Study shows disparities in race and gender in state contracts
The majority of state contracts for construction, goods, and services are going to nonminority firms according to a study ordered by the General Assembly.
Senate Majority Leader Bryan Townsend says the report found that businesses owned by women and people of color lagged far behind in contracts received between 2015 and 2020.
"That there is a disparity between how much the state spends on contracts to companies that are owned by minorities or women, and the prevalence of those businesses in the community," said Townsend. "So we don't spend anywhere near as much on a percentage basis as the businesses that are actually out there."
The study conducted by MGT Consulting Group found that businesses owned by women received less than 3% of total state contracting dollars from 2015 to 2020 while during that same period those owned by people of color received less than 7%.
It analyzed contract data from the Office of Management and Budget, Department of Health and Social Services, and Department of Correction.
The study didn’t find any built-in barriers intentionally restraining or constraining any business from getting a contract.
"This report confirms what we already knew. We have to do better,” said Ayanna Khan, founder and president/CEO of the Delaware Black Chamber of Commerce. “Delaware does not presently ask for ethnicity when registering a business for the issuance of a business license. This is a fatal flaw that disallows the promotion of diversity and equity in Delaware’s business sector. Just as a census, collecting ethnicity information promotes business and supplier diversity, and provides a more accurate and complete representation of the makeup of Delaware’s business community.
The report did find that the OMB and other procurement partners can work more collaboratively with all state agencies to increase awareness, interest, and participation in procurement and contracting.
“The disparity study shows that while Delaware is doing a lot of things right, there still is plenty of room for improvement. As with many efforts to increase participation in longstanding situations, it’s not always enough to open opportunities, but we must take active steps to help new players get their foot in the door,” said Rep. Kendra Johnson, chair of the Delaware Legislative Black Caucus.
Townsend called for the study, and he explains one step the state can take.
"Ensure that there is sufficient staffing and focus in the Office of Supplier Diversity in the state. They really need to be involved in the front end of contracting to ensure that contracts can achieve more diversity of suppliers," said Townsend.
To level the playing field, the report recommends the state use project-specific and overall diversity goals, use a vendor rotation system for smaller contracts, and enhance record retention and data collection.
It also recommends the state to adopt a narrowly tailored program to promote supplier diversity, and to expand outreach and training for federally certified disadvantaged businesses.
The report did credit Gov. John Carney for hiring the state’s first Chief Diversity Officers and establishing an anti-discrimination policy across state government.