Minority and Women-Owned Businesses and Enterprises

DeSoto, TX

Population: 50,000- 100,000 | Government type: City | Topic: Diversity Vendors

The Program

In July 2020, DeSoto, TX passed a Minority and Women Business Enterprise (MWBE) policy to increase minority contracting with the city. The city’s Black residents are not alone in the ongoing local battle to compete with white-owned companies; market and capital access are a struggle nationwide for minority-owned businesses. Covid-19 further exacerbated the rate of Black unemployment and the need to support business ownership to contribute to local economic stability.

Twenty percent of all city contracts must have minority participation. For contracts between $3,000 and $24,999, the city must contact at least two diversity vendors (out of the minimum three required). The city will begin hosting workshops to get minority business owners in the pipeline to be "bid ready" for larger projects such as building a new city hall or fire station. This commitment reflects Black-owned buisnesses’ ongoing lack of access to resources, training, and capital due to economic discrimination.

Collaborative Governance

Small business owners spoke at council meetings of how they were not receiving bids. A former diversity business program manager also helped to craft the policy along with staff and council. The testimony revealed how much stronger DeSoto’s minority community would be if they had the tools to thrive like the outside firms bidding against them. 

Emphasis on equity

The city council must approve all bids over $100,000. Those between $50,000 and $100,000 are approved by the city manager, while those under $50,000 require no bidding or approvals. According to the regional certification agency, DeSoto has 600 minority-owned businesses in the city, but they are not getting city-based contracts. On the bid, the contractors will indicate where they are based.

In FY 2019-20, Councilmember Candice Quarles began tracking all of the contracts that the city approved. She found that while DeSoto is 80 percent Black and Latinx,  minority contractors received less than 10 percent of contracts over $100,000. It is likely that smaller contracts without any approval process went to an even smaller percentage of minority contractors. As it currently stands, minority taxpayers in DeSoto are funding outside contractors to do city-based projects despite having a well-established network of minority contractors to choose from. 

Strong communities thrive in part by keeping tax dollars circulating within the local economy. By awarding nearly all city contracts to non-DeSoto residents, the community was sending away millions of tax dollars to fund and support other communities. 

The economic system, built on white supremacy, intentionally suppressed and excluded communities of color.  In more recent decades, business elite who run and benefit from the capitalist system prevent people of color from building community wealth through their own business ventures. People of color find it difficult to attain the resources, expertise, and access to capital necessary to compete with large (and often predominantly white) firms for bids. The addition of the two diversity vendor requirements increases access for communities of color and, as a result, helps drive resources and wealth more equitably across DeSoto.

Analysis

• Preemption: Given the extent of Texas state pre-emption, localities are not able to require this level of regulation around private contracts so cities are limited to regulating only the ones they make that impact city workers.

• Local government dynamics: The city council is moderate with a strong pro-business leaning and a minority progressive wing.

• Policy strength: Although there may be state limits on which contracts fall under this bidding and approval process, and that is true in this case, local leaders should take action to collect data to establish the inequalities they seek to redress. In this instance, there is a vast landscape of barriers to minority and women-owned businesses and this policy change is a positive step towards identifying and addressing them.

Last updated: January 19, 2021

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