Houston City Council delayed a vote for up to 30 days on changes to the city’s minority subcontracting program following pushback from business owners, despite a looming court deadline to update the program.
Houston currently operates its minority- and woman-owned business enterprise program based on the results of a 2006 disparity study. The Office of Business Opportunity presented the recommendations from a 2024 study to a council committee last week, which included the transfer of Hispanic, Asian and nonminority women-owned businesses from certain types of contracts to a separate, race-neutral small business program.
More than 40 people spoke against the changes last week, but Houston faces external pressure to update the MWBE program using the latest disparity study data because of an ongoing civil lawsuit alleging the city illegally gives work to subcontractors on the basis of race, limiting opportunities for other business owners.
RELATED: Minority business owners oppose recommended changes to Houston subcontracting program
The federal judge presiding over the case gave the city until mid-April to decide whether to update the program, which would give the plaintiffs time to review the changes and assess whether they address the plaintiffs’ allegations.
City Attorney Arturo Michel on Wednesday said that delaying the vote for up to 30 days would give City Council the ability to bring the proposed changes back early for a vote if needed for the court case.
“We also have to consider the impacts of litigation, but having the opportunity to do this and make sure that we are not harming those that have a history of not having a shot at city business to lift those communities up and continue to support those small businesses is absolutely important,” District C Councilmember Abbie Kamin said.
Houston’s MWBE program began in 1984 as a way to broaden access to city contracts for small minority- and women-owned businesses that historically had been shut out of doing business with City Hall. Harris County, as well as other cities and counties throughout the state, operate similar programs.
The city’s program requires contractors and vendors to make good-faith efforts to subcontract a certain percentage of their work to certified MWBE businesses. The percentage of work to be subcontracted varies by the type of contract.
The most recent study found that disparities still exist among all racial and ethnic groups, especially among Black-owned businesses. However, it also found some groups no longer faced disparities in certain categories, such as Hispanic-owned businesses looking for construction contracts or Asian-owned businesses seeking professional service contracts.
RELATED: Houston minority contracting program may be at crossroads with new study, lawsuit
The Houston Hispanic Chamber of Commerce Tuesday requested council members take their time to deliberate potential unintended consequences of the recommended changes and seek more public input on how business owners would be affected.
Business owners who spoke before a council committee last week said it was likely that a small number of companies were getting the majority of MWBE contracts, which did not mean disparities did not exist.
District K Councilmember Martha Castex-Tatum said Wednesday the delay would allow the administration more time to engage with stakeholders. She also said the disparity study confirmed the results of the recently released Ernst and Young efficiency study that examined contracts in all city departments, and concluded that a small number of firms received a majority of city contract spending.
Castex-Tatum said the administration would consider bringing the proposal back to council sooner than 30 days if it found a “consensus or a better sweet spot” for community members.
City Council also voted Wednesday to expand the existing Ernst and Young contract 18 months for an additional $3.9 million to implement the changes suggested in the initial report.
Reporter Monroe Trombly contributed to this story.
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