Miami-Dade black leaders: School contracts short-change minority firms

Black-owned businesses want a fair shot at landing contracts with the Miami-Dade County school district as it rolls out a $1.2 billion bond program.

On Wednesday, community leaders called for bond spending to stop until issues with minority contracting can be worked out.

“This is about institutional racism and systemic racism,” said Ron Frazier, CEO of BAC Funding Corporation, a non-profit that lends to minority-owned businesses. “We found it in the policies and procedures of the school board in how they are implemented, and the attitudes of the people in charge.”

District officials say they have made progress in fixing historical injustices and have been working on more changes.

“I don’t know of people who are doing more than us,” said Brian Williams, head of the district’s Office of Economic Opportunity.

Ironically, the debate has prevented some of the very policies some in the African American community are wanting from the district. That’s because it has delayed final approval of a district report that is legally-required before any race- or gender-based policies can be enacted.

The controversy centers around the district’s disparity report. It is supposed to determine in a factual way whether there is inequity in how the district spends its money. That determination is legally necessary before implementing any policies based on race or gender.

Superintendent Alberto Carvalho promised to do the disparity report during his campaign for voter approval of a massive bond to fix up schools and pay for technology upgrades. The bond passed in 2012.

A draft of the report, conducted by national consultants MGT of America, found disparity in all areas surveyed except in the district’s use of subcontractors. Those findings have been debated and derided since the study was released in November 2013.

The Miami-Dade chapter of the NAACP, along with the Urban League of Greater Miami and BAC Funding Corporation launched their own committee to respond to the disparity report. On Wednesday, the committee presented their findings publicly and called for the disparity study to be rejected.

Called “Leveling the Playing Field,” the study calls the school board’s report “flawed, inaccurate and unreliable.” The counter-study looks at district business between 1986 and 2009 — the only years audited financial information is available, according to people involved in the study. The conclusion: African Americans received less than two percent of procurement contracts in that time frame. Carvalho became superintendent in late 2008.

Among the issues cited:

The disparity study only looks at contracted dollars given to minority firms, rather than actual money spent on a contract. Frazier said he knows of cases where a black-owned business was terminated from a job before a contract was up.

The number of available African American-owned businesses was the same for every year examined in the disparity study, which is unlikely in the changing world of construction.

The district’s consultants relied on self-reported data to conclude whether general contractors used black-owned businesses to complete contracts.

The district counters with its own statistics. When it comes to bond projects, almost 37 percent of about 150 prime contracts have gone to minority-owned firms. Additionally, the district has certified 165 black-owned companies to do business with Dade county schools — many for the first time. Companies have to be certified to be considered for some district contracts.

Among the recommendations by the NAACP, Urban League and BAC: implementation of a diversity policy, mandatory diversity training and the launching of a program to help businesses with bonding issues.

Carvalho has said he accepted all but two of 15 recommendations made. Not accepted: to refer the findings to the Inspector General and to place a moratorium on bond spending until a program can be put in place to benefit minority-owned businesses.

Despite the superintendent’s agreement with all the other recommendations, people involved in the counter-study say the district has yet to act on them. Committee members on Wednesday called for the superintendent to put his commitment in writing along with a time line for implementation.

“We don’t think we should move forward...until we see something that justifies these numbers,” Frazier said.

When district officials tried to present their case at Wednesday’s meeting, they were shut out because the superintendent himself wasn’t there.

“We want to work with the superintendent,” said T. Willard Fair, head of the Urban League of Greater Miami. “If this was the Rotary Club of Gables by the Sea, he would not be sending someone else to talk to me. And I find it to be insulting.”

Williams, the head of the district’s Office of Economic Opportunity, told the Miami Herald that Dade schools has already made progress on many of the recommendations.

For example, the Leveling the Playing Field study calls for verification of how much subcontractors were actually paid. That issue will be addressed in two separate, ongoing audits that were commissioned by the district in response to public criticism of its disparity report. Carvalho has also promised a third independent review of the subcontracting issue, specifically.

Other recommendations by the NAACP, Urban League and BAC include implementation of a compliance program and a payment database. Williams said he is in the procurement process for computer software that will do both.

His office is also hiring an additional employee to conduct field audits — fulfilling two recommendations in the report: to do site visits and to beef up staff in the Office of Economic Opportunity.

Williams said the district was working on many of these initiatives even before the NAACP, Urban League and BAC recommendations.

Other issues are outside of the district’s control, Williams said. For example, it’s up to the Inspector General which cases to take on, and the office only looks into specific kinds of allegations. Another recommendation to prohibit general contractors from setting their own rules about who can work with them might be trampling on private business rights.

“They have to know the firms they’re working with or contracting with meet some minimum qualifications because they’re essentially taking on a risk,” Williams said.