Latino business owners hoping for a clear road to receiving their fair share of state contracts may be waiting longer than anticipated. A disparity study regarding the Minority Business Enterprise conducted by the Connecticut Academy of Science and Engineering (CASE) is lacking key data on state sub-contracting jobs, officials say.
The Department of Administration Service (DAS) sets aside 6.25 percent of its discretionary spending for Minority Business Enterprises, which includes both minority-owned and women-owned businesses. As previously reported by CTLatinoNews.com, Latino business owners feel the state is not sending a fair share of contracts their way.
According to Richard Strauss, Executive Director of CASE, the disparity study aims to analyze data from state prime and sub-contracting jobs to determine if there is any discrimination regarding minority-owned businesses and state-issued contracts. However, Strauss said that for most part, the state only has information available in terms of what has been paid to prime contractors, not sub-contractors.
Gathering sub-contractor information is a crucial to the statistical analysis portion of the study, he said.
CASE could request the records from the past three years from each contractor that worked on a state contract, of which there are thousands. However, Strauss said that unless there is an extremely high response rate, which then needs to be audited, the information may not be accurate enough to hold up legally.
What may need to occur, he said, is a complete overhaul of Connecticut’s data collecting system before any disparity regarding minority-owned business contracts comes to light.
The final piece of the puzzle, once a new system is in place, is determining whether there is a disparity between availability of minority contracts and the states utilization of them.
“If there’s a great difference, you have to figure out why that might be occurring. Then from that, you can determine whether there is a persistence of discrimination in state contracting,” he said. “If there is, the program needs to be redesigned to correct the discrimination, in part using race-neutral, proactive measures to increase utilization.”
He said that the best suggestion at this phase of the study is for the state to implement a diversity management system to collect the information CASE needs. Collecting enough data to analyze could take up to a year, which would then be used to set goals for what percentage should be allocated to minority businesses.
Moving forward, Strauss said he would recommend the state begin thinking about how to redesign the Small Business Enterprise program to take market availability of minority-owned businesses into account.
CASE entered into a contract to conduct the study for a fiscal year. If the project is not completed by the mid-June deadline, they need to receive a carry over from the legislature.
“It was generally understood by people aware of what disparity studies include that this would take more than eight months, especially because the data and information is not available,” he said.
Werner Oyanandel, Executive Director of the Latino and Puerto Rican Affairrs Commission, said the study is instrumental for Latino contractors.
“[The study] will be important to determine through data what appropriate standard the state should have for the growing Latino population doing business in Connecticut,” he said.
However, he worries that because of the lack of information, even if the study is completed, it will not be “completely accurate.”
For Oyanadel, the lengthy time-frame CASE presents is “detrimental” to the cause.
“We cannot wait to see more businesses go belly up,” he said, calling for action sooner rather than later.
Options moving forward vary, Oyanadel said, including waiting indefinitely for the disparity study to be complete, asking the state to take over the study, or awarding a contract to a new firm to conduct the study.
Dr. Fred McKinney, President of the Greater New England Minority Supplier Development Council, who has been a leading force in trying to get the state to change how it classifies minority-owned businesses and was involved in the early stages of the study, was “instrumental” in convincing CASE to take it on. They were selected because of budget cuts and the legislature had to find a firm willing to do the study for half the price, he said.
Despite the lack of hard data, McKinney continues to call for reform for the “apartheid-like policies.”
“Business owners need to organize themselves around these issues . . .and educate their own immediate family, friends, customers and employees about how these [policies] have an impact on their communities,” he said.
Next Wednesday, LPRAC will hold a legislative round table discussion on issues Latino small business owners face. Stakeholders, law makers, economists, and researchers will discuss access to state contracts, loans and credit, and what steps should be taken to help Latino businesses access those resources.
The round table is open to the public and will begin at 10 a.m. in LOB 1C at the State Capitol