MWBE Program rigged?

By Joe B. Kent

Addressing economic growth starts with black small business and workforce development in Memphis. Memphis has an abundance of governmental and nonprofit programming to address local challenges but if its rigged; it won’t work. So, is the City of Memphis’ MWBE program rigged? One anonymous local MBE contractor thinks so.

The African American contractor points to 3 primary reasons they feel the City of Memphis MWBE program is rigged against African American, smaller non-establishment players:

1. The combining of MBE and WBE contracting to satisfy local MWBE requirements. The contractor says that WBEs often serve as façade for local establishment players to exploit the MWBE provision resulting in the same establishment players getting MWBE business. The contractor advocates for separating MBE and WBE goals.

2. Bonding provision for anything over $150K on the $175M Cook Convention Center project. The contractor states that the bonding requirement is exclusionary for smaller less established African American business. The contractor provides a solution in the form of an insurance policy that acts as a bond which smaller contractors will more likely qualify. The insurance approach is used in other cities on large projects.

3. Excessively large contracting packages on the Cook Convention Center project that smaller contractors can’t handle. The contractor advocates for breaking contracting opportunities down into smaller packages so that more MBEs can participate.

The contractor also shared concerns of getting “the back and forth” between City Officials and those involved in managing the Convention Center bid process regarding contracting issues as well as the same MBE establishment players getting excessive amounts of minority business. The contractor fears other contractors may be masquerading as WBEs for continued participation in MWBE programming.

Having done work across the country, the highly qualified contractor feels embraced in other communities. Other communities need this contractor and this contractor needs them. But that feeling does not exist for this contractor in their home of Memphis which is discouraging for this contractor. The contractor knows that if current rigged trends continue, it will further decimate African American business in Memphis.

If the MWBE requirements for the largest City of Memphis project in over a decade are any indication of a desire to grow, then the local establishment probably doesn’t want to grow. Given the already concerning data trends, this won’t be good for Memphis.

 

Does Memphis Want To Grow?

Does Memphis want to grow ? It’s a question that does not need to be asked in most cities. But it’s a legitimate question given the data, the self-inflicted wounds by the establishment, the lack of course correction, the rigged state and the over-abundance of ineffective governmental and nonprofit programming to address local challenges.

In order to address Memphis economic development challenges, the city will need to be derigged. By definition, system rigging guts system vitality required for growth. Signs of a rigged system are evident in Memphis trend line declining small business vitality data and can be directly linked to the Memphis Tomorrow CEO organization largely taxpayer funded Fast Forward project.

Since the Memphis Tomorrow birthed Economic Development Growth Engine (EDGE) started their retention payment-in-lieu of taxes PILOT program that prioritizes incentives for corporate interests, small business vitality has declined to last in the country. In fact, according to data from the American City Business Journal, the Memphis MSA lost 923 small business establishments between 2012-17 which can be shown to cost 13,588 jobs, $680M in lost wages and $20M in lost Memphis / Shelby tax revenue. The price of a rigged system is high!


Economic development in Memphis starts with black small business growth and workforce development. No rigged system in the world is going to fix that. These trend lines signal a need for culture change which points to system derigging while prioritizing the needs of customer taxpayers.

 

Conclusion

A rigged system doesn’t work in a competitive global economy. Current trends indicate a Crump like culture of times gone by that leverage large sums of government funds for the small few in social elites and developers. System derigging and cultural transformation, starting at the top, appear to be the only path forward for Memphis. A closed rigged system just won’t work.

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