Disparity Study

	CONTACTS
	If you have any questions or comments regarding the 2022 City of Knoxville Disparity Study, please contact: Penny Owens Purchasing Agent City of Knoxville 865-215-2070 [email protected] Alternatively, you can contact the project team directly: Sherry Williams Project Manager, Miller3 Consulting, Inc. [email protected] Larry Scott Assistant Project Manager, Miller3 Consulting, Inc. [email protected] Please submit any comments that you may have about your experiences working in the local marketplace, working with the City, or about the disparity study. E-mail your comments directly to the project team at [email protected].
	MEETINGS
	The City and M3 Consulting kicked off the 2022 City of Knoxville Disparity Study in February 2022 with a series of virtual meetings with various City departments and representatives. M3 Consulting met with the City to introduce the study, answer questions, and begin the data collection process starting with assessing and understanding contracting and vendor data that the City maintains. Disparity Study Public Meeting Monday, Nov. 6, 2023 at 5 p.m. in the Public Works Service Center, 3131 Morris Ave.
	FILES
	A list of FAQs and a report from Miller3 Consulting, Inc. is available below along with presentations from the November 6, 2023 meeting: • Disparity Study FAQs [PDF] • City of Knoxville Disparity Study Executive Summary [PDF] • City of Knoxville Disparity Study Final Report [PDF] • Appendix A - Additional Tables [PDF] • Miller3 Consulting Presentation - Nov 6 meeting [PDF] • City of Knoxville Draft Implementation Plan Presentation - Nov 6 meeting

COMPREHENSIVE DISPARITY STUDY COMPLETED:

MAYOR KINCANNON PLEDGES QUICK ACTION

On Monday, Nov. 6, 2023, the City and its consultant presented the findings of a comprehensive Disparity Study, which aims to identify ways to make it easier for small businesses and those owned by minorities, women, service-disabled veterans and persons with disabilities to compete for and be awarded City contracts.

The public meeting was held at 5 p.m. on Monday, Nov. 6, at the Public Works Service Center, 3131 Morris Ave.

• 2022-23 Disparity Study [PDF]: Click here to read the analysis and recommendations by Miller3 Consulting. PDF file also includes Appendix. (16MB)

The Disparity Study, requested by Mayor Indya Kincannon and approved by City Council, was the first such top-to-bottom analysis in 25 years.

Over 21 months, almost 50 Disadvantaged Business Enterprise (DBE) owners were interviewed one-on-one by Miller3 or participated in group discussions. Another 3,284 DBE business owners were contacted and asked to participated in surveys.

“I’m very pleased that we took this initiative,” Kincannon said. “Bolstered with current data, national expertise and extensive business community input, I am prepared to take steps to make it easier for DBEs to attain a bigger share of City contracts.”

• View Full News Release


BACKGROUND INFORMATION


Background: What Preceded the 2022-23 Disparity Study?

The City of Knoxville’s Purchasing Division is responsible for all purchases for the City and Knoxville Area Transit (KAT). This public spending – on average, roughly $110 million per year – can help local businesses grow and prosper. 

Knoxville Mayor Indya Kincannon, City Council and City department heads agree: All businesses deserve to have a fair shot in competing for City contracts. The more reflective of the City’s demographic makeup, the better. Part of that commitment to a level playing field for business owners is outreach to Disadvantaged Business Enterprises, or DBEs. 

The City is committed to ensuring that businesses owned by minorities, women, service-disabled veterans, persons with disabilities, and small businesses have opportunities to compete for and participate in the City’s procurement of goods and services, professional services contracts, and construction contracts.

What barriers or hardships do DBEs face in trying to do business with the City?

Mayor Kincannon and City Council wanted to find out – and then take action to make it easier for DBEs to compete for City contracts.

In February 2022, the Mayor and Council hired Miller3 Consulting to do a top-to-bottom Disparity Study – the first such analysis in 25 years.

Miller3 met with almost 50 DBE owners, and another 3,284 DBE owners were asked to participate in surveys.

• 2022-23 Disparity Study: Click HERE to read the complete Miller3 Consulting Report

HOW WE GOT HERE

The City has worked for 20 years to establish and grow a DBE outreach program.

The City’s Small Business and Diversity Outreach Office communicates with DBEs about contracts coming up for bid and offers assistance in preparing proposals. The office also recommends strategies to small businesses, such as pairing up with other companies to be able to better compete jointly for a large contract.

Goals for contracting with DBEs are set annually, and tracked, and publicly recognized, for each City department.

The City’s Small Business and Diversity Outreach Office (SBDOO) produces a quarterly newsletter with information on both upcoming bid opportunities and recently awarded contracts.

The SBDOO also provides direct assistance throughout the year by meeting individually with DBEs interested in doing business with the City and by attending numerous business outreach events hosted by both the City and other entities.

And at Purchasing’s annual Business Opportunities Breakfast, business owners can get a full look ahead of upcoming projects, and talk with department managers, to be better prepared to make a competitive bid for near-future contracts.

Over the years, the City has increased significantly the size of its contracts with minority-owned businesses. In Fiscal Year 2016, minority-owned companies had been awarded just 1.97 percent of City contracts. But by FY20, that number had grown to 5.71 percent.

WHAT A DISPARITY STUDY IS - AND ISN'T

Miller3 collected and developed data to determine the disparities, if any, between availability and utilization of small-, minority-, and women-owned business for contracts awarded by the City.

Following analysis of the data collected and After extensive engagement with business owners, Miller3 is recommending immediate and short-term actions to remove barriers for DBEs – such as increasing the training and technical assistance that City staff and partner agencies provide to DBEs. And better communicating to DBEs when small contracts are coming up for bid.

The City currently sets goals for doing business with DBEs for each City department. Miller3 is recommending that the City continue the practice and that department heads see the DBE contract award metrics earlier in the fiscal year and more often. The idea is to provide more opportunity for the departments to take additional steps if they are not meeting their DBE goals.

Miller3 was tasked only with analyzing the amount of business the City conducts with DBEs and correcting business disparities that may exist.

The Disparity Study does not address larger societal disparity issues that are beyond the scope of City of Knoxville government. For example, it doesn’t look at geographic distribution of retail stores or medical facilities.

Evaluating whether or not a disparity exists in awarding of public contracts can be complicated. It is not as simple as comparing demographic numbers with the percentage of contracts.

For example, how many women- or minority-owned companies operate that install commercial electric circuitry, or perform accounting services, or provide gasoline or office supplies? And of those, which have available capacity to take on the City contracts, and which are already at full capacity? The disparity study first determines the availability of DBE firms within the relevant market and then does an analysis on the utilization to determine disparities.

ARE THERE LEGAL LIMITATIONS?

State and federal law, and court rulings, generally limit what local governments can do.

A key landmark case was the U.S. Supreme Court’s 1989 City of Richmond v. J.A. Croson Co. decision. The court held that a Richmond program, giving preference in awarding contracts to minority-owned businesses, was unconstitutional.

Miller3’s study for the City of Knoxville complies within the parameters of the Croson ruling.

However, it has been argued that, if disparities are identified, cities may have more latitude in addressing those disparities.

The Miller3 report recommends initiating immediate and shorter-term practices, and closely monitoring the results.

If the initial actions do not result in more contracts with DBEs, then longer-range more intensive actions could be taken – requiring private prime contractors working on City projects to show proof of their good-faith efforts to privately hire DBE subcontractors, as one example.


IMPLEMENTATION UPDATES


Please find continuous updates below as the City team implements the recommendations from the study shared with the public during the November 2023 meeting.




STUDY PROGRESS


The City will provide regular updates about M3 Consulting’s progress on the disparity study throughout its course. Please check back periodically for those updates.

April 2023 - M3 continues to analyze the data collected and anecdotal information collected during individual interviews and focus groups M3 conducted in the Fall of 2022. Details on a public hearing conducted by M3 to share your thoughts on doing business with the City will be coming soon.


NEXT STEPS


M3 Consulting will engage in the following tasks:

Community Engagement

• One on One interviews - The project team conducted a series of one-on-one interviews with both non-minority and minority business owners on their experiences doing business or attempting to do business with the City. - COMPLETED

• Focus Groups - The project team conducted a series of focus groups with both non-minority and minority business owners on specific topics related to their experiences doing business or attempting to do business with the City. - COMPLETED

• Public Hearing - The project team will conduct a public hearing in various locations throughout the City. During the public hearings, the project team will present information about the disparity study, answer any questions, and solicit participants for any verbal or written testimony that they would like to share about their experiences working in the marketplace. Further details including specific dates, times, and locations of the meetings will be available soon.

Data Collection

M3 Consulting will continue to work with the City to collect data on contracts that it awarded during the study period and the vendors that participated in those contracts.

Data Analysis

M3 Consulting has began analyzing data that it collected from the City. M3 Consulting will assess the subindustries that account for the majority of City contracting, the geographical area that is most relevant to the City's contracting, and the percentage of total contract dollars M/W/SDV/PWDBEs received on City's prime contracts and subcontracts during the study period.

Capacity Surveys

In the Late Summer/Early Fall of 2022, the project team conducted capacity email and telephone surveys with businesses in the relevant geographic market area that performed work that is relevant to City contracting. 

(If we contact your business, please participate in the community engagement and survey process to help ensure an accurate and comprehensive survey process!)


PROJECT TEAM


The project team for the 2022 City of Knoxville Disparity Study includes 4 firms that possess expertise directly relevant to conducting the study in a manner that meets the highest industry and legal standards.

Miller³ Consulting (M³ Consulting), prime consultant and minority-owned firm based in Atlanta.

Two firms—Southern Solutions and Leroy Thompson Consultants—are Women and Minority-owned businesses based in Knoxville.

Q & A Research—a national Hispanic-owned market research firm based in California that has previously worked with M3 Consulting on multiple disparity study efforts across the country.

Miller3 Consulting

Miller3 Consulting, successor firm to D.J. Miller & Associates, Inc., is a 2nd generation, minority-owned firm based in Atlanta, Georgia. M3 Consulting conducted the very first disparity study in the United States for Hillsborough County, Florida in 1988, which correctly anticipated the direction of the U.S. Supreme Court. Since then, M3 Consulting has remained on the cutting edge, creating industry-adopted methodologies, and going on to conduct over 140 disparity studies across the country on the local, state and federal level. Known as the “creators” of the disparity study industry, M3 Consulting has over 35 years of experience in inclusive policy initiatives, disparity study analysis and minority/women owned business enterprise (M/WBE) program design and development. The firm has conducted disparity studies in 9 of the 11 judicial circuits and engaged in litigation in 5 of the 11 judicial circuits, including the most conservative circuits: 1st, 2nd, 5th, 6th, and 11th.

The firm is proud of the fact that:
• NO M3  Consulting study has ever been overturned
• NO M3  Consulting study has been challenged since 1997

Sherry Williams
Project Manager, Miller3 Consulting, Inc.
404-827-9019
[email protected]

Dave Miller
CEO & Data Manager, Miller3 Consulting, Inc.
404-793-4687
[email protected]

Larry Scott
Assistant Project Manager, Miller3 Consulting, Inc.
404-827-9019
[email protected]

For more information about M3 Consulting, please visit www.Miller3Group.com.

Southern Solutions

Southern Solutions Market Research has over 22 years of marketing research experience specializing in nationwide recruiting and data collection. From pencil and paper surveys, customized online surveys, to turn-key focus groups anywhere you need them, they have conducted all types of research. Their experienced team of Project Managers is made up of former facility managers that have been through every aspect of the data collection process. As part of the M³ Consulting team, Southern Solutions will provide support on data collection and anecdotal research

Leroy Thompson Consultants

LeRoy Thompson Consultants is a premier resource for public and private development strategies, based in Tennessee and with vast networks and relationships coast to coast. LeRoy Thompson Consultant’s breadth of experience in commercial development and construction projects, public and private economic and social development initiatives, and civic and business relationships make us uniquely qualified to serve as a supporting resource and partner for a variety of needs that require informed decisions to achieve tailored results- tailored results to meet your very unique situation. As part of the M3  Consulting team, Leroy Thompson Consultants will provide support on race neutral analysis and anecdotal research.

Q & A Research

Q & A Research, Inc. is a full-service quantitative and qualitative marketing research provider, but also operates Q & A Focus Suites (a chain of focus group facilities), as well as Hispanic Perspectives (a division of the company dedicated to Hispanic research). Q & A Research opened its doors in 1991 and within a few short years became among the top 100 fastest growing firms in the Bay Area twice, as reported by the San Francisco Business Times. The company now has three locations across the country and employs over 120 employees. As part of the M3  Consulting team, Q & A Research will provide survey administration support. For more information about Q & A Research, please visit www.QAR.com.