Philadelphia Announces New Rules for Minority and Women Preferences in Contracts

We recently wrote here that if a company wants to benefit from government programs that provide for preferences for Minority Business Enterprise (MBE) and Woman Business Enterprise (WBE) firms, it needs to be fully aware that different jurisdictions have different certification requirements. Not all city or state governments will accept all MBE or WBE certifications.

Baltimore City, we pointed out, will not accept Maryland State, Baltimore County, or federal certifications. Rather, a company needs to be certified by Baltimore City’s Minority and Women Business Opportunity Office.

On September 20, 2012, the City of Philadelphia issued a detailed Executive Order amending its “Anti-Discrimination Policy Relating to the Participation of Minority, Woman and Disabled Businesses in City Contracts.”

Interestingly, Philadelphia does not now itself certify minority- and women-owned businesses. Rather, its Office of Economic Opportunity (OEO) is tasked with establishing standards for certifying agencies and maintaining a registry of acceptable businesses, sorted by North American Industry Classification System (NAICS) codes.

Every year, each department of the city government is required to submit to the OEO a compliance plan for “providing maximum opportunities for the participation” of minority-, women-, and disabled-owned companies, including a “participation range” for city contracts awarded by the department.

Since Philadelphia is relying on third-party certifications that it deems acceptable, it will become more and more important for companies to obtain those certifications. This is especially true if other governments, feeling cash-strapped and preferring not to make their own decisions on the qualifications for minority- and women-owned preferences, also decide to rely on such third parties.

Companies that want to get the most they can from these complicated programs are well advised to consult with experienced legal counsel.

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