For the first time in state history, the level of state purchasing made through Minnesota small businesses owned by veterans, women, minorities, people with disabilities, or operating in economically disadvantaged areas, (equity vendors) exceeded $100 million, according to the Minnesota Department of Administration, which oversees state contracts and purchasing. Total spending on equity contracts reached $103.6 million in fiscal year 2019, up from $85 million in 2018. Since 2015, the value of state contracts to equity vendors increased by more than 58 percent, from $65,423,609 to $103,632,181. The percentage of total state contracting to this category of vendors more than doubled during that time, from 4 percent to 8 percent. The milestone is a significant step in meeting the goals of Gov. Tim Walz’s One Minnesota Council on Diversity,
Inclusion and Equity, which calls for broadening contracting, civic engagement and employment to those who have historically been underserved by government operations and services.
Businesses owned by veterans showed some of the biggest increases – from $1.82 million in FY 2015 to $19.3 million in FY 2019– an increase of 963.3 percent. Total contracts to minority-owned businesses more than doubled, from $12.4 million in 2015 to $27 million in 2019.
“We’ve made a concerted effort over the last five years to broaden the pool of vendors available to state agencies through the work of our Equity in Procurement and Procurement Technical Assistance teams,” said Alice Roberts- Davis, Commissioner of Administration. “Their job is to connect with small business owners and work directly with agencies to understand their procurement needs and create matches between the businesses and the agencies.”
The Procurement Technical Assistance Center (PTAC) joined the Department of Administration in 2017. Along with the Office of Equity in Procurement (OEP,) they led or participated in 105 outreach events in FY 2019. State law provides additional strategies that have contributed to the improvement in equity purchasing. They include:
- Equity Select allows for the direct selection of a certified targeted group, economically disadvantaged, or a veteran- owned business up to a total dollar value of $25,000. In FY19, state agencies have utilized Equity Select 430 times for a total amount of more than $5.7 million.
- Sheltered Markets, which allows for the designation of contracts to be awarded only to certified targeted group, economically disadvantaged, or veteran-owned small businesses. Thirty-nine projects have been awarded under this provision since 2016.
- Vendor Preference. State law allows up to a six percent preference to businesses owned by women, minorities, veterans, economically disadvantaged and persons with substantial physical disabilities.
“Increasing the number of vendors available to state and local purchasers is a big win for Minnesota,” said Commissioner Roberts-Davis. “More vendors, across a broader range of people, foster keener competition for state and local government business. It also increases the likelihood that business is spread across a broader spectrum of Minnesota’s regions and population.”
“Over $100 million in business is a big increase, but we’re still a long way from achieving true equity in how government purchases goods and services. We have the roadmap and processes in place, and we’re confident that we’re on our way to real equity in purchasing.”
(Source: Minnesota Department of Administration)