In a recent audit released by Denver Auditor Timothy M. O’Brien, CPA, prime contractors have been found in violation of their contract terms with the city, and the oversight intended to prevent such infractions appears to be falling short. The audit points toward a concerning lack of accountability for these contractors, particularly affecting small, minority, and women-owned businesses that work as subcontractors.
With the Division of Small Business Opportunity at the helm of the contracting process, its role extends to certifying businesses and overseeing 3,149 contracts as of July 2025. However, the division's practices have opened up room for contractors to delay payments to subcontractors without facing penalties. "Not having enough staff for timely payment-report review is problematic for the division. It’s troubling that prime contractors can, without penalty, pay subcontractors late," Auditor O’Brien highlighted, as per the Denver Auditor's Office. Prime contractors have evidently taken advantage of the situation, creating an unlevel playing field for disadvantaged businesses relying on these contracts.
Contract compliance or the lack thereof has come into sharp focus, with findings that prime contractors are not reporting payments in the monitoring software, leaving overdue payment reports unchecked, and at times, avoiding oversight through absent documentation. This avoidance tactic essentially leaves small businesses in the lurch, undermining the division's goal of facilitating the participation of certified businesses in city contracts. Moreover, significant site visits are not being carried out, with 23 certified Disadvantaged Business Enterprise businesses failing to receive due oversight despite the claim of their participation in closed contracts.
Another hiccup in the process stems from the procurement practices, where the division often remains uninformed about upcoming contract opportunities. This miscommunication trickles down to excluded small or disadvantaged businesses, putting a dent in the city's procurement efforts for inclusivity. "A lack of communication and poor procedures are getting in the way of the city fostering small-business growth and financial success," said Auditor O'Brien, as obtained by the Denver Auditor's Office, underscoring a breakdown at the procedural level that inhibits the integration of diverse-owned small businesses in city contract opportunities.
