February 2010 E-Newsletter

Federal Recovery Act Contracts to Small, Minority and Women Business Enterprises

Of the $40 billion of Recovery Act contracts awarded by the federal government by January 10, 19 percent has gone to small businesses, including 5.9 percent to minority-owned small businesses and 2.7 percent to women owned small businesses. This does not count the billions of dollars of contracts awarded by states and local governments through the Recovery Act. It also does not include any sub-contracts that small businesses may have received from a larger business.

The small, minority, and women contract percentages represent a slight decline from the overall federal contracting percentages from fiscal year 2007, with the largest decline among women owned businesses. This provides some evidence that fears of the need to expedite Recovery Act projects might leave behind smaller businesses. The contracting data is updated daily on the federal contracting reporting website.

Prime Contracts on Federally-administered ARRA (Recovery Act) Projects, as of Jan. 10, 2010

 Source: Federal Procurement Data System

Six States Top 14% in Highway Contracts with DBEs in FY2008

The USDOT Federal Highway Administration (FHWA) released its FY2008 contract percentages for each state Department of Transportation (DOT) a few months ago and six states were able to top the 14% mark, up from four states in FY2006, according to our research. Maryland and Massachusetts were above 14% both years, while Georgia and Illinois slipped backwards from their FY2006 mark. The figures include both contracts and sub-contracts with Disadvantaged Business Enterprises (DBEs), a status that primarily includes minority and women owned firms.

Rhode Island and Arkansas DOT’s stand out for their improvement in FY2008. Many of the most diverse states in the country were near the bottom in DBE contracting percentages, including Hawai’i, California, and New Mexico. However, in the case of Hawai’i and California, along with seven other states in the 9th Circuit Court, the Western States Paving decision put their race- and gender-conscious programs on hold until disparity studies were completed.

Percentage of State Contract and Sub-contract Dollars to DBEs, FHWA, FY2008

Source: US Department of Transportation, via National Black Chamber of Commerce

Along with highlighting the efforts of Maryland DOT, the overall leader in DBE contracting and first for Asian Pacific American and women owned firms, we recognize the following district and states:

• District of Columbia DOT – #1 for African American owned firms and #2 (tied) for Asian Pacific American owned firms
• Puerto Rico DOT – #1 for Hispanic owned firms
• South Dakota DOT – #1 for Native American owned firms, and
• Connecticut DOT – #1 for Asian-sub continent owned firms
• Rhode Island DOT – #2 for African American owned firms
• Massachusetts EOT – #2 for Hispanic owned firms
• Oklahoma DOT – #2 for Native American owned firms
• Texas DOT – #2 for Asian-sub continent owned firms
• Washington DOT – #2 (tied) for Asian Pacific American owned firms
• Arkansas DOT – #2 for women owned firms

Guidelines for State DOTs when Planning for a Disparity Study

The federal Transportation Research Board released on February 3 an official study on “Guidelines for Conducting a Disparity and Availability Study for the Federal DBE Program.” This comprehensive guide should be invaluable for federal, state, and local agencies when discussing whether to conduct a disparity study or how to properly plan for one. While primarily aimed at state Departments of Transportation, the information should also be useful for other jurisdictions and agencies. Inclusive Business Initiative collaborator Colette Holt was one of the authors of the team led by National Economic Research Associates, Inc.

Inclusive Business Initiative, 2009 Year in Review

Network of State Directors of Minority and Women Business Programs

The Inclusive Business Initiative continued to facilitate a network of directors and managers of state minority and women business programs throughout 2009. The network includes 94 participants from 35 state Departments of Transportation and 33 state small, minority and women business programs. About 200 separate conversation threads were part of the closed listserv which provides state directors with an exclusive space to discuss best practices and share strategies, information, and policy documents.

Florida – Delaware Supplier Diversity Peer to Peer Exchange

A state program peer-to-peer exchange was facilitated by the Inclusive Business Initiative between Florida's Office of Supplier Diversity (OSD) and Delaware's Office of Minority and Women Business Enterprise (OMWBE). During the spring 2009 exchange, OMWBE Executive Director Jay Burks traveled to Florida to study that state's Office of Supplier Diversity (OSD), while Florida OSD Director Torey Alston later visited Delaware, along with Inclusive Business Initiative Director, Tim Lohrentz.

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

New Castle County Small Business Program Development

The Inclusive Business Initiative worked together with the DelACCESS Consortium to formulate a new small business policy and program for New Castle County, Delaware, to ensure that a significant portion of the contract dollars related to the county’s apportionment of American Recovery and Reinvestment Act (ARRA) funds would go to small, local businesses, especially minority and women owned businesses. As part of the effort, the Inclusive Business Initiative studied best practices in 11 counties similar to New Castle. Inclusive Business Initiative Director Tim Lohrentz formally presented the study to the county’s Human Relations Commission in November. The report and new policy should be officially accepted sometime later in 2010.

Santa Rosa Day Laborer Worker Cooperative Set-Up

The Inclusive Business Initiative worked together with the Sisters of St. Joseph of Orange, Community Health Office, to establish a workers cooperative among day laborers in Santa Rosa, California. The cooperative will set up a small farm to produce fruits, vegetables, and herbs and sell the produce in a road-side stand and at local farmers markets. A local church is donating use of about 1½ acres of land. The Inclusive Business Initiative developed a business plan with the day laborers and wrote the memorandum of understanding between the church and the cooperative. The cooperative, Cielo Azul Farm, should become operational in March 2010 with approximately 10 members.

Information Sharing

Social Media

The Inclusive Business Initiative greatly upgraded its communication portfolio with a full range of social media efforts. The centerpiece has been the creation and maintenance of a linkedin group, Public Supplier Diversity and M/WBE Programs. The group includes over 110 professionals engaged in governmental sector supplier diversity and minority and women business development efforts, with active discussions, news sharing, and networking. The Inclusive Business Initiative also has a Group page on Facebook and is active on Twitter, @biz_inclusion.

Speaking Engagements and Publications

Inclusive Business Initiative Director, Tim Lohrentz made a presentation on state and local minority business programs at the federal Minority Business Development Agency MBE Summit in July, with an audience of about 250 national business leaders. He spoke about the need to replicate best practices across states, counties, and cities.

Lohrentz also wrote a chapter on “Inclusive Business Practices” in the guidebook Building Healthy Communities: A Guide to Community Economic Development for Advocates, Lawyers and Policymakers, published by the American Bar Association.

E-Newsletters and Blog

During 2009, three electronic newsletters were elaborated and distributed to 1,400 people each, including community banks, corporate supplier diversity directors, and federal, state, and local government agencies. The Inclusive Business Initiative moved its blog off-site to make it more versatile and accessible and published a list of resources and information on its web page for minority and women owned businesses, related to the American Recovery and Reinvestment Act (ARRA).

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