A “statistically significant disparity” exists in New Jersey when it comes to public contracts awarded to minority- and women-owned business, a study commissioned by the Murphy administration has found.
The study, conducted by California-based Mason Tillman and Associates, reviewed statewide procurement data relating to goods and services, professional services and construction over a five-year span. It found that New Jersey faces a disparity in awarding of public contracts across multiple minority-owned and women-owned business enterprises.
Gov. Phil Murphy’s administration called for the study in 2020 to find out how many minority and women-owned businesses were part of the state’s contracting process and decide if there should be more programs implemented to create a more equitable business environment in New Jersey.
What did Murphy say?
Murphy said in a statement Tuesday that “our diversity is our greatest strength, and it is imperative that our procurement processes reflect these values.
“The critical findings from this study will ensure the state is well equipped to address the inequities in public contracting opportunities faced by women-owned, minority-owned businesses and service-disabled veteran-owned businesses,” Murphy said. “I look forward to the work ahead as we identify responsive state action while launching initiatives to promote equitable contracting practices with the support of our lawmakers and the business community.”
Finishing the study is a critical step in identifying and addressing disparities in public contracting, said New Jersey Treasurer Elizabeth Maher Muoio.
There hasn’t been a study of this topic in more than 15 years and the firm reviewed more than 1.2 million records and 240,000 contracts from over 60 contracting agencies, authorities, commissions, state colleges and universities, officials said. Those contracts had been awarded between July 1, 2015 and June 30, 2020.
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What was the scope of disparity?
The study revealed that significant disparities were found in contracting with minority-owned and woman-owned businesses and that the value of those contracts was significantly lower.
Minority owned businesses represented 27.97% of the available construction businesses but received only 3.69% of the money for prime construction contracts valued from $65,000 to $5,710,000 while woman-owned businesses represented 37.75% of the available professional services businesses but received only 9.91% of the dollars on prime professional services contracts valued from $40,000 to $800,000.
There were also significant disparities found in subcontracts in the construction industry for minority-owned businesses, in subcontracts for professional services for Black Americans, Hispanic Americans, and woman-owned businesses.
The study found statistically significant overutilization of businesses owned by white men across all areas studied.
The Office of Diversity and Inclusion within the Department of the Treasury oversaw the disparity study. In September of 2021, more than 500 businesses attended six virtual business community meetings held throughout the state.
The study is expected to be used to create initiatives to address disparities in state contracting.
“This study ultimately shines a light on how we can improve state procurement practices. This study is validation that we can and must do better,” said Assemblywoman Shavonda Sumter, chair of the Legislative Black Caucus. “We must support small businesses and it is essential that we support women and minority-owned small businesses throughout the state. It is time to do the work to ensure practices are equitable and offer fair opportunities and inclusivity for all businesses in state procurement opportunities.”
Katie Sobko covers the New Jersey Statehouse. Email: editor@patersonpress.com
