St. Paul – The Minnesota Department of Administration announced today that 28 percent of businesses available to provide construction, goods, and services to the State of Minnesota were owned by women or people of color, but that only 11.5 percent of public contracting dollars went to women or people of color. In 2015, the state of Minnesota began implementing new strategies to improve state spending with targeted businesses and make state government more accessible for all Minnesotans. The results of the disparity study demonstrate the continued need for these recently implemented efforts, which are not fully reflected in the study which examined the time period between 2011 and 2016.

The results of the new study will help the state and local governments better evaluate and target initiatives aimed at increasing participation of businesses owned by people of color, women, veterans, and people with disabilities.

“By working together, we can strengthen supplier diversity programs across the public sector, allowing us to be better partners with diverse businesses,” said Assistant Commissioner Alice Roberts-Davis. “With more data, we can develop better programs and policies to address disparities and help these businesses compete and win public sector contracts.”

Historically, diverse business owners have had difficulty accessing opportunities to bid on and secure government contracts. Governor Dayton’s Administration has focused on better communication and collaboration with diverse businesses to ensure greater contracting opportunities and more businesses competing for state contracts.

These efforts have resulted in an 89 percent increase in state contracts with businesses owned by people of color, women, and veterans, from $39.7 million in 2015 to $74.9 million in 2017. In particular, state contracts with African American owned businesses have increased 1,075 percent – from $135,000 to more than $1.5 million in 2017.

State Strategies for Reducing Contracting Disparities

The Minnesota Department of Administration, which is responsible for procurement across state government, operates a range of programs to help address contracting disparities. These programs include:

• Small Business Preference – Businesses that are owned by women, minorities, people with disabilities, or veterans, as well as businesses in economically-disadvantaged counties, can be certified under the Targeted Group Small Business Procurement Program, and are given a preference in competitive bids.
• Subcontracting Diversity Goals – the state assesses construction projects and assigns subcontracting goals to incentivize construction companies to hire targeted businesses.
• Equity Select – State law allows for direct purchases of up to a $25,000 from certified targeted group businesses.

Though some of these programs have been in place for several years, others were not implemented during the study period (July 2011 through June 2016). In addition, the state’s Office of Equity in Procurement launched in July 2015, and conducts outreach, training, and certification of diverse businesses.

About the 2017 Minnesota Joint Disparity Study

The 2017 Minnesota Joint Disparity Study marks the first time that State and local governments have combined efforts to complete a joint study. In addition to the Department of Administration, the City of Minneapolis, City of Saint Paul, Saint Paul Housing and Redevelopment Authority, Hennepin County, Metropolitan Airports Commission, Metropolitan Council, Minnesota State, Metropolitan Mosquito Control District participated in the study.

The unprecedented collaboration of the public entities participating in this one makes it one of the most comprehensive disparity studies conducted in the United States. The study also examined marketplace conditions for veterans and people with disabilities.

In addition to guiding diversity and inclusion efforts, the study ensures the state of Minnesota remains in compliance with past U.S. Supreme Court rulings, which require public entities offering gender- and race-based supplier diversity preference programs to periodically complete such an assessment to determine whether a disparity exists for minority and women-owned businesses as compared to majority-owned businesses.

The full 2017 Minnesota Joint Disparity Study can be found here.

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For additional information, please contact:
Curt Yoakum, Assistant Commissioner
(651) 201-2771
curtis.yoakum@state.mn.us