Evanston council members Monday are scheduled to consider a staff proposal to stop letting contractors get full minority- and woman-owned business credits on contracts for pass-through transactions.
Corporation Counsel Nicholas Cummings told the city’s MWEBE Committee in September he wanted to change the ordinance to stop letting contractors meet the city goals by bringing on contractors who were not providing any real services — but instead were being used as pass-through entities for purchasing supplies from non-minority owned firms.
“This is somewhat shady on the low end, and potentially illegal on the upper end,” Cummings told the committee. But given the way the city’s ordinance is currently phrased, Cummings said, the city had no way to prevent it.
Under the proposed change, the ordinance would specify that a minority- or woman-owned business “does not perform a commercially useful function if its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed.”
The revised ordinance would also require that contractors perform at least 30% of a contract with its own work force to qualify for the full MWEBE credit. And it would specify that a contractor providing supplies that does not maintain a distribution warehouse or manufacturing operation would be considered a broker and receive only a 5% credit.
The changes also would give the city discretion to consider industry practices in determining whether a contractor is performing a commercially useful function.
Update 12/14/21: The proposed ordinance changes were approved for introduction on the City Council’s consent agenda Monday night.