What is a disparity study?
A disparity study determines if inequities exist in the public purchasing and contracting process that adversely affect minorities and/or women-owned businesses (MWBEs). It involves analyzing data on past purchasing and contracting practices to identify any patterns or trends that may indicate barriers for certain businesses.
Why did the City of Waco perform a disparity study?
The disparity study will identify if MWBEs have equal opportunities in City projects and the wider market compared to non-minority or male-owned businesses. The study's goal is to find any disparities, or gaps, between the number of MWBEs available and those hired for City contracts and related jobs.
By identifying potential barriers and systemic inequalities, the study will suggest strategies and recommendations to dismantle the obstacles and create a level playing field where all businesses, regardless of ownership, have an equal chance to compete.
This ensures that the City gets the best value for goods and services and helps strengthen the local workforce economy.
Is the City of Waco prioritizing business with certain vendors over others?
No. The goal of a disparity study is not to prioritize one group of vendors over another but to ensure that the purchasing and contracting process offers fair and inclusive opportunities for all vendors to participate.
Who performed the disparity study?
MGT Consulting Group
What type of data was collected for the study?
MGT combined data from the City of Waco’s vendors with subcontractor data collected via a survey of the City of Waco’s vendors to create one database. MGT evaluated $427.91 million in spending from October 1, 2016, to September 30, 2021 (Fiscal Years 2017 to 2021), encompassing five sectors: construction, architecture and engineering, professional services, other services, and goods. The majority of spending occurred in construction and goods.
MGT also utilized qualitative data collected from surveys, community meetings, online comments, focus groups, and one-on-one interviews with businesses to identify the presence of discrimination, issues, and concerns common to businesses.
What areas or locations did the disparity study include?
Based on guidelines set by the Supreme Court case Croson v. Richmond, the City of Waco was expected to define its relevant market area as the geographic areas from which most of its purchases are procured. MGT recommended using 50 counties where vendors can commute to the City to provide goods and services as the geographic unit of measurement.
What are the key findings of the disparity study?
- MWBEs combined have substantial and statistically significant disparities in all sectors.
- The City of Waco awards contracts to non-MWBE firms at a higher rate than MWBE counterparts.
- No disparity was found in construction for Hispanic Americans. This is partly due to a few Hispanic Americans making up most of the business in that sector.
| Procurement Category |
All |
Construction |
Architecture & Engineering |
Professional Services |
Other Services |
Goods |
| African Americans |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
| Asian Americans |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
| Hispanic Americans |
No Disparity |
No Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
| Native Americans |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
| Total MBI Firms |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
| Nonminority Females |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
| Total M/WBE Firms |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
Disparity |
BOLD indicates substantial statistically significant disparity.
How is the City of Waco addressing these disparities?
- The City of Waco Purchasing Division has established financial policies encouraging diversity, equity, and inclusion.
- The City of Waco maintains a diverse list of investment brokers to choose from, not just big banks. The City also requires their investment advisor to solicit one quote for all purchases from at least one diverse business (minority, women, or veteran-owned).
- For the first time in decades, the City of Waco conducted a request for proposals (RFP) for financial advisory services. The City selected two firms to be advisors, with the intention of one being an MWBE firm.
- The City of Waco Purchasing Division implemented a new eProcurement platform for submitting bids and offered presentations or small classes to help small businesses and MWBEs with the new eProcurement portal.
- The City of Waco breaks down larger contracts, when possible, to allow for small business and MWBE participation.
- The City of Waco has implemented bidder rotation for goods and services, which involves a group of bidders who agree to take turns winning contracts.