Kansas City business owners voice concerns after minority contracting program ends

Kansas City is holding listening sessions with business owners to determine its next steps after a state-filed lawsuit forced the end of a program that awarded contracts exclusively to women- and minority-owned businesses.

The Minority and Women Business Enterprise (MWBE) program ended after a court deemed it discriminatory. The city’s Civil Rights and Equal Opportunity (CREO) department is holding three meetings around the city – one held Wednesday and two upcoming this week.

About a dozen business owners expressed fear and frustration over the program’s end.

“I don’t know where we fit or how this impacts us,” one owner said Wednesday.

“This is freaking terrifying,” said another. “It’s terrifying.”

The MWBE program, which started in 1981, was discontinued Aug. 24 as a result of the lawsuit.

Missouri Attorney General Catherine Hanaway called the end of the “indefensible” program “a major victory for equality” following the decision. “We are proud to secure this win for all hardworking Missourians who will no longer be denied the chance to be selected as contractors because of unlawful race- and sex-based quotas.”

The city also had a quota dictating what percentage of awarded companies belonged to specific race and sex groups, incentivizing investment in those businesses instead of others owned by white men.

But CREO Director Jaime Guillen said the city would now try to accomplish similar goals in different ways.

“A federal lawsuit or a local lawsuit doesn’t negate the impact of historic discrimination, and the city still has a place in trying to remediate that,” Guillen said at the meeting. “So, it may look a little different, but the goal and the mission is still the same.”

Kansas City has enacted an interim small business program (SBE) to offer race- and gender-neutral certifications while a permanent business program is developed.

“What comes next is a stronger, broader program that follows in the legacy of our groundbreaking work to build, sustain, and celebrate outstanding minority and women owned firms,” Kansas City Mayor Quinton Lucas said in the SBE program’s announcement. “Catherine Hanaway’s legal stunts may detract from the safety of Missourians, but will never break our commitment to every entrepreneur in Kansas City.”

The main disagreement among small business owners at the public session revolved around how a small business should be defined – by yearly income, personal net worth, number of employees or number of hours worked.

The next public engagement sessions will be held Sept. 16 at Northland Neighborhoods Inc. at 3 p.m. and virtually Sept. 18 at 10 a.m. A survey for businesses to give CREO feedback on the interim program to be implemented as part of the permanent plan is also active.

After the sessions and survey are completed, the collected feedback will be incorporated into the proposal, and a final draft is expected to be completed by the end of the month, Guillen said. The draft will then go to legal counsel for review before eventually being sent to the City Council for approval.

“This has been eye-opening for me,” Guillen said about the public session. “Obviously we have a perspective from within City Hall of how the program operates and how the program is received by the contractors who take advantage of it and utilize it. … But there is a very different experience when it comes to how professional services firms and construction firms deal with and navigate the program.”

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