Back in December, Hattiesburg officials explored the idea of encouraging eligible entrepreneurs to register as a Disadvantaged Business Enterprise, a concept designed to increase opportunities and participation for minority-owned businesses in Hattiesburg by opening the door to funds for state and federal projects.
But after an initial disparity study showed a lack of DBE-eligible businesses – for example, of the 1,252 construction companies within a 45-mile radius of Hattiesburg, only one is certified as a minority business enterprise – officials are proposing a “race and gender neutral” approach that would not require a disparity study and would increase the city’s pool of DBEs.
“Disparity studies are a lot; you do a lot of interviews with individuals in the community, plus public hearings,” said Zach Jones, office manager for Mayor Toby Barker’s office and legal assistant for the city attorney. “I’m not saying that just because it’s a lot, we shouldn’t do it, but it costs about $200,000 to have one of those done.
“On the other hand, with the race and gender neutral approach, it wouldn’t require a disparity study, but that would mean there would be no new space set aside. It would also allow us to incorporate other disadvantaged groups like veterans, disabled LGBTQ, and even on a case-by-case basis, people who are minorities or people who maybe have declared bankruptcy.”
Under the terms of the enterprise, socially and economically disadvantaged business owners – including women, African Americans, Hispanics, Native Americans and Asian Americans – who own at least a 51 percent interest of the business may be eligible to qualify as a DBE.
To be regarded as economically disadvantaged, an individual must have a personal net worth that does not exceed $1.32 million. In addition, a business owner must meet “small business” criteria of the Small Business Administration and have average annual gross receipts not to exceed $23.98 million.
“The National Academy of Sciences has conducted a study on implanting race and gender neutral measures, and in state DBE programs, we had 47 of out 50 United States participate in this study with a 94 percent response rate,” Jones said. “The study shows that a significant percentage of the participants have had success with implementing these race neutral measures.
“Some of those included support services and training, providing one-on-one business interviews, technical assistance, seminars and workshops, how to do business with the City of Hattiesburg, how to submit a bid, how to set up and design a website.”
The DBE program is designed to ensure nondiscrimination, create a level playing field for businesses and keep money in the local community. The program stipulates that at least 10 percent of the amounts made available for any federal aid highway, mass transit and transportation program must be expended with certified DBEs.
To become DBE-certified, a business owner must apply for certification through the statewide Unified Certification Program.
If the race and gender neutral methods were to be applied to the City of Hattiesburg, the city would divide its contracts into four main categories. Those include architectural engineering; infrastructure, including utilities, streets and paving; construction, particularly contractors, materials and supplies; and professional services such as financial and insurance matters.
Officials have divided the market area into three tiers, including 0-45 miles, 46-70 miles and 71-100 miles.
“We’ve kind of ranked the contracts that are done closer to home, and have them count more toward a DBE goal, to encourage contractors to subcontract more locally. Our next steps are to continue gathering data on the local market. Right now we’re working particularly on the construction market … and in the coming weeks we’ll do the same on architectural engineering, infrastructure and professional services.”
