Philadelphia Business Journal – The real numbers behind diversity in government contracting (Opinion)

Philadelphia Business Journal
The real numbers behind diversity in government contracting
By Malik Majeed, Guest Columnist
November 19, 2018

I had the pleasure recently of attending a news conference presented by members of Gov. Tom Wolf’s administration regarding progress in making Pennsylvania’s contracting process more inclusive of small and small diverse businesses.

Pennsylvania’s Secretary of General Services Curt Topper noted small diverse businesses continue to face barriers in government contracting. In fact, he called the data “eye-opening.” He noted the administration took steps in 2015 to even the playing field and the portion of contract funding awarded to small diverse businesses increased 35 percent over the past year.

I applaud these officials for their efforts – and the numbers are certainly better under Gov. Wolf; however, we need to look beyond the numbers to understand what that actually means for Pennsylvania.  As indicated at the news conference, studies were performed to look at the disparities between the percentage of contract dollars the Department of General Services (DGS) and PennDOT spent with different groups of minority businesses, and the percentage of contract dollars those businesses would be expected to receive based on their availability to perform specific types of contracts.

Out of the $10.8 billion in DGS contracts, $85.9 million, or 4.5 percent, went to small, diverse businesses. Of the $12.5 billion spent in PennDOT contracting, $1.4 billion, or 11.5 percent, went to certified disadvantaged business enterprises or to diverse businesses. While there has been a significant increase over the last few years, the very low participation percentages indicate the state has a long way to go in leveling the playing field to providing minority contracting opportunities.

PRWT has been growing over the years and has not been considered a small business for some time. As a result, PRWT does not fall into the “small diverse” category, however, our leadership knows African-American- and Hispanic-owned businesses across the state are doing everything they can to compete for contracts. In some cases, African-American and Hispanic business owners have been placed at a disadvantage in the pool of small,  diverse businesses because some of the businesses they are competing against are operated by families, and those family members have the option of deciding “who owns the business,” i.e., the husband or wife, thereby taking advantage of being able to create a small diverse business by putting the wife in as the majority owner and head of the company. According to Philadelphia’s Office of Economic Opportunity, women-owned businesses historically have received 17.3 percent of the total economic opportunity contract dollars compared to 13.8 percent for minority-owned companies.  African-Americans and Hispanics don’t have the option of choosing which category to place themselves. They are simply African-American or Hispanic.