Boston Mayor Michelle Wu kicked off a new effort Monday to support the development of minority-owned businesses in the hopes that these firms can ultimately win a quarter of city contracts issued every year.

Wu began focusing on minority business development early in her mayoral tenure. The city released new data Monday showing that the city awarded contracts valued at a total of $151 million to certified MBEs during the 2023 fiscal year, or about 14% of the city’s $1 billion total contracts. A year prior, minority businesses only won 6% of city contracts.

Wu and Chief of Economic Opportunity and Inclusion Segun Idowu said they are proud of that growth, but there is more to do.

“At the end of the day this about creating opportunities for our city residents,” Wu said at an event in Roxbury to kick off Boston's Supplier Diversity Week. The mayor said growing these businesses is “not only for the employees and the entrepreneurs that will benefit directly from some of the contracts and programs, but for every single member of our community who ends up seeing the ripple effect when businesses right here in Boston get the chance to grow to their fullest potential.”

Iduwo’s office launched a new $2.4 million business accelerator project Monday called the Supplying Capital and Leveraging Education program to provide training, advice and in some cases cash assistance to small businesses in several sectors — like snow removal, food and dining services, and general construction trades — where the city spends a lot of contract dollars. The program will help companies prepare to apply for city contracts, whether by beefing up their own business plans or locating investment capital.

A woman smiles and stands with her hands held in front of her as she speaks at a press conference.
Boston Mayor Michelle Wu speaks at an event to highlight the city's effort to increase contracts with minority-owned businesses on Oct. 30, 2023.
Paul Singer GBH News

Wu and several organizations that represent diverse businesses — including Amplify Latinx, the Asian Business Empowerment Council, and the Black Economic Council of Massachusetts — signed a compact pledging to work together to help minority suppliers apply for city contracts.

BECMA President and CEO Nicole Obi told GBH News there is not a shortage of minority contractors, but many of them have given up trying to get government contracts.

“After a long history of very little success of actually doing procurement with the city of Boston, there needs to be a trusted advisor to be part of the process to help these businesses engage with the city,” she said. “It’s about building the trust building the pathway to getting a return on the investment required to actually bid to do work with the city.”

Eneida Román, president and CEO of Amplify Latinx, said the new compact just formalizes the city’s relationship with the associations that are already working with disadvantaged businesses. She said her group and the other signatories have been meeting with the city quarterly to talk about ways to improve opportunities for disadvantaged businesses.

She said Amplify Latinx has its own certification process for companies to make sure they are ready to do business with the city, and “we want that to have value ... so that companies and government will say, ‘You know what? Amplify is behind them, so we can get behind them.'”

In 2021, the city published a study showing that over the prior five years, minority-owned firms had the capacity to fulfill about 6% of city contracts but only won about 2.5% of the work. Asian-owned businesses accounted for about half the city contracts won by minority firms.

The BECMA, Amplify Latinx and the Greater Boston Latino Network filed a discrimination complaint with the Department of Justice and Department of Transportation based on the finding that only 1.2% of city contacts went to Black- and Latino-owned businesses over that time period.

Shortly after taking office in November 2021, Wu launched a “sheltered market program” that allowed the city to designate a handful of specific contracts, beginning with cleaning services and event planning, that are reserved specifically for minority- and women-owned businesses.