Rauner signs “sheltered markets” EO
Wednesday, Jul 13, 2016 - Posted by Rich Miller
* Press release…
Governor Bruce Rauner today signed an Executive Order to help ensure equal opportunity is provided to all Illinois businesses looking to contract with the State. Executive Order 16-08 directs the Illinois Department of Central Management Services (CMS) to oversee the implementation of the recommendations from a 2015 Disparity Study. It also directs CMS to investigate and, if needed, take appropriate steps to implement a sheltered markets initiative, to increase the number businesses owned and controlled by minorities, women, and persons with disabilities doing business with the State.
“We need to lift up minorities, women, and persons with disabilities who have been overlooked within our society and are underrepresented in our economy,” Governor Rauner said. “Illinois is one of the most diverse states in the country, yet a 2015 study found that disparities exist between the number of minority-owned and women-owned businesses and their utilization on contracts and subcontracts through the State. This Executive Order seeks to address this disparity and ensure more minority-owned businesses are given the opportunity to do business with the State.”
EO 16-08 directs CMS to institute a number of reforms to how it currently administers State of Illinois Business Enterprise Program (BEP) to address the problems highlighted by a 2015 Disparity Study. Details of the study can be found here.
Many of these reforms are common sense administrative fixes to make it easier for BEP businesses to understand and access state markets, including: creating an electronic data collection and monitoring system to track BEP utilization; reviewing CMS’ own process for setting BEP goals on state contracts; and, reviewing the time it takes to get procurements out to the public and the time bidders have to submit responses to these procurements.
“This Executive Order, especially the thoughtful consideration of use of Sheltered Markets, is perhaps the most important step the State of Illinois has taken toward bringing equity to Black and minority-owned businesses in the state,” said Larry Ivory, President and CEO of the Black Chamber of Commerce.
Other reforms are designed to help BEP businesses become more competitive bidders, including: developing a mentoring program to pair BEP businesses with more established businesses; strengthening State-sponsored bonding and financial assistance programs; and, implementing procurement forecasts to increase BEP businesses’ access to contracting information.
“This is an important step for the minority business community and their ability to compete and grow,” said Sheila Morgan, President and CEO of the Chicago Minority Supplier Development Council. “The Governor’s action today shows a sincere desire to support economic development through inclusive practices in procurement in the State of Illinois.”
The Executive Order also directs CMS to determine whether the creation of “Sheltered Markets” can reduce disparities and, if so, take appropriate steps to establish sheltered markets in industry-specific areas.
Sheltered markets may be created when certain State procurement solicitations are specifically set aside for BEP-eligible businesses. These initiatives are able to target areas where discriminatory practices have prevented progress towards parity in contracting. They also complement and bolster the efforts of other BEP measures such as the state goal of 20 percent of contracts awarded to minority businesses.
Pursuant to the Executive Order, CMS must report on its results on July 1st of each year, beginning on July 1, 2017.
As I write this, the order itself is not yet posted online.
* A press release this past March from the U of I will give you some insights into how this could work…
The University of Illinois Board of Trustees on Wednesday approved the state’s first contracts under a new Illinois purchasing initiative enacted to attract more minority and female-owned businesses as vendors for state agencies and universities.
Under the groundbreaking awards, 28 minority- and female-owned companies will receive three-year contracts to provide information technology services on an as-needed basis, augmenting existing staff on the university’s campuses in Chicago, Springfield and Urbana-Champaign. The contracts take effect July 1, 2016.
The university received bids from 45 companies after issuing the state’s first request-for-proposal last April through the new “sheltered market” initiative, which followed years of work by the state to address disparities in contracting IT and telecommunications services by state entities.
The “sheltered market” initiative allows certain state contracts to be set aside specifically for businesses owned by minorities, females and people with disabilities, and was established after an Illinois Business Enterprise Program Council disparity study found that sectors of the IT/telecommunications industry were being unfairly excluded from state business.
- Anonymous - Wednesday, Jul 13, 16 @ 11:20 am:
This will make it easier for such businesses to not get paid like other businesses contracting with the State.
- Sir Reel - Wednesday, Jul 13, 16 @ 11:21 am:
Forgot my nickname.
- Anon221 - Wednesday, Jul 13, 16 @ 11:27 am:
Here are the awardees from the UI RFP:
https://www.procure.stateuniv.state.il.us/dsp_notice.cfm?Uni=UIC&PN=KRS102
- Honeybear - Wednesday, Jul 13, 16 @ 11:33 am:
Well……on the one end, I’m really really happy about this. I’m hoping this just isn’t window dressing. It concerns me that DCEO, which had been involved in this work is cut out. What happened to Jimmy Odom at DCEO? It’s fine, not fine, great to go about this work. It’s okay to do it from a contracting perspective, although given our bill backlog, I don’t think minority owned businesses could take that for long. Maybe this is a way of getting them paid faster? But focusing efforts in CMS makes me wonder if this isn’t another effort to kill the public function of DCEO so that the privatization of DCEO will be complete. Now if I’m being paranoid somebody bust me. I’ve got trust issues with Rauner and will forever doubt his intentions.
- Henry Francis - Wednesday, Jul 13, 16 @ 11:33 am:
Nice quote from Ms. Morgan, who was appointed by the Guv to serve on the board of his private DCEO.
- Precinct Captain - Wednesday, Jul 13, 16 @ 11:35 am:
Whatever happened to Rauner’s million at the credit union?
- Anon221 - Wednesday, Jul 13, 16 @ 11:39 am:
This may be an “apples-to-oranges”, or it may be a cautionary tale-
http://www.wweek.com/portland/article-11505-sheltered-existence.html
- Dr X - Wednesday, Jul 13, 16 @ 11:39 am:
Isn’t this collectivism?
- Old Programmer - Wednesday, Jul 13, 16 @ 11:44 am:
No question that women, blacks and Hispanics have been underrepresented in technology. Solutions start by awareness of the problem.
But a lot of the IT and telecommunications small businesses are Indian owned and have been very competitive and successful in the private sector without needing any preferences. The fact that these same firms are also classified as “minorities” puts them an even stronger position when bidding on public contracts. How will the Black Chamber of Commerce react to this in a year or two?
Will the state’s definition of “minority” need to be amended?
What if the majority is considered a “minority”?
- Honeybear - Wednesday, Jul 13, 16 @ 11:46 am:
OHHHHHHHHHH I get it now. Henry Francis gave me the tip. This is how they are going to score the 501c3 status for the ILBEDC or Intersect Illinois or whatever they are going to call it. See to get non for profit status they have to either A. serve a minority or marginalized community OR B. prove that the bureaucracy at DCEO is too cumbersome but this option takes legislative approval. Now I get it. They tried option A and it failed. Now they change their name quietly reincorporate (not sure if it would be needed but probably), use the new reason for the EDC, and voila we have a viable 501c3 privatization of DCEO which will not be FOIA and Rauner can run his backroom deals through.
Nice move Rauner.
That’s why Hoffman at CMS is involved.
Well this will probably work and you can kiss the majority of jobs at DCEO goodbye.
To the minority businesses, watch this like a hawk. My suspicion is that you are about to be used big time. Make sure the money goes to you and is not being used as a backdoor un FOIA EDGE vehicle.
- Henry Francis - Wednesday, Jul 13, 16 @ 12:09 pm:
HB - they already have filed with the SOS “Intersect Illinois” as the assumed name of the IBEDC. They have yet to update their website though. And, as far as I know, have yet to disclose anything about the funders or even the law firm that filed its incorporation paperwork.
- Fr. Murphy - Wednesday, Jul 13, 16 @ 12:18 pm:
Is it worth it to pay more for “x” in order to purchase it from a “sheltered” vendor?
- Anonymous - Wednesday, Jul 13, 16 @ 12:26 pm:
Mr/Ms HB &HF
Any thought why they used five year old data for their study?
- Springfield Since '77 - Wednesday, Jul 13, 16 @ 12:29 pm:
Too bad we just can’t get a qualified vendor at the lowest price…
- Anon221 - Wednesday, Jul 13, 16 @ 12:35 pm:
Intersect Illinois- https://www.ilsos.gov/corporatellc/CorporateLlcController
- Johnnie F. - Wednesday, Jul 13, 16 @ 1:04 pm:
I wonder how many Barry Saacks types Rauner or his 0.1% buddies have had waiting in the wings for this EO?
- Juvenal - Wednesday, Jul 13, 16 @ 1:06 pm:
Can someone please explain the difference between a “sheltered market” and a “minority set aside”?
- NeveroddoreveN - Wednesday, Jul 13, 16 @ 1:15 pm:
I am thinking that this was a procedural move to comply with 2 CFR part 215.44(b). Any Federal pass through grants to a University would need to show due diligence in this regard. Most, if not all, States are likely to be doing similar EO’s.
- zatoichi - Wednesday, Jul 13, 16 @ 1:28 pm:
How many vendors currently in areas that could be considerd ’sheltered markets’ have been paid at any level since July 1, 2015? Vendors usually have costs associated with whatever they provide to the state. The state is not exactly keeping up their payment portion of the purchase agreements.
- Honeybear - Wednesday, Jul 13, 16 @ 1:40 pm:
–Any thought why they used five year old data for their study?–
They probably don’t have the workers/staff to run new ones. They’ve gutted DCEO in order to ensure failure.
- Anon221 - Wednesday, Jul 13, 16 @ 2:00 pm:
Juvenal-
Minority set aside: 2. A program requiring that a percentage of government procurement contracts be reserved for disadvantaged businesses. (Free Dictionary online)
“Sheltered market” shall mean a procurement procedure whereby certain contracts are selected and specifically set aside for businesses owned by minorities, females, and persons with disabilities on a competitive bid or negotiated basis. (http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=550& )
- Anon221 - Wednesday, Jul 13, 16 @ 2:24 pm:
2013 CMS Study on sheltered Markets in IT-
https://www.illinois.gov/cms/business/sell2/bep/Documents/BEC_Sheltered_Market_Report2013.pdf
- Chicago_Downstater - Wednesday, Jul 13, 16 @ 2:33 pm:
@ Anon221
Thanks for sharing that study. I think the biggest difference between the Portland program and the Rauner EO is that the Portland program also threw in early small businesses along with women and minority owned businesses for the special designation. That’s how the program actually ended up helping white males more than anyone else. A lot more info here: https://www.portlandoregon.gov/auditservices/article/276119
Additionally, I think the goal setting provision under implementation of Rauner’s EO is an effort to get around the Croson decision that hamstringed the Portland Program from really taking race into consideration. Specifically I think the goal setting aspect will be used to set the necessary “narrowly tailored means” in order for race to play a role.
That second part could be complete rubbish, so anyone feel free to correct me. But the first part is solid. Still the Portland study shows we have to be careful with the implementation of what could be a very wonderful Rauner EO.
- wordslinger - Wednesday, Jul 13, 16 @ 2:47 pm:
Strange, coming from an “economic freedom” kind of guy.
It bears watching. Daley was infamous for the abuse of MBE/WBE that went on in his administration, rewarding cronies and front groups .
- Unfair practices - Wednesday, Jul 13, 16 @ 2:48 pm:
Now, how does this jive with IDOT that continuously targets DBE’s for discriminatory practices in highways department, EEO and Quality Control led by Jeff Heck. EEO & OEIG should do forensics audit and find all the goodies. To quote Alec Baldwin: “You think I’m Effing with you? I am not Effing with you.”
- Anonymous - Wednesday, Jul 13, 16 @ 2:58 pm:
The EO is now at that link.
- Anon221 - Wednesday, Jul 13, 16 @ 3:01 pm:
Another consideration (might address Unfair practices question)- some Federal matching grant programs may have requirements that the states have to follow for letting contracts on certain projects. Don’t know. Just a musing.
- sharkette - Wednesday, Jul 13, 16 @ 3:47 pm:
Murphy, all bids are bid, they don’t pay more for x. Lowest bid wins the deal, unless the winner is unqualified, or lied.
CMS does a great job at processing invoices, as do all agencies.
The comptroller processes invoices, in order of invoice date received, with no precedent that a vendor, is or is not minority or local, nor certified, that is 1 of many probs. The larger problem is the primes do not solicit subs & say they do/did, some contacts say they are sole source only, whenin fact they are not, and most contract do not require any BEP participation. SO if you want to grow IL, for EVERYONE
- Blue dog dem - Wednesday, Jul 13, 16 @ 9:44 pm:
Is this the work of the self proclaimed ” free market capitalist”?