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State government makes gains in contracting with minority-owned businesses

Alice Roberts-Davis
Alice Roberts-Davis

Over the past three years, the Minnesota state government has significantly increased its contract spending with minority-owned businesses and hired more vendors from underserved communities.

The amount of money the government spent on contracts with African-American-owned businesses climbed from $135,000 in 2015 to $1.5 million in 2017. During the same period, contract spending with Asian-owned businesses grew from $11 million to $16 million; Hispanic-owned businesses: from $1 million to $2.7 million; and women-owned businesses: from $25 million to $47 million.

The increase wasn’t just in the amount of money allocated. The state has also enlisted more vendors owned by African-Americans, immigrants, women and veterans to bid for state contracts. Since 2015, the number of certified businesses owned by these groups grew by 33 percent — from nearly 898 to 1,200 last year.

The contract expansions are the result of new efforts meant to make the state government procurements more accessible to all Minnesotans, said Alice Roberts-Davis, an assistant commissioner in the Minnesota Department of Administration

The effort to boost those numbers was in part an answer to an audit released last February that revealed state agencies have failed to implement policies aimed to diversify the contracting and purchasing deals the government makes with the public.

“We’re proud we’re not where we were,” Roberts-Davis said. “We’re happy that agencies have bought in to what it is that we’re trying to do and are committed to making progress.”    

How Minnesota got here 

To increase the hiring and contracting, the state did several things. It created a mandatory training of more than 700 state employees to ensure they understood the Dayton administration’s diversity and inclusion initiatives around procurement.    

Participants in the training learned about the importance of using diverse vendors through activities that demonstrated what it means to be a minority-owned entrepreneur who is navigating the procurement process and trying to compete against established businesses. 

Following the training, state officials set a 12 percent goal to boost government contract access for minority, women and veteran businesses and an 8 percent increase to add more “targeted group businesses,” which Roberts-Davis describes as small businesses owned and operated by minorities, veterans, people from disadvantaged counties or individuals with physical disabilities.

The state also expanded efforts to engage with entrepreneurs of color. For the first time in 2016, Roberts-Davis said, the state held an “opportunity fair” that brought together business owners and department leaders in one room.

The idea was to introduce entrepreneurs and state officials, especially those with procurement authority, to inspire potential working relationships that would lead to contract opportunities between the two parties.

In 2017 alone, Roberts-Davis said, her office hosted or attended more than 86 outreach events, where they met with minority and women businesses owners. “We’ve been very, very active in the community. We’ve had the ability to meet business owners from different communities to talk about what the certification process means and the opportunities that exist around that.”

‘There’s more work to do’

While the report on the state’s spending with minority-owned vendors has shown substantial improvements in the last three years, the spending with these populations represents only 5.4 percent of the annual $2.5 billion the government spends with vendors. “This is still not enough,” said Roberts-Davis. “We’re not where we wanted to be and there’s more work to do.”

But the 5.4 percent increase is at least better than the 3 percent the equity audit found when looking at the amount of money the government spent on contracts with the targeted businesses in 2015. This wasn’t because the state didn’t have policies promoting equal-opportunity policies; it was because no one was implementing it.       

Going forward, Roberts-Davis said state officials plan to continue to work with the targeted businesses and expand the pool of certified vendors that the state contracts with. 

“We’ll also continue to be very aggressive with our agency partners on how they could push their goals and push beyond the goals to ensure they continue to integrate small businesses,” she said.  

Comments (18)

  1. Submitted by Ilya Gutman on 01/15/2018 - 10:43 am.

    “state officials set a 12 percent goal to boost government contract access for minority, women and veteran businesses and an 8 percent increase to add more “targeted group businesses,” which Roberts-Davis describes as small businesses owned and operated by minorities, veterans, people from disadvantaged counties or individuals with physical disabilities.” Isn’t this a quota that the Supreme Court ruled illegal?

    • Submitted by RB Holbrook on 01/16/2018 - 02:39 pm.

      No

      It’s a “goal,” meaning it’s something to work towards. There are no legal consequences if they don’t meet the goal.

      • Submitted by Ilya Gutman on 01/16/2018 - 09:03 pm.

        The Supreme Court in the affirmative action application to college admission case, said that quotas are illegal. All quotas are goals with no legal consequences if they are missed. You just can’t set them regardless because the assumption is that people try to meet the goals in which case they will violate the Constitution.

        • Submitted by RB Holbrook on 01/17/2018 - 09:17 am.

          No, it Did Not

          I assume you’re talking about the Texas case, where the girl whose grades weren’t good enough to get into UT sued (which is totally not a sign of entitlement, right?). That case held that race still may be considered in college admissions.

          • Submitted by Ilya Gutman on 01/17/2018 - 10:12 pm.

            No, I am talking about 1978 case, Regents of the University of California v. Bakke when the Supreme Court found that quotas are illegal http://www.ncsl.org/research/education/affirmative-action-court-decisions.aspx.

            • Submitted by RB Holbrook on 01/18/2018 - 01:50 pm.

              A Great Year, 1978

              Yes, the Bakke decision ruled that explicit numerical quotas in university admissions are unconstitutional. In the more recent case of Fisher v. Texas, the Court upheld an admissions system that used race as one factor in deciding who may be admitted.

              Racial quotas in government contracts are allowed as a remedy for identified past discriminatory practices.

              • Submitted by Ilya Gutman on 01/18/2018 - 10:29 pm.

                “Racial quotas in government contracts are allowed as a remedy for identified past discriminatory practices” Do you have a court ruling on this?

                • Submitted by RB Holbrook on 01/19/2018 - 10:48 am.

                  A Couple

                  One of the more recent ones (if not the most recent one) is Rothe Development, Inc. v. Department of Defense, 107 F.Supp.3d 183 (DDC 2015). A system involving racial preferences, if not quotas, will be upheld if there is evidence showing actual discrimination.

                  The seminal case on the matter is Richmond v. J.A. Croson Co., 488 US 469 (1989), The affirmative action plan there was ruled unconstitutional because it had not been adopted in response to actual discrimination.

                  • Submitted by Ilya Gutman on 01/19/2018 - 09:42 pm.

                    Allowing quotas is not mention anywhere in that decision; all it says is that government may help those who were disadvantaged before and that help is really just technical assistance. So I hope we established now that quotas or goals for certain percentage of minorities is unconstitutional.

                    • Submitted by RB Holbrook on 01/21/2018 - 02:51 pm.

                      Try Again

                      “Where 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. Under such circumstances, the city could act to dismantle the closed business system by taking appropriate measures against those who discriminate on the basis of race or other illegitimate criteria. In the extreme case, some form of narrowly tailored racial preference might be necessary to break down patterns of deliberate exclusion.” Richmond v. J.A. Croson Co., 488 U.S. at 509 (citations omitted).

                    • Submitted by Ilya Gutman on 01/21/2018 - 09:26 pm.

                      “In the extreme case, some form of narrowly tailored racial preference might be necessary to break down patterns of deliberate exclusion” Narrowly tailored racial preferences are not quotas – it’s something like they do in college admission – some extra points. And what is extreme case?

  2. Submitted by Curtis Senker on 01/15/2018 - 02:51 pm.

    Today, of all days, I’d hope we could all agree that government contracts should be awarded without regard to race or gender. Surprised I have to even mention it, to be honest.

    • Submitted by RB Holbrook on 01/16/2018 - 02:56 pm.

      Today, of All Days

      (Actually, yesterday)

      I’d hope we could all remember the actual words spoken by Dr. King, and not project upon him our own ideals about what he should have thought:

      In 1964, one year after the “I Have a Dream” speech: “Whenever the issue of compensatory treatment for the Negro is raised, some of our friends recoil in horror. The Negro should be granted equality, they agree; but he should ask nothing more. On the surface, this appears reasonable, but it is not realistic.”

      And this: “It is impossible to create a formula for the future which does not take into account that our society has been doing something special against the Negro for hundreds of years. How then can he be absorbed into the mainstream of American life if we do not do something special for him now, in order to balance the equation and equip him to compete on a just and equal basis?”

      Just a little more context, from 1967: “Again we have deluded ourselves into believing the myth that Capitalism grew and prospered out of the Protestant ethic of hard work and sacrifice. The fact is that capitalism was built on the exploitation and suffering of black slaves and continues to thrive on the exploitation of the poor – both black and white, both here and abroad.”

      • Submitted by Curtis Senker on 01/16/2018 - 07:32 pm.

        So, you’re suggesting the whole “judge me not by the color of my skin” deal was nothing more than buncomb?

        Well, the left has taken that position, I’ll give you that but in 2009, SCOTUS set the wheels back on the track with Ricci v. DeStefano.

        • Submitted by RB Holbrook on 01/17/2018 - 09:16 am.

          No

          I’m suggesting that pretending that all of Dr. King’s ideas and legacy can be boiled down into a few words is, at best, blinkered.

          I’m also suggesting that it is hypocritical for the right-wing to indulge in its yearly lip-service on behalf of the memory of Dr. King after all the effort it put into vilifying and marginalizing him. Taking isolated statements out of context and proclaiming them as his true ideal is fooling only those who want to be fooled.

          In addition, I’m suggesting that Ricci v. DeStefano did not establish a blanket rule that affirmative action quotas are unconstitutional, despite what you may have read on rightist websites. I’m also suggesting that the Roberts Court in that case continued to overstep the bounds of judicial review, but I suspect that’s cool when it’s done to hand the liberals a defeat.

  3. Submitted by Roger Clegg on 01/15/2018 - 08:53 pm.

    Unfair and illegal

    Awarding contracts with an eye on race is unfair, divisive, corrupting, inefficient — and illegal, indeed unconstitutional. Someone should sue, and this law should be changed so that contracts go simply to the lowest bidder.

  4. Submitted by Ivy Chang on 01/16/2018 - 11:38 am.

    Set goals

    The comments above point out the illegality of awarding contracts based on gender and race.
    I’ve been in business for 19 years. My business has been passed over after the bidding process and I accept the decision except when I found out businesses owned by Caucasians received the awards. What if 3 businesses provided the lowest, and the same, bids? The state has seen its agencies give preference to white males in past years and created the new goals. In the past 2 years, I have received more government contracts. I don’t know the Supreme Court ruling.

    • Submitted by Ilya Gutman on 01/16/2018 - 09:03 pm.

      The Supreme Court ruling applied to college admission process but it’s obvious that it should have a much broader implication. I can hardly believe that it is possible to have three identical bids but I would guess that in this case other considerations would be taken into account such as firm’s experience, personnel, past quality of work, etc. I would also guess that all public entities have to explain the reasons for their decisions. So the question is why the state agencies gave preference to white males in the past – were there any objective criteria?

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