Minority and Women Business Enterprises, or MWBEs, are companies owned by socially or economically disadvantaged groups.
In 2009, a lawsuit over Houston's MWBE program forced the city to conduct a disparity study to compare the number of MWBE firms used in city contracts to the number of such companies available in the region. After completing the study, Houston officials reevaluated how they award contracts to minority and small business owners.
Houston Mayor Annise Parker says previously the city's goal was to award 14 percent of contracts to MWBEs.
"Today we established a new goal for contractors of 34 percent. But there's another number you should know, and that is that we are already achieving 32 percent. So we have had a strong and robust program."
Last year the city awarded $706 million in construction contracts, with minority and small businesses taking $229 million of the total.
Carlecia Wright is director of the Mayor's Office of Business Opportunity. She says her office worked with the Houston Contractors' Association, the National Association of Minority Contractors, the Women Contractors' Association and other stakeholders to develop the new requirements.
"There was a lot of dissention in the business community amongst these organizations. And so for the last couple years we really focused on transparency, including them in the process, and making sure that we can get buy-in. And so as the mayor stated earlier today, we've got a program that's a really good program. Not everyone gets what they want, but they get a good program that the city can be proud of, that the stakeholders can commit to."
Mayor Parker adds the new goals are designed to ensure historically underutilized companies will get a fair chance to compete for city contracts.
"This is not a program that necessarily reflects the population of Houston or the greater Hosuton area. It reflects, however, the capacity of the businesses in the area to meet the needs in public contracting."
Houston councilmembers unanimously passed the revisions to the MWBE program.
They also asked for greater accountability in making sure the city follows through on hiring MWBE contractors.