Northam issues order to study disparity in state contracts

After the same proposal failed during the General Assembly veto session, Gov. Ralph Northam has issued an executive order to study how the state awards contracts to certain businesses.

“Small businesses are a vital economic engine for Virginia, making up 97 percent of all businesses, but we know there is work to do to ensure they have equal opportunity to grow and succeed in our Commonwealth,” Northam said in a release.

“With this Executive Order, we are strengthening our commitment to expanding small business participation in state contracting and achieving equity for our women- and minority-owned businesses.”

Northam’s order also includes small and service-disabled veteran businesses in the study, which will be completed by an outside party.

The order directs the Virginia Department of Small Business and Supplier Diversity, which certifies small businesses, to develop new outreach programs. It also requires cabinet secretaries to keep track of their institutions’ spending with small businesses.

During the General Assembly session, Northam wanted to include just over $900,000 in the budget over the next two years to hire a firm to study the state’s procurement practices; create a new team of state employees to “strategically source small, woman-owned, and minority-owned participation on large dollar Commonwealth contracts”; and funding for programming specifically for women- and minority-owned businesses.

Republicans shot down the idea, saying the state office that currently works with those businesses is set for a major audit this year and it didn’t make sense to boost their funding or implement new programs until that work is complete.

“Virginia has a long history of racial inequality and disenfranchisement of minority communities,” Northam wrote in his order. “We have made some progress in the last six decades since the civil rights movement began, but not enough. Additionally, in June we celebrate the centennial anniversary of Congress passing the women’s right to vote. One hundred years later, however, women are more likely to live in poverty, economic gender inequality continues, and women are underrepresented in elected office, business, and the workforce.”

In 2009, the last time the state did a procurement disparity study, 2.82 percent of total state contracts were awarded to women- and minority-owned businesses.

The state contracts a number of different services including construction, architecture, engineering, professional services and goods and supplies.