Jan. 6—Twenty percent of Frederick's procurement spending in 2022 went to small, women-, or minority-owned businesses, as the city continues to develop a program to ensure more equitable spending in city business.

More than $8.8 million of the $44 million the city spent on procurement last year went to small businesses owned by women or minorities, according to data that members of the city's staff presented to the mayor and aldermen at a workshop Wednesday.

The tally did not include things such as payments of debt, taxes, support for nonprofit organizations, intergovernmental spending, benefits, insurance or land purchases.

The city has certified 154 small businesses and collected vendor information forms for more than 400 businesses — including 223 small and minority- or women-owned businesses that have done or will do business with the city — since January 2022, Rebecca DeSantis-Randall, the city's manager of equity and inclusion, said Wednesday.

Gathering the information is part of an effort to build a "really comprehensive list" of businesses for all sorts of procurement, DeSantis-Randall said.

The city commissioned a study in February 2020 to see whether a statistically significant disparity existed between the percentage of available and qualified minority- and women-owned businesses in relevant areas and the percentage of money the city spent on purchases.

A new policy approved in December 2021 included many of the recommendations, including setting up a small business reserve program, creating a minority- and women-owned business enterprise program, and requiring yearly reviews of the program's effectiveness.

The reserve program for small businesses applies to construction projects of less than $250,000 and all other procurement of more than $10,000.

For construction projects of more than $250,000, goals will be included in the contract based on the scope of work and the availability of minority- or women-owned subcontractors.

Bidders must meet the contract goals or provide proof of significant good faith efforts to meet the goal. The use of subcontractors will be a key part of the contract monitored by the city.

For the design of the city's new police headquarters, the goal of 40% use of MWBE subcontractors has been met, with the construction goal of 41% still to come, Director of Budget and Administration Katie Barkdoll said.

The city exempted 60 purchases from the policy in 2022. That included 23 because of sole-source supply issues, 16 because of an inability to get at least three quotes from small businesses, eight because an inability to find any small or minority-owned businesses to provide the product or service, and 13 for various other reasons, DeSantis-Randall said.

Many of the sole source exemptions were for buying equipment or software for which repairs by anyone other than the provider would void a warranty, she said.

Barkdoll said many of the exemptions for which at least three bids couldn't be found were products such as items for the city's water or wastewater treatment plants that require specific equipment.

Among changes suggested for the aldermen to consider was allowing an exemption to allow the city to engage in so-called "piggybacking," or joining with other municipalities or jurisdictions for contracts to buy large quantities of items such as road salt or ammunition for the firearms used by the police department.

Alderman Derek Shackelford said he thinks the city has made strides in the past year, and asked what the city has done to coordinate with other municipalities on finding appropriate vendors and companies.

The city has talked with a number of other municipalities about how they run their programs, and some have provided directories of contractors, DeSantis-Randall said.

The staff members asked for guidance on finding a balance for when it's OK to go over budget for an item by using a small business, and when the cheaper alternative from a larger company should be used.

The city knows it's going to be paying more for some items because of the program, Barkdoll said.

Alderman Kelly Russell said it's important to expand the use of small businesses, but they also have to be responsible stewards of public money.

Alderman Ben MacShane said he also believes it's appropriate to spend a little more to work with small businesses, but there has to be a threshold.

Mayor Michael O'Connor recommended the aldermen let the city's staff work on the numbers and come back with a recommendation.

"I think we certainly understand it's not about carte blanche," O'Connor said.

Follow Ryan Marshall on Twitter: @RMarshallFNP