Business Inclusion

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.