Disparity Studies’ Purpose

Disparity Studies are conducted to determine the utilization of Disadvantaged Minority and Women-owned Business Enterprises (DMWBE) for various states, counties and cities.  The study generally examines the process for attaining products and services, the subcontracting practices of prime contractors/service providers who do business with the government, and the evidence collected from a broad cross section of DMWBE and non-DMWBE firms. The studies usually evaluate goals established by federal, state, and local governments and help these agencies to develop effective and lawful affirmative action programs for procuring goods and services from businesses owned by minorities and women.

The 2012 Census reported that were 27.6 million businesses: 7.8 million MBE; 9.8 million WBE; and, 2.5 Veteran businesses (VBE). Further 2007 MBE breakdowns indicated: 1.9 million African-American; 1.6 million Asian-American; 2.3 million Hispanic-American; 237,736 Native American; and 38,881 Native Hawaiian; with another 2.4 million veteran owned (VBE) businesses. We imagine these numbers will continue to grow.

In Montana, we’re one of 216 MWBE firms — 156 owned by white women.  So this means there are only 60 minority firms certified by Montana’s Department of Transportation.  Of those 60, more than half (36) are owned by Native Americans … with the African American, Hispanic American and Asian American firms clocked in at 24.  This is quite a small program in comparison, say to our home county (Allegheny) in the state of Pennsylvania that had us as one of 26,413 WBEs in 2007. Then there’s New York which still has two distinct certifying agencies that use the DOT criteria (Empire State Development agency certifies MWBEs while NY DOT certifies disadvantaged MWBEs), where we were one of 725,709 WBEs in 2010. Illinois, like New York, has two certifying agencies (Central Management Services and IL DOT), and here we are one of 417,500 WBEs. Down in Maryland, we’re one of 209,119 WBEs.

Enough with the numbers already, right? Our point is, there are a large number of SDMWVLGBTBEs (Small, Disadvantaged, Disabled, Minority, Women, Veteran, Lesbian, Gay, Bisexual or Transgendered Business Enterprises) in the United States and while not absolutely positive, we believe the vast majority of reported firms are certified.  Ultimately, this ties back to disparity studies and the need for MWBE programs at the federal and state level. Disparity studies are one of the ways states determine the necessity of their DMWBE programs and helps them make informed choices about goal setting in their own contracting activities.  We won’t bore you with more numbers, but if you’re interested you can take a look at the 2015 US Federal goals and actual spend by agency.

It seems that a number of states are wrapping up their disparity studies, to learn how their MWBEs (Minority and Women Business Enterprises) have fared under their programs — to see if there has been a net positive impact of MWBE business contracting.  As a certified DWBE in multiple states (20), we participated in several this year.  Each was interesting in its own way.  The great majority were simple online surveys about our experiences in contracting with their particular state government and soliciting comments about how the program could be improved.  In Maryland, however, we participated in one of several actual interview processes held around the state.  It was eye opening in many ways.

Maryland’s interviews were segmented by business type (Construction & Maintenance; Engineering & Construction related professional services; Commodities, Supplies & Equipment [including IT equipment]; and, Other Professional & General Services [including IT services]). We, of course, fell in the last category, and spent two hours in a room of 50 or so service providers.  What we learned was that construction related business and commodities providers are doing quite well, and their success is often the reason many constituents think DMWBE programs have fulfilled their mission and that the state should consider retiring the program. On the other hand, professional services have had almost polar opposite experiences and their lack of representation in DMWBE dollar spend is cited as a primary reason for keeping the program. One thing everyone in the room agreed upon, that there is a disconnect between contract goals/awards and the actual work done/paid for — compliance.  And, that there seems to be no consequences to the primes if they fail to comply with the terms and conditions of DMWBE use.

Our favorite moment, however, came from the devil’s advocate sitting next to me.  She asked whether the MWBE companies in the room had a diverse staff.  She wanted to know if their diversity and inclusion practices had resulted in an employee population that mirrored the state’s population statistics. We came away with that comment resonating deeply. In fact, our own organization doesn’t reflect the Pennsylvania population. Though our MBE and VBE employees outnumber the two Caucasian males and two Caucasian females, we are under-represented in the Hispanic and Native American categories.  So we’re thinking about how to address that issue internally.

Our take away from disparity studies – yes, we still need programs that encourage the use of SDMWVLGBTBEs in state and federal contracting opportunities. But, a bigger issue, shouldn’t we SDMWVLGBTBEs think about our human resource recruitment procedures and how to diversify our own workforce?