Santa Clara County gives few contracts to minority-owned businesses

A study of Santa Clara County’s public contracts shows only a fraction goes to small, local businesses.

The county launched a vendor disparity study in 2022 to examine the number of minority-owned businesses that won public contracts between July 2016 and June 2021. The study’s final draft was released last week, finding that local, minority-owned businesses amount to only about 15% of the county’s total payments. It recommended the county start a small business enterprise program to give local, diverse businesses a more equitable opportunity to bid on public contracts.

According to the study, the county has significant disparities across all four procurement categories: public works and construction, professional services, non-professional services and goods and related services.

The county spent about $2.4 billion on contracts — of that amount only $364 million, or 15%, went to minority-owned businesses. Less than 1% was spent on Black, Hispanic or Native American owned businesses.

Walter Wilson, a co-founder of the Silicon Valley Minority Business Consortium, said these findings are “disgraceful.”

“Clearly, there needs to be a program in place to address these disparities,” he told San José Spotlight.

Wilson added that the amount of money given to “unclassified” firms — a whopping 85% — was at odds with the county’s demographic makeup. In the study, “unclassified” firms are those not owned by people with minority identities or businesses whose owners could not be identified.

These sorts of disparities are why Black residents have been leaving Silicon Valley, he said, and why projects like the Silicon Valley African American Cultural Center will be vital for supporting the community’s future.

Dennis King, executive director of the Hispanic Chamber of Commerce of Silicon Valley, also said he’s not surprised by how few minority-owned businesses are contracted by the county — but having these numbers in writing will help the county and other local agencies improve in the future.

“It’s a point of reference,” King told San José Spotlight. “From this time forward, we can evaluate who’s being included in the contract channel and what still needs to be (done) in terms of identifying opportunities for community participation in the future.”

Bridging the gap between the number of minority-owned businesses and the amount they receive from county contracts is going to be a step-by-step process, King said, including more outreach and education for small businesses so they’re better be equipped to apply for and win these contracts.

“These are local people that are paying local taxes and they’re electing local officials,” King said. “So if local people also gain in the contracts then it’s kind of a win-win for everybody.”

The county’s Office of Countywide Contracting Management and study’s authors are hosting a virtual public forum Monday at 1 p.m., and people can register here. A county spokesperson said the survey’s results will be presented and they’re hoping to gain public feedback at the forum, especially from business groups. They also said the survey’s results will be presented to the Board of Supervisors in the coming weeks, though a date has not been finalized.

Wilson said he hopes these findings push the county to address disparities in how much public money goes into local, minority-owned businesses, such as through opening a program specifically targeting these businesses for inclusion in the contracting process or through hiring people into the procurement process who are familiar with working with minority-owned businesses.

“This racism is real,” he told San José Spotlight. “They could talk about how progressive this county is, but you should look at the numbers. That’ll tell you how progressive they really are. Or aren’t.”

Contact B. Sakura Cannestra at [email protected] or @SakuCannestra on X, formerly known as Twitter.