New Orleans Sets 35% Contracting Target for Disadvantaged Firms

The City of New Orleans has established a standing goal that 35% of all public spending goes to socially and economically disadvantaged businesses. This target applies to both direct government purchases and private projects that receive public funding or incentives. The policy is part of the Equitable Business Opportunities (EBO) Program, which aims to increase the number of qualified Disadvantaged Business Enterprises (DBEs) in the local market.

For a firm to qualify as a DBE under the State and Local Disadvantaged Business Enterprise (SLDBE) Program, it must meet specific financial and ownership criteria. The program is race and gender neutral, meaning applicants must prove their own social and economic disadvantage. A key financial threshold is adjusted personal net worth, which must not exceed $1.32 million. Additionally, the business must have annual gross receipts under $23.98 million over the previous three fiscal years.

Ownership and control are strict requirements for certification. The firm must be at least 51% owned by a socially and economically disadvantaged person. That owner must also have the power to direct the company's management and policies. The business cannot be so tied to another entity that its independence is compromised. Firms certified by the Louisiana Unified Certification Program (LAUCP) are granted provisional DBE status by the city.

Prime contractors bidding on city work face mandatory compliance steps unless a waiver was granted before the solicitation was released. They must submit a Comprehensive Plan for DBE Participation with their bid. This plan must list the specific DBE firms they intend to hire, the scope of work those firms will perform, and the percentage of the total project value allocated to them. A letter from the DBE on their own letterhead acknowledging the partnership is also required.

If a contractor cannot meet the 35% goal, they must document Good Faith Efforts. This includes attending pre-bid meetings, contacting certified firms on city lists, and advertising subcontracting opportunities in trade publications and on the city's website. Contractors must keep records of all contacts, including names, addresses, and the reasons for any rejections. These records must be submitted on the DBE Compliance Form 2.

The Office of Supplier Diversity provides an annual performance report to the City Council. The latest data covers the 2023 to 2024 reporting period. The scorecard assigns letter grades to city departments based on their progress toward the 35% contracting goal. The evaluation includes both ongoing and closed contracts, not just new commitments made in the current year.

Firms seeking certification must apply online through the city's Disadvantaged Business Enterprise System. Interested businesses can find open bids and subcontracting opportunities by viewing the Capital Projects Look-Ahead report or checking the advertised subcontracting opportunities page. The city maintains a directory of certified SLDBE firms for public access.