COLUMBUS, Ohio — The state of Ohio spent a record $165 million on contracts with minority-owned businesses in the last budget year and recorded its best performance ever toward hitting participation standards.
Since 1980, federal standards have required state of Ohio government agencies to set aside 15 percent of their spending for minority businesses. Ohio has never hit that target.
But the percentages for budget year 2014, which ended June 30, were higher than ever before.
Among the administration’s cabinet agencies, which account for the bulk of the state contracts,14.41 percent of the state’s business went to minority business enterprises, data obtained by Northeast Ohio Media Group showed. When including the state’s boards and commissions, 14.24 percent of the state’s business went to MBEs.
Among other findings from 2014:
- State cabinet agencies, boards and commissions spent more than $165 million in contracts with minority-owned companies — up from $106 million spent in 2013.
- Seventeen of 24 cabinet agencies surpassed the 15 percent target, up from 10 in 2013. More than half of the Office of Budget and Management’s expenditures were with minority-owned companies.
- Forty-one of 50 non-cabinet boards and commissions surpassed the 15 percent target, up from 14 in 2013.
- The state purchased goods and services from 282 certified minority businesses, up from 207 in 2013.
Over time, many reasons have been cited for why Ohio did not achieve 15 percent participation, ranging from not being able to find MBE companies qualified to do the work to state agencies simply not looking hard enough.
Gov. John Kasich labeled it as a priority when he took office and frequently has said he views it as important for Ohio’s economy.
Achieving the standard and bolstering minority participation will improve a portion of the economy that historically has not had great access to state contracts, he has said. That will in turn boost the whole economy as a whole.
The state’s Development Services Agency, which focuses on economic growth, and the Department of Administrative Services, which is the state’s human resources division, have worked together on the effort.
One reason for the improving numbers is the state has done a better job of identifying companies that would qualify as minority business enterprises and letting them know what kind of work is available, said Jacqueline Williams, the chief of DSA’s Minority Business Development Division.
The time needed to get a business certified as eligible for contracts as an MBE has been shunk to 19 days. It had been 45 to 90 days for years.
The minority business division has six offices around Ohio that help get those companies certified and relay information on the broad type of contracts available. Those range from food, laundry and janitorial services to court reporting to office and lab supplies.
“What we’re looking at is having businesses look at the state as another client,” Williams said.
Administrative Services staff has met with the state’s agencies, meanwhile, to streamline processes and make them aware of potential minority contracts. Through that effort the types of goods and services for which the state has contracted with minority businesses has expanded, said Todd McGonigle, Equal Employment Opportunity manager at DAS.
The trend line for Ohio had started to improve before Kasich took office, but the percentage of purchases from cabinet agencies remained well short of the 15 percent goal.
The figure was 2.5 percent for the 2008 budget year during Gov. Ted Strickland’s administration. It climbed during his tenure.
In 2011, the figure broke 10 percent for the first time. For that budget year, which includes the first six-months of Kasich’s administration, 11.5 percent of the spending in the cabinet agencies went to minority companies.
Williams said the goal isn’t just to hit the federal standard, but to establish more permanent changes.
“The objective isn’t just to meet the 15 percent, but to build on the infrastructure so that we can meet it every year.”