Bad news for women-owned businesses

April 1, 2009 5:18:33 PM PDT
A big change is underway in the way the city of Houston awards construction contracts. Companies owned by women will no longer get preferential treatment.[SIGN UP: Get headlines and breaking news sent to you]

This means that women-owned businesses will now have to compete in a larger pool for those contracts.

This applies strictly to construction contracts and not professional services, goods or commodities. The city council voted to amend its affirmative action rules as part of a lawsuit settlement.

Under the existing rules, construction contracts were awarded as follows: 14% to minority owned businesses; 5% to woman owned businesses; and 3% to small businesses.

Under the new settlement, minority-owned businesses stay the same at 14%; Small businesses increase to 8%; and women-owned businesses are left out of the equation.

The rules will be in effect until a disparity study is completed by the end of the year, but some council members suggest now might be the time to do away with affirmative action rules and replace them with rules which would help small businesses. That's not what one female business owner wanted to hear.

"I would be very concerned about that. We would not have an MWBE program if by through the natural process, minority-owned businesses and women-owned businesses were getting some of the city's business," said small business owner Connie Barnaba.

Houston City Council Member Toni Lawrence said, "We should have had the confidence to say this mayor could set up a small business program that would take in those people that are losing their jobs today and yesterday and make leaders of them, help their businesses be successful, and include everybody."

That study should be completed by the end of the year. The city council will look at the recommendations there and determine whether or not any more rules need to be changed.

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