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The Bottom LineThe Bottom Line

Black and Latino Businesses Say Boston is Violating their Civil Rights

The complaint comes on the heels of a study that showed Black-owned businesses have been largely and systematically shut out of city contract dollars. 

Black- and Hispanic-owned businesses have been shut out of Boston contracting opportunities (including those in construction), a new report commissioned by the city says. (Photo by coia.nac / CC BY 2.0)

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It’s called an administrative complaint.

Under Title VI of the Civil Rights Act of 1964, all recipients of federal grant funding are barred from discriminating against anyone based on race, color, or national origin. Every federal grantmaking agency has a civil rights office where anyone can submit a Title VI administrative complaint, initiating a process that can lead to a range of outcomes including but not limited to that federal agency filing a lawsuit against the accused grantee, or even the withholding of federal grant dollars until the situation is sufficiently resolved.

Organizations representing Black, Latino and other communities of color in Boston filed a Title VI civil rights administrative complaint in February with two federal agencies alleging that the City of Boston is in violation of Title VI of the Civil Rights Act because the city’s public contracting processes discriminate against businesses owned by Black, Latino and other people of color.

The complaint comes on the heels of a disparity study, first obtained by local press and later released in full, that showed Black-owned businesses have been largely and systematically shut out of city contract dollars.

Commissioned by the city, the disparity study analyzed more than 47,000 contracts worth almost $2.2 billion that the city of Boston awarded between 2014 and 2019. Of that, just 0.4 percent, or $9 million, in contract dollars went to Black-owned businesses and just 0.8 percent, or $18 million, went to Hispanic-owned businesses. That’s despite the fact that, according to the study, Black-owned businesses alone represented more than three percent of the firms available for those contracts and more than five percent of the firms available for subcontract dollars.

The disparity study confirmed what the members of the Black Economic Council of Massachusetts have been saying since long before the organization was founded five years ago. Also known by its acronym, BECMA, the group is one of the organizations behind the new Title VI civil rights complaint.

“BECMA and my board and members have been trying to work with [Mayor Walsh] for all seven years of his administration and got nothing,” says BECMA executive director Segun Idowu. “This seems to be the only way to compel the city to do right by our members. And now he’s about to leave. Of course the mayor is upset about our statement and the complaint. But at this point 0.4 percent of me cares what the mayor thinks about this.”

The Mayor’s Office declined to comment directly on the civil rights complaint, saying it’s an ongoing litigation issue. It included a statement from the city’s chief communications officer that read, in part, “While the results of this study are not surprising, they reaffirm our belief that more work needs to be done to institutionalize these practices into the everyday business of city government, and reaffirm our commitment to getting the work done.”

State and local governments spend $3.8 trillion a year, about a third of which goes to procuring goods and services from private sector contractors. In the 1970s and 1980s, as the first wave of Black mayors came into office, they frequently saw city contract dollars as an opportunity to support Black businesses, creating new opportunities to scale up Black-owned businesses, which are more likely than others to hire from Black communities.

But the backlash from white companies was fierce, culminating in the Supreme Court case Richmond v. Croson, which in 1989 ruled that giving procurement preferences to minority-owned companies violated the constitution. Many cities that had established race-conscious public procurement preference programs in the preceding decade had to scuttle those programs.

Conducting a disparity study became part of the required legal justification for any municipal or state program seeking to give some kind of preference for minority- and women-owned business enterprises, or MWBEs, post-Richmond v. Croson. It can be an expensive process, bringing on a consultant to do the study. Sometimes it’s only politically possible within a single agency, like the sewer or water department or a transportation agency.

But when they are conducted, disparity studies routinely show that procurement processes shut out businesses owned by Black, Latino and other people of color.

It’s often no longer intentional. It’s always easier for procurement officers to use existing vendors, since they’re already vetted and set up inside the city’s reporting and payment systems. Or there may be requirements for contractors that have nothing to do with race on the surface but have the ultimate effect of preventing Black or Latino businesses from submitting a bid on a contract — such as minimum years in operation of the firm or minimum number of city projects previously completed.

Boston’s disparity study found that some of the city’s bids require firms to certify that they have previously completed at least five state or municipal contracts worth at least $80,000 each in the last five years. The thinking is that requirements like these ensure bids only come from firms with the necessary experience, but those requirements can shut out new firms whose Black or Latino owners actually have the necessary experience from decades of working for larger, white-owned firms.

The Title VI administrative complaint submitted by BECMA and its allies suggest a number of changes including the elimination of “unnecessary RFP/RFQ and other bid criteria to ensure that overly-stringent requirements do not unnecessarily inhibit competition and limit the ability of MWBE firms to compete.”

BECMA, the Greater Boston Latino Network, and Amplify Latinx submitted the administrative complaint to both the Department of Justice and the Department of Transportation, as both agencies administer various grants to the City of Boston. They could have also submitted complaints to the civil rights offices at departments of Housing and Urban Development or Health and Human Services or Education, but the choice was strategic, under the advice of their legal representatives at Lawyers for Civil Rights Boston.

“Both of those federal agencies have rules and regulations promulgated around Title VI saying that not only does direct discrimination violate Title VI, but also disparate impact is a violation,” says Priya Lane at Lawyers for Civil Rights Boston. That means that at those agencies, plaintiffs don’t have to prove an intent to discriminate, only that a policy resulted in discriminatory results.

Any city receiving funds from either agency is thus required to avoid even unintentional discrimination against any protected groups under the Civil Rights Act.

But enforcing that requirement takes someone to speak up, evidence to substantiate a claim and resources to investigate and implement.

“We filed the complaint saying look, there is a clear disparity, the statistical evidence speaks for itself,” says Lane. “When you have $2.1 billion spent and only 0.4 percent going to Black businesses owners, there’s definitely at the very least, disparate impact affecting Black and Latinx business owners.”

Lane says colleagues of hers at Lawyers for Civil Rights Boston have had success filing previous civil rights complaints. It can be a way to get changes made more quickly than actually going to court, but it’s not as well-known that communities have this option.

“In this case as we’ve done before, we met with affected community members to talk about what the difference was between an administrative complaint and a lawsuit and what everyone should expect to see coming out of this process,” says Lane. “If our experience with agencies in the past is anything to go by, it can move really quickly.”

Lane points to one case from two years ago when Lawyers for Civil Rights Boston filed a Title VI civil rights complaint with HUD, charging that the Boston Planning and Development Agency (BPDA) violated federal civil rights law by failing to make a major development project’s supposedly public review process accessible to non-English speakers in a neighborhood where 46 percent of current residents had limited English proficiency. It was one of the biggest development projects in the history of Boston, and ultimately it only took a few months for HUD to mediate the dispute and get the project moving forward again.

“HUD actually came in and mediated with the affected community members and BPDA,” says Lane. “We had amazing outcomes with that complaint and we’re assuming and hoping for a similar outcome here. So we had good luck with HUD even under the Trump administration, and that’s why we’re very, very hopeful that the new administration will be even more helpful when it comes to this complaint.”

Even with recent successes like that, the fact that the landmark Civil Rights Act has this Title VI provision within it remains something of an open secret.

“The lesson for me and for the board has been in understanding the difference between the administrative complaint we filed versus a straight up lawsuit,” Idowu says. “The idea of a complaint has not been in the general lexicon. Certainly that’s been educational for us and the hope is the other 350 cities and towns in Massachusetts are paying attention, because while this is something we are doing in Boston, it’s not something we are limiting to Boston.”

Boston Mayor Marty Walsh, currently under consideration for appointment as Secretary of Labor in the Biden-Harris Administration, issued an executive order in conjunction with the release of the disparity study. The executive order sets new goals for MWBE procurement and requires goal tracking and reporting on those goals as part of the annual budget process. It’s the second executive order issued by Mayor Walsh regarding MWBE procurement, but Idowu says neither has been good enough. BECMA members want the city to set higher goals, they want some mechanism for real accountability if those goals are not met, and they want better communication about upcoming contract opportunities from the city.

Boston previously did have an MWBE procurement program — but it was scuttled in 2003. Idowu says it was because then-Mayor Thomas Menino, despite supporting the creation of the program earlier in his tenure, eventually felt threatened by potential lawsuits from white-owned firms.

But even more than a stronger MWBE procurement program per se, Idowu says BECMA members want the city to sit across the table from them as equals to negotiate all of those things, instead of the mayor’s office setting policies unilaterally. He’s very hopeful that council speaker Kim Janey will be open to that process. Once Mayor Walsh presumably steps down to accept his post at the Department of Labor, she’ll become the first Black mayor and first woman to be mayor of Boston. And she’s also been an ally to BECMA on the issue of MWBE procurement in her time as a city council member.

“At the end of the day, the ultimate goal of this, and what we requested in the complaint, is there just be a community remediation process where it’s not just the city is making their own decisions on this but making commitments based on what the community including our members are saying what needs to happen,” says Idowu. “It’s not going to be a new conversation, it’s not going to be new solutions, but at least the city won’t be able to just put out an executive order like we just saw and then don’t do anything in response to the demands the community’s been making for years.

This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter.

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Oscar is Next City's senior economic justice correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha and Fast Company.

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Tags: small businessbostonprocurementminority-owned business

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