Chicago’s construction set-aside program extended by six years with revised eligibility standards

Chicago’s construction set-aside program for minorities and women will remain in place until December 2027 – with revised eligibility requirements that expand the framework – thanks to a six-year extension brought forward on Friday.

Armed with a new “disparities study” commissioned by a federal judge, the Chicago city council committee on contract monitoring and fairness has agreed to extend one of the latest construction set-aside programs of the country, while maintaining the percentages of aid to set aside.

Until December 2027, the city will allocate 26% of all construction contracts to businesses owned by minorities and 6% of those contracts to businesses controlled by women.

“It’s not all that everyone wants, and we really want it to be more. We want the limits to be higher. We want the percentages to increase, ”Ald said. Jason Ervin (28e), president of the City Council’s Black Caucus.

“But we certainly thank [consultant Collette] Holt for the work she has done in blazing a trail for us that is not only defensible but almost a guarantee. This gives us the best possible leverage to keep the program going and continue to grow small minority and women owned businesses. “

Ald. Gilbert Villegas (36e), chairman of the Hispanic Caucus, said he would “like to take it a step further.” But Villegas said he was satisfied with the “small steps” proposed by the mayor.

These revised eligibility requirements include:

– Allow minority and women-owned businesses to qualify for the program until they reach 150% of the standard size set by the US Small Business Administration.

– Average gross revenue over a period of seven years, instead of five years.

– Restriction factors used to calculate personal equity by eliminating illiquid assets which include real estate, retirement savings and owner’s interest in uncertified businesses.

“Raise the ceilings a little more and also the gross receipts [gives] minority and women owned businesses the ability to compete as bonuses, which we all want – see more… [of these] top-tier companies, which in turn hire other minority and women-owned businesses, ”Villegas said.

Villegas initially proposed raising the limits on personal net worth and gross income to $ 10 million and $ 100 million respectively. After reviewing five years of minority contracts and subcontracting by the city, Villegas said Holt essentially told him: “maybe we can do it another time.”

Ald. Sophia King (4th), chair of the Progressive Caucus, said she too “thinks we should increase our numbers.”

“Because of the ‘but for’ clause, because of discrimination, African-American businesses in particular have not been able to grow. In fact, I think the numbers would show they’ve gone down, ”King said.

“In my experience, not that there is no availability, but that majority companies choose to go to the suburbs and hire people they know and with whom they have a consistent relationship. That there is availability, but that they are simply not taken into account.

Acting Procurement Services Commissioner Monica Jimenez said the relaxed eligibility standards “will better reflect the financial challenges facing small business owners.”

This will open the door for “more minority and women owned businesses to enter the market, grow and prosper,” she said.

The new eligibility requirements were recommended by minority contracting consultant Colette Holt, whose “disparities study” found “ample evidence that race or gender continues to significantly hamper opportunities. comprehensive and fair ”for minorities and women seeking urban construction contracts.

“Stereotypes, biased perceptions, assumptions of incompetence and downright hostile work environments remain all too common. Industrial networks remain closed to [minority- and women-owned businesses]. Project managers who use [minority- and women-owned businesses] to achieve the government’s affirmative action goals, even rarely soliciting them to bid on work unrelated to the goals, ”the summary said.

“The city’s program remains essential to the success and often even to the existence of these businesses. Without positive corrective intervention, it is likely that the city would become a passive participant in the market failure of discrimination.

Without a six-year extension, the construction set-aside program will end at the end of the month. City council is expected to approve the extension.

Earlier this month, indicted Ald. Carrie Austin (34th) resigned as chair of the Market Watch and Fairness Committee after Lightfoot requested it.

Austin led the charge on Friday, urging his colleagues to support the six-year extension.

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