Business Trends: States are moving to develop local M/WBEs

When New Jersey Governor Jon S. Corzine signed Executive Order 34 calling for the establishment of the Division of Minority and Women Business Development in the Office of Economic Growth, he became part of a growing trend among state governments to develop local enterprises owned by minorities and women. Gov. Corzine says his directive is designed to increase the number of such enterprises that do business with the Garden State. Essentially, the new unit will establish and monitor a goals-based program for contract letting to M/WBEs with the state of New Jersey.

“[The state] will be using its purchasing power to help facilitate growth among New Jersey’s minority- and women-owned businesses,” he says in a media release. “This Executive Order represents another step toward guaranteeing equal opportunity for everyone.”

Monique King-Viehland, senior director of the division, will oversee operations of the initiative and monitor the progress of various state agencies in compliance with the mandate. King-Viehland says state agencies will be held responsible for, among other things, submitting annual procurement plans, including detailed goals for utilizing M/WBEs on various projects throughout the state.

“Minority- and women-owned firms account for between 20 and 28 percent of the small businesses in the state,” King-Viehland says. “Yet the number of contracts that these small businesses receive from the state is less than 3 percent.” Viehland says the state spends more than $2 billion annually on goods and services from businesses.

New Jersey is not the only state in recent months to follow-up with or launch various initiatives designed to increase the pool of M/WBEs doing business with state agencies. New York’s Governor Eliot Spitzer on Feb. 18 signed an executive order creating an Executive Leadership Council and Corporate Roundtable to promote opportunities for M/WBEs. Last September, Pennsylvania Gov. Ed Rendell announced that the Depart-ment of General Services, a state agency in Pennsylvania, awarded or renewed about $42.3 million in contracts to M/WBE vendors. In a release, Rendell says the figure represents an increase of about 6 percent since January 2003.

“When I took office, it was clear minority- and women- owned businesses were being shut out of the procurement process,” Rendell says. “We established a system that levels the playing field for these firms [and it’s working].”

In October, New Orleans Mayor Ray Nagin enacted an executive order to support M/WBEs in the rebuilding of the city more than a year after Hurricane Katrina. Nagin also announced that a lucrative city contract worth between $20 and $25 million was awarded to two African-American–owned area businesses. Richard’s Disposal in New Orleans and Metro Disposal of Harvey, La., will each earn approximately between $8 million and $12 million over the next seven years to remove trash and debris in and around the city of New Orleans.

In a release, Nagin says, “The bottom line is we are talking about improved services, technology and accountability. This is the foundation of the new New Orleans.”

Many M/WBEs depend on contracts with the city, state and/or federal government to survive. In order to be in the running for these contracts, they must be certified as a minority- or woman-owned enterprise by a nationally recognized organization, or by a federal, state or city agency. Businesses certified by the state government, for example, are listed in the state government’s directory of certified M/WBEs used by all state agencies and contractors. The same is true for businesses certified by the federal and city governments.
M/WBE-certifying institutions in-clude the following:     

• National Minority Supplier Dev-elopment Council (www.nmsdcus.org) and its local chapters

• Women’s Business Enterprise National Council, www.wbenc.org

• Empire State Development Corp-oration, www.empire.state.ny.us

• New York City Department of Small Business Services, http://home2.nyc.gov/html/sbs/html/mwbe.html

• New Jersey Commerce, www.njcommerce.org

• U.S. Small Business Administra-tion, www.sba.gov/sdb