It’s been an extraordinarily busy week in the news, so you may not have noticed the story that Pennsylvania Gov. Tom Corbett, in addition to angrily brushing off questions about his role in the Penn State investigation as Attorney General, announced new efforts to provide a leg up for small businesses and small veteran-owned businesses in competing for state contracts as prime contractors.
Announcing the creation of the Small Business Procurement Initiative and the expansion of the Small Diverse Business Program, Corbett said, "There is no denying small businesses are the engines of our economy. With more than 300,000 small businesses in Pennsylvania, we have a responsibility to create opportunities for the development of new businesses and ensure the continued success and growth of established businesses. The Small Business Procurement Initiative helps us to meet that responsibility."
Sounds great on the surface, but the devil, as always, is in the details. In this case, the question is how these initiatives would benefit minority contractors, and their ability to do business with the state. The answer, sadly, is not much.
The Bureau of Contract Administration and Business Development (BCABD), an agency within the Pennsylvania Department of General Services, is the designated monitoring agency of state contracts. Since1993, the Bureau has been tracking state contracts for minority participation and inclusion. Their own website provides a sobering glimpse into the obstacles minority business owners face when trying to bid for state business, and the agency’s own limitations about BCABD data:
“Precise contracting figures cannot be produced. Although most state agencies are required to report to BCABD, currently only 21 of the state’s 35 agencies report. In addition, many agencies are late in reporting by one to three quarters, making it difficult for BCABD to provide accurate analyses of contract activity for any given period.”
So they can’t really monitor how well the program works for minority business owners, because not all agencies have to report their numbers, and those who do, report them late.
But here’s the kicker: “Agencies only report payments made to M/WBEs that are prime contractors, even though M/WBEs, being mostly small firms, participate in state contracts most often as subcontractors.”
Small veteran-owned businesses benefit, and that’s good, but unless minority business owners can somehow break through the “old boys” network in significant numbers and earn prime contractor status, what Corbett’s new initiatives accomplish on their behalf essentially amounts to cutting the state contracting pie into even smaller pieces.