State announces new diversity goal formula
Thursday, Feb 11, 2021 - Posted by Rich Miller
* This makes sense, but relying on existing vendor pools still lets state contractors off the hook. Contractors need to be pushed to help establish a much more diverse pool of subcontractors. That can’t be done overnight, but there’s no time like the present to get things started…
The Illinois Department of Central Management Services (CMS) Business Enterprise Program (BEP) today announced the roll out of its new formula to increase representation of diverse contractors throughout the state. The new methodology is the first change to the formula since its inception and will help ensure that diversity goals are attainable.
”CMS is committed to increasing access to opportunities for diverse businesses across the State to ensure they have the resources they need to grow and thrive,” said CMS Director Janel L. Forde. “Businesses have been hit especially hard over the last year and we are exploring new options like this methodology to build equity and representation in state contracting.”
BEP establishes diversity contracting goals for state agencies based on the Federal Disadvantaged Business Enterprise (DBE) model. The model uses a formulaic approach to diversity goal setting.
The new formula changes make contracting goals more representative of the overall vendor pool. In the previous methodology, goals were set using the Dun & Bradstreet Hoovers database which is comprised of more than 1M vendors who may not all be interested in doing business with the State. The new methodology replaces that formula input and narrows the data source to the approximately 20,000 vendors who have registered in the State’s BidBuy e-procurement system, demonstrating that these businesses are ready and willing to bid on State contracts.
The new formula divides the number of BEP certified vendors registered with the State, under the relevant scopes of work, by the overall number of vendors registered under the relevant scopes of work to determine the percentage of BEP vendor availability (BEP Vendors / All Vendors in BidBuy). This change will increase the diversity goal percentage by using a smaller pool of vendors and increasing the contract spend with BEP certified vendors.
For example,
Contract A for uniforms is worth $250,000. If the previous goal was 1%, the spend with BEP certified vendors would equal $2,510. Using the new formula, the goal could increase by 15%, resulting in a spend of $40,160 with BEP certified vendors.
- Friendly Bob Adams - Thursday, Feb 11, 21 @ 12:43 pm:
While they are at it, CMS should look into the way that BEP classifies businesses as being owned by people with disabilities. The current practice leaves a lot to be desired.
- Perrid - Thursday, Feb 11, 21 @ 1:12 pm:
I remain a cynic. Like 99% of what happens at DCEO, or the comptroller’s Vendor Payment Program, I’m pretty sure BEP exists to give money to lawmakers’ “friends”. They just put a pretty bow on it.
But sure, why not. Minorities should get in on the grift too. I almost mean that without snark.
- Just Me 2 - Thursday, Feb 11, 21 @ 1:30 pm:
I work for a DBE and when we pitch ourselves to big companies they inevitably say something to the effect of, “We’ve been using this other company for 20 years and happy with them.” Contractors need to better understand the value of these programs and not view them as an annoying compliance issue.
- Ghost Duster - Thursday, Feb 11, 21 @ 1:32 pm:
How does SG feel about this?
- used to be - Thursday, Feb 11, 21 @ 1:34 pm:
Rich until Secretaries and Directors personally sign off on waivers there will be no accountability in the system. if second and third tier staff have sign-off no one is accountable.
- Dan Johnson - Thursday, Feb 11, 21 @ 1:38 pm:
Rep Delgado’s HB132 would help by counting any minority business enterprise certified by Chicago or Cook County *automatically* eligible to work as a subcontractor on state or university projects. It makes no sense to require subs to get certified by the state that they are still owned by a minority, woman or a veteran if the city or the county have already done so. This bill would double the pool of subs essentially overnight.
- Lincoln Lad - Thursday, Feb 11, 21 @ 1:59 pm:
I think this should be a positive change. Somewhere along the way the significance of these goals has been diminished IMO. Started under Rauner, and never came back to where it was.
- Lincoln Lad - Thursday, Feb 11, 21 @ 2:02 pm:
I don’t support a goal on the $20 you put on your iPass account via a credit card.
I also don’t support a 20% goal being applied on the dollars paid to your doc through state issued healthcare.
- Merica - Thursday, Feb 11, 21 @ 2:09 pm:
This will just result in the State paying more for everything. By the way, the state already pays more for everything, because we pay late, and because we make vendors certify with a web of complicated entities. To be a vendor you must register with the Secretary of State, the State Board of Elections, BidBuy, the Department of Aging. The result is that when the state buys a laptop that costs $800.00 at best buy, it ends up paying $1,700.00. If you add subcontractors, the State will end up spending $2,000.00. In the end, the taxpayers suffer, and state employees suffer, because there aren’t enough laptops, and managers force them to work in the office and expose themselves to Covid, or simply stay at home doing nothing without access to a computer.
- AndyIllini - Thursday, Feb 11, 21 @ 2:23 pm:
When the governor paid for the renovations of the governor mansion himself, it would have been nice if he still would have followed the standards.
- Candy Dogood - Thursday, Feb 11, 21 @ 2:57 pm:
In 2019 CMS had 8.64% African American representation among coded employees at the agency. One of the worst rates in the State Government.
I hope they do a better job of enforcing standards than they do following them.
- walker - Thursday, Feb 11, 21 @ 3:31 pm:
“”I’m pretty sure BEP exists to give money to lawmakers’ “friends”. “”
You’re pretty sure? OK then. /s
- RNUG - Thursday, Feb 11, 21 @ 3:41 pm:
I’m a cynic. Businesses will just front whoever / whatever is required to be a minority or to be diversified. Saw it happen all the time when I was reviewing bidders / contracts. Lots of smaller businesses that, on paper, were 51% special category of the year owned while that 51% ‘owner’ was a silent non-involved partner.
And -Merica- has a valid point also. Learning how to meet all the State required certifications and forms is (a) a barrier to smaller businesses competing and (b) increases costs either through the time spent to learn how to properly respond to the system or paying consultants to help you navigate the system.