The Comptroller of Public Accounts’ (CPA) Historically Underutilized Business (HUB) program was originally conceived as a means to close the gap between minority- and women-owned businesses and the most lucrative contracting opportunities in the public and private sectors. For some, such as minority business enterprise (MBE) advocacy organizations like the Minority Business Enterprise Institute of Public Policy (MBEIPP), this remains an ongoing struggle despite the raft of resources and advice that the state makes available.
“What I believe is that if we’re going to have a sustained economic recovery, it has to be job-based. In order for it to be job-based, it must include small businesses, and the fastest-growing segment of small businesses are those owned by people of color,” said Cliff Miller, a founding director of MBEIPP, in a recent interview with the Dallas Examiner.
A recent Disparity Study commissioned by the Comptroller reveals that Texas is still a long way away from achieving parity in contracting opportunities for Black-owned firms, even though the HUB program is almost 20 years old. For example, of $38.61 billion in state spending on prime contracts, HUB vendors received a little over $2.95 billion, only 7.64 percent. For African-American HUBs, it was a mere 0.63 percent. The most lucrative contracting opportunities are in heavy construction, and this has emerged as a focal point of reformers.
“At this time, the Comptroller’s office is proposing new administrative rules to address the recommendations made in the Disparity Study,” said the agency’s Allen Spelce, in response to questions about the continuing problems faced by HUBs. “All small businesses, not just HUBs, have difficulty supplying a state the size of Texas. We are still researching these issues, but do make multiple awards and regional awards to ensure smaller business have the ability to compete with large businesses.”
“I am committed to making Texas’ HUB Program one of the best in the nation,” said Comptroller Susan Combs in a public statement. “I strongly encourage woman- and minority-owned businesses to become certified as HUBs and enroll on the state’s Centralized Master Bidders List so they can be notified of state contract opportunities and have a chance to bid.”
The agency will be holding public hearings about the proposed rule changes throughout the state in March, including one in Dallas (Thursday, Mar. 24, 2011 6:00 p.m. - 8:00 p.m. at the J. Erik Jonsson Central Library). However, some have already expressed concern that some of the proposed changes recommended in the Disparity Study, such as adding new, race-neutral categories such as DBE, SBE (Small Business Enterprise), HUBZone, and SDB (Small Disadvantaged Business) will warp the original HUB concept, watering it down and creating a misleading picture of contractor and supplier diversity.
The official rationale for any rule changes centers on the presumed need to update definitions to “ensure that the adoption of HUB utilization targets are based upon the most recent defensible evidence of contractor utilization disparity,” in the words of the proposed rule text in the Texas Register, the weekly journal of state agency rulemaking for Texas. On Dec. 8, 2010, State Senator Royce West of Dallas provided the Dallas/Fort Worth Minority Supplier Development Council (D/FW MSDC) a copy of the proposed HUB rule changes, who then distributed them to several minority business advocacy organizations for review and feedback.
One such organization, the Minority Business Enterprise Institute of Public Policy, issued a position summary that made several recommendations, including not diluting the HUB classification; elimination of a provision allowing for state agencies to achieve HUB goals without using certified HUBs; encouraging MBE (minority business enterprise) utilization of other MBEs; and eliminating size standards (currently, firms “graduate” out of the HUB program upon achieving a certain size).
But tweaking the rules is only part of the solution. Like all businesses, HUBs are concerned with having equal access to state contracts and a level playing field when competing for them. However, identifying those specific stumbling blocks that HUBs are more likely than other businesses to perceive as obstacles is an ongoing area of research. The Texas Association of African American Chambers of Commerce (TAAACC) recently created a Professional Services Committee (PSC) to provide more intensive troubleshooting on behalf of HUBs that are still struggling to gain some ground in the extremely competitive world of state contracting.
“The creation of this committee is the culmination of many years of work – encouraged by Senator Royce West – undertaken by TAAACC,” said TAAACC chairman Jim Wyatt in an official announcement. “And the work we propose to do through this new Professional Services Committee going forward is critical to the development of sound, vibrant, viable businesses in our state.”
Among the state agencies listed as supporting the work of the PSC are: Texas Commission on Environmental Quality, Texas Department of Transportation, Texas Department of Criminal Justice, the University of Texas, Comptroller of Public Accounts and Texas Health & Human Services Commission. The PSC is scheduled to deliver a first draft of its findings to the TAAACC board at its annual meeting in September.
Because of CPA’s ethical requirements not to favor any one vendor over another, the agency is barred from working with vendors in the preparation of their bids. For minority business enterprises, this leaves informal networks and advocacy organizations like MBEIPP and TAAACC as the primary tools for businesses seeking to make the learning curve less steep.
The future viability of the HUB program will ultimately depend on more than good ideas and the will to implement them. The state’s budget crisis looms over the entire landscape, even though CPA is currently “unable to determine what, if any, impacts will occur to the HUB program due to the state budget cuts,” according to Allen Spelce.
Despite the climate of uncertainty, CPA officially backs the program. “The 2009 Texas Disparity Study confirms the need for the continuation of the Statewide HUB Program,” says the agency on its website. “This conclusion is based primarily on:
- statistical disparities by race, ethnicity and gender classification in current HUB utilization, particularly in prime contracting
- statistical disparities by race, ethnicity and gender classification in the private marketplace, particularly in the area of utilization of women- and minority- owned firms in commercial construction
- statistical disparities in firm earnings by race, ethnicity and gender classification, even after controlling for capacity-related factors; and
- anecdotal testimony of disparate treatment as presented by business owners in interviews, surveys, public hearings and focus groups.”
No comments:
Post a Comment