Business Inclusion

National Association formed to address M/W/DBE Matters

The following press release was distributed today:

The National Association of State Minority, Women and Disadvantaged Business Enterprise (M/W/DBE) Directors officially incorporated on April 27 to promote business development among minority, women and disadvantaged business enterprises in communities and states throughout the United States.

"The formation of this National Association presents a tremendous opportunity for states to come together to learn best practices from each other,” said Ron Marlow, Assistant Secretary for Access & Opportunities for the Commonwealth of Massachusetts and Chair and President of the Association. “We represent a new forum to bring forward federal and state policy and programmatic initiatives that foster equity of opportunity among minority, women and/or disadvantaged business enterprises."

The Association will include state M/WBE procurement and supplier diversity programs as well as state transportation department Disadvantaged Business Enterprise (DBE) programs. States that have business development programs geared toward M/WBEs also will be included.

The Association is a nonprofit corporation whose activities will consist of an email listserv for state M/W/DBE directors and managers, ongoing discussion and sharing of ideas and best practices, regular conference call meetings, online staff development seminars and conferences. The Association also will be coordinating with the federal government to find synergy between federal M/W/DBE programs and state programs and initiatives.

“With so many firms struggling, our focus on creating economic and business development opportunities for minority, women, disadvantaged and small business firms is more important than ever,” said Bridget Wall-Lennon, the Association’s Vice Chair and Director or North Carolina’s Office for Historically Underutilized Businesses.  “Advocacy to increase procurement and contracting opportunities within state government and the public and private sector will promote jobs and business growth for years to come.”

The goals of the association are to:

• Increase national visibility and awareness of state M/W/DBE programs and missions;
• Provide focused networking nationally among professionals in the field;
• Create a formal professional development and training program for the M/W/DBE industry;
• Develop mechanisms to support and encourage others to join the industry through scholarships or other outreach programs;
• Survey and document the history, present and future of M/W/DBE programs nationwide;
• Disseminate local and national policy changes and court decisions affecting M/W/DBE programs;
• Educate and inform local, state and federal lawmakers on issues relevant to the M/W/DBE industry;
• Increase the development, implementation, and effectiveness of state M/W/DBE programs.

The formation of the Association follows several activities led by the Insight Center for Community Economic Development, including the first-ever study of all 50 states’ M/W/DBE programs, a gathering of state M/W/DBE directors in Kansas City in 2008, and an email listserv begun in late 2008 that includes state directors from 43 states. The association was incorporated with the assistance of Tim Lohrentz, Director of the Inclusive Business Initiative at the Insight Center for Community Economic Development.

Nine persons make up the Board of Directors of the Association, including:

• Chair & President: Ron Marlow, Assistant Secretary for Access & Opportunities, Executive Office for Administration & Finance, Massachusetts
• Vice-Chair: Bridget Wall-Lennon, Director, Office for Historically Underutilized Businesses, North Carolina
• Secretary: LeRoy Romero, State Director, Minority Business Office, Colorado
• Treasurer: L. Jay Burks, Director, Office of Minority & Women Business Enterprise, Delaware
• Melinda Carter, Director, Equal Opportunity, Department of Administrative Services, Ohio
• Cynthia Cooper, Director, Office of Minority & Women’s Business Enterprises, Washington State
• Donna Lowery, Targeted Small Business Program Manager, Department of Economic Development, Iowa
• Robert Padilla, Disadvantaged Business Enterprise Program Manager, Office of Civil Rights, California Department of Transportation
• Ken Talley, Minority Business Coordinator, Department of Commerce, Oklahoma

Contact: Tim Lohrentz, 415-250-7879

March-April Inclusive Business Initiative E-Newsletter

The Inclusive Business Initiative has released its March-April 2010 E-newsletter. It was sent to over 1,400 subscribers earlier this week. Some of the highlights from the newsletter include:

• Webinar:  Best Practices in County Supplier Diversity Programs, 11 AM - 12:20 PM Pacific, May 6. This webinar will discuss practices and innovations among counties across the US in relation to supplier diversity, procurement with local small businesses, and minority and women business procurement programs. Register from this link.
• Report on County-based Local Small Business Programs and Supplier Diversity. The Insight Center, in partnership with the DelACCESS Consortium, released a new report (PDF) on best practices in strategic sourcing and supplier diversity among 11 U.S. counties. The research was conducted by the Insight Center's Inclusive Business Initiative, along with DelACCESS Consortium, which is based in Newark, Delaware.

• New Small Local Business Enterprise Program in San Diego

• State-by-state Data on Black Farmers and Historic Settlement by USDA with Black Farmers. The Obama administration announced a $1.25 billion settlement February 18 with thousands of black farmers who had claimed that they had been discriminated against by the US Department of Agriculture (USDA) in its loan programs for decades.

• Anti-Affirmative Action Measure is Again Knocked Off the Missouri Ballot. The measure was withdrawn after the ACLU challenged the measure's language.

To subscribe to the Inclusive Business Initiative e-newsletter, fill out and submit this e-form.

San Diego Serious About Small, Local Business Participation

The City of San Diego has designed and approved a small, local business enterprise program, effective July 2010. The program is a race- and gender-neutral program, allowable under California's restrictive Proposition 209. One of the objectives of the program is to increase the participation of small, local business enterprises (SLBEs) in City contracting and to ameliorate to the extent possible any disparities in the participation of minority business enterprises or women business enterprises on City contracts.

The program will have an overall aspirational goal for both SLBEs and the smaller Emerging Local Business Enterprises (ELBEs) and mandatory contract-by-contract SLBE/ELBE goals on certain contracts. Smaller contracts will first be open only to SLBEs and/or ELBEs, depending on the size of the contract. To be local a business has to be located within San Diego county.

A mentor-protege program is also part of the program. There are specific program elements for Public Works contracts, Consultant contracts, and Goods and Services procurement. The City's Office of Small Business will also provide outreach and technical assistance to SLBEs.

Anti-Affirmative Action Measure Off the Missouri Ballot

Ward Connerly has lost again in Missouri. Connerly's supporters in Missouri were attempting to put a measure on this November's ballot that, if passed, would have made affirmative action illegal in that state. But they withdrew the measure when faced with an ACLU challenge over the measure's language. A similar measure failed to get on the ballot in 2008 as well.

Such a measure would have had a major impact on the state's Office of Supplier and Workforce Diversity. It also may have impacted the contracting programs of Jackson County and Kansas City.

At the same time, a legislator in Utah has introduced legislation in that state that would ban affirmative action. The impact would be mainly in the areas of higher education and employment. Neither the state nor local governments have affirmative action in procurement or contracting. However, it would restrict their ability to create such a program in the future.

Black Farmers in the US and the $1.25 Billion Settlement with the USDA

The Obama administration announced a $1.25 billion settlement February 18 with thousands of black farmers who had claimed that they had been discriminated against by the US Department of Agriculture (USDA) in its loan programs for decades.

This settlement follows a related settlement in 1999 in which $1 billion was provided to 16,000 black farmers. Notification errors left many eligible farmers out of that settlement, errors which critics said was a continuation of discriminatory practices. The left out group of farmers filed suit, known as the Pigford Class Action Lawsuit. If 25,000 farmers share in the settlement, it would equal $50,000 for each claimant.

A number of organizations have been advocating for this second settlement, including the National Black Farmer Association and the Federation of Southern Cooperatives. Many farmers lost their farm property waiting for the USDA to act on their loan applications.

To commemorate the settlement, I took a look at the 2007 USDA data on African American farmers. What is most striking is the low average of total sales per farm: among the 12 states with at least 1000 African American farmers, only one has an average annual sales figure of greater than $45,000 - North Carolina, with average sales of about $68,000.

Even more shocking, four of these 12 states have average annual sales among African American farmers of less than $20,000, including Texas, which has the most black farmers, and Oklahoma, which comes in lowest, at $10,024. In farming there is a very direct correlation between ability to obtain a loan for seed or equipment and the revenue generated by the crops at the end of a season.

Best Practices in Supplier Diversity Among 11 Counties

The Insight Center, in partnership, with the DelACCESS Consortium, releases a new report on best practices in strategic sourcing and supplier diversity among 11 U.S. counties. The research was conducted by the Insight Center's Inclusive Business Initiative, along with DelACCESS Consortium, which is based in Newark, Delaware. The research was performed for New Castle County, Delaware, and the 11 counties were selected due to their similarity to New Castle County, as well as their procurement system.

New Castle County sponsored the research in order to determine strategies to save county funds due to strategic sourcing, but also to maximize county procurement with local small and diverse businesses, such as on projects funded by the federal Recovery Act (ARRA).

The Inclusive Business Initiative identified nine key components of supplier diversity programs and determined best practices among the 11 counties for each of the nine areas. For example, the study found that DeKalb County, GA; Essex County, NJ; and Fairfax County, VA had best practices in organizing numerous events and partnerships with local ethnic chambers and business associations.

This study and assistance to New Castle County was the first project in an ongoing partnership between the Insight Center and DelACCESS Consortium.

February 2010 e-Newsletter of the Inclusive Business Initiative

The Inclusive Business Initiative of the Insight Center for Community Economic Development releases its February 2010 e-newsletter. The e-newsletter includes the following highlights:

• Data on the portion of federal Recovery Act (ARRA) contracts going to small businesses, minority businesses, and women owned small businesses. The minority business contracts are broken out for each racial or ethnic group.
• Data on state contracts and subcontracts funded by the Federal Highway Administration (FHWA) to Disadvantaged Business Enterprises (DBEs) for each of the 50 states, as well as District of Columbia and Puerto Rico, for fiscal year 2008.
• The 2009 Year in Review of the Inclusive Business Initiative, including our work with Delaware which led to the state's new supplier diversity policy.

If you would like to subscribe to the e-newsletter, send an email to tlohrentz@insightcced.org with the word 'ADD' in the subject and your contact info in the body of the email.

State of Delaware's new Supplier Diversity Program

Delaware Governor Jack Markell passed Executive Order (EO) 14 on December 22, 2009, which creates a supplier diversity program for the state. Under the EO, each state agency will create a supplier diversity plan and appoint a supplier diversity liaison. Public supplier diversity programs are efforts to ensure that a state's or city's vendor pool matches the diversity of its taxpayers.

The supplier diversity program will be under the direction of the state's Office of Minority and Women Business Enterprise (OMWBE), headed by L. Jay Burks. The OMWBE certifies and provides training to minority and women owned businesses.

The EO also establishes the Governor’s Supplier Diversity Council which will consist of 11 members. One of the duties of the Council is to research the feasibility of the state conducting a disparity study to determine specific procurement disparities, barriers, and tailored solutions for various small business groups in Delaware. The state already participates in the DelACCESS Consortium which is an effort to publicize public and private procurement opportunities in Delaware and surrounding regions to the region's small businesses.

The supplier diversity program came about through the extended efforts of OMWBE Executive Director Burks who recently participated in a state peer-to-peer exchange sponsored by the Insight Center's Inclusive Business Initiative. During the spring 2009 exchange Burks traveled to Florida to study that state's Office of Supplier Diversity (OSD), while Florida OSD Director Torey Alston later visited Delaware.

The Inclusive Business Initiative studied all 50 states' minority and women business programs in 2007 and found that Florida's voluntary supplier diversity program was one of the best practice programs. The state peer-to-peer exchange and the 50-state policy scan were made possible by funding from the Ford Foundation.

City of Portland Sheltered Market Program Showing Some Success

Results over the first ten years of the City of Portland's race and gender-neutral small business procurement program, the Sheltered Market Program (SMP), show increases in city spending with minority and women owned firms. All very small businesses (under $1 million in annual receipts) have benefited, including those owned by white men. Yet, the local Oregonian newspaper went out of its way to racialize this program and cast it in a negative light.

My research (right) has shown that all small businesses in the US are losing market share to large corporations. Therefore programs like Portland's and Virginia's, which I recently highlighted, are well situated to address the barriers that all small businesses face. Portland's SMP also provides business development services.

Seven local agencies participate in the program which restricts competition: five city agencies most involved in public works, the Housing Authority of Portland, and the Portland Development Commission.

My biggest complaint of this program is that few contracts are being sheltered - only $13.7 million worth of contracts since 1998. However, even many states and cities with very strong affirmative action programs do not have prime contractor programs.

Virginia SWaM Program Increases Minority Business Spending in FY2009

The Small Women and Minority Business (SWaM) program of the state of Virginia received modest praise for increasing state spending with minority-owned businesses, including prime and sub-contractors, from 2.3 percent in fiscal year 2008 to 5.4 percent of state discretionary spending in fiscal year 2009.

The SWaM program is race- and gender-neutral and has increased state spending with white, male-owned small businesses even more than minority businesses.

The Virginian-Pilot newspaper spoke with the Virginia Department of Minority Business Enterprise Director, Samuel Hayes III, who said, "Let's say that Norfolk State or Old Dominion puts out a contract, and I see the type of people that they're looking for, and I say, 'Have you considered this vendor?' I try to give them multiple vendors, so I can't be accused of pre-selection. In many cases, they've been successful."

The challenges, he said, include a shortage of minorities in some fields, such as architecture, and pockets of resistance in state government.

Mr. Hayes is a member of the network of state minority and women business programs, coordinated by the Insight Center's Inclusive Business Initiative.