The New Jersey Diverse Business Advisory Council, a coalition of chambers of commerce and advocacy groups including NJBIA, is supporting a package of bills that would increase procurement opportunities for small and diverse businesses seeking public contracts.
At the most recent meeting of the Legislature’s Joint Committee on Economic Justice and Equal Employment Opportunity, co-chairs Senator Gordon Johnson (D-37) and Assemblyman (D-35) Benjie Wimberly (D-35) spoke about the immediate need to change the way the state procures with businesses that are owned by minority, women, LGBTQ+, veterans and the disabled.
A state-commissioned report released earlier this year, The New Jersey Disparity Study, documented a host of challenges that diverse businesses face in obtaining state contracts. For example, the report found that although Black-owned companies in the state represent 9.19% of construction businesses but they received only 0.14% of the dollars spent on construction contracts valued between $65,000 to $5.71 million.
“The testimony heard in our first meeting reinforced the urgency of addressing the decades-long disparity in procurement with small and diverse businesses. Even with current legislative measures like set-aside contracts or diverse business certifications, New Jersey is still not meeting its inclusion goals,” said Senator Johnson.
“Testimony revealed that a disorganized and antiquated diverse supplier database, lack of outreach about procurement opportunities, and the bundling of state contracts has led our diverse businesses to miss out on millions in state contract opportunities,” Gordon said.
Assemblyman Wimberly said the state needed to do better to foster an environment that allows small and family-owned business to thrive.
“Our collective future hinges on fostering an environment where family-owned and small businesses can thrive,” Wimberly said. “Our current system must evolve to allow equitable competition for all who are in pursuit of success.”
The New Jersey Diverse Business Advisory Council has identified a list of priority legislation that would create a more level playing field for small diverse businesses and drive economic empowerment and prosperity for all communities. These include:
- Prompt Payment Program: Ensuring timely payments within 15 days of completion of work for small diverse businesses contracted with state agencies.
- Creation of the Office of Small Diverse Business Development: Establishing an official office within the Governor’s office dedicated to the development and support of small diverse businesses.
- Funding for diverse chambers of the NJDBAC: Allocating budgetary resources to diverse chambers affiliated with the NJDBAC for outreach and programming initiatives.
- Publication of all spends by state agencies: Mandating transparency by requiring state agencies to publish spending data on small diverse businesses vs. total spends quarterly.
- Annual diversity procurement training for procurement officers: Ensuring procurement officers are equipped with the necessary knowledge to engage with diverse business communities effectively.
- Waiver of registration fees for newly formed small diverse businesses: Removing barriers to entry by waiving start-up costs and registration fees for certified diverse businesses.
- Waiver of EZPass tolls for small diverse businesses: Providing relief by waiving EZPass tolls for vehicles owned by small diverse businesses.
- Creation of a 10% Price Preference Program: Granting price preference to small diverse businesses bidding on public projects to encourage their participation.
- NJEDA Diverse Business Lending fund: Establishing a fund for small diverse businesses to access capital using state contracts as collateral.
- Diversity business goals for state funds allocated to counties and municipalities: Ensuring diversity goals are tied to state funds allocated to local governments.
- Inclusion of small diverse businesses in I Bank-funded projects: Setting diversity goals for Infrastructure Bank (I Bank) projects and issuing waivers as needed.
- Funding for capacity building and mentorship: Providing resources for training and mentorship programs to strengthen small diverse businesses.
- State certification for Military Spouse Owned Businesses: Introducing a state certification to support businesses owned by military spouses.
- First look Program: Requiring procurement personnel to prioritize small diverse businesses in purchasing decisions.
- Creation of Ombudsmen at all state agencies: Establishing Ombudsmen positions to assist small diverse businesses with various issues related to state contracts.
