Governor Warner Acts to Strengthen State’s Supplier Diversity Program

On Tuesday,lost amid news on the budget and Kaine cabinet appointments, Virginia Governor Mark Warner announced that he had signed Executive Order 103 revising and expanding the state’s program to enhance the participation of small, women and minority owned (SWAM) businesses in state contracting.

Dissatisfied by the state’s meager progress since a statewide disparity study identified wide gaps between the availability of SWAM businesses and their utilization in providing goods and services to the state, the Governor imposed new requirements on state purchasing officials, including a requirement not to use past experience to exclude suppliers and specific authorization to contract with SWAM businesses where they are not the low bid.

Executive Order 103 builds on steps first laid out in Executive Order 29 issued by the Governor in 2002.

Despite the best efforts of the Governor and his cabinet over the past three years, Virginia SWAM businesses, which make up 99% of all Virginia businesses, still are not receiving their fair share of the state’s business. The Governor’s action this week will help Virginia continue to make progress toward full equality of opportunity in state contracting for all small, women and minority businesses doing business in the Commonwealth.


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7 responses to “Governor Warner Acts to Strengthen State’s Supplier Diversity Program”

  1. This Tuesday I attended a meeting over at VITA on the new staff augmentation procedures (SMSA). Basically all staff aug/body shop stuff is now going through a one vendor: Computer Aid ( http://www.computer-aid.org/ ). I think RFP’s will still go out through EVa but all resumes will be submitted to CA who will cull down the results to 5 candidates. Then CA turns over those 5 to the hiring manager who picks one.

    The tricky part of the system is that it is tiered. Tier 1 consists of 35 “reliable and proven” vendors, while Tier 2 is everyone else. The majority (the numbers were a little fishy but it looked like 95%) of the requests are filled by those Tier 1 businesses.

    You can see why this is a downer for SWAMs. How many of those 35 Tier 1’s will be SWAMs? Not only that, but the resumes don’t have names or companies listed on them when they reach the hiring manager. So even if a manager wanted to use a SWAM he wouldn’t be able to know whether the resume he held in his hand was from IBM or PharrOut.

    It was an interesting presentation.

  2. Will Vehrs Avatar

    I think it’s time to stop adding more and more bureaucratic bean-counting and reporting requirements to the SWAM initiative and start looking at real bids and real bidders to diagnose what is going on, why it is going on, and whether there is intentional or even inadvertant discrimination or underutilization.

    I suspect most state agency personnel would tell you that purchasing has become infinitely more complicated and less efficient since all the SWAM requirements–and there are new ones! If SWAM numbers are still low with all that, maybe it’s time to take a new approach.

    Either eVA is a fair and transparent system or it is not. If it is transparent, SWAM vendors have equal access to all bids and winning bids are posted. If a SWAM vendor knows he/she put in the low bid and didn’t get it, there should be a “champion,” and “advocate,” an “ombudsman” or somebody to investigate. Is that happening? If they are not low bidders or best service providers, how is it unfair that they are not getting bids?

    The Department of Business Assistance (DBA) has offered training to over 2,000 potential SWAM vendors on how to get certified as a SWAM vendor and how to register with eVA. DBA is now getting ready to survey these attendees to find out if they have gotten any contracts. Shouldn’t the eVA system be able to generate that kind of report?

    DBA probably has more people assigned to helping small companies get a piece of the procurement pie than they have assigned to provide broader help to small businesses so they can compete in the larger market.

    What really constitutes a “fair share” of contracts for SWAM vendors? Is it based on census population or business population? Is it vendors who have registered with eVA or all businesses? SWAM businesses may quite possibly fall into categories that are not proportional to the categories where state purchasing is most concentrated.

    Look at it this way in terms of the overall business populatioin: for every woman or minority firm that does not get a state contract, two or three non-minority/woman owned businesses don’t get one, either. A company has to be in the game to compete. The state is doing a bang-up job trying to get SWAM companies into the game. Maybe if we spent a little more time studying individual companies and their experience as opposed to concentrating on filing reports, we might come up with better ways of helping SWAM vendors get contracts.

    When I was in private industry, purchasing staff had specific office hours when they would see vendors–ten minutes, make your pitch, leave your material, and get some feedback or direction on future opportunities. Do state purchasing officials have that? Wouldn’t that be a great chance for SWAM vendors to get the real inside info they need? Wouldn’t that be more helpful than another report submitted from the trenches? You can’t see vendors when you’re filling in little boxes.

  3. Will:
    All of your points are well taken. To answer your question about how availability is determined, it is based on industry specific information. The full methodology is set out in the nearly 400 page long disparity report linked to my post.

    You are right that some individualized assessment and vendor specific approaches need to be added to the data driven accountability measures. But, to paraphrase something the Governor said today, if you don’t measure where you are against where you want to be you can’t get there.

    The Executive Order does include some proactive measures, like a new method for getting projected future purchasing opportunities out in public so that folks will know what they might be able to bid on in the future.

    Ultimately, though, sales depend on relationships, and businesses that want to sell to the state do have an obligation to get into the system, meet with buyers, etc. The problem right now is that state procurement isn’t what one would call transparent. eVA is helping but there is a long way to go.

    The complications of the VITA contract bundling described in the post by Ross is a glimpse of some of the complexity that’s out there confronting small businesses that want to sell to the state.

  4. Anonymous Avatar

    What will be the impact of CAFTA on SWAM contracting? My understanding is that under both NAFTA and CAFTA, a party that is excluded from a state contract due to being offshore can file a protest in court.

    This already happened when a Canadian company was excluded from a Virginia state contract.

    Does SWAM have any meaning if the state is required to accept bids from outsourced and offshore firms in Central America?

    Jonathan Mark
    GoodbyeJim.com

  5. Will Vehrs Avatar

    CG2, with all due respect to the Governor, I once said, if you spend all your time and resources measuring, you keep knowing a lot about where you are and how far you have to go.

    Lots of companies decide to get certified as “small,” instead of minority or woman-owned, just because the application process for minority or woman owned is so complex and requires so much documentation. The certification is of no use anywhere but in the eVA system.

    Go the eVA website and tell me if it is intuitive as to how a new company should register. Ask someone who has finally figured out how to register how long it took them. Ask the average small businessperson how much time they have to waste in an average day.

    Who’s in charge of the SWAM program? Who goes around trying to break down the real barriers? Who is measuring the performance of all the supposed advocates? Who is coordinating DGS, DBA, DMBE, and all the other agencies that have a role, real or assumed, in getting more contracts for SWAM businesses?

    How does the state establish credibility with this program when we know that the bigger the vendor, the chances of the cost being less are greater? Why do we see press releases announcing the latest contract with a CGI or other big firm, but we never see a press release saying that in November $X million in state contracts went to SWAMs?

    Nobody cares more about small businesses of every stripe than I do. I talk to 50 every day. Maybe I’m just frustrated because I see a lot of paper flying, but not many streamlined procedures to help small businesses get in the procurement game, assuming it’s realistic and advantageous for them to do so. We do no favors by signing up businesses for eVA if they aren’t ready or capable. Those companies need a different kind of help.

  6. Anonymous Avatar

    I think small businesses are going to have a much greater problem getting work from the state unless they subcontract with the big boys. Looks like all our work is going to the mega-companies like Staples, Northrop Grumman and CGI-AMS. Does the state count the businesses that are contracted by them in the mix?

    I don’t even know how small business could ever complete with these companies. Obviously, the big guys have the money to throw as bait. The little companies will never stand a chance there.

  7. Will:
    As always, you’re asking the right questions.
    CG2

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