New Orleans Contracting: 35 percent goal for disadvantaged firms

The City of New Orleans has set a firm target for its procurement system. All public spending, as well as private projects using public funding or incentives, must direct 35 percent of contract value to Disadvantaged Business Enterprises. This policy forms the core of the Equitable Business Opportunities program. The city states this goal ensures meaningful participation for firms owned by socially and economically disadvantaged persons.

The city’s policy is rooted in a commitment to nondiscrimination. It covers factors including social and economic disadvantage, race, color, gender, disability, and national origin. The program aims to increase the number of certified firms. It also seeks to raise the dollar amount of contracts awarded to these businesses. Officials want to create a level playing field where these firms can compete fairly for city work.

Certification under the State and Local Disadvantaged Business Enterprise program is not automatic. It is a race and gender neutral process. Applicants must prove their own social and economic disadvantage. This burden of proof requires showing that circumstances outside their control prevented their business from competing successfully against similarly situated firms.

Social disadvantage requires specific evidence. Applicants must list at least one objective factor, such as a physical handicap or military service. They must also document personal experiences of chronic social disadvantage. This disadvantage must have negatively impacted their entry into or advancement in the business world. Economic disadvantage is defined by a limited capacity to compete due to reduced capital and credit access.

Financial thresholds are strict. An applicant’s adjusted personal net worth cannot exceed $1.32 million. This figure follows federal regulations found in 49 CFR Part 2. The firm must also meet size standards set by the Small Business Administration. Annual gross receipts for the firm and its affiliates must stay under $23.98 million over the previous three fiscal years.

Ownership and control are key eligibility requirements. A socially and economically disadvantaged person must own at least 51 percent of the firm. The owner must have the power to direct management and policies. They must also possess managerial and technical competence related to the specific type of business the firm operates. The business must maintain independence from other firms to avoid compromised control.

Prime contractors must include a Comprehensive Plan for DBE Participation in their bids. This plan lists the specific DBE firms involved and the scope of their work. It states the percentage of the total project they will perform. If a contractor cannot meet the 35 percent goal, they must document good faith efforts. This includes holding pre-bid meetings, contacting certified firms, and advertising opportunities through city portals and trade publications.

The Office of Supplier Diversity monitors compliance and reports annually to the City Council. The 2025 report covers data from 2023 and 2024. It introduces a new visual for departments granted special accommodations based on the availability of certified firms. Firms can apply for certification through the city’s online system. Those already certified through the Louisiana Unified Certification Program receive provisional certification as a DBE for city contracts.