Chicago’s construction set-aside program extended for six years with revised

Chicago’s construction set-aside program for minorities and women will remain in place until December 2027 — with revised eligibility requirements that broaden the umbrella — thanks to a six-year extension advanced Friday.

Armed with a new “disparity study” mandated by a federal judge, the Chicago City Council’s Committee on Contracting Oversight and Equity agreed to extend one of the last surviving construction set-aside programs in the country but keep the set-aide percentages the same.

Through December 2027, the city will earmark 26% of all construction contracts for companies owned by minorities and 6% of those contracts for firms controlled by women.

“It’s not everything that everyone wants, and we definitely want it to be more. We want the limits to be higher. We want the percentages to go up,” said Ald. Jason Ervin (28th), chairman of the City Council’s Black Caucus.

“But we definitely thank [consultant Collette] Holt for the work that she’s done in laying out a path for us that is not only defensible but almost a guarantee. It gives us the best leverage possible to keep the program and keep growing small minority- and women-owned businesses.”

Ald. Gilbert Villegas (36th), chairman of the Hispanic Caucus, said he would like to “go a little bit further.” But Villegas said he was satisfied with the “baby steps” proposed by the mayor.

Those revised eligibility requirements include:

— Allowing minority-and women-owned companies to qualify for the program until they reach 150% of the size standard established by the U.S. Small Business Administration.

— Averaging gross receipts over a seven-year period, instead of five years.

— Narrowing factors used to calculate personal net worth by eliminating non-liquid assets that include real estate, retirement savings and the owner’s interest in non-certified businesses.

“Lifting the caps a little bit more and also gross receipts [gives] minority-and women-owned businesses the ability to compete as primes, which is what we all want – to see more … [of these] firms at the prime level, which in turn hire other minority-and women-owned businesses,” Villegas said.

Villegas initially proposed raising the caps on personal net worth and gross receipts to $10 million and $100 million respectively. After review five years of minority contracting and sub-contracting by the city, Villegas said Holt essentially told him, “maybe we can do that another time.”

Ald. Sophia King (4th), chairwoman of the Progressive Caucus, said she, too, “thinks we should increase our numbers.”

“Because of the `but for’ clause, because of the discrimination, African-America firms particularly haven’t been able to grow. In fact, I think the numbers would show that they’ve decreased,” King said.

“My experience has been, not that there’s not availability, but that majority firms are choosing to go to the suburbs and hire people that they know and have had…

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