Jun 3, 2024 - News

How Massachusetts leaders are tackling contract diversity

Illustration of the Massachusetts State House with lines radiating from it.

Illustration: Brendan Lynch/Axios

Companies and government agencies trying to diversify contracting often call up Black and brown business leaders and ask for a list of minority-owned businesses.

Why it matters: That usually doesn't work, business leaders say.

Nicole Obi, president and CEO of the Black Economic Council of Massachusetts, has tried a different approach at her organization and has taken those lessons to the state advisory board she leads.

The big picture: Those new strategies can be crucial in Massachusetts, where Gov. Maura Healey's administration is bolstering efforts to diversify state contracting.

  • Healey announced plans in January to reopen seven statewide contracts.

Zoom in: BECMA's supplier diversity services program starts with a buyer-intake process.

  • The team asks buyers about their projects, the type of vendors they want and the criteria they need candidates to meet, Obi tells Axios.
  • This not only helps BECMA connect organizations with the right candidates, but also determine whether the criteria they've relied on fits the work they want done, Obi says.

The advisory board is working with state agencies and municipalities to understand their processes and the barriers they've seen to meeting diversity goals, Obi tells Axios.

  • The board is also researching what barriers deter certified minority-owned businesses from bidding in the first place, which could range from delays in getting paid to high business insurance requirements.
  • "The myth is that they don't exist," Obi says. They do, but they don't think they'll have better chances of succeeding than others who have tried in the past.

Between the lines: The usual way companies try to find minority-owned businesses – asking for a list – can be ineffective, Obi tells Axios.

  • The vendors aren't aware they're being presented and don't know what the opportunity is, and organizations like BECMA can struggle to understand the buyers' needs without discussing that more first.
  • "Why don't we figure out what it is we're really trying to accomplish and think about it rather than just jumping in and doing the same thing and expecting different outcomes?" Obi asks.

The state supplier diversity office has also tried to get buyers to revisit their goals and criteria.

  • Bill McAvoy, the SDO's executive director, said some agencies once refused to consider applications from companies that hadn't done business with the state, even if they had relevant experience.

The office also launched a supplier diversity hub, where state agencies and prime vendors can connect directly with diverse and small businesses.

  • It also created an interactive map that helps agencies and contractors find potential business partners based on location.

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