If you had asked Walter Wilson to tell you whether Santa Clara County does a good job of spreading its many lucrative contracts out to a diverse set of businesses, he’d have given you a short and simple answer: No.
“This is a huge crisis,” Wilson said.
Wilson, a co-founder of the Minority Business Consortium and longtime advocate for equity, said he’s been pushing the county to diversify its contracting base for more than a decade, even taking on an analysis of their procurement strategies in the past to help highlight the problems.
However, a recently completed study, more than two years in the making, shows what Wilson said he and many others already knew: Santa Clara County only awards a small sliver of its contracts to businesses owned by people of diverse backgrounds and women.
The $500,000 study, by consultant MGT, examined $2.4 billion worth of contracts the county awarded from July 2016 through June 2021 in various industries, such as construction, information technology, laundry, landscaping and equipment purchases.
Just over 15% of those contracts went to what the county calls diverse business enterprises, which are firms owned and controlled by Black people/African Americans, Asian Americans, Hispanic Americans, Native Americans or nonminority women, the study showed.
The overwhelming majority of contracts — roughly 85% and worth about $2 billion — went to firms owned by nonminority men or to firms MGT could not confirm as being a diverse business.
“This racism is so obvious, it’s just sickening, really,” said Wilson, who identifies as African/African Ancestry. “At the end of the day, this is systemic racism.”
In the study period, the county spent about $365 million with diverse businesses, though the largest chunk, about $172 million, went to Asian American-owned businesses, and nonminority women-owned businesses took in about $168 million.
Hispanic American-owned firms, meanwhile, took in nearly $16 million, African American-owned firms collected nearly $7 million, and Native American-owned firms received just over $3 million.
The study report indicated the county could have nearly doubled its spending with those various categories of businesses, noting there was 28% availability overall of diverse businesses willing and able to do the work the county contracted for in that period.
James Williams, the county’s CEO, said at a recent board meeting where the study results were being presented that the study was long overdue.
“I think it’s to no one’s surprise that there’s very, very significant disparities in our contracting relative to the availability of minority and disadvantaged businesses in our community,” Williams said.
Williams and other leaders said this is the first time the county has studied its contracting for disparities, and though there are some severe limitations on the data — including the exclusion of any COVID-19-related expenditures — the county needed a baseline of information to begin addressing the issues.