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Destroying supplier diversity under the guise of ‘efficiency’

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Senate Bill 133 undermines supplier diversity and threatens Indiana minority businesses.

Marshawn Wolley

Indiana is open to borrowing from a state that has good ideas. Still, in this instance, when lawmakers ventured across the border to Ohio, they neglected to realize the glaring differences in the two states’ circumstances.  The proposed policy is to make it so that any business that can become certified as a minority, woman, or veteran-owned business through the state can automatically be certified by the city of Indianapolis.

Unlike Ohio, Indianapolis has the only public certifying agency that recognizes businesses to do business for local public contracts. As a service the city offers, it is free for companies seeking certification. Most of the major cities in Ohio have an office focused on minority and women business enterprises.

An Ohio law implemented in Indiana will have a fundamentally different impact here – the only other public agency in the state would lose its ability to control its certification process and race and gender program—which is supposed to be narrowly tailored to meet the city’s demographics, geography, and procurement needs.

The city and state used to have agreements where the same company could more easily pursue state certification if the city certified a business. The city and the Indiana Department of Transportation currently have MOUs establishing a similar arrangement because they have the same federal criteria for certification.

The city and the state have two different processes in part because they have different geographic areas for their programs, demographics, and procurement needs.

The city has a different definition of minority and more defined definitions of control, independence, and affiliation.

Only around 20% of businesses are certified by both agencies—because the agencies serve different areas.

Indianapolis is among the most diverse areas of the state and so it has different spend goals than the state.

Perhaps more concerning is that while the city does onsite visits to ascertain whether or not a business does what it purports to do—the state does not do site visits.

In addition to not having site visits, the state has reciprocity agreements with eight states, leaving the impact of companies not domiciled in Indiana to bid on local contracts. This directly impacts the number of out-of-state businesses seeking to work with the city and reduces the intended benefit to local minority businesses—especially Black businesses. 

This is a smack in the face, too well-rooted tenets of “Buy Indiana.”

While the state office that conducts fiscal impact analysis notes that local governments’ workloads will increase, there wasn’t any consideration as to how businesses from around the state and outside of the state could now use state certification as a loophole to access city contracts.

So, even as the state would likely see an increase in its workload, there isn’t a proposed increase in funding for an already under-resourced state office.

The state has six total employees for all Division of Supplier Diversity functions, including two that focus on certifications. Indianapolis has eight employees who are focused on certification and helping XBE vendors.

More cynical minds might believe that the goal is to end Indiana supplier diversity.

The conversations with very few Black business-serving organizations only happened after the decision to pursue the policy was made.

This bill wasn’t designed to help the Black business community.

When one juxtaposes this attack on the city’s certification office and very public pronouncements concerning efforts by state officials to eliminate state funding for diversity, equity, and inclusion, one sees pieces falling into place.

Taking an understaffed agency that cannot do site visits and creating a massive incentive to expand the number of businesses applying for certification to their agency and not providing additional resources isn’t about improving things.

It is a recipe for reducing the credibility of the certification process by making it easier for businesses that don’t actually meet the criteria for certification to get by, or pass-through.

Eliminate the city office, leaving only the state office. Defund the state office. Supplier diversity in Indiana is gone. 

Indianapolis has a more rigorous process, which means less system exploitation. My genuine concern is that some wish to have an easier path to exploiting supplier diversity programs.

In the name of “efficiency,” supplier diversity will become indefensible in Indiana.

Marshawn Wolley, President and CEO of Black Onyx Management, Inc.

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