Hartford Business Journal

8 Hartford Business Journal • September 21, 2020 • www.HartfordBusiness.com By Matt Pilon mpilon@hartfordbusness.com S tate agencies spend more than $100 million a year doing business with mi- nority-owned small busi- nesses in Connecticut, well exceeding targets enshrined in state law, but business people of color say they are getting short-changed. As Black Lives Matter protests around the country this year have drawn attention to police brutal- ity against minorities and other institu- tional racism, a decades-long fight over a Con- necticut pro- gram designed to alleviate historic disparities experienced by minority- owned companies trying to win state contracts has churned on with no apparent resolution in sight. The situation with the state's Sup- plier Diversity Program has led to frustration and feelings of hopeless- ness among some minority entre- preneurs who have been pushing reforms with little success. Some say the legislature's fail- ure to address the matter adds yet another societal barrier to those already faced by many minorities in Connecticut and elsewhere, includ- ing higher rates of poverty, unem- ployment and business failure. The coronavirus pandemic has painted an increasingly dire pic- ture, particularly for entrepreneurs of color. Across the country, 41% of Black-owned businesses and 32% of Latino-owned companies closed their doors temporarily or permanently in April, compared with one-quarter of women-owned companies and 22% of all businesses, according to the Na- tional Bureau of Economic Research. Connecticut's supplier diversity program, commonly referred to as a contract set-aside program, directs most state agencies to make a good faith effort to spend 25% of their an- nual contract dollars with Connecticut small businesses (defined as firms with $15 million in annual revenue or less). Of that slice of the pie, 25% is sup- posed to go to small companies owned by specific racial and ethnic minorities, such as Black, His- panic and Native American entre- preneurs, as well as by women of any race, includ- ing those who are white. That means out of all the money Con- necticut agen- cies spend on contracts, for anything from architectural work to mason- ry and janitorial services, 6.25% of the total pie is supposed to go to so-called "mi- nority business enterprises." "You're talking 6.25% out of 100%," said Bernard Thomas, chairman of the Connecticut Minority Construc- tion Council and owner of Hartford- based construction consulting firm BT Solutions. "That's a huge prob- lem right there." Minority business owners have long argued that the target is too small to accurately reflect the chal- lenges they face in bidding on public work and winning favor with larger contractors who can subcontract them for taxpayer-funded projects. They also say that people of color ac- tually tend to receive an even smaller share of contracts because the pro- gram — unlike similar ones in other states, like Massachusetts — lumps together minority-owned companies with women-owned firms that may not be led by an ethnic minority. Fred McKinney, a Quinnipiac busi- ness professor as well as the owner of a consulting business, said 6.25% of state agency contracts is not helping the economic development of racial and ethnic communities in Connecticut. "The state's procurement policies are not currently designed to pro- mote the economic development of Black and brown communities in the state," McKinney said. "That's a fact." Agencies exceed, but numbers can mislead On the whole, Connecticut agen- cies routinely spend much more than 6.25% of their annual contract expenditures on certified minority business enterprises. All combined, agencies spent nearly $901 million on such con- tracts between 2012 and 2019, com- pared to their set-aside target of just $257 million for that period, accord- ing to data from the Department of Administra- tive Services (DAS) and the Commission on Human Rights and Opportuni- ties (CHRO), which oversee certification of minority enter- prises and set- aside program performance, respectively. But minority business owners say the numbers mask the truth. Besides Thom- as and McKin- ney, a number of other advocates — including Minority Construction Council Executive Director Jennifer- Little Greer, Sen. Douglas McCrory (D-Hartford), and Peter Hurst, CEO of the Bridgeport-based Greater New England Minority Supplier Develop- ment Council — are convinced that women-owned businesses are getting a disproportionate share of the diver- sity program's already modest set- DIVERSITY DIVERSITY DIVERSITY INC. An HBJ Special Focus Section Fair Shot With millions of dollars at stake, CT's diversity contracting program leaves minorities behind, reform advocates say Jennifer-Little Greer, executive director of the Minority Construction Council, with MCC board chairman Bernard Thomas. The two allege that construction businesses owned by Black entrepreneurs and other minorities haven't been getting their fair share of state contracts for many years. Minority-owned enterprises can have several ethnic, gender or other affiliations A breakdown of minority business enterprise certifications as of Sept. 14, 2020. Women 789 Black American 391 Hispanic American 210 Asian American 93 Iberian Peninsula 39 Disabled 29 Native American 17 Source: BizNet state contracting portal Note: Number of firms don't accurately reflect total, as a single minority-owned enterprise can be a part of several subgroups. HBJ PHOTO | STEVE LASCHEVER

• Cover