Where Is the Diversity? Florida Government Spending Bypasses Minority Businesses

March 24, 2016

Co-authored by Torey Alston

Gender and racial bias -- intentional or not -- in the process of awarding contracts in construction, architecture, engineering and professional services is a major hindrance to small business growth for minority- and women-owned companies.

Year after year, city and state governments set spending goals for businesses led by minorities and women, but these goals rarely translate into sizable or proportional contracting awards for these groups.

The state of Florida provides an enlightening illustration of this reality. According to the latest Small Business Administration Office of Advocacy report, the Sunshine State can boast one minority-owned business for every 11 minority residents -- the highest rate of minority entrepreneurship in the country. However, public agencies and the private sector spend less than 1% of their procurement expenditures contracting with minority-owned businesses.

This puts millions of Florida workers and business owners at a disadvantage. Small businesses comprise 40% of the private sector workforce in Florida, and of these small business, roughly 1.3 million are women- and minority-owned. These numbers underscore just how important it is that states meet their procurement diversity goals in order to grow inclusive local economies.

Fortunately, advocacy and civil rights groups continue to bring awareness to this issue because diversity and inclusion practices directly impact job creation opportunities, career advancement options and wealth building. The Florida NAACP state conference recently released the Diversity Matters Statewide Report Card, which examined the procurement practices of cities, counties, school districts and private corporations throughout the state. The report's findings reveal a mixed bag of economic opportunities for Florida women and people of color. On one hand, the workforce diversity of most local governments reviewed in the NAACP report were exceptional. However, advertising and marketing dollars for veteran, minority- and women-owned businesses has generally been a failure.

According to the NAACP survey, the biggest area of opportunity is actual contracting with diverse firms. Many Florida public agencies still do not track spending by race and ethnicity nor is this data easily accessible to the public. Torey Alston, Florida NAACP State Conference Economic Development Chair, shared that most Florida agencies either do not have a dedicated advertising and media budget or spend very little on marketing targeted at diverse groups which do not reflect the diversity of the state of Florida. Public agencies receive tax dollars and spend money at private businesses, so we must hold them accountable to equitable spending across gender and racial lines.

So what's the solution? One opportunity to help expand procurement opportunities for minority- and women-owned businesses is to challenge agencies to track race and ethnicity during vendor registration processes. This strategy will increase transparency and improve the accuracy of reporting expenditures for minority suppliers. All states, and Florida in particular can establish a non-race focused program (e.g., small business enterprise program), race-conscious program (e.g., minority business enterprise program) or a hybrid approach to enhance economic opportunities for small, veteran and minority businesses. In addition, let's pay attention to states that have been successful at supporting minority entrepreneurs. For example, Texas requires reciprocity by local governments to accept the state's Minority, Women and Service-Disabled Veteran certification. Certification is an additional stamp of approval by public agencies that increase the visibility of minority businesses and validate ownership and control along with incentives provided by the local agency.

Not all states are created equal when it comes to setting procurement goals and ensuring equitable opportunities for minority entrepreneurs. For Floridians, gross procurement disparities are continuously ignored by state leaders, local elected officials, business leaders in public and private organizations. This should be unacceptable. Diversity and inclusion is not only the right thing to do in both government and the private sector, but is what will best serve Florida and its residents.

Torey Alston is the NAACP Florida State Conference Economic Development Chair and Lillian Singh is the Associate Director of the Racial Wealth Divide Initiative at CFED.

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