Internal documents shed light on Mayor Cherelle L. Parker’s decision to end Philadelphia’s racial diversity goals in contracting

Mayor Cherelle L. Parker has said her administration relied on expert advice from a top law firm when it decided to end a Philadelphia policy prioritizing businesses owned by women or people of color in city contracting following recent court rulings that limited affirmative action-style government programs in hiring and contracting.

“I call them my genius attorneys because they all clerked for Supreme Court justices, and they handle the hardest cases throughout the country,” City Solicitor Renee Garcia, the city’s top lawyer, recently said of the New York-based firm Hecker Fink.

“And we went back and forth,” Garcia said. “Can we do this? Can we do this? What about this? What about that?”

» READ MORE: Philadelphia is halting the use of some diversity targets in city contracts as national DEI backlash grows

But when it came time to replace the city’s old program with a new policy, the Parker administration didn’t adopt all of the suggestions it received from Hecker Fink, internal administration documents obtained by The Inquirer show.

Hecker Fink attorneys suggested that Philadelphia replace its old contracting system with one that favors “socially and economically disadvantaged” businesses, the documents show. Parker instead created a new policy favoring “small and local” companies.

The differences between Parker’s program and alternatives the city could have adopted are highly technical but hugely important, attorneys and researchers who study government contracting told The Inquirer.

Critics say the new policy indicates Philadelphia took the easy way out in the face of conservative legal attacks, instead of fighting to preserve the spirit of the old program: promoting equity and diversity in city contracting.

Parker, however, is adamant that her “small and local” policy will achieve that goal, given that many small companies in the city are owned by Black and brown Philadelphians who have faced discrimination.

“Our small and local business program is our disadvantage program,” Garcia said in a written statement. “Considering counsel’s advice, the City determined that a small and local business program is the best way to incorporate social and economic disadvantage in a way that is objective, content-neutral, consistent, demonstrable, and could be stood up very quickly.”

The documents, which include confidential legal memos from Hecker and internal administration emails, show how top city officials attempted to navigate a new legal landscape after the U.S. Supreme Court in 2023 upended decades of jurisprudence on affirmative action and other race-conscious policies.

In early 2025, the Law Department provided a spreadsheet of line-by-line edits to the city’s Five Year Plan, a long-term budgeting document, to remove language about racial and gender-equity goals submitted by city departments.

When the Office of Community Empowerment and Opportunity, for instance, wrote that its mission involved “advancing racial equity,” the Law Department simply wrote, “remove racial,” as it did for several other agencies.

The edits signify a stark contrast to the city’s approach under former Mayor Jim Kenney, who in 2020, operating under very different circumstances, instructed all departments to craft comprehensive racial-equity plans.

There is no indication in the internal documents, which are primarily from 2024 and 2025, that Parker, the city’s first Black female mayor, or administration officials were eager to make those changes. And no city officials appeared in the documents to view the “small and local” policy as less aggressive or safer than the other options at Parker’s disposal when she replaced the city’s race-conscious contracting system.

But for Wendell R. Stemley, president of the National Association of Minority Contractors, the mayor’s choice was revealing.

“The cities that want to cave in on this issue without doing the hard work are just doing small [and] local, race- and gender-neutral,” Stemley said.

The documents obtained by The Inquirer show that Hecker recommended the city abandon its decades-old contracting system — responsible for allotting more than $370 million each year in city contracts to historically disadvantaged firms — due to the threat of potential legal challenges, as Parker and Garcia have said.

But they also show that the firm proposed replacing that policy with a system “setting mandatory goals for hiring socially and economically disadvantaged businesses or persons,” a race- and gender-neutral standard based on the federal Small Business Administration’s 8(a) business development program.

» READ MORE: Mayor Cherelle Parker defends ending racial diversity goals for Philly contracts: ‘Fighting the fight the way I know best’

Like the city’s contracting policies, the federal program previously had a stated policy of aiding business owners who were members of specific historically disadvantaged groups, such as women and Black people. But a 2023 federal court ruling in Washington, D.C., prohibited the SBA from presuming that members of those groups had faced barriers and required 8(a) applicants to demonstrate social and economic disadvantages.

The change allowed the program to pass legal muster by not favoring race or gender groups, while still allowing the agency to consider whether each applicant had faced discrimination on an individual basis.

Hecker, a litigation and public interest firm, suggested that Philadelphia adopt a similar approach.

“Adopting mandatory goals for hiring socially or economically disadvantaged individuals or businesses, defined along the same race-neutral lines as in the SBA’s 8(a) program, would likely be defensible if challenged,” Hecker lawyers wrote in a May 5 memo to the city.

An internal administration memo analyzing the city’s options on May 16 said that Hecker “recommended taking a look at the federal SBA 8(a) Business Development Program as a model.”

“This is a program to recognize small and disadvantaged businesses,” the city’s memo said, adding that the SBA defines socially disadvantaged individuals as “those who have been subjected to racial or ethnic prejudice or cultural bias within American society because of their identities as members of groups and without regard to their individual qualities.”

The executive order governing the city’s old minority contracting program, which aimed to award 35% of contracts to historically disadvantaged firms, expired at the end of 2024, and the city quietly ended it at some point earlier this year.

Parker did not announce that the program had been discontinued or that it would be succeeded by her “small and local” policy until an Inquirer story published last month revealed the change.

The key difference between Parker’s program and the 8(a) model is that the city’s new policy gives no explicit consideration for social disadvantage, prejudice, or cultural bias.

Garcia, the city solicitor, firmly pushed back against the notion that the city had ignored Hecker’s advice on reshaping its contracting landscape and contended that the “small and local” policy will result in equitable outcomes because many of Philadelphia’s small businesses are owned by people of color and have faced discrimination and other barriers to growth.

“The City’s small and local business program ... is more aggressive [than an SBA 8(a)-style policy] in that it is broadly applicable to small and local businesses, without creating unnecessary hurdles and confusion over the word ‘disadvantage’ or requiring onerous paperwork" for business owners to demonstrate their disadvantages, she said.

Although Parker’s new program is not exclusively available to disadvantaged firms, Garcia said it “has built-in elements of social and economic disadvantaged programs like the SBA 8(a) and [U.S. Department of Transportation] programs, such as utilizing SBA business size standard caps, examining years in business, examining employee count, and personal net worth considerations.”

But Andre M. Perry, a senior fellow at the Brookings Institution, said that while the city may be intending to help disadvantaged businesses with its “small and local” approach, specifying that goal in writing is important. The mayor’s executive order does not use the word disadvantage.

“They are different,” said Perry, the author of Black Power Scorecard, an examination of access to property, education, and business success. “The downside of any approach that does not use some criteria for being disadvantaged is that you can ignore them.

“There is a history that suggests that you absolutely need some process to identify groups of people who have been ignored by the city. It’s certainly not a given that you will touch those communities that have been denied opportunities in the past under ‘small and local,’” Perry said.

Parker’s move to abandon the city’s goal of prioritizing businesses owned by women and Black and brown people has become the latest flashpoint in the debate over the centrist Democrat mayor’s approach to the new political reality under President Donald Trump’s second administration, as critics like progressive City Councilmember Kendra Brooks have accused her of “caving” to Trump.

» READ MORE: Mayor Parker’s restraint with Trump is both calculation and gamble as the president escalates against blue cities

Parker, however, said the city had little choice but to end the old system following Students for Fair Admissions v. Harvard, a 2023 Supreme Court ruling that prohibited affirmative action in college admissions and has had widespread consequences for race-conscious government programs.

“There were people who told us that leadership meant justifying the [old] law,” Parker said at a recent news conference announcing the contracting policy changes. “They said, ‘Forget about the Supreme Court ruling. Philadelphia should just continue functioning and operating its program even if your Law Department and these genius lawyers at [Hecker] who have clerked for Supreme Court justices [recommended abandoning it.]’

“I want to take some advice from somebody to interpret the Supreme Court ruling right for some folks who have worked there.”

But Parker also said she felt that the city’s old system was “broken” long before the Harvard decision because it failed to achieve its goal of boosting the number of “Black and brown and women and disabled business owners” in Philadelphia.

Chief Deputy Mayor Vanessa Garrett Harley added that an administration review found that only 20% of the firms in Philadelphia’s registry of businesses owned by women, people of color, or people with disabilities were getting city contracts.

Parker, who as a lawmaker worked on policies aimed at boosting economic opportunities for minority- and women-owned firms, said she was optimistic that pivoting to a focus on “small and local” firms would produce better results.

Parker has not publicly discussed suggested alternatives to her new policy, including the 8(a)-style approach.

Several government contracting attorneys and researchers interviewed by The Inquirer said that both “small and local” and “socially disadvantaged” programs have downsides and that the success of either would primarily depend on how well it is executed. Details are scant on what the new policy will actually look like, making it difficult to evaluate the potential impact.

But experts said choosing a policy that seeks to favor disadvantaged businesses rather than any small Philadelphia firm would indicate the mayor was fighting to maintain the spirit of the old program, which sought to boost companies owned by women and people of color who have long been underrepresented among business owners and government contractors.

“Adopting an 8(a)-style program with language prioritizing contracts for socially disadvantaged businesses would signal a desire to maintain the pre-2024 understanding that cities can procure goods deliberately, intentionally, in different ways, with preferences from disadvantaged businesses,” said Brett Theodos, a senior fellow at the Urban Institute who has written a paper about how governments can use contracting to promote equity, despite recent court decisions. “Having an (8)a-style [program] would signal that the mayor wanted to try something more.”

Parker has defended her policy shift by invoking the bona fides of the Hecker attorneys who worked with the city. She and other city officials have noted that one clerked for liberal U.S. Supreme Court Justice Sonia Sotomayor and now works for the American Civil Liberty Union — “not somebody who would have had a conservative mindset,” as Garrett Harley put it. (Those comments later prompted the ACLU-PA to distance itself from what it described as the city’s “DEI rollback.”)

» READ MORE: ACLU slams Mayor Parker for invoking the organization’s name amid ‘DEI rollback’

To be sure, adopting a program in which contractors need to demonstrate social disadvantages, such as past instances of discrimination, has its own drawbacks.

Following the 2023 federal court decision, the SBA now requires 8(a) applicants to submit “social disadvantage narratives,” or essays, increasing administrative burdens and potentially favoring savvier contractors. The U.S. Department of Transportation has a similar essay-based approach.

“We have heard from our businesses it is already too hard to do business in Philadelphia; these kinds of additional requirements will exacerbate an already difficult and burdensome process,” Garcia said.

And despite being a race- and gender-neutral federal policy, the current 8(a) standard, which was adopted in President Joe Biden’s administration, may still be challenged in court.

The lawyers at Hecker Fink, however, believed that a Philadelphia version of the policy could withstand scrutiny.

“The next wave of conservative litigation in this space may target such programs, arguing that social or economic disadvantage is a proxy for race,” Hecker attorneys wrote in the May 2025 memo. “However, based on our assessment of the current legal landscape, the City would have a strong chance of defeating such challenges.”

Like many diversity, equity, and inclusion initiatives cast as discriminatory by the president, the 8(a) program has come under siege since Trump took office in January. On the agency’s website, hyperlinks to guidelines on how companies can demonstrate social disadvantage have gone dead, and the Trump administration has launched an audit of the program in the wake of an alleged bribery scheme.

None of those issues, however, address the question of whether a similar policy crafted for the city would be legally defensible. Despite Trump’s attacks, the current version of the 8(a) program’s focus on “socially disadvantaged” firms has not been overturned in court.

Regina Hairston, president and CEO of the African-American Chamber of Commerce of PA, NJ, and DE, said the organization will wait and see how Parker’s new policy shakes out.

“It’s too early to tell if the mayor’s policy is the right policy, but from what I’ve seen across the country, other cities are moving to [prioritize] small, medium enterprises,” Hairston said. “We don’t know if that’s the answer, but we will be monitoring it.”

Staff writer Anna Orso contributed to this article.