“Disparity studies are about economic empowerment more than anything else. With greater economic equity within communities, we create more jobs, business opportunities, family income, and tax revenue to enhance the growth, prosperity, and well-being of families and communities.” – Fred Seamon, PhD
History of Disparity Studies
Disparity studies were born out of the 1989 U.S. Supreme Court case City of Richmond v. J.A.Croson. The Supreme Court ruled that governments must establish what they call a “compelling interest” to support the creation of contracting programs that specifically target minority- and women-owned business enterprises (MWBE) and remedy the effects of past and present discrimination. That landmark Supreme Court case decision generated the disparity study industry. The City of Richmond is now known as the birthplace of disparity studies. For background, in 1983, Richmond, Virginia, required that prime construction contractors set aside 30% of their subcontracting dollars for firms that were at least 51% minority-owned. Six of the nine justices struck down the Richmond ordinance. The court reasoned that governments couldn’t apply a remedy to a harm they hadn’t explicitly proved existed.
After several key court rulings later, disparity studies emerged as the way for municipalities to prove procurement inequity.
Pioneering Disparity Studies at MGT
After the City of Richmond v. J. A. Croson ruling, MGT wanted to work with city, county, and state governments that have MWBE programs to essentially prove that there is a compelling interest.
We approached the City of Tallahassee about the implications of Richmond v. Croson because they had a preference program for minority- and women-owned businesses. The City Manager knew about MGT. In 1990, we worked together to conduct one of the first disparity studies in Florida. Since then, we’ve done over four disparity studies for the City of Tallahassee and Leon County.
From that one study in Tallahassee, we saw requests for disparity studies gradually increase across the country. MGT competed in the bidding process and has won a significant share of projects over the last 30 years. Very few firms have MGT’s level of expertise, experience, and success in this field, providing legally defensible studies regarding the availability and utilization of minority and women-owned businesses. To date, we have completed more than 300 disparity and equity studies nationally. In addition to responding to requests for proposals, referrals have come from our network of clients, as well as colleagues and former students who are now city managers, county managers, assistant city managers, and elected officials.
Creating Actionable Roadmaps and Opportunities
Recently, MGT completed the City of Richmond’s first disparity study, to provide the city with actionable policy and programmatic recommendations for ensuring procurement and contracting fairness for minority- and women-owned businesses.
Outcome: The study provides a roadmap to help grow and sustain businesses, increase jobs, and provide economic opportunities in communities throughout Virginia.
Other notable studies:
City of New York: MGT partnered with the mayor’s office to conduct one of the largest and most sweeping disparity studies ever completed. MGT analyzed billions of dollars in public spending over a ten-year period, gathered evidence from thousands of businesses and individuals, and developed a comprehensive set of recommendations to further the City’s goals for fairness and equity in public procurement.
Outcome: The study achieved its goal of 9,000 City-certified MWBEs – doubling the pool of vendors in less than three years. The City continues to make steady progress toward its goals of awarding $25 billion to MWBEs by the end of FY 2025 and awarding 30 percent of the value of all City contracts to MWBEs.
Portsmouth Public Schools, Virginia, Disparity Study: MGT assessed the utilization of minority- and women-owned businesses for goods and services in prime and subcontracting.
Outcome: The study resulted in the establishment of an MWBE Program and commercial anti-discrimination rules.
State of Delaware Disparity Study: MGT’s assessment found that women-owned firms received less than 3% and ethnic minorities received less than 7% of total state contracting dollars between 2015 to 2020.
Outcome: Recommendations for expanding outreach and training for federally-certified disadvantaged businesses and a vendor rotation system for smaller contracts.
City of Baltimore Disparity Study: MGT conducted a legally defensible disparity study to determine if discrimination exists in the marketplace that warranted a remedial MWBE Program. The scope included analyzing how much of the City’s contracting dollars were spent with minority, women, disabled, veteran, and LGBTQ-owned businesses.
Outcome: The study found evidence of marketplace discrimination and underutilization that allowed the City to continue its MWBE Program and conduct business development outreach assistance to scale businesses working on City contracts to increase employment, wages, and revenue for businesses and the City.
“We are confident that we have a roadmap to ensure that we are navigating a course that eliminates any barriers for MWBEs to successfully enter the business sector in our city.”
– Christopher R. Lundy, Esq., Chief, Minority & Women’s Business Opportunity Office, City of Baltimore
At MGT, we believe disparity studies and economic impact assessments are vital tools for fostering equity, opportunity, and prosperity within communities. Our work has provided actionable roadmaps to address systemic inequities, create meaningful change, and drive economic growth for minority- and women-owned businesses nationwide.
Partner with MGT to champion fairness and unlock economic opportunities in your community. Together, we can pave the way for sustainable growth and ensure every business has an equal chance to thrive. Contact us today to begin building a more equitable future.
