Women-, minority-owned businesses lose extra preference points on San Antonio city contracts

SAN ANTONIO – Small businesses owned by women or people of color will get less of an advantage when they bid on some City of San Antonio contracts starting next year.

Supporters of the change said it’s time to give all small businesses the same leg up over larger companies. However, opponents worry it could reverse the city’s progress in opening doors for minority and woman business owners.

The San Antonio City Council voted 7-4 Thursday on several long-expected amendments to the Small Business Economic Development Advocacy (SBEDA) program. The changes will take effect Aug. 1, 2025.

The most controversial amendment was the program’s use of “preference points.”

Roughly three-quarters of the city contracts are low-bid jobs based solely on the bidder’s price to complete a contract. Most of the city’s construction jobs fall into that category.

The other quarter of jobs are what the city calls “discretionary” contracts, which also take into account considerations like a bidder’s qualifications, experience, and specific proposals for tackling a job.

Small businesses can get extra points when scoring for those jobs, and small businesses owned by women or people of color can get even more on top of that.

Under the amended program, no extra advantage will be based on race or gender. All small businesses will get that same level of additional points, up to 20 out of 100, no matter who the owner is.

City officials said it shouldn’t change much in the way of who wins a contract. When city officials looked at seven years’ worth of contracts, 97% of those won by minority- or women-owned businesses under the current scoring system would still have been won by them under the new system.

Another race and gender-based tool that city officials said has been more effective will stay in place: “contracting goals.” These goals will allow the city to require a particular portion of a contract’s workload to be done by women- or minority-owned businesses.

That means that even if a big company or a small business owned by a white man wins the primary bid, the winner would still have to sub out some of the work to meet the goals.

The city said it has to tailor the SBEDA program to the disparities it finds. Otherwise, it could get in legal hot water. Currently, minority- and woman-owned businesses are doing well regarding city contracts.

A 2023 disparity study found that 53% of all city contract payments in seven years went to minority- and woman-owned businesses, even though they only made up 25% of the available market.

“This has nothing to do with perceived threats of litigation,” Mayor Ron Nirenberg said.

However, the consultant who conducted the disparity study, Colette Holt, told reporters, “We think that these recommendations that we made will help to strengthen the program and the legal defense ability of the program.“

Councilman Jalen McKee-Rodriguez (D2), Councilwoman Teri Castillo (D5), Councilwoman Melissa Cabello Havrda (D6), and Councilman Manny Pelaez (D8) voted against the amendments. Most of them spoke against the change in preference points.

“Some of these businesses, yeah, they could be successful without the points, but again, let’s not forget how they got there in the first place,” said Cabello Havrda.

Castillo added, “Yes, it has worked for some, but there are still many small minority-owned businesses that are still looking for an opportunity to be successful.”

One of the other amendments to the program allows the city to include emerging small businesses in its contracting goals.

The city said it will continue to monitor the performance of women- and minority-owned businesses in case it needs to backtrack on some of the amendments.