Surrounding recent presidential executive orders ending affirmative action in federal contracting and eliminating all federal diversity, equity, and inclusion (DEI) staff, there are still questions regarding what these mandates mean for state and local public agencies and their procurement operations.
The executive orders did not specify which DEI practices were illegal or discriminatory, nor has the government indicated that these orders extend to state or local contractors – only federal ones.
While these changes specifically impact federal contractors, the broader issue of diversity remains a vital aspect of American society. Diversity initiatives have long been embedded in various sectors, including government employment, federal government contract awards, procurement practices, and business and community dynamics.
As of now, public agencies at the regional, state, and local levels must still abide by any and all state regulations regarding DEI, including meeting diversity initiatives for the inclusion of Women Business Enterprises (WBE), Small Business Enterprises (SBE), Disadvantaged Business Enterprises (DBE), and veteran-owned businesses.
Based on U.S. Census data from 2021 cited in National Association of State Procurement Official's 2024 Supplier Diversity Review, approximately 22% of employer businesses were women-owned, 21% were minority-owned, and 5.2% were veteran-owned.
In procurement, these businesses are the key components for diversity. The challenge is not so much the acceptance of diversity but the creation and administration of a plan for diversity. Once there is a plan and goals are set, qualification can be a time-consuming process.
In capital projects, government agencies typically will require primes and subcontractors to become prequalified before they can bid on a project. The Public Works departments collect and review a significant amount of information from a pool of subcontractors. This can result in delays in the procurement process and potentially impact project timelines.
The Metropolitan Water District of Southern California (MWD) is one agency that has taken significant strides in promoting diversity within procurement in recent years.
The MWD operates an SBE certification program. The agency decided that the awarding prime contractor must include 18% with a certified SBE. Once MWD moved their certification process online with PlanetBids, it allowed their contractors to not only search their approved database of SBEs, but also required them to record monthly payments to their SBE subcontractors. In turn, MWD saw substantial growth in their SBE numbers. MWD has since increased its participation goal from 18% to 25%, according to Carmen Bermudez-Bracy, the water agency's Contract Compliance Program Administrator.
Bermudez-Bracy emphasized the importance of user-friendly online systems in handling more than 1000 new supplier certifications and renewals annually, especially given MWD's annual $250 million construction spend. Encouraging participation from small businesses and Disabled Veteran Owned Business Enterprises (DVBEs) while effectively tracking and reporting on projects has become a pivotal focus.
To meet its goals, MWD harnessed the power of PlanetBids' procurement platform to augment their supplier pool and assist with the Small and Disadvantaged Business program. The capability to perform quick quotes, including an easier way for bidders to accept contract terms and conditions, helps field staff contract with suppliers/contractors quickly.
PlanetBids provides the advantage of greater outreach to small businesses, a primary goal for MWD, because it allows the sharing and collaboration of established vendor databases across multiple agencies. This reciprocity provides greater outreach and access to small and disadvantaged businesses across the region.
Having access to a database of 20,000 vendors and more than 4,000 certified firms "makes the goals of reaching small business entities more attainable," Bermudez-Bracy said.
San Diego International Airport has also fully embraced diversity initiatives in procurement. In 2022, the airport awarded contracts totaling $359 million, with 16% going to certified small businesses and 21% to certified local businesses. The Local Business Certification process was seamlessly executed through the PlanetBids portal, according to Jana Vargas, Director of Procurement and Small Business Development and Vice President of the Airport Purchasing Group.
Diversity management and reporting have been integral components of PlanetBids' online procurement platform, a concept conceived in 2000. Today, in its third generation, PlanetBids boasts a fully-equipped Business Certification module that empowers organizations to administer Women Business Enterprise (WBE), Small Business Enterprise (SBE), and Minority Business Certification programs, in addition to contractor and subcontractor pre-qualification, vendor self-management of certifications, automated renewal notifications, audit capability, and search functionality for certified vendors.
For additional information about PlanetBids for Business Certification, contact PlanetBids' procurement experts now.
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