City of Somerville Disparity Study Executive Summary — File 25-0583

SOMERVILLE, MASSACHUSETTS 2025 DISPARITY STUDY EXECUTIVE SUMMARY 235 Peachtree St NE Atlanta, GA 30303 p: [phone removed] | f: 404-584-973 gspclaw.com

Griffin & Strong Project Team • Rodney K. Strong, Co-Project-Executive • Delmarie Griffin, Co-Project Executive • Dr. Imani Strong-Tucker, Chief Operating Officer • Dr. J. Vincent Eagan, Principal Investigator • Dr. Gregory Price, Senior Economist • David Maher, Legal and Policy Analyst • Michele Clark Jenkins, Director of Research and Methodology • Hema Dass-Narinesingh, Sr. Manager, Consulting • Trinity Williams, Project Management Coordinator • Kevin Vega, Deputy Project Manager • Kalvin Walden, Data Analyst • Susan G. Johnson, Project Administrator • Dr. George White, Anecdotal Analyst • Stephanie Moore, Anecdotal Interviews • Creative Research Solutions, Survey of Business Owners

The City of Somerville, Massachusetts (“City”), along with the Town of Brookline (“Town”), contracted with Griffin & Strong (“G&S”) to conduct a Disparity Study to determine the effectiveness of the current Disadvantaged Business Enterprises (“DBE”) and Small Disadvantaged Owned Business Enterprises (“SDB”) resulting in a quantifiable, statistically significant variance of availability versus utilization of such businesses in government purchasing. The Study analyzes the procurement of Construction, Architectural & Engineering Services (“A&E”), Professional Services, Other Services, and Goods (“Industry Categories”) from July 1, 2017, through June 30, 2022 (“Study Period”). SDBs include small firms owned by minorities, women, disabled persons, and LGBTQ+ persons. G&S was further to recommend modifications and adjustments, if necessary, that are in compliance with the current law. Additionally, the analysis will determine the Utilization of Small Business Enterprises and Disadvantaged Business Enterprises (DBEs), which is inclusive of minorities, women, disabled persons, and LGBTQ persons, relative to the Availability of such business. G&S shall provide the City with current legal guidance not only relative to new legislation, policies and procedures to meet any constitutional mandates, but also the programmatic needs of the constituencies of the Town. A further objective is to recommend programmatic recommendations to remedies to assist in addressing any identified disparities and reduce or eliminate any barriers that adversely affect the participation of DBEs and SDBs, should they exist. Governmental entities across the country authorize Disparity Studies in response to City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989) and subsequent cases in order to determine whether there is a compelling governmental interest for the creation or continuation of remedial procurement programs, based upon race, gender, and ethnicity. For the legal requirements of Croson and its progeny to be satisfied for any race or gender-based activities, G&S must determine whether there is a factual basis for the remedial program. A. Scope of Work I. INTRODUCTION

B. Study Objectives The principal questions of this Study were: • Is there a statistically significant disparity in the relevant geographic market between the percentage of qualified DBEs and SDBs willing and able to provide goods or services to the City of Somerville in each of the Industry Categories and the percentage of dollars spent by the Town and the City with such firms (whether as prime contractors/consultants or subcontractors/consultants)? • If a statistically significant disparity exists, have factors other than race and gender been ruled out as the cause of that disparity, such that there can be an inference of discrimination? • Can the disparities be adequately remedied with race- and gender-neutral remedies? • If race- and gender-neutral remedies are not sufficient, does the evidence from the Study legally support a race- and/or a gender-conscious make remedial program • Are the proposed remedies narrowly tailored to the strong basis in evidence from the Disparity Study?

C. Technical Approach • In conducting this Study and preparing its recommendations, G&S followed a carefully designed work plan that allowed Study team members to fully analyze Availability, Utilization, and Disparity with regard to DBE and SDB participation. The final work plan consisted of, but was not limited to, the following major tasks: • Establishing data parameters and finalizing a work plan; • Legal analysis; • Reviewing policy and procurement processes; • Collecting electronic data, inputting manual data, organizing and cleaning data, and filling any data gaps; • Conducting geographic and product market area analyses; • Conducting Utilization analyses; • Determining the Availability of qualified firms; • Analyzing the Utilization and Availability data for disparity and statistical significance; • Conducting private sector analysis including credit and self-employment analysis; • Collecting and analyzing anecdotal evidence; • Establishing findings of fact regarding the existence and nature of marketplace discrimination and/or other barriers to DBE and SDB participation in the City’s contracts; and • Preparing a final report that identifies and assesses the efficacy of various race- and gender- neutral and narrowly tailored race- and gender-based remedies if indicated by the findings.

6 D. Historical Development of the Relevant MWBE Programs Disparity studies are the product of federal case law; more specifically, the decisions of the United States Supreme Court in City of Richmond v. J.A. Croson Company, 488 U.S. 469 (1989), Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995), and their progeny. In Croson, the Court stated that strict scrutiny was the standard of judicial review for any race- conscious program. In that, the state or local governmental entity would have to demonstrate both a compelling state interest by a factual predicate that identifies discrimination and a narrowly tailored remedy to the findings of any discrimination. Disparity studies have become an important tool for governmental entities in deciding whether to enact Minority business programs or legislation, and in justifying existing programs or legislation in the face of constitutional challenge. E. The Supreme Court’s Decision in City of Richmond v. Croson To fully appreciate the usefulness of disparity studies for development and defense of Minority business programs, an overview of the Croson decision is helpful. Laws that, on their face, favor one class of citizens over another, may run afoul of the Equal Protection Clause of the Fourteen Amendment. DBE/MBE/WBE programs and legislation are among the types of laws invoking such concerns. Depending on the nature of the differentiation (e.g., based on race, ethnicity, gender), courts evaluating the constitutionality of a Minority business program will apply a particular level of judicial scrutiny. As explained at greater length below, race- based programs are evaluated under a “strict scrutiny” standard, and gender-based programs may be subject to strict scrutiny or under a less-rigorous “intermediate scrutiny” standard, depending on the federal circuit within which the entity sits. In its Croson decision, the Supreme Court ruled that the City of Richmond’s Minority Business Enterprise (hereinafter “MBE”) program failed to satisfy the requirements of “strict scrutiny.” “Strict scrutiny” review involves two co-equal considerations: First, the need to demonstrate a compelling governmental interest; Second, implementation of a program or method narrowly tailored to achieve/remedy the compelling interest. In Croson, the Supreme Court concluded that the City of Richmond failed to show that its Minority set-aside program was “necessary” to remedy the effects of discrimination in the marketplace.

7 In fact, the Court found that the City of Richmond had not established the necessary factual predicate to infer that discrimination in contracting had occurred in the first place. The Court reasoned that a mere statistical disparity between the overall minority population in Richmond (50 percent African American) and awards of prime contracts to Minority-Owned firms (0.67 percent to African American firms) was an irrelevant statistical comparison and insufficient to raise an inference of discrimination. Addressing the disparity evidence that Richmond proffered to justify its MBE program, the Court emphasized the need to distinguish between “societal discrimination,” which it found to be an inappropriate and inadequate basis for social classification, and the type of identified discrimination that can support and define the scope of race-based relief. Specifically, the Court opined that a generalized assertion of past discrimination in an entire industry provided no guidance in determining the present scope of the injury a race-conscious program seeks to remedy and emphasized that “there was no direct evidence of race discrimination on the part of the City in letting contracts or any evidence that the City’s prime contractors had discriminated against minority-owned subcontractors.” Accordingly, the Court concluded there was no prima facie case of a constitutional or statutory violation by anyone in the construction industry that might justify the MBE program. Justice O'Connor nonetheless provided some guidance on the type of evidence that might indicate a proper statistical comparison: [W]here there is a significant statistical disparity between the number of qualified minority contractors willing and able to perform a particular service and the number of such contractors actually engaged by the locality or the locality's prime contractors, an inference of discriminatory exclusion could arise. Stated otherwise, the statistical comparison should be between the percentage of MWBEs in the marketplace qualified to do contracting work (including prime contractors and subcontractors), and the percentage of total government contract awards (and/or contractual dollars paid) to Minority firms. The relevant question among lower federal courts has been which tools or methods are best for such analysis; a matter addressed in the detailed discussion of statistical comparison provided below. Additionally, the Court in Croson stated that identified anecdotal accounts of past discrimination also could provide a basis for establishing a compelling interest for local governments to enact race-conscious remedies. However, conclusory claims of discrimination by City officials, alone, would not suffice, nor would an amorphous claim of societal discrimination, simple legislative assurances of good intention, or congressional findings of discrimination in the national economy. In order to uphold a race- or ethnicity-based program, the Court held, there must be a determination that a strong basis in evidence exists to support the conclusion that the remedial use of race is necessary.

8 Regarding the second prong of the strict scrutiny test, the Croson Court ruled that Richmond’s MBE program was not narrowly tailored to redress the effects of discrimination. First, the Court held that Richmond’s MBE program was not remedial in nature because it provided preferential treatment to minorities such as Eskimos and Aleuts, groups for which there was no evidence of discrimination in Richmond. Thus, the scope of the City's program was too broad. Second, the Court ruled that the thirty percent (30%) goal for MBE participation in the Richmond program was a rigid quota not related to identified discrimination. Specifically, the Court criticized the City for its lack of inquiry into whether a particular Minority business, seeking racial preferences, had suffered from the effects of past discrimination. Third, the Court reasoned that the City failed to properly consider race-neutral alternatives to remedy the under-representation of minorities in contract awards. Finally, the Court highlighted the fact that the City’s MBE program contained no sunset provisions for a periodic review process intended to assess the continued need for the program. Subsequent to the decision in Croson, the Supreme Court and the federal Circuit Courts of Appeal have provided additional guidance regarding the considerations, measurements, information, and features surrounding a DBE/MBE/WBE program which will assist in protecting the program from constitutional challenge under a strict scrutiny analysis. F. The Supreme Court’s Recent Decision in Students for Fair Admissions v. Harvard College In 2023, the Supreme Court issued its opinion in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, which dealt with affirmative action in college admissions. The decision in Students for Fair Admissions is limited, for now, to college admissions programs that use race as a determinative factor for admission without basing such use on a real-world factual predicate. Though the opinion does not directly address affirmative action in public procurement, there are some aspects of the court’s decision that may apply to or influence future cases in that context, so a brief overview is offered here. As an initial matter the Supreme Court cited, with approval, the jurisprudential framework that supports disparity studies and, by extension, appropriately designed and implemented MWBE programs. In essence, the court reaffirmed the legal infrastructure (including methodologies) that grants viability to disparity studies and enforceability to MWBE and SBE (Small Business Enterprise) programs across the nation, with reference to Croson, Adarand, and their progeny.

9 Further, when the court provided its reasoning for striking down the admissions programs/processes at Harvard and at the University of North Carolina, it cited constitutional concerns or infirmities that either have no application in the public procurement context or which have already been addressed methodologically as a result of prior federal appellate decisions. On the issue of the “compelling state interest” (and supporting factual predicate), the court in Students for Fair Admissions concluded that the schools’ stated “diversity” aims: “(1) training future leaders in the public and private sectors”; (2) preparing graduates to ‘adapt to an increasingly pluralistic society’; (3) fostering innovation and problem solving; (4) preparing engaged and productive citizens and leaders; and (5) enhancing appreciation, respect, and empathy, cross-racial understanding, and breaking down stereotypes[,]’” were insufficiently “coherent for purposes of strict scrutiny.” The Court focused its criticism on the immeasurability of these goals and the difficulty in assessing when such goals are achieved in ruling that this first prong of the strict scrutiny test was not met. In contrast, the compelling state interests of remedying the present effects of past discrimination and of avoiding current discrimination in the context of governmental procurement are well-accepted in the existing case law. On the issue of narrow tailoring, the court in Students for Fair Admissions concluded that the schools’ policies/programs are not sufficiently narrow, in large part because there is no express endpoint or measurable benchmark that would signal that the program is no longer needed. This element of narrow tailoring has been an established part of public procurement case law for many years and express “sunset clauses” represent current best practices in this area.

II. EXECUTIVE SUMMARY OF FINDINGS AND RECOMMENDATIONS This Executive Summary presents the findings and recommendations resulting from the Disparity Study for the City of Somerville, Massachusetts (hereafter the “City”) related to the Industry Categories of Construction, Architecture & Engineering (A&E), Professional Services, Other Services, and Goods during the Study Period of July 1, 2017 – June 30, 2022 (FY2018-FY 2022).

This Executive Summary presents the findings and recommendations resulting from the Disparity Study for the City of Somerville, Massachusetts (hereafter the “City”) related to Construction, Architecture & Engineering (A&E), Professional Services, Other Services, and Goods for July 1, 2017 – June 30, 2022 (FY2018-FY 2022). As outlined in the Legal Analysis, the courts have indicated that for race-based or gender-based preference programs to be maintained there must be a strong basis in the evidence for the establishment of such programs or the continuation of existing programs. As the detailed findings below will demonstrate, G&S found that the City had underutilization of Disadvantaged Business Enterprises (“DBE”), Minority Business Enterprises (“MBE”) and Woman Business Enterprises (“WBE”) in the (5) Industry Categories analyzed, which establishes the factual predicate necessary to support race- and gender-conscious remedies, with authority from the Commonwealth, along with race- and gender-neutral efforts. The exceptions will be discussed in the findings below. G&S conducted a regression analysis as part of the Study and found that there was evidence to indicate disparities by race, ethnicity, or gender status of the firm owners even after controlling for capacity and other race- and gender-neutral factors. The statistical evidence found support in the anecdotal evidence of the experiences of firms in the Relevant Market Area which has been defined as the Boston-Cambridge-Newton MSA (Metropolitan Statistical Area). A. Findings 1. Purchasing Policies, Practices, and Procedures Findings This section presents findings from a comprehensive review of the City’s purchasing policies, including staff interviews to examine the written policies, Commonwealth laws, and the application of Commonwealth laws by the City of Somerville. FINDING 1: A&E SERVICES While state laws have exempted some services from competitive sourcing, the City of Somerville’s operating policy, with limited exceptions, is to seek competitive offers even for exempt services. This is particularly true for A&E services. Service contracts with architects, engineers or related professionals are exempt from M.G.L. c. 30B (1)(b) (32A). Under the Commonwealth of Massachusetts’s designer selection law (M.G.L. c. 7C, §§ 44-58), there is a mandated advertised, competitive, qualifications-based selection process for choosing designers for public building projects. The City of Somerville’s operating policy is to competitively source all design professionals even when the designer selection law does not apply. The City provides some A&E services through the form of blanket contracts, utilizing the qualifications-based selection procedures outlined in the designer selection law. 11

FINDING 2: CONSTRUCTION SERVICES Blanket contracts are applicable to individual project tasks with construction labor costs up to $50,000. Blanket contracts create a roster of pre-approved vendors in specific trade areas. This enables the City to request quotes from at least three vendors on this list for separate construction tasks as they emerge. The City has competitively sourced and used on-call contracts, a type of blanket contract, for a range of construction trades, including but not limited to painting and plumbing. In Massachusetts, awarding authorities have the option to use construction management at-risk (CMAR) and design-build approaches for certain project types. These methods are applicable when the estimated construction cost is $5 million or more. The City has used CMAR but not design-build as construction procurement methods during the Study Period. Massachusetts employs a “filed sub-bid” system. Followed by the City where applicable, for selecting subcontractors on certain public projects. A filed sub-bid system is a process used for public building contracts exceeding a certain cost. Under M.G.L. c.149, municipalities must solicit separate bids for 18 specified subtrade categories, distinct from the project's general bid. Prequalified subcontractors then submit their bids prior to the due date for general bids, which are then reviewed and filed by the municipality. Each prequalified general contractor selects one sub- bidder in each industry category to include in their general bid. This system applies when: • The estimated cost of construction exceeds $150,000. • The subcontractor's work is within a specified category. • The subcontract cost is over $25,000. 12

FINDING 3: BONDING AND INSURANCE A 100% performance bond is required for building projects over $150,000. City procurement staff did not report significant vendor concerns about bonding requirements. City procurement staff also did not report significant vendor concerns about insurance requirements. Most complaints have been from small vendors, and less so recently. In the G&S Survey of Business Owners, when asked if bonding was a barrier to their firm obtaining work with the City, 8% selected performance bond requirements and approximately 10% selected bid bond requirements as barriers.2 However, out of 33 African American owned firms, 21.2% selected bid bond requirements. When asked about insurance requirements, 7.1% of survey respondents identified it as a barrier to their firm obtaining work with the City.3 FINDING 4: PROMPT PAYMENT In Massachusetts, for progress payments directed to the prime contractor on a public project, the payment is due within 15 days following the submission of an appropriate payment request. Final payments to prime contractors are due within 65 days after the project has reached substantial completion. In the G&S Survey of Business Owners, 22,2% of African American, 50% of Asian American, 52% of Caucasian American, and 39.3% of Women respondents reported receiving payments from the City between 61 – 90 days after submitting their invoices.4 Final payments to subcontractors are due within 65 days following the substantial completion of the work performed by that specific subcontractor. Massachusetts state law does allow for the direct payment of subcontractors by local agencies. In the event of delayed or unjustly withheld payments in public construction projects in Massachusetts, the outstanding amounts are subject to interest penalties. 13

FINDING 5: VENDOR REGISTRATION Procurement managers routinely build a list of prospective bidders for any given procurement process and notify that list of vendors about the contracting opportunity and share the bid package with everyone on the list. The City procurement website presents current bids and opportunities, a registration form, and recently posted a buying plan for upcoming bid opportunities. The City posts solicitations on the State COMMBUYS system, as required by statute for formal procurement. COMMBUYS is the Commonwealth’s electronic procurement system. FINDING 6: CERTIFICATION The City of Somerville has a policy of recognizing and seeking suppliers that are certified as MBE, WBE, VBE, etc. by other widely recognized agencies, including the SDO and City of Boston. The City does not have its own distinct certification program. Table 1 shows the number of certified firms located in the City. The City’s Economic Development Department created a Somerville Diversity Catalog to serve as “a marketing tool for businesses that wish to offer their services and/or products to individuals, other businesses, and institutions within the Greater Boston Area.” Table 1: Certified Firms Located in the City of Somerville, 2025 Somerville Disparity Study Business Classification Number in Directory Minority Business Enterprise 20 Woman Business Enterprise 24 Veteran Business Enterprise 4 Services Disabled Veterans Business Enterprise 1 LGBTQ+ Business Enterprise 1 Disabled Business Enterprise 0 Disadvantaged Business Enterprise 7 Source: Commonwealth of Massachusetts, Directory of Certified Businesses 14

FINDING 7: MWBE PROGRAM The City has no program with MWBE or Small Disadvantaged Business Enterprise (SDB) goals, set asides, or bid preferences program. Commonwealth law requires a disparity study to implement such a program. However, the City has set new policies and objectives for supplier diversity. The City supplier diversity goals for FY 2024 are: • Increase diversity of suppliers that do business with the City. • Increase quantity and quality of offers City receives from suppliers of goods and services. • Increase spending with suppliers that are owned by minorities and women. • Coordinate and lead multi-jurisdictional effort as needed in Massachusetts. FINDINGS 8: SHELTERED MARKETS State law allows local governments to have sheltered markets for disadvantaged vendors. The City does not currently have a sheltered market program. FINDING 9: BUSINESS DEVELOPMENT EFFORTS During the last few years, the City of Somerville’s Economic Development Division has been focused on COVID-19 recovery. Recently, the Senior Planner for Women- and Minority owned businesses has been leading an effort to build a database of Women- and Minority owned businesses. FINDING 10: REPORTING SDB UTILIZATION The City does not track or report SDB utilization and vendor demographic status is not indicated in the City financial system. The City is in preliminary stages of tracking SDB utilization outside of Massachusetts School Building Authority (MSBA) projects. 15

The new City supplier diversity policy requires that diversity information on vendors be recorded in MUNIS and that the City report the “breakdown of vendor diversity” by fiscal year. FINDING 11: STAFFING AND BUDGET The City has an Office of Racial and Social Justice (part of the City Executive Office), but SDB is not one of its focus areas. There is no internal or external City SDB advisory committee. 2. Quantitative Findings This section presents the findings from the statistical disparity analysis, which identified the Relevant Geographic Market that informed the Availability Study, Utilization Analysis, and Disparity Ratios. There will be tables below to provide a visual representation of all the Quantitative Findings. FINDING 12: RELEVANT GEOGRAPHIC MARKET AREA The Study compares the Availability and Utilization of firms in a common area, the Relevant Geographic Market, which is where the Study determines at least 75% of the agency’s spending with vendors. The Relevant Geographic Market Area was Boston-Cambridge-Newton Metropolitan Statistical Area (MSA)5, based on the following percentages of spending. • In Construction, 98.01% • In A&E, 97.84% • In Professional Services, 86.14% • In Other Services, 90.88% • In Goods, 65.16%6 • In Total, 92.86% Given that 92.86% of all the City of Somerville spending was with firms located in this Relevant Geographic Market Area, G&S determined that one consistent Relevant Geographic Market across all Industry Categories was appropriate. 16

FINDING 13: AVAILABILITY The measures of Availability utilized in this Study incorporate all the criteria of Availability required by City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989). • The firm does business within an industry group from which the City of Somerville Government makes certain purchases. • The firm's owner has taken steps to demonstrate interest in doing business with the government (by registering, certifying, prequalifying, bidding, etc.) • The firm is located within a relevant geographical area such that it can do business with the City of Somerville Government The firms used to calculate Availability came from the Master Vendor File in the Relevant Geographic Market Area. G&S found that firms were available to provide goods and services to the City as reflected in the following percentages by each race, ethnicity, and gender group (Table 2). Business Ownership Classification Construction Architecture and Engineering Professional Services Other Services Goods TOTAL (%) (%) (%) (%) (%) (%) African American 7.34% 2.95% 10.49% 7.86% 2.35% 6.44% Asian American 1.59% 7.44% 6.48% 2.21% 1.97% 3.36% Hispanic American 6.86% 3.23% 4.38% 3.43% 1.05% 3.60% American Indian 0.42% 0.00% 0.12% 0.05% 0.05% 0.12% Portuguese American 1.11% 0.00% 0.56% 0.63% 0.10% 0.51% Unknown MBE 0.14% 0.14% 0.19% 0.14% 0.14% 0.15% TOTAL MINORITY 17.45% 13.76% 22.22% 14.32% 5.66% 14.18% Non-Minority Woman 10.39% 18.96% 22.72% 10.39% 6.52% 12.62% TOTAL MWBE 27.84% 32.72% 44.94% 24.72% 12.18% 26.80% Non-MWBE 72.16% 67.28% 55.06% 75.28% 87.82% 73.20% TOTAL FIRMS 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Table 2: Availability Estimates by Industry Category In the Relevant Geographic Market Area (Based upon the Master Vendor File) City of Somerville Disparity Study Source: Griffin & Strong, 2025 17

The Availability of “Other Certified” firms (LGBTQ+, Small, Veteran, Disabled Veteran, and Disabled) in the Relevant Geographic Market Area across all Industry Categories is presented in Table 3. These “Other” categories overlap with the race/ethnic categories and can overlap amongst themselves (e.g., a Small Business can be owned by a Veteran). A total of 737 vendors were available in the “Other Certified” category, constituting 9.13% of available businesses. Table 3: Summary of Availability Estimates for LGBTQ+, Small, Veteran, Disable Veteran, and Disabled (Using Master Vendor File) City of Somerville Disparity Study Business Ownership Classification Construction A&E Professional Services Other Services Goods TOTAL (%) (%) (%) (%) (%) (%) LGBTQ+ 0.14% 0.28% 1.05% 0.36% 0.19% 0.41% Small 8.86% 7.87% 12.65% 8.45% 3.98% 8.16% Veteran 3.32% 1.12% 2.16% 1.13% 1.05% 1.71% Disabled Veteran 1.66% 0.14% 0.93% 0.50% 0.62% 0.79% Disabled 2.01% 0.42% 1.30% 0.59% 0.72% 1.00% TOTAL UNIQUE OTHER CERTIFIED 10.04% 8.71% 14.14% 9.22% 4.65% 9.13% Non-Other Certified 89.96% 91.29% 85.86% 90.78% 95.35% 90.87% TOTAL FIRMS 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Source: Griffin & Strong, 2025 18

FINDING 14: MWBE PRIME UTILIZATION As Table 4 below shows, the City of Somerville paid a total of $379.36 million in prime construction spending in the Relevant Market during the Study Period and $3.60 million of this amount, or 0.95% was paid to MWBE firms as prime contractors. MWBEs were paid 4.57% of A&E, 38.87% of Professional Services, 1.11% of Other Services, and 6.38% of Goods. MWBEs won 3.62% of prime payments across all purchasing categories ($21.39 million). Table 4: Summary of MWBE Prime Utilization by Industry Category In the Relevant Geographic Market Area (Based upon Vendor Payments FY 2018-2022) City of Somerville Disparity Study Business Ownership Classification Construction A&E Professional Services Other Services Goods TOTAL ($) ($) ($) ($) ($) ($) African American $ 216,247 $ 0.00 $ 0.00 $ 0.00 $ 10,121 $ 226,368 Asian American $ 0.00 $ 172,933 $ 2,307,667 $ 16,000 $ 607,017 $ 3,103,616 Hispanic American $ 0.00 $ 0.00 $ 8,847,902 $ 380,459 $ 0.00 $ 9,228,362 American Indian $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 Portuguese American $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 9,087 $ 9,087 TOTAL MINORITY $ 216,247 $ 172,933 $ 11,155,570 $ 396,459 $ 626,225 $ 12,567,433 Non-Minority Woman $ 3,385,206 $ 2,570,035 $ 177,816 $ 470,839 $ 2,223,318 $ 8,827,214 TOTAL MWBE $ 3,601,453 $ 2,742,968 $ 11,333,386 $ 867,298 $ 2,849,542 $ 21,394,648 Non-MWBE $ 375,758,743 $ 57,247,089 $ 17,825,702 $ 77,458,181 $ 41,796,419 $ 570,086,134 TOTAL FIRMS $ 379,360,196 $ 59,990,057 $ 29,159,088 $ 78,325,480 $ 44,645,962 $ 591,480,782 Business Ownership Classification Construction A&E Professional Services Other Services Goods TOTAL (%) (%) (%) (%) (%) (%) African American 0.06% 0.00% 0.00% 0.00% 0.02% 0.04% Asian American 0.00% 0.29% 7.91% 0.02% 1.36% 0.52% Hispanic American 0.00% 0.00% 30.34% 0.49% 0.00% 1.56% American Indian 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Portuguese American 0.00% 0.00% 0.00% 0.00% 0.02% 0.00% TOTAL MINORITY 0.06% 0.29% 38.26% 0.51% 1.40% 2.12% Non-Minority Woman 0.89% 4.28% 0.61% 0.60% 4.98% 1.49% TOTAL MWBE 0.95% 4.57% 38.87% 1.11% 6.38% 3.62% Non-MWBE 99.05% 95.43% 61.13% 98.89% 93.62% 96.38% TOTAL FIRMS 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Source: Griffin & Strong, 2025 19

FINDING 15: “OTHER CERTIFIED” PRIME UTILIZATION Small Business Enterprises (SBEs) were paid the most prime dollars during the Study Period amongst the Other Certified firm category, with $4,165,961 (Table 5). Veteran owned firms, which included Disabled Veteran owned firms and other firms owned by Disabled Persons, were paid $471,233. No prime dollars were spent with LGBTQ+ owned firms in any Industry Category; none with Veteran owned firms in A&E, Professional Services, or Goods; and none with Disabled owned or Disabled Veteran owned firms in Construction, A&E, Professional Services, or Goods over the Study Period. Source: Griffin & Strong, 2025 Business Ownership Classification Construction A&E Professional Services Other Services Goods TOTAL ($) ($) ($) ($) ($) ($) LGBTQ+ $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 Small $ 2,801,910 $ 80,190 $ 180,254 $ 524,916 $ 578,691 $ 4,165,961 Veteran $ 471,233 $ 0.00 $ 0.00 $ 12,566 $ 0.00 $ 483,799 Disabled Veteran $ 0.00 $ 0.00 $ 0.00 $ 8,500 $ 0.00 $ 8,500 Disabled $ 0.00 $ .000 $ 0.00 $ 8,500 $ 0.00 $ 8,500 TOTAL FIRMS $ 379,360,196 $ 59,990,057 $ 29,159,088 $ 78,325,480 $ 44,645,962 $ 591,480,782 Business Ownership Classification Construction A&E Professional Services Other Services Goods TOTAL (%) (%) (%) (%) (%) (%) LGBTQ+ 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Small 0.74% 0.13% 0.62% 0.67% 1.30% 0.70% Veteran 0.12% 0.00% 0.00% 0.02% 0.00% 0.08% Disabled Veteran 0.00% 0.00% 0.00% 0.01% 0.00% 0.00% Disabled 0.00% 0.00% 0.00% 0.01% 0.00% 0.00% Table 5: Prime Utilization of LGBTQ+, Small, Veteran, Disable Veteran, and Disabled In the Relevant Geographic Market Area (Based Upon Vendor Payments FY 2018-2022) City of Somerville Disparity Study 20

FINDING 16: MWBE SUBCONTRACTOR UTILIZATION The City did have reports of subcontractor spending with MWBEs on the Somerville High School Project. There was a 10.40% MWBE goal on the project. Table 6 shows the amount of MWBE Subcontractor dollars for the five (5) Industry Categories. • MBEs were paid $521,420 in Subcontractor Utilization, or 0.38%, while Non-Minority Woman owned firms were paid $2,967,656, or 2.15% in Construction. • MBEs were paid $1,161,063 in Subcontractor Utilization, or 18.88%, while Non-Minority Woman owned firms were paid $33,643, or 0.55% in Goods. • MWBEs were paid no Subcontract dollars in A&E, Professional Services, or Other Services. MBEs were 1.09% and Non-Minority Woman owned firms were 1.94% of Subcontractor dollars spent in the five Industry Categories during the Study Period. 21

Business Ownership Classification Construction A&E Professional Services Other Services Goods TOTAL ($) ($) ($) ($) ($) ($) African American $ 349,420 $ 0.00 $ 0.00 $ 0.00 $ 395,606 $ 745,026 Asian American $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 765,457 $ 765,457 Hispanic American $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 American Indian $ 172,000 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 172,000 Portuguese American $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 TOTAL MINORITY $ 521,420 $ 0.00 $ 0.00 $ 0.00 $ 1,161,063 $ 1,682,483 Non-Minority Woman $ 2,967,656 $ 0.00 $ 0.00 $ 0.00 $ 33,643 $ 3,001,299 TOTAL MWBE $ 3,489,076 $ 0.00 $ 0.00 $ 0.00 $ 1,194,706 $ 4,683,782 Non-MWBE $ 134,397,481 $ 4,624,355 $ 0.00 $ 6,311,636 $ 4,955,677 $ 150,289,149 TOTAL FIRMS $ 137,886,557 $ 4,624,355 $ 0.00 $ 6,311,636 $ 6,150,383 $ 154,972,931 Business Ownership Classification Construction A&E Professional Services Other Services Goods TOTAL (%) (%) (%) (%) (%) (%) African American 0.25% 0.00% 0.00% 0.00% 6.43% 0.48% Asian American 0.00% 0.00% 0.00% 0.00% 12.45% 0.49% Hispanic American 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% American Indian 0.12% 0.00% 0.00% 0.00% 0.00% 0.11% Portuguese American 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% TOTAL MINORITY 0.38% 0.00% 0.00% 0.00% 18.88% 1.09% Non-Minority Woman 2.15% 0.00% 0.00% 0.00% 0.55% 1.94% TOTAL MWBE 2.53% 0.00% 0.00% 0.00% 19.42% 3.02% Non-MWBE 97.47% 100.00% 0.00% 100.00% 80.58% 96.98% TOTAL FIRMS 100.00% 100.00% 0.00% 100.00% 100.00% 100.00% Source: Griffin & Strong, 2025 Table 6: Subcontractor Utilization Somerville High School Project In the Relevant Geographic Market Area Distribution of Dollars by Business Ownership and Fiscal Year (Using Vendor Payments, FY 2018-2022) City of Somerville Disparity Study 22

G&S also conducted a Prime Vendor Telephone Survey to request subcontractor payment data from prime payees during the Study Period. The survey was sent to 1,389 prime vendors in all Industry Categories, except for Goods, where there is little subcontracting. G&S followed up with a telephone campaign to 217 Construction and A&E prime vendors, making total of 73 and 37 calls to Construction and A&E prime vendors, respectively. There was only about $4 million in subcontractor dollars found through this survey. Of these subcontractor dollars, MBEs won $448,370 (11.21%) and firms owned by Non-Minority Women won $345,015 (8.63%). FINDING 17: SUMMARY OF DISPARITY ANALYSIS FOR FY2018-FY2022 Table 7 below indicates those MWBE groups where a statistically significant Underutilization (X) was found between Prime Utilization for Construction, A&E, Professional Service, Other Services, or Goods and Availability. There was Underutilization in prime contracting for all available MWBE groups, except Asian American and Hispanic American owned firms in Professional Services. In order to control for capacity, G&S also conducted a disparity analysis for contracts under $500,000 and under $1 million. There was Underutilization in prime contracting for all available MWBE groups, except Asian American owned firms in Professional Services for both contracts under $500,000 and under $1 million. 23

Table 7: Summary of Statistically Significant Underutilization of MWBEs in Prime Contracting City of Somerville Disparity Study Business Owner Classification Construction A&E Professional Services Other Services Goods African American X X X X X Asian American X X X X Hispanic American X X X X Portuguese American X X X X X American Indian X X X X X Non-Minority Woman X X X X X Source: Griffin & Strong, 2025 24

Table 8 below indicates those MWBE groups where a statistically significant underutilization (X) was found between subcontractor Utilization for Construction, Engineering, Professional Services, Other Services, or Goods and Availability. There was Underutilization in subcontracting for all available MWBE groups, except firms owned by African Americans and Asian Americans in Goods. Table 8: Summary of Statistically Significant Underutilization of MWBEs in Total Utilization City of Somerville Disparity Study Business Owner Classification Construction A&E Professional Services Other Services Goods African American X X X X Asian American X X X X Hispanic American X X X X X American Indian X X X X X Portuguese American X X X X X Non-Minority Woman X X X X X Source: Griffin & Strong, 2025 25

3. Marketplace Contracting Disparities Findings The section presents the findings from the analysis of the private sector that was conducted to determine whether the City of Somerville has been a passive participant in discrimination carried out by the private sector. FINDING 18: SMALLER REVENUE SHARES RELATIVE TO MARKET SHARE In the Relevant Geographic Market Area, relative to White American owned firms, the estimated revenue shares of each Minority owned firm never exceeded 4.1% (Women). All MWBEs have estimated revenue shares far smaller than their firm representation shares. Relative to firms owned by White Americans in the Relevant Geographic Market Area, exclusive of Women owned firms—some of whom are White Americans—the sum of individual MWBE revenue shares is of a large order of magnitude below their implied 10% (approximately) firm representation shares. This is consistent with and suggestive of, but not necessarily causal evidence for, MWBEs facing discriminatory barriers in the private sector of the Relevant Geographic Market Area. FINDING 19: MWBEs ARE LESS LIKELY TO BE SELF-EMPLOYED Relative to White Americans, Women, African Americans, and Hispanic Americans are less likely to be self-employed in the Relevant Geographic Market Area. This is suggestive of these types of firms facing barriers to self-employment in the Relevant Geographic Market Area. The lower self- employment likelihood of these type of MWBEs could reflect disparities in public contracting as there is research evidence that the self-employment rate of African Americans is increasing with respect to the provisioning and establishment of MWBE public procurement programs. FINDING 20: MWBEs ARE LESS LIKELY TO BE SELF-EMPLOYED IN THE CONSTRUCTION SECTOR Relative to firms owned by White Americans, Women, African Americans, and Hispanic Americans are less likely to be self-employed in the Relevant Geographic Market Area construction sector. This is suggestive of these firms facing barriers to self-employment in the construction sector. The lower likelihood of these types of MWBEs being self-employed in the construction sector could reflect disparities in public contracting, as there is research evidence that the self-employment rate of African Americans in construction is increasing with respect to the provisioning and establishment of MWBE public construction procurement programs. 26

FINDING 21: COMPLETE DOMINANCE OF NON-MWBEs IN BUILDING PERMITS The estimated low commercial building permit shares for MWBEs in the City of Somerville are suggestive of private sector barriers that constrain the ability of these types of firms to participate in the economy. Our estimates suggest that Non-MWBEs accounted for approximately 98% of building permits in the City of Somerville. To the extent that experience acquired by participating in the private sector translates into an enhanced capacity to compete in the market for public sector contracts and subcontracts, the almost complete dominance of Non-MWBEs in securing building permits suggests the presence of private sector barriers faced by MWBEs. In this context, if there are any public contracting/subcontracting disparities between MWBEs and Non-MWBEs in the City of Somerville, it could constitute passive discrimination against MWBEs, as the disparities could reflect barriers, possibly discriminatory, that MWBEs face in the private sector that serve to undermine their capacity to compete for contracts and subcontracts with the City of Somerville. FINDING 22: CERTAIN FIRMS ARE MORE LIKELY TO HAVE BEEN DENIED A COMMERICAL BANK LOAN Relative to Non-MWBEs, firms owned by African Americans, Asian Americans, Bi/Multi-racial Americans, and Women are more likely to have been denied commercial bank loans in the City of Somerville. This suggests that in the Relevant Geographic Market Area, any public procurement disparities between MWBEs and firms owned by African Americans and Women in the Relevant Geographic Market Area can be explained, at least in part, by differential access to private credit (e.g. race-based credit market discrimination) that enables financing a capacity for success in public procurement. FINDING 23: MINORITY owned FIRMS AND WOMEN owned FIRMS ARE MORE LIKELY TO BE NEW FIRMS Relative to Non-MWBE firms, firms classified/certified as Minority owned and Women owned, are more likely to be new firms in the Relevant Geographic Market Area. When disaggregated by race/gender/ethnicity status, firms owned by African Americans, Asian Americans, Bi/Multi-racial Americans, and Women are relatively more likely to be new firms. This suggests that any public contracting disparities between Non-MWBEs and firms owned by these types of MWBEs can possibly be explained by differential rates of market experience. 27

FINDING 24: ASIAN AMERICAN owned FIRMS ARE LESS LIKELY TO SUBMIT PRIME BIDS TO THE CITY OF SOMERVILLE Relative to Non-MWBEs firms owned by Asian Americans, are less likely to submit prime bids relative to Non-MWBEs to the City of Somerville. This suggests that any disparities in public procurement outcomes between firms owned by Asian Americans and Non-MWBEs in the Relevant Geographic Market Area can possibly be explained by their relatively lower prime bid submission rates. FINDING 25: CERTAIN MWBE FIRMS ARE LESS LIKELY TO WIN PRIME CONTRACT AWARDS FROM THE CITY OF SOMERVILLE Relative to Non-MWBEs, firms owned by African Americans, Hispanic Americans, Asian Americans, Bi/Multi-racial Americans, Portuguese Americans, and Women are less likely to win prime contract awards from the City of Somerville. This suggests that, at least for these type of MWBEs, there are prime contracting award disparities between them and Non-MWBEs in the City of Somerville. FINDING 26: CERTAIN MWBE FIRMS ARE LESS LIKELY TO WIN A SUBCONTRACT AWARD FROM THE CITY OF SOMERVILLE Firms owned by Hispanic Americans, Asian Americans, Bi/Multi-racial Americans, and Women are less likely to win a subcontract award from the City of Somerville. This suggests that at least for these types of MWBEs, any disparities between them and Non-MWBEs in public contracting awards can be explained, at least in part, by differential experiences acquired through subcontracting. FINDING 27: CERTAIN MWBE FIRMS ARE MORE LIKELY TO HAVE NEVER BEEN A PRIME CONTRACTOR OR SUBCONTRACTOR WITH THE CITY OF SOMERVILLE Relative to Non-MWBEs firms owned by Hispanic Americans, Asian Americans, and Bi/Multi-racial Americans, are more likely to have never been a prime contractor or subcontractor with the City of Somerville. To the extent that success in public contracting is proportional to having prior prime contracts or subcontracts, this suggests that for these types of MWBEs any contracting disparities between and Non-MWBEs can possibly be explained by their relative disadvantage in having secured prior prime contracts or subcontracts from the City of Somerville. 28

FINDING 28: NO DIFFERENCES BETWEEN MWBES AND NON-MWBES WITH RESPECT TO PERCEIVED PRIVATE SECTOR DISCRIMINATION There are no differences between MWBEs and Non-MWBEs with respect to perceived experiences of private sector discrimination in the Relevant Geographic Market Area. This suggests that, at least in the Relevant Geographic Market Area, private sector discrimination that undermines the capacity to compete for public procurement awards, cannot explain public contracting disparities between MWBEs and Non-MWBEs. FINDING 29: CERTAIN MWBE FIRMS ARE MORE LIKELY TO PERCEIVE EXPERIENCES OF DISCRIMINATION BY THE CITY Relative to Non-MWBEs, firms owned by African Americans and American Indians, Bi/Multi-racial Americans, and Portuguese Americans are more likely to have perceived discriminatory experiences by the City of Somerville. To the extent that discrimination in the City of Somerville can undermine the capacity of MWBEs to compete for public sector procurement, this suggests that discrimination at the City of Somerville can explain, at least in part, public contracting disparities between Non- MWBEs and these types of MWBEs. FINDING 30: CERTAIN MWBE FIRMS EXPRESS INFORMAL NETWORKS AS PUBLIC CONTRACTING BARRIER Relative to Non-MWBEs, firms owned by African Americans, Bi/Multi-racials, Other Race, and Women are more likely to agree that informal networks are important for public contracting success with the City of Somerville. This suggests that, at least for these types of MWBEs, contracting disparities between them and Non-MWBEs can explained, at least in part, by their exclusion from City of Somerville public contracting networks that reduce their ability to secure prime contracts and subcontracts. FINDING 31: AFRICAN AMERICAN AND WOMEN owned FIRMS MORE LIKELY TO AGREE THAT NON-MWBE FIRMS SOLICIT BUT DO NOT USE MWBE FIRMS Relative to Non-MWBEs, firms owned by African Americans and Women are more likely to agree that Non-MWBEs often solicits, but do not use MWBEs in the City of Somerville in subcontracts. This suggests that, at least for these types of MWBEs, contracting disparities between them and Non- MWBEs can explained, at least in part, by the lack of enforcing MWBE participation requirements on City of Somerville public contracting awards to Non-MWBEs. 29

4. Anecdotal Findings FINDING 32: CLARITY IN THE BIDDING PROCESS One MWBE said that she believes the biggest obstacle faced by a Minority owned business is the lack of education on how things work. She described how she had to speak with three different individuals to get clarity on the difference between COMMBUYS and the supplier diversity portal. She never received any information on how to apply to an RFP and it was unclear how to go about submitting a successful proposal. Participants in one focus group also complained that the user experience with COMMBUYS is discouraging because it can be “[d]ifficult to filter to find jobs.” Of those survey respondents who provided feedback at the completion of the survey, 20% of African Americans and 16.7% of both Asian Americans and White females provided feedback that indicated problems with “[c]ontract management and clarity,” while another 7.5% of all respondents provided feedback that suggested problems with “[p]rocess clarity and accessibility.”7 FINDING 33: PERCEPTIONS OF BIAS IN FINANCIAL LENDING AND OTHER ASPECTS OF PUBLIC CONTRACTING When given the statement “Double standards in qualifications and work performance make it more difficult for Minority and/or Woman owned business to win bids or contracts.”, 75% of Brazilian Americans, 66.7% of Bi/Multi-racial Americans, 48.5% of African Americans, 33.4% of Hispanic Americans and 23.5% of Asian Americans either “Agreed” or “Strongly Agreed;” 16.6% of White females and 13.1% of Non-Minority males held the same sentiment.8 In response to the question “[h]ow many times have you been denied a commercial (business) bank loan from 2017 - Present?”, 65% of Non-Minority Woman respondents and 57.4% of Non-Minority males marked “None” but only 50% of Portuguese Americans, 45% of African Americans and 33.3% of Bi/Multi-racial Americans agreed. In sharp contrast, 33.3% of Bi/Multi-racial Americans, 27.3% of African Americans and 17.6% of Asian Americans marked “1-10,” as compared to 1.6% of Non-Minority males and 1.5% of White females.9 FINDING 34: COMPLICATED BIDDING PROCESS One Non-Minority male business owner said that he “finds the COMMBUYS portal hard to navigate and [it] does not really apply to businesses like his.” 50% of Brazilian Americans, 30.3% of African Americans, 25% of American Indians and 11.8% of Asian Americans noted “excessive paperwork” as an impediment.10 Members of one focus group hoped that the City would revisit the creation of the RFPs to make sure that they are clearly written, with concise, easy-to-understand titles and delivered to the business community with ample time for adequate responses. These concerns were exacerbated by the 30

absence of a relationship with officials in the City who could help unknot certain conundrums. In this regard, one MWBE indicated that the major barrier he saw as a hindrance to his participation was the fact that he has “no connections with the City.” FINDING 35: INFORMAL NETWORKS An Asian American male made it known that he believes the biggest obstacle [he faces] as a Minority owned business is the “old boys club” [he experiences] when attending networking events where [he] does not feel as comfortable. Similarly, an African American interviewee hinted at the prevalence of informal networks when he said that the biggest obstacle “being a Minority owned business is feeling stifled because they are not given opportunities and are not on a preferred list.” When asked “[d]o you believe there is an informal network of prime and subcontractors doing business with the City of Somerville…that monopolizes the public contracting process?,” 32.5% of all respondents selected “Yes.” It should be noted that 100% of Brazilian Americans, 66.7% of Bi/Multi-racial Americans, 57.6% of African Americans, 35.3% of Asian Americans, and 33.3% of Hispanic Americans held this belief.11 FINDING 36: BARRIERS TO PARTICIPATION Many of the interviewees articulated barriers to participation such as the following: lack of scale; lack of familiarity with the City and/or its policies; effective communication; costs; and lack of experience. An African American male who acknowledged not knowing how to use the City’s system also admitted “how his time is limited and does not have a lot of time to dedicate to researching municipality work.” A Hispanic American Woman noted that she “does not know what the City is looking for.” 50% of Brazilian American, 21.2% of African American, 17.6% of Asian American, and 14.8% of Non-Minority male survey respondents identified a “[l]imited knowledge of [the City’s] purchasing/contracting policies and procedures” as a barrier to bidding on and winning City projects.”12 A Hispanic American male mentioned reaching out to municipalities but people who work for the municipality do not call back. 25% of American Indian, 18.2% of African American, 17.6% of Asian American, and 13.3% of Hispanic American business owners listed “pre-qualification requirements” as an issue that would prevent a firm from bidding on or obtaining work on a City project.13 Although many survey participants cited their firm’s lack of experience as an issue, this barrier was felt most acutely by MWBEs, with 33% of Bi/Multi-racial Americans, 17.6% of Asian Americans, 12.1% of African Americans and 6.7% of Hispanic Americans selecting “lack of experience” as a problem.14 31

FINDING 37: RELUCTANCE TO REGISTER WITH THE CITY A slight majority of survey respondents (45.3%) indicated that their business was not registered with the City.15 43.8% of survey respondents indicated that they did not know how to register with the City16 and 52.1% claimed to not know that there was a registry.17 Additionally, 34.6% of White female, 20% of Hispanic American, 5.9% of African American, 9.5% of Non-Minority male, and 10% of Asian American survey participants noted that they “do not see any benefit in registering.18” 15.6% of all survey participants stated that they did not register because they did not believe their firm would be awarded a contract with the City. This sentiment was most pronounced among MWBEs: 23.5% of African Americans, 50% of Brazilian Americans, and 20% of Hispanic Americans maintained this belief, compared to 11.5% of White females and 14.3% of Non-Minority males.19 By contrast, four out of five survey respondents registered their firms with other governmental agencies such as the Commonwealth of Massachusetts. 5. Legal Finding FINDING 38: OVERALL LEGAL FINDING During the Study Period, the City of Somerville implemented race- and gender-neutral measures to try to increase utilization of MWBE firms in City procurement, but this Disparity Study demonstrated that those efforts were not effective in avoiding or resolving the disparities identified.20 The City therefore has an evidentiary basis to introduce more robust race- and gender-neutral remedies, and also a legal basis, under current applicable law, to introduce narrowly tailored race- and gender- conscious remedies toward the goal of eliminating the identified disparities. The regression analysis and the evaluation of the contracting environment in the private sector as part of this Study demonstrate that factors other than MWBE status cannot fully account for the statistical disparities found. Stated otherwise, The City can show that MWBE status continues to have an adverse impact on a firm’s ability to secure contracting opportunities with it, further supporting more aggressive remedial efforts. Lastly, having obtained statistical and anecdotal evidence of disparities that are race, ethnicity, and gender specific for each of the studied industry categories, the City can ensure that the more robust remedies recommended can be limited to minority groups for which statistically significant underutilization has been identified in a particular Industry Category – that is, they are narrowly tailored to address the specific disparities measured. 32

B. COMMENDATIONS COMMENDATION 1: THE CITY HAS SUPPLIER DIVERSITY GOALS G&S commends the City of Somerville for its FY24 Supplier Diversity Goals, which emphasize expanding the number of diverse businesses, improving the quantity and quality of offers, and increasing overall spending with Minority- and Women owned businesses. COMMENDATION 2: THE CITY POSTS CURRENT BIDS AND OPPORTUNITITES ON THEIR WEBSITE G&S commends the City of Somerville for posting current bids and opportunities on their website, thereby ensuring businesses have access to this information. COMMENDATION 3: THE CITY HAS AN OFFICE OF RACIAL AND SOCIAL JUSTICE G&S commends the City of Somerville for creating the Office of Racial and Social Justice (ORSJ) to spearhead equity initiatives and collaborate with city departments, constituents, and stakeholders in addressing racial inequalities and social injustices. COMMENDATION 4: THE CITY RECEIVED MINIMAL OR NO COMPLAINTS REGARDING BONDING AND INSURANCE G&S commends the City of Somerville for receiving few, if any, complaints regarding bonding and insurance requirements in the bidding process. When overly burdensome, these requirements can serve as a barrier, hindering small and disadvantaged businesses from competing for contracts. 33

C. RECOMMENDATIONS The findings of this Study conclude that under current law there is a factual predicate for the City to utilize some race- and gender-conscious remedies in addition to race- and gender-neutral efforts. A regression analysis found that disparities by race, ethnicity, or gender status of the firm owners remained in some cases after controlling for capacity and other race and gender-neutral factors. However, the City may not be authorized under Massachusetts state law to institute certain race- and gender- conscious remedial actions. RECOMMENDATION 1: DATA REFORM G&S collected, cleaned, and analyzed five (5) years of data from the City. As a result, it was able to observe those areas where data could more effectively be maintained. This is critical to the implementation of any remedial activities to track their effectiveness properly and accurately. G&S suggests the following data reform. 1. Subcontractors: The City should begin tracking all subcontractors across all industry categories internally. 2. Bid Tabulations: In helping to build a large volume of local vendors for outreach, it should be mandatory for vendors to register with the City before being able to place a bid. 3. Lack of Vendor Information: The City should conduct a thorough data inventory and create a centralized data repository that contains necessary vendor information (Vendor Name, Address, Industry Codes, etc.) 4. Commodity Codes: The City should have firms identify the commodity codes (NIGP or NAICS) under which they provide goods or services. This should be used to notify firms of applicable bid opportunities rather than only notify firms on a limited list. RECOMMENDATION 2: IMPLEMENT AN SDB CONTRACT-BY-CONTRACT SUBCONTRACTING GOALS PROGRAM WITH AUTHORITY FROM THE COMMONWEALTH There is a factual predicate for a race- and gender-conscious subcontractor goals program if the City receives authorization from the Commonwealth of Massachusetts. G&S would suggest that the City set specific contract-by-contract goals for SDBs. 34

RECOMMENDATION 3: IMPLEMENT A RACE- AND GENDER-NEUTRAL SHELTERED MARKET PROGRAM WITH AUTHORITY FROM THE COMMONWEALTH Massachusetts G.L. c. 30B, § 18 may permit a race and gender conscious sheltered market, however, G&S recommends the creation, with approval from the Commonwealth, of a race-and gender-neutral sheltered market program to further expand competition for the City of Somerville procurement and help all small businesses to work as prime contractors and increase their capacity. Through the Survey of Business Owners, G&S gathered empirical anecdotal evidence indicating that many small firms, including DBEs and SDBs, perceive that informal networks dominate the public contracting process in the City of Somerville. In addition, Many small and MWBE firms complained about unfair competition against large firms in prime contracting. Since many MWBE firms are also small businesses, one method to assist in increasing MWBE participation as well as increasing the capacity of small businesses is to establish a threshold under which only small businesses can bid. This would encourage small businesses to certify as such and to bid on small contracts which will help them to grow their capacity and increase competition on City contracts. RECOMMENDATION 4: CONSIDER INDIVIDUAL EXPERIENCE OF FIRMS WHEN EVALUATING BIDS G&S recommends the City consider the individual experiences of business owners, not just the length of experience of the firm, especially that of small business owners, who may not have many years of experience within the Relevant Geographic Market Area. Otherwise, it could hinder businesses that are new to the City and inhibit their ability to compete for bids. . 35

36 RECOMMENDATION 5: PROVIDE SMALL BUSINESS DEVELOPMENT ASSISTANCE G&S recommends the following: • Consider providing financial supportive services to vendors. The City of Cambridge offers financial and technical assistance, including a variety of programs, workshops, grants, and resources. In addition, the City should encourage and support local businesses in obtaining third-party resources, like SBA grants and loans. • Partner with small business development organizations. The City of Memphis, TN has been providing funding to several local business incubators but has not had a system for accountability. After its last study, it implemented an accountability process where it required the incubators that it was assisting with funding to provide reports on which firms were being assisted and the outcomes of that assistance. Eventually, it brought some of those business incubators in-house as part of its physical City of Memphis Business Development Center. • Partner with local banks to provide factoring of city contracts. Government contract factoring involves businesses selling unpaid government invoices to a third-party factoring company to receive immediate funding. The City of Boston partners with several factoring companies to provide this option for businesses working on government contracts. RECOMMENDATION 6: ENHANCE COMMUNICATIONS AND MARKETING RESOURCES Based on Anecdotal Findings, in which firms discussed a lack of outreach and familiarity with the bidding process. Firms also indicated the belief that there is an informal network that is excluding firms from obtaining projects, G&S recommends that the City enhance its communications with firms, particularly through early forecasting to dispel the perception that certain firms have access to information ahead of others due to their relationships within the City. G&S also recommends that the City collaborate with the Town of Brookline on joint outreach efforts to ensure firms receive sufficient information and to prevent any disconnect between the firms and the City of Somerville.

G&S specifically suggests the City does the following: Forecasting: Alerting businesses to upcoming needs even before a formal bid is issued. This will allow the City to provide supportive services well in advance of bid issuance, if needed. G&S recommends that the City endeavors to reach out to more firms than just those that they are already familiar with to get quotes. So, where there is no formal bid, lists of the City’s upcoming needs and types of services and goods anticipated should also be made available to firms with opportunities posted at least a year in advance. Knowing ahead of time what work will be presented in the coming year will give room for contract compliance to schedule networking events and encourage firms to team. It also gives more time for mandatory pre-bid conferences where potential prime contractors can meet potential subcontractors. Targeted Outreach: Along with developing a forecasting plan, identifying firms within the Relevant Geographic Market that would be eligible for projects as they emerge would aid in providing more awareness to bid opportunities for firms to do business with the City. This will show the City’s interest in expanding its reach and will demonstrate the City’s willingness towards inclusivity. Establishing a Marketing Campaign to Increase Registration/Certification resources: G&S recommends that the City explore methods that improve their registration database by better communicating the benefits of registration and certification. The City should join with the Town of Brookline to conduct a joint registration campaign. Vendor Training: Anecdotal evidence revealed that firms lack an understanding of the City’s purchasing policies and processes. The City should hold seminars and training sessions to provide potential vendors with information to assist them in responding to solicitations. 37

RECOMMENDATION 7: ENHANCE CONTRACT COMPLIANCE To continue to effectively administer an effective and increasingly robust procurement process, the City should enhance its contract compliance efforts, including robust tracking and monitoring of contracts, to ensure that prime contractors utilize firms as committed to in their bid package. The five (5) steps of Contract Compliance are: 1. Assessment: An initial assessment of individual firm availability and capacity for specific scopes of work. 2. Outreach: An on-going campaign to let the SDB business community know that the City wants to do business with them and that the City is willing to work with firms to create opportunities and assist, particularly local firms, in building capacity. 3. Certification/Verification: The City should continue to encourage and assist firms in getting certified both as SDBs with the City and through the Commonwealth of Massachusetts. 4. Procurement: All applicable solicitation packages and awarded contracts should include the SDB commitments as contract terms, as well as City participation requirements, such as all firms performing commercially useful functions. 5. Tracking and Monitoring: It is essential that SDB participation be closely tracked and monitored. Likewise, projects should be efficiently closed out to verify that SDB firms are actually performing the work that they were contracted to perform. Finally, firms should be compensated in a timely manner and in the amounts committed. Monitoring vendor performance should also ensure equal and fair treatment in terms of contracts. RECOMMENDATION 8: TRACK MWBE PARTICIPATION AND REVIEW CLAIMS G&S recommends the City to continue to track MWBE participation in City and Prime contracts. Likewise, the City should continue to review any claims of racial discrimination from MWBEs and ensure that businesses are aware of the resources and information provided. RECOMMENDATION 9: STREAMLINE BIDDING PROCESS AND LIMITING PAPERWORK The City of Somerville should review and streamline its bidding process to ensure required submissions are not overly burdensome, especially for small firms handling smaller projects. Implementing an online 38

bidding tool and adopting more efficient procedures could simplify participation in procurement, making it more accessible and inviting, particularly for smaller businesses with limited resources to dedicate to bid preparation. Additionally, better coordination of the release of bid opportunities, either by expanding the time available to respond, or a more consistent release time (weekly, monthly, or quarterly, for example) will give companies ample time to respond. The City should also review the paperwork required to submit bids and consider reducing paperwork requirements for smaller bids. In the G&S Survey of Business Owners, many small firms, including DBEs and SBDs, identified excessive paperwork as an issue that complicates the bidding process by imposing additional burdens on small firms, who might not have the capacity to complete them. G&S recommends that the City review the necessary paperwork that is required to submit bids, especially for smaller dollars, and reduce the paperwork requirements to prevent complicating the bidding process. RECOMMENDATION 10: ENFORCE PROMPT PAY PROVISIONS AND IMPLEMENT INTERNAL REVIEW OF INVOICES The G&S Survey of Business Owners indicated that both prime contractors and subcontractors identified prompt payment as a barrier to participation. 36.5% of survey respondents reported that it took between 61 and 90 days to receive payment from the City, while 19% of subcontractor respondents indicated the same payment timeframe. Strengthening enforcement of payment provisions and assessing internal payment processes to prime contractors could significantly improve this issue. G&S recommends that the City of Somerville review and enforce its prompt pay provisions on both the prime and subcontractor levels. This process would include implementing an internal review of invoices and monitoring how long it takes for a prime contractor to be paid by the City from the time it submits its first invoice to find out if the problem is in the City’s processing or in prime contractors having to resubmit invoices because of errors. If it is the latter, the City should provide vendor education on how to submit proper invoices. 39

RECOMMENDATION 11: EVALUATE OPPORTUNITY FOR ADDITIONAL STAFFING AND RESOURCES G&S’s recommendations represent a possible need for increased resources and staffing. Prior to undertaking these recommendations, the City should consider whether there is a need to allocate additional resources and potentially additional staffing. G&S is aware that additional funding would be dependent on the budgeting process. The City can utilize the time period before additional resources are approved and applied to: • Accept the Study and its Recommendations; • Plan for Implementation (Steps, Phases and Tasks); • Determine Budget and Staffing Needs for New Policy Elements; and • Develop a Training Protocol and Train any additional staff 40

END NOTES 1. See “Somerville City, Massachusetts Population, 2024 (with upward population growth trend line since 2010), World Population Review Newsletter, at worldpopulationreview.com, accessed on October 11, 2024; “Assembly Square, the Back Story,” June 22, 2012, The Somerville Times, at www.somervilletimes.com, accessed on October 10, 2024. 2. Somerville Survey, Survey Table #42 3. Somerville Survey, Survey Table #46 4. Somerville Survey, Survey Table #63 5. The Boston-Cambridge-Newton Metropolitan Statistical Area (MSA) is composed of the following counties: Essex County (MA), Middlesex County (MA), Norfolk County (MA), Plymouth County (MA), Suffolk County (MA), Rockingham County (NH), and Strafford County (NH) 6. It is not unusual for the Industry Category of Goods to fall below the 75% threshold as an individual category. 7. Somerville Survey, Survey Table #122 8. Somerville Survey, Survey Table #120 9. Somerville Survey, Survey Table #85 10. Somerville Survey, Survey Table #45 11. Somerville Survey, Survey Table #118 12. Somerville Survey, Survey Table #52 13. Somerville Survey, Survey Table #41 14. Somerville Survey, Survey Table #54 15. Somerville Survey, Survey Table #17 16. Somerville Survey, Survey Table #18 17. Somerville Survey, Survey Table #19 18. Somerville Survey, Survey Table #20 19. Somerville Survey, Survey Table #24 20. As noted in the Policy Chapter, on state funded construction and design projects, the City applied the race and gender-conscious goal provisions required by the Commonwealth of Massachusetts for such projects. 41

SOMERVILLE, MASSACHUSETTS 2025 DISPARITY STUDY EXECUTIVE SUMMARY 235 Peachtree St NE Atlanta, GA 30303 p: [phone removed] | f: 404-584-973 gspclaw.com