The City of Chicago’s recent request for a 3% reduction on contract invoices places an unfair burden on small and diverse-owned businesses, potentially jeopardizing their financial stability and workforce. HACIA, alongside the American Council of Engineering Companies (ACEC) and the Illinois Road & Transportation Builders Association (IRTBA), has strongly opposed this measure, emphasizing its disproportionate impact on contractors who already operate on thin margins.
HACIA’s Executive Director, Jacqueline Gomez, highlighted the severe consequences of this cut, stating, “Particularly for construction, it’s already a low-bid type of environment. To ask for an additional 3% really puts them out. Instead of uplifting fair contracting practices, they’re undercutting our small businesses. … They’re essentially putting small businesses out of business with this ask.” This issue becomes incredibly important to HACIA because our members rely on fair contracting practices to sustain their businesses and workforce, and we are committed to ensuring their voices are heard.
This move not only threatens business viability but also the workforce that depends on these contracts. Many small businesses already face significant challenges, including increasing costs due to tariffs and delayed city payments that often extend six months or more. The added pressure of a retroactive fee reduction could lead to layoffs, project delays, and even business closures.
Beyond financial harm, this approach could undermine trust in the city’s procurement process. Contractors fear that rejecting this request may negatively impact future opportunities, raising concerns about fairness and transparency in city contracting. As noted in the Chicago Sun-Times, industry leaders have cautioned that the Federal Highway Administration has previously rejected similar approaches, emphasizing that unilateral modifications like this violate federal guidelines and could put millions in federal funding at risk.
HACIA remains committed to working collaboratively with the City of Chicago to develop solutions that support both responsible budgeting and the operations of small and diverse-owned businesses. We strongly believe that decisions impacting the contracting partners should include input from industry leaders for a fair outcome. Our organization stands ready to partner with city officials to identify those fair and sustainable solutions that benefit both parties. By working together, we can create policies that strengthen economic opportunities without jeopardizing the viability of small businesses.
Take Action: Stand Up for Fair Contracting
We urge our members and industry partners to take action. Contact your Chicago City Council members and the City’s Department of Procurement Services to demand fair contracting practices. Share your experiences and advocate for equitable opportunities that support small and minority-owned businesses.
📢 Act now! Visit the Department of Procurement Services website: https://www.chicago.gov/city/en/depts/dps
📩 Find your alderman and voice your concerns: https://www.chicago.gov/city/en/about/wards.html