Subject: 2024 City Of Oakland Disparity Study Final Report From: Office Of The City Administrator Recommendation: Receive An Informational Report On The 2024 City of Oakland Disparity Study Prepared By Mason Tillman Associates (MTA) Pursuant To Resolution No. 89058 C.M.S.

The 2024 City of Oakland Disparity Study Final Report, conducted by Mason Tillman Associates (MTA) for $600,000, reveals widespread and statistically significant discrimination in the City's contracting activities from July 1, 2016, to June 30, 2021. The study concludes that the City was an active and passive participant in disparities against Minority and Woman-Owned Business Enterprises (M/WBEs) in both prime contracts and subcontracts.

Key Findings on Contracting Disparities (2016-2021):

• Overall Spending: Of $486,705,907 in prime contracts, 27 contractors received 50% of the total dollars, indicating high concentration.
• Prime Contracts: M/WBEs were significantly underutilized across all four industries (construction, architectural & engineering, professional services, goods & services). For example, African Americans received only 0.30% of construction dollars and 0.78% of goods & services dollars.
• Subcontracts: Of $42,937,441 in subcontracts, M/WBEs were also significantly underutilized, with African Americans receiving 2.11% of construction subcontract dollars.
• Statistically Significant Disparities: Discrimination was found against African American males and Caucasian females in construction prime contracts; African American males in architectural & engineering prime contracts; and African American males, Asian American females, and Hispanic American males in professional services and goods & services prime contracts.

Program Efficacy & Systemic Issues:

• L/SLBE Program: The Local and Small Local Business Enterprise (L/SLBE) Program, in place for decades, failed to meet its 50% participation goal, with L/SLBEs receiving only 46.69% of prime contract dollars and 38.88% of subcontract dollars. 99 out of 128 (77.34%) waiver requests for L/SLBE requirements were granted.
• Discretionary Contracts: $198,826,717 was awarded through non-competitive methods (on-call, emergency, cooperative agreements). In these awards, M/WBEs received 11.68% (MBEs) and 5.04% (WBEs) of dollars, while non-M/WBEs received 84.84%. Public Works awarded 62 prime contracts over $250,000 without competitive bids, with non-minority males receiving 83.78% of the dollars and African Americans receiving 0%.

Federal Funding & Compliance:

• Federally Assisted Contracts: 442 contracts totaling $112,049,675 (23.02% of total City spend) were federally assisted. The City failed to comply with Title VI requirements (e.g., no signed nondiscrimination statement, no designated coordinator, no training). For USDOT-assisted contracts, Oakland-based Disadvantaged Business Enterprises (DBEs) received only 2.16% of dollars, far below the 17.6% statewide goal.
• COVID-19 Impact: CARES Act contracts disproportionately favored non-minority businesses outside Oakland. Analysis of business licenses showed a decrease from 62,456 (2019) to 55,977 (2022), with the largest declines in minority-populated zip codes (e.g., -15% in 94621, 94% minority residents).

Legal & Policy Implications: The study's findings meet the Supreme Court's strict scrutiny standard, providing a legal basis for the City to implement narrowly tailored race and gender-based remedies, despite California's Proposition 209. The report recommends a systemic overhaul of procurement policies, including enhanced certification processes, elimination of waivers, improved subcontractor payment verification, and targeted outreach to address the documented