COMMONWEALTH OF VIRGINIA
Department of Minority Business Enterprise
1111 East Main Street, Suite 300, Richmond, Virginia 23219
Tel: (804) 786 – 6585 Fax: (804) 786 – 9736
Supplier Diversity in the Commonwealth is Gaining Strength
In August 2006, Governor Kaine issued Executive Order 33 to enhance state contracting opportunities for small, women- and minority-owned (SWaM) businesses with an aggressive goal of spending 40% of the Commonwealth’s approximately $5 billion annual discretionary budget purchases with small businesses. Race and gender-neutral strategies were implemented to accomplish this goal and have been in use over the last three years. The Commonwealth simplified its certification process as well as made registration with eVA, the state’s online procurement system, almost seamless.
Once certified and registered in eVA, businesses can have notices of government contracting opportunities throughout the Commonwealth pushed out to them electronically. The system allows for complete transparency in current contracting opportunities as well as future procurement projects. This transparency means every Virginia taxpayer can see not only where the dollars go, but to whom. Both vendors and the Commonwealth have benefited from increased competition.
Since eVA was started, the Commonwealth has moved from spending only $39 million with minority firms in fiscal year 2004 to spending over $266 million in fiscal year 2008, a 682% increase. During that same time frame, spending with women-owned firms went from $22 million to over $201 million, a 914% increase.
During fiscal year 2008, the Commonwealth of Virginia spent over $62 million with African American vendors. This is up 360% from only $17 million spent in fiscal year 2006. Its spending with Hispanic American vendors was over $66 million, up 456% from only $14 million spent in fiscal year 2006. Its spending with Asian American vendors was over $70 million, an increase of 291% from $24 million spent in fiscal year 2006. The Commonwealth also spent over $1.4 billion with small businesses, up from $419 million spent in fiscal year 2006.
In fact, through the first three quarters of this fiscal year, the Commonwealth has spent over $46 million with African American businesses, $48 million with Hispanic American businesses, and $37 million with Asian American businesses. These amounts do not include state dollars spent through state universities and agencies such as Virginia Commonwealth University, George Mason, UVA, the Port Authority, Virginia Tourism and others that self-report their spending. In the same period, the spending of the Commonwealth with businesses identified as women-owned was $189 million and $1.9 billion with businesses identified as small. These notable efforts in supplier diversity have added to the momentum of the SWaM program, making the state’s business climate more conducive for small, women- and minority-owned businesses.
To increase contracting opportunities for certified and registered vendors, the Commonwealth moved to execute Memorandums of Understanding (MOUs) with local governments including Fairfax and Virginia Beach, corporate Virginia and governmental entities to help them pursue greater supplier diversity and feature procurement opportunities for vendors through eVA. The MOU with the Richmond Redevelopment and Housing Authority (RRHA) is just such a memorandum. It will provide assistance and exposure to business opportunities for state SWaM firms as well as for Section 3 businesses. In addition, contractors will have transparent, equal and full access to opportunities at RRHA, and in turn RRHA will have access to certified vendors. Even with the downturn in the economy, the State expects college and university spending opportunities to continue as higher education construction projects come on the horizon.
Since the 2004 State-authorized procurement disparity study, both the Warner and Kaine administrations have taken aggressive steps to address the unconscionable disparity in state contracting that the study found. In that study, the Commonwealth of Virginia’s spend with women- and minority-owned businesses was reported to be only 1.27% of a $5 billion budget- with less than half of one percent being spent with minority firms.
Almost five years have elapsed since that study, and there is a significant amount of state purchasing data that the Commonwealth has collected since then. We need to know exactly what impact the race and gender-neutral purchasing policies in effect under this administration have had on increasing economic opportunities in the Commonwealth for under-utilized businesses. To that end, the Commonwealth recently released a request for proposal to the public for a disparity study to analyze the last five years of the state’s spending practices. We may not be where some would hope the Commonwealth would be at this point, but we have come a long way. While not sitting on our laurels, we wish to share our successes and to thank state procurement decision makers for their efforts.
Viola O. Baskerville
Secretary of Administration
