Philly DEI panel endorses Parker’s contracting overhaul as Black business owners warn of consequences
Parker said new national legal precedent made the city’s practices vulnerable to court challenges. Council’s committee agreed.
Nearly a year after Mayor Cherelle L. Parker announced that Philadelphia would move away from using its long-held diversity goals in awarding public contracts, a City Council committee on Monday formally recommended that the city codify the change.
However, several corporate leaders who advised the special committee’s work testified during a hearing that the shift away from race- and gender-conscious contracting would set the city back.
Craig T. Williams, founder of the construction firm Pride Enterprises, said the city’s move to provide contracting advantages to businesses certified as “small and local” — instead of to businesses owned by women, minorities, and people who are disabled — will make it harder for Black-owned firms like his to grow.
“While the new terminology is intended to retain support for diverse businesses, it also removes the intentional mechanisms that once created predictable access for them,” Williams said. “The shift in terminology will likely result in an increase in opportunities for non-diverse firms, widening the disparity gap.”
And Michael Brown, CEO of The 360 Group, a consulting firm, said “minority businesses across Philadelphia are witnessing a catastrophic erosion of margins, pushing foundational enterprises to the brinks of collapse.”
He cited data showing that the state government awards only a small portion of its contracts to Black- and Hispanic-owned businesses.
“Philadelphia is slowly sleepwalking down the same exact destructive path,” he said.
Council’s Special Committee on City and Private Sector Diversity, Equity and Inclusion Policies, which is led by business community leaders, was convened in 2024 by Council President Kenyatta Johnson. The group was charged with drafting recommendations to strengthen the city’s DEI policies and address barriers faced by women, people of color, and people with disabilities who own businesses.
In the midst of the committee’s work, Parker’s administration last year quietly eliminated the city’s goal of awarding 35% of its government contracts to those businesses.
The city also stopped assigning participation “ranges” to publicly funded projects, meaning contractors are no longer given benchmarks for the amount of dollars that should go to subcontractors and suppliers owned by people of color, women, and people who are disabled.
The change came amid a broader dismantling of affirmative action-style programs at the federal level led by President Donald Trump’s administration. Parker said new national legal precedent made the city’s practices vulnerable to court challenges, so the administration will now aim to give preference to businesses that are certified as small and local.
On Monday, Council’s committee agreed. Its report recommends the city move to a more legally defensible, race-neutral framework like the one Parker’s administration is already building. The committee also recommended that the city adopt more aggressive preferences to give those businesses clear advantages when they’re bidding for city dollars.
Still, members of the committee said Monday that they have concerns about implementation.
Michelle Flamer, a former longtime attorney for the city, said she is worried that the city will stop collecting demographic data on businesses that bid for contracts.
“We’re in a time period in this country of great distress, of really unbridled racist behavior, but this will not last forever, and we have to continue to collect this data so we will be prepared for a new day,” she said. “But if we don’t have it, we won’t be able to hold anyone accountable.”
And Harold T. Epps, the city’s former commerce director who co-chaired the committee, said he’s concerned that providing advantages to small businesses — which are defined as those which bring in less than $47 million over a three-year period — effectively puts a cap on how a business can grow.
“It seems the city has fallen into the same old trap of predetermining how large a business that has any elements of diversity can be,” he said.
Nadir Jones, the director of the city’s Office of Business Impact and Economic Advancement, said the Parker administration is exploring implementing a “middle market” program for companies that “graduate” out of the small business classification.
But, Jones said, “we’re not there yet.”
