PHILADELPHIA, PA - JULY 24: Workers prepare the podium ahead of the Democratic National Convention at the Wells Fargo Center, July 24, 2016 in Philadelphia, Pennsylvania.
Drew Angerer — Getty Images
By Jeremy Quittner
July 28, 2016

Republicans may have abandoned their big tent philosophy this year with a presidential candidate who belittles minorities and winks at white supremacists and foreign dictators. But for Democrats, winning minority voters is key to prevailing in the 2016 election.

One way the Democratic National Committee (DNC) and its affiliates hope to reach this critical voting block of non-white voters, who represent nearly a third of all eligible voters, is through contracts to minority–owned small businesses that provide everything from political consulting in local races to mugs and t-shirts at the Democratic convention.

Yet for years, Democratic party spending on its minority contractors has more or less mirrored federal spending, meaning only a fraction of contracts actually gets to such vendors. The party has recognized that this is a missed opportunity, and so during this presidential election cycle, it has amped up it contracting target goals for minority vendors at the convention in Philadelphia. In other areas, like political consulting, it still has work to do.

“The ‘election industrial complex’ is spending millions of dollars, and [Democrats] are not putting our money where our people are,” says Jessica Byrd, a principal or Three Point Strategies, an African–American woman-led political consulting firm in Washington, D.C.

There’s a lot of money at stake. During the 2016 presidential race, both parties are expected to spend at least $5 billion.

For the 2010 and 2012 election cycles, the main Democratic party committees (the DNC, Democratic Congressional Campaign Committee, and the Democratic Senatorial Campaign Committee) spent $1.1 billion , with $514 million going to political consultants, according to a 2014 report by PowerPacPlus, a nonprofit political advocacy group. A scant 1.7%, or $8.7 million, of that funding went to minority-owned consulting firms. While Byrd — who consults for PowerPacPlus — says the party has made improvements since the report came out, the relative lack of contracts is still a lost opportunity to connect with minority voters.

Realizing this liability, the DNC has tried to address the situation for its big showcase, the convention in Philadelphia, which it held last week.

 

In 2015, the Democratic National Convention Committee (DNCC) attempted to open up its diversity contracting opportunities. It did so by promising to award 35% of the more than $100 million it expects to spend in Philadelphia with minority contractors—a goal it says it has already met. (Its prior goal was 33%.) To get the word out that such contracts are available, the DNCC publicized its opportunities through local business town halls, and through outreach to local chambers of commerce, according to DNCC spokesman Lee Whack.

Five of the DNCC’s largest contracts for 2016 have gone to minority suppliers, including for housing, construction, insurance, and transportation, Whack says. He did not specify how many large contracts it typically awards, nor their dollar value.

One minority business owner who’s thrilled about his new opportunity is Luis Liceaga, the founder of Impact Dimension, a Hispanic-owned company based in Philadelphia.

The company snagged a lucrative contract, which Liceaga says is worth up to $500,0000, to produce all of the t-shirts, mugs, pins, and other convention paraphernalia that’s either sold on the premises or given away as swag by corporate sponsors.

“The DNCC did an amazing job way early in the game, reaching out and getting the word out that these contracts were available,” Liceaga says. The contract will be a big boost to his company and its 22 employees, with revenue of more than $6 million annually.

Still, not everyone is happy. Vectour Group, a black-owned transportation company in Atlanta that won contracts to provide bus services for the 2008 and 2012 conventions in Denver, Colorado and Charlotte, North Carolina, respectively, lost out this year to a firm it had partnered with four years ago.

“I am disappointed because we love working with the DNC, and being a part of the event,” says Reginald Haslam Jr., the company’s president and chief executive. Haslam says he estimates this year’s contract is worth as much as $9 million, an amount DNCC did not confirm as it says it does not discuss contract amounts.

Lack of the additional revenue will scuttle his plans for hiring five more full-time employees this year, Haslam says. It will also affect the local subcontractors he typically works with for such events, who provide drivers, vehicles, and event expertise. The company has 20 full-time employees and annual revenue of about $1 million.

“We have heard from several local minority [transportation] vendors in Philadelphia who did not feel as if they were included as they had anticipated,” Haslam says.

To be sure it’s the nature of contracting that businesses sometimes lose opportunities they’ve had for years. In this case, Vectour lost out to Event Transportation Associates (ETA), a transportation company for which it served as subcontractor during the Democratic convention in 2012. At the time, ETA was neither a woman-owned nor a minority-owned firm.

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In January 2016, ETA, based in Kingston, Washington, became a woman-owned firm when Janie Hollingsworth purchased a majority share of the company from its parent Shuttle Smart, whose ownership structure is unclear. ETA currently lacks a certification as a woman–owned enterprise, Hollingsworth said in an email, although it is in the process of getting one. Such certifications are usually necessary to qualify for state, federal, and corporate contracts designated for minority groups.

Hollingsworth described her motivation for taking on the contract herself.

“I really have a vision to grow the company in this vertical and that means relying less on other event management companies that essentially are competitors to ETA,” Hollingsworth said, adding she has subcontracted to a woman-owned temporary staffing firm, and minority-owned bus companies that are providing transportation for the convention.

Like the DNC, diversity is a goal toward which ETA is also working.

“I recognize that developing and retaining the best qualified employees through diversity and inclusion enhances ETA’s work environment and is essential to ETA’s long-term success,” Hollingsworth says.

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