As part of his focus on job expansion, Gov. Bob McDonnell announced yesterday the formation of an advisory board to look at how the state awards contracts to small-business-, womenand minority-owned firms.
The Supplier Diversity Advisory Board is tasked with revamping and revitalizing the state’s procurement program.
“Providing equal opportunity for a diverse set of businesses to win state contracts is an integral part of fostering a ‘commonwealth of opportunity,'” McDonnell said in a statement.
The idea is that better access to state contracts will help businesses grow, which will boost hiring.
“There’s a lot of room for improvement, specifically with the numbers for women-owned businesses and minority-owned businesses,” said Lisa M. Hicks-Thomas, the governor’s secretary of administration and chairwoman of the advisory board, which had 18 members appointed yesterday.
In fiscal 2010, 29.2 percent of state contracts went to certified small businesses, 5.8 percent went to women-owned businesses, and 6.5 percent went to firms with minority owners.
Critics of the small-business-, womenand minority-owned contracting program say the definition of small business is so broad that 99 percent of businesses in Virginia qualify.
To be considered small in Virginia, a business must be independently owned and operated with 250 or fewer employees, or have gross receipts of $10 million or less averaged over three years. That means a firm with 100 employees and receipts of $40 million would still be considered small.
“[Until] they change the meaning of small business, it’s going to remain the same,” said Melvin Brown, owner of M B Mechanical in Richmond’s Jackson Ward.
“It should be based on gross sales [only],” he said. “That way I can compete competitively . . . no matter who they are or where they are from.”
Brown was a contractor at the heart of a 1989 U.S. Supreme Court ruling requiring localities to justify the creation of minorityor gender-based set-aside programs. It stemmed from a contract to replace urinals and toilets at the Richmond City Jail and a city requirement that minority contractors get 30 percent of work. The Supreme Court said states and localities can have set-aside programs only if they are narrowly tailored and are the result of proven discrimination.
A Virginia disparity study released in January said minority firms were nearly universally underused in favor of white male-owned firms.
Hicks-Thomas said the new advisory board will look at suggestions McDonnell has made in the past and evaluate options, including altering the definition of small business.