R.I. falls short of minority, women contracting requirement

NEW DATA from the R.I. Department of Administration shows the state failed to meet its requirements for contracts awarded to women and minority-owned businesses in fiscal year 2020. / PBN FILE PHOTO/ NICOLE DOTZENROD

PROVIDENCE – The state failed to meet its own minimum requirements for contracts and purchases awarded to women- and minority-owned businesses in fiscal 2020, according to data from the R.I. Department of Administration.

The department estimates 7.86% of the roughly $1 billion spent on state contracts in fiscal 2020 went to certified minority- or women-owned businesses – falling short of a requirement that requires 10% these dollars go to those businesses.

Unlike in years past, however, the law did not apply for the last 3½ months of fiscal 2020 – former Gov. Gina M. Raimondo waived the requirements for contracting with minority and women-owned businesses under the state of emergency when the COVID-19 pandemic hit.

The data is the latest of several years in which the state has failed to fulfill its longstanding requirement to support historically disadvantaged business owners through state contracts and purchases. Since fiscal 2014, the state has only hit or exceeded its 10% goal twice – in fiscal 2018 and 2019.

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RHODE ISLAND has not met its required minimum contract dollars for women and minority-owned businesses for five of the last seven fiscal years, including fiscal 2020. / COURTESY RI OFFICE OF DIVERSITY, EQUITY & INCLUSION

In an emailed statement on July 23, DOA spokesman Derek Gomes said the pandemic was the primary reason for the lower participation of minority and women-owned businesses in state contracts. Not only was the requirement suspended, but many of the state purchases were for items for which there are few or no certified women-owned or minority businesses to choose from — items including testing supplies, laboratory supplies, and personal protective equipment, Gomes said.

Other projects, particularly for construction or construction-related services, which tend to have more minority businesses, were put on hold or canceled during the pandemic, Gomes said.

The lack of minority and women-owned business participation in state contracting became a flashpoint over the last year due to the pandemic and the racial reckoning sparked by George Floyd’s death in May 2020 while in police custody in Minnesota. A flurry of bills introduced in the General Assembly this year sought to tackle this problem. Proposals included increasing the minimum percentage of state contracts from 10% to 25% and eliminating businesses owned by people of Portuguese descent as a recognized category of minority business enterprises.

While a majority of these proposals did not pass, one did: preventing the state from bypassing its minority- and women-owned business contract requirements during future states of emergency.

The bill became law after passing both chambers as of July 1, but without the signature of Gov. Daniel J. McKee. The governor’s office did not immediately respond to questions about why he did not sign the bill, but Rep. Karen Alzate, D-Pawtucket, questioned the meaning behind McKee’s missing signature.

Alzate, who chairs the state’s Black and Latino Caucus, said lawmakers have been urging McKee to back their bill, as well as additional changes to improve the program for minority business owners. 

The state has in past years blamed its inability to meet requirements for minority- and women-owned business contracts on the lack of eligible businesses that complete the mandatory registration and certification to be considered for a contract or purchase. 

However, a new report released by the R.I. Office of Diversity, Equity & Opportunity suggests otherwise. The 264-page document from consultant Mason Tillman Associates Ltd. published July 21 compares the percentage of registered minority contractors to the dollars they received in state contracts and purchases from fiscal 2014 to 2017. Overwhelmingly, the results suggest “statistically significant disparities” between the percentage of minority- business owners certified as contractors or subcontractors and the percentage of state contract dollars spent in a given year that went to these businesses.

For example, Black-owned construction contractors comprised 8.45% of available contractors for construction jobs, but received just 0.16% of dollars spent in that area. By contrast, construction companies owned by white men comprised 58.78% of available contractors but were awarded 93.94% of dollars spent.

A NEW REPORT shows significant disparities between the percentage of available minority and women contractors and the percentage of dollars they received in state contracts and purchases. This table looks at the difference between available construction contractors of different demographic groups and the percent of contracts they received of $10,000 or less. / COURTESY RI OFFICE OF DIVERSITY, EQUITY AND INCLUSION

The report offers a host of recommendations for how to address discrimination in the state contracting program, including adding points to the scoring of applications from minority- and women-owned enterprises and cutting 5% of their bid estimates, which are typically awarded to the lowest eligible proposal. The report also suggested more detailed ways for contractors to prove they have made a “good faith effort” to subcontract with minority or women-owned businesses if they cannot find one, and enforcements for those who not comply, such as cutting off payments and ending contracts.

In a statement, the R.I. Black and Latino Caucus called for McKee and the state to address these findings and ensure “that this law of fairness will be respected in order to help the minority and women-owned businesses of Rhode Island, especially after the devastation of the pandemic.”

Alana O’Hare, a spokeswoman for McKee, said in an emailed statement that the administration is reviewing the recommendations and “is committed to finding solutions to obstacles facing MBEs and streamlining procurement processes, with the goal of utilizing MBEs to the greatest possible extent.”

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