Business

Boston’s contracts have long lacked diversity. Mayor Wu’s plan to change that would be the first of its kind in Mass.

"As we recover from the pandemic, the City of Boston will use every dollar to make our city a place for everyone."

David L. Ryan/Globe Staff
Boston Mayor Michelle Wu at City Hall. David L. Ryan/Globe Staff
Inside City Hall

A pilot program aiming to make Boston’s public contracting more equitable to minority and women-owned local businesses is moving closer to taking hold at City Hall.

And when it does, the initiative will be the first of its kind in Massachusetts.

The City Council on Wednesday backed Mayor Michelle Wu’s proposal to create a sheltered market program.

The program, similar to efforts in other cities in the United States, allows for the city to designate certain contracts for goods and services to be awarded only to disadvantaged businesses, according to correspondence Wu sent to the council on Dec. 1.

“These types of programs have been implemented in municipalities around the country since the 1990s and have a proven track record of not only diversifying a city’s current spend, but also diversifying the pipeline of businesses available for future city contracting opportunities,” Wu wrote.

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“With this sheltered market pilot, we will explore the effectiveness of such a program in Boston as part of a comprehensive strategy to build equity in city procurement and create wealth-building opportunities across our communities,” she added.

Boston’s contract inequities have been a consistent, substantial concern for city leaders who’ve sought ways to combat significant income inequalities facing the city’s communities of color, especially in a majority-minority city.

A city-commissioned report published earlier this year found that during the first term of former Mayor Marty Walsh — between 2014 and 2019 — the city awarded $2.1 billion in its contracts for construction, goods, and services. But only 1.2% percent of that sum went to Black- and Latino-owned businesses.

“As we recover from the pandemic, the City of Boston will use every dollar to make our city a place for everyone,” Wu said in a statement earlier this month.

According to Councilor Lydia Edwards, chair of the council’s Committee on Government Operations that reviewed Wu’s proposal, the plan will tap Boston’s Chief Procurement Officer and CFO Justin Sterritt to create the sheltered market program.

“The challenges surrounding procurement are complex, and require using every tool available to help close persistent gaps and inequities in City contracting,” Sterritt said in a statement. “This sheltered market program builds on a series of reforms and Council orders to improve the procurement process and increase opportunity for new and diverse vendors. Under Mayor Wu’s leadership, we will use every tool at our disposal, and the addition of this sheltered market program is a major step.”

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The program will designate no more than six contracts to be awarded to “disadvantaged minority and women owned vendors for whom there is a demonstrated ‘substantial disparity’ in the City’s 2020 Disparity Study,” Edwards wrote in a committee report. The contracts, which have not yet been determined, must be awarded by June 30, 2022.

“I think it’s really fulfilling a promise of making sure that we go through and make sure all aspects of the city government, including the financial benefits, are accessible to people in the City of Boston,” Edwards told councilors on Wednesday.

The council vote authorized the creation of the program. Sterritt’s office now must develop written procedures for the program and hold a public hearing.

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