In Response to the ODEO Disparity Study and Inaction to Comply with State Law, RIBBA issues a Failing Grade and Urgent Action Demand to the State of Rhode Island.
Providence, Rhode Island – July 28, 2021 – The Rhode Island Black Business Association (RIBBA)
, a non-profit organization dedicated to advancing the business opportunities and vitality of Black-owned and minority businesses in Rhode Island, calls on state leaders to respond to the Disparity Study
conducted by Mason Tillman Associates and released by Office of Diversity, Equity & Opportunity (ODEO). The Disparity Study, first authorized by then Governor Gina Raimondo, was commissioned to examine State Agency’s procurement activities for any evidence of discrimination in the award of contracts to available minority and women owned enterprises. The release of the study by ODEO on Tuesday, July 20, 2021, came eight months after completion and cost a hefty $499,029 of taxpayers’ money.
The Disparity Study
states that there is evidence of discrimination in the state agency’s contracting with MBE/WBE prime and subcontractors. The Rhode Island Black Businesses Association calls on the State of Rhode Island to enforce its 35-year-old Rhode Island General Law 37-14.1
. This law centers Minority business enterprises targeted for participation in all procurement and construction projects and shall be awarded a minimum of ten percent (10%) of all dollar value of the procurement or project. In 35 years, the state has only complied with its own law two times, once in 2018 and again in 2019.
“The Advocacy and Policy Committee has studied the disparity report produced by the ODEO, and while the results are not surprising and reflect the gap we work to fill, the data is disappointing and painful to see,” said RIBBA’s Advocacy & Policy Committee in a joint statement. “While the report highlights data points between 2014 and 2017, current economic trends have displayed that the treatment of MBEs and WBEs has not received the systemic changes it desperately desires. With the untimely and tragic death of George Floyd and the Black Lives Matter Movement, Rhode Island went through the symbolic process of denouncing systemic racism and inequities by officially changing our name last year – that is not enough. Rhode Island must rid itself of the vestiges of structural and systemic racism and inequality by taking actionable steps to ensure an equitable economy for Black and brown Rhode Islanders. There is a great opportunity within this data, and the Rhode Island Black Business Association looks forward to being a trusted part of the solution.”
The report notes that state agencies did not maintain data on the subcontracts awarded by prime contractors. This data had to be reconstructed by the consultant conducting the study. Based on the findings, the State of Rhode Island failed to maintain the required data to measure the effectiveness and compliance of the law. The state failed in its support of Black and minority owned business owners.
“The real problem is there are so many moving parts to the State of Rhode Island’s procurement process that it is difficult to point the finger at a single person or source of the problem,” said Casby Harrison – owner and litigator at Harrison Law Associates. “Without one general, one powerful person that can be held accountable for the program’s success, the program is doomed to failure and without a mandate from the top, there is no incentive to make the MBE program work.”
Black and minority owned businesses have been historically, disproportionately impacted by systemic racism and a lack of broad base support by private or public entities. The lack of generational wealth or liquid capital brought about a rapid decline of these businesses with the COVID-19 pandemic. The National Bureau of Economic Research (NBER) working paper estimates that between February and April, the number of Black businesses nationally decreased by 41 %, the largest change of any racial group included in the study. In contrast, the study estimates that the number of white businesses saw a 17 % drop-in activity over the same period.
“Why did it take 8 months after the study’s completion before it was released to law makers and the public? Why wasn’t Mason Tillman Associates personnel available to answer questions regarding the study upon the State’s release of the Disparity Study? The state’s inability to follow its own law enacted in 1986, the late release of the study 8 months after its completion, and the lack of depth to a study of this importance is both unacceptable and reprehensible,” said RIBBA’s Executive Director – Lisa Ranglin. “After six Governors, absolutely nothing quantifiable has been done to improve the lives of Black and brown people in Rhode Island. The data we do have provides evidence consistent with a system hell bent on upholding the pillars of systemic racism and a lack of commitment by state leaders to changing the outcomes of Black and brown Rhode Islanders. RIBBA demands that given the inequities that COVID 19 has exposed, plus the findings of this limited Disparity Study, that Governor Mckee rights this wrong and enacts real and quantifiable change.”
The Executive Office and the General Assembly ‘sit on their hands’ when it comes to encouraging Black entrepreneurship and investing in Black businesses. Systemic racism and structural poverty continue to drive gun violence in areas devoid of investments. To address these disparities and the spiraling decline of communities, Black businesses must be fully and intentionally supported in order to create jobs and build stronger communities.
The Rhode Island Black Business Association, (RIBBA) agrees with the Disparity Study that there is evidence of discrimination in the state agencies contracting with MBE/WBE prime and subcontractors and is issuing a Call to Action to all stakeholders: elected officials, public and private sector entities, and civic leaders to make this a real turning point in closing skills and opportunity gaps disproportionately affecting Black Americans and communities of color in Rhode Island.
Based on the status of Black and minority-owned businesses in Rhode Island, the findings of the Disparity Study, and the State’s inability to follow its own law enacted in 1986, RIBBA issues a Failing Grade to the State of Rhode Island.
RIBBA and its supporters have identified several solutions in addition to the recommendations cited in the disparity study.
- Establish a Contract Compliance office outside of government to monitor and enforce compliance to MBE commitments
- Mandate when a prime contractor fails to meet the goal of awarding 10% of the prime contract to a M/WBE, that prime contractor must submit good faith documentation indicating efforts to engage and hire minorities or women, a requirement existing as far back as 1996
- Investigate complaints of non-compliance and develop corrective action plans as needed
- Implementation of MBE/WBE tracking of comprehensive data on the subcontracts awarded by the prime contractors
- Increase the government procurement participation goal for Black and Latino contractors to reflect the increased minority population in RI
- The state must set up, and financially assist organizations that provide support to Black businesses so that they too can grow and thrive
- Issue an Executive order to establish preference in state contracts where Black and brown people are the predominant group to be served or when contracts are cited within a neighborhood where the population is 20% or more minority
- Commit at least 20% of funding to economic development in Black and brown communities
- Intentionally work with organizations led by Black and Latino leaders
- Increase loan funds available through Black and Latino organizations
- Establish clear lines of authority to the office of the Attorney General or other legal entity to ensure enforcement
- Implement a Pay Audit System to be used by Prime Vendors and their Subcontractors to independently report payments from Prime Vendors to the Subcontractors on state contracts.
About the Rhode Island Black Business Association (RIBBA):RIBBA
is a non-profit organization dedicated to advancing the business opportunities and vitality of Black-owned and minority businesses in Rhode Island through access to capital, contracting, business development resources, entrepreneur training, business advocacy, meaningful investor services, and workforce development.