AFTER THE STATE last year exceeded the minimum requirements for awarding government contracts to minority- and women-owned businesses, Gov. Daniel J. McKee wants to raise those legal requirements even higher.
McKee has proposed boosting participation in the Minority Business Enterprise program from 10% to 15%, but some advocates say raising those mandates is meaningless unless there is a plan and money to get more minority firms ready and able to bid on state contracts, and a commitment to enforce the law.
As it is, the state has failed to meet the required 10% minimum mark nearly every year since the law was passed in 1986.
The 13.16% of state contracts awarded to women- and minority-owned businesses in fiscal 2022 is one of only three times – along with fiscal 2018 and 2019 – in which the state has exceeded the 10% minimum, according to data from the R.I. Office of Diversity, Equity and Opportunity.
Lisa Ranglin, CEO and president of the Rhode Island Black Business Association, isn’t supportive of McKee’s proposal. “It’s a little premature, I think,” she said. “We need to see that we’re consistently meeting the 10% goal before we think about going higher.”
But state officials say that increased participation in 2022 is the result of new leadership and a renewed focus on the MBE program.
“We feel strongly that, by building on our outreach methods, the state can achieve the 15% participation rate,” Tomás Ávila, associate director for the Office of Diversity, Equity and Opportunity, said in an emailed statement.
Ávila also says the governor’s proposal, which calls for separate thresholds for women- and minority-owned businesses – at 7.5% each – was recommended in a state-commissioned study of the MBE program.
The 2021 study also urged better tracking of dollars awarded to women and minority contractors and subcontractors, and better enforcement.
In regard to enforcement, officials note that the state is considering suspending payments or ending the contract with a company for not complying with the 10% requirement for subcontracts, the first time the state would bring penalties related to the MBE program, according to Laura Hart, R.I. Department of Administration spokeswoman. Hart wouldn’t identify the contractor.
Still, Ranglin is worried by what appears to be a lack of plans to increase the number of local minority businesses able to compete for state contracts and purchases. She says building a pipeline of certified Black-owned businesses should be the state’s first priority, and there should be dedicated funding to do it.
With remaining COVID-19 relief dollars and a projected $600 million surplus, the state should have ample money to invest in the MBE program, says Oscar Mejias, CEO of the Rhode Island Hispanic Chamber of Commerce.
As of now, McKee’s $13.8 billion state budget plan includes $123,600 to hire someone for MBE enforcement, but the budget does not mention other allotments or changes related to the program. McKee’s office did not respond to inquiries for comment.
Meanwhile, Sen. Sandra Cano, D-Pawtucket, and Rep. Joshua J. Giraldo, D-Central Falls, have submitted companion bills to increase MBE participation from 10% to 20%, with a 10% minimum each for minority- and women-owned businesses.
Sen. Jonathon Acosta, D-Central Falls, co-chair of the Rhode Island Black, Latino, Indigenous, Asian-American and Pacific Islander Caucus, says structural changes and increasing the participation requirements can happen simultaneously.
Ranglin disagrees.
“If you increase the goal without having the protocols and businesses at scale, you will never reach that 15%,” she said.
