Assemblywoman Shavonda Sumter (D-Passaic) speaks about a legislative package intended to reduce racial and gender disparities in state procurement at a news conference at the Statehouse in Trenton on Monday, Sept. 23, 2024. (Dana DiFilippo | New Jersey Monitor)
New Jersey awards hundreds of millions of dollars in government contracts every year almost exclusively to companies owned by white men, a study found earlier this year.
So Monday, legislators advanced a wide-ranging legislative package intended to reduce racial and gender disparities in public procurement in New Jersey.
“The talking is over. I think we as leaders have to step forward. We cannot settle for less, and when we’re doing this, we’re doing this for our children, our grandchildren, our great grandchildren,” said Assemblyman Benjie Wimberly (D-Passaic), a sponsor on five bills. “There’s nothing right about these numbers. This is true disparity. These numbers are not satisfactory. Our folks deserve better, and they deserve more.”
The 12 bills approved unanimously by the Assembly’s community development and women’s affairs committee target what one racial justice advocate, the Rev. Charles Boyer, called “the shameful reality of a structurally racist procurement system in our state government.”
They build on the legacy of the late Sen. Ronald Rice, the longtime chair of the Legislative Black Caucus whose bills led the state in 2018 to create a chief diversity officer in the state Department of the Treasury and to commission a study in 2020 on disparities in public procurement, said Assemblywoman Shavonda Sumter (D-Passaic), the caucus’ current chair and a sponsor on four bills.
Among the bills advanced Monday are measures that would:
Establish the “Minority and Women-Owned Businesses State Contractor Remedies Act,” which sets a goal that state agencies award at least 30% of their contracts to socially and economically disadvantaged businesses.
Require the state Treasury’s chief diversity officer and other state officers to do outreach and offer training and educational programs for minority- and women-owned businesses.
Direct the state Department of Treasury to study procurement disparities every five years.
Require the New Jersey Turnpike Authority, the South Jersey Transportation Authority, the New Jersey Economic Development Authority, the Casino Reinvestment Development Authority, the Delaware River Port Authority, and the Port Authority of New York and New Jersey to consider minorities and women when hiring or awarding contracts.
Provide corporate business tax and gross income tax credits for employers of certain people with disabilities.
Sumter and other lawmakers and bill supporters stumped for the new bills at a morning news conference before their committee hearing Monday at the Statehouse in Trenton.
They cited statistics from a state-commissioned disparity study, released in January, in which researchers reviewed statewide procurement data relating to goods and services, professional services, and construction over a five-year span.
That 221-page study found numerous statistically significant disparities, such as woman-owned businesses getting less than 10% of state dollars spent on professional services contracts worth $40,000 to $800,000 — despite representing almost 38% of such businesses. It also found minority-owned businesses received less than 4% of the dollars for construction contracts worth $65,000 to $5.7 million despite representing 28% of construction businesses.
“The evidence is clear: Systemic inequities persist, hindering the growth and prosperity of marginalized communities,” Sumter said. “Today, we recommit to building a more inclusive and equitable business landscape, one where every entrepreneur, regardless of background, has the chance to thrive.”
Lawmakers also have acted to expand contract opportunities for disabled veterans and LGBTQ business owners, Sumter added.
The new bills drew some opposition from industry lobbyists and others, who applauded the bills’ intent but raised concerns about various provisions.
“We are concerned that Black, Hispanic, and women-owned engineering firms do not exist in sufficient numbers in New Jersey to meet the goals set forth in this work,” said TJ Mann of the American Council of Engineering Companies of New Jersey. “Accordingly, we have concerns about any liability our member firms will have for noncompliance.”
Ryan Sharpe of the Utility and Transportation Contractors Association of New Jersey told lawmakers the bills fail to address the “root causes” of disparities in state procurement, which he identified as overregulation and a shortage of minority- and women-owned businesses.
“The vast majority of public works contracts are awarded in a low-bid system, meaning they must be awarded to the bidder who submits the lowest responsible bid,” he added.
John Harmon, who heads the African American Chamber of Commerce of New Jersey, urged legislators to add liquidated damages and clawback provisions to the legislation to protect business owners.
John Harmon, who heads the African American Chamber of Commerce of New Jersey, testifies before the Assembly community development and women’s affairs committee hearing on Monday, Sept. 23, 2024, at the Statehouse in Trenton. (Dana DiFilippo | New Jersey Monitor)
“This is the teeth that will make the legislation effective. Intent and outcome is two different things, and I think you all are well-intended here,” Harmon said.
He also asked lawmakers to disaggregate data in disparity reporting on procurement so that policymakers and the public can get more detail on the demographics excluded from public contracts.
He pushed back on the industry lobbyists’ claims of a shortage of minority- and women-owned businesses.
“The lack of capacity, as you stated, is underscored by the lack of inclusion. You can’t build capacity if you don’t get opportunities,” he said. “We have the wherewithal to compete, we just need access to opportunity … That’s a systemic discriminatory practice on behalf of the state of New Jersey that we must all change.”
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