economic outcomes of the business owners and direct investment into the neighborhoods where they operate.
Best practices in implementation
Offer technical assistance: Small and minority- and women-owned businesses often have limited resources to compete for government contracts. By providing technical assistance to these businesses, local governments can foster more diverse and competitive vendor pools. Identifying “advocates” who conduct outreach to, train, and guide small and minority- and women-owned businesses through the procurement process is one example.
Set and track measurable goals: Local governments should set and track measurable goals for small and minority- and women-owned business participation. Incorporating these goals into how departments are evaluated and making these goals public will increase accountability. Similarly, when preparing contracts with vendors, local governments should set measurable goals that align with their strategic priorities. Tracking businesses’ performance along these goals will create greater accountability for them to meet provisions in their contract.
Provide prompt payment: Small and minority- and women-owned businesses can be discouraged from doing business with local governments when payment is issued months after they rendered their services. Local governments can minimize this disincentive by issuing payments to vendors more quickly and requiring prime contractors to issue payments to their subcontractors in a timely fashion.
Engage key stakeholders: When evaluating their procurement process, local governments should engage relevant internal and external stakeholders. Engaging local businesses will reveal barriers preventing small and minority- and women-owned businesses from bidding for contracts. Similarly, internal stakeholders can inform the redesign by identifying existing strengths and building buy-in.
- Change narratives around racial equity: As local governments reshape procurement processes to become more equitable, changing narratives among internal stakeholders and the broader public is an important driver of success. Without a shared understanding of the historical role that government has played in creating inequities, internal stakeholders are less likely to engage in new procurement processes. And without a clear external narrative on the factors that have driven racial inequities and the steps needed to confront racist legacies, public support for equity-informed procurement decisions will be less easily secured.
Coordinate procurement across departments: When local governments have decentralized procurement systems, each department may develop a different procurement process. Coordinating procurement processes across departments creates a more consistent and navigable experience for vendors and facilitates the sharing of best practices between departments.