State government isn”™t meeting its “intended” goals for contracting with minority-owned businesses, according to the Greater New England Minority Supplier Development Council.
A bill that would have revised contracting requirements to ensure minority- and women-owned businesses receive a fair portion of goods and services contracts from towns and state agencies was introduced in the Connecticut General Assembly earlier this year.
But the bill was quickly scrapped in March after six agencies testified against it, arguing the state must first complete a study to determine whether there are in fact contracting disparities ”” which could take years to complete ”” before drafting any new legislation.
Under the current law, the state aims for a quarter of the total value of all government contracts to be awarded to small businesses. Of that, 25 percent should go to minority- or women-owned businesses.
But that doesn”™t appear to be happening, according to Fred McKinney, CEO of the Greater New England Minority Supplier Development Council, which is based in Bridgeport.
For example, McKinney said, the state Department of Correction in 2012 aimed to set aside a 3 percent of its $670 million budget for small businesses and 5 percent of that amount was designated for minority- or women-owned businesses, according to DOC documents obtained by the minority council. By the end of the first quarter of that year, the DOC had spent $7,600 with two minority-owned firms.
“We”™re talking billions of dollars in spending by the state and local towns for goods and services, and minority businesses are not participating in the economic growth or life of the state,” McKinney said. “We complain about the depressed conditions in the urban communities and there”™s a reason for that. (Minority businesses) are not participating in the growth of the region. There”™s no money flowing into the minority business community.”
Still, the DOC and state are technically meeting its minority contracting goals.
Michelle Schott, DOC director of fiscal services, confirmed the dollar amount spent on minority contracting, but said the percentages did meet the 25 percent goals.
Agencies can apply for exemptions for certain goods and services, so they don”™t count against the agency”™s goals. For the DOC, this includes salaries, utilities, workers compensation, telecommunications, travel, fuel, postage, payments to state agencies and the federal government, inmate pay, lease payments on buildings and medical services for inmates.
After all the exemptions are applied, the DOC had an actual goal of $1.3 million in contracts to go toward minority- or women-owned businesses.
But with so many exemptions allowed, McKinney said it defeats the purpose of the law.
Each of the parties testifying against the new bill, including the Department of Administrative Services and the Permanent Commission on the Status of Women, said the state couldn”™t justify the proposed legislation until officials can see if and how large of a gap there is between the number of minority-owned businesses that are hired by the state and those ready, willing and able to work.
The last report on contracting disparity dates back to 1992 and called for the creation of a database to track contracting goals and to track the number of minority-owned businesses that have a presence in Connecticut.
However, that database still hasn”™t been created, making it difficult to complete an updated study, said Richard Strauss, executive director of the Connecticut Academy of Science and Engineering (CASE), which is in charge of the new study.
Strauss said he hopes CASE will finish its preliminary findings by June, but that any legislation will require several more years of data to justify new requirements and protect against reverse discrimination lawsuits.
McKinney said he”™d like to see new legislation written that distinguishes between contracting requirements for women-owned businesses and minority-owned businesses and ends exemptions on contracting for agency services and municipalities.
But without updated legislation in sight, McKinney said he thinks it will need to become a political issue in order for a solution to be found.
“The minority community in this state needs to demand attention to this program,” McKinney said. “Not any politician should get the support of the minority community until this issue is addressed properly. It”™s that important.”
