When you renew your business registration or register a new business this year, you’ll notice something new: the option to specify whether your business is minority-, woman-, veteran-, and/or disabled-owned.
This option is part A Delaware Black Chamber of Commerce (DBCC) An initiative to track unrepresented business data at the regional level to clearly show how government funds and contracts are distributed.
“As a country, we cannot distinguish which demographics our businesses belong to,” said DBCC president and CEO. Ayana Khan They spoke technical.ly. “This created a problem when the outbreak happened, because we had [Black business owners] Claiming that you are ineligible or disqualified for relief. and then [the response was]’Because we don’t ask for this information, we don’t know if it’s true.’
As a result, it’s easy for minority, woman, veteran, and disabled (M/W/V/D)-owned businesses to fall through the cracks.
What should entrepreneurs know about the change? Here are the details:
Should you tick a box?
If you fall into one of the categories, you may be wary of sharing more personal information online or worry that identifying your business as “minority-owned” will lead to harm.
First Off: No one is asked to check the boxes. If you’re interested in landing government contracts and getting billions of dollars from banks and other corporations earmarked for small business growth, checking a box is a step in that direction.
The data from the checked boxes to Delaware Office of Supplier Diversity (OSD).
What is the Supplier Diversity Office?
OSD arm of Delaware State Small Business Division According to him Delaware.gov page, has a mission:
[To] Increase economic opportunities for the diverse business community of minorities, women, veterans, service-disabled veterans, and business owners with disabilities (M/W/V/D) as well as small businesses of exceptional size and help them compete. Supply of goods, services and facilities to state departments, agencies, authorities, school districts, institutions of higher education and all businesses.
Those who opt in will be notified that they may be eligible to be certified by the state, a process that places them in the OSD directory of at least 51% M/W/V/D-owned certified businesses. Business owners. Once certified, businesses have improved access to state contracts and other opportunities.
Simply put, a certification certifies companies that claim to be in one of the categories offered by the OSD, so when the state or other parties want to contract with different suppliers, they can be sure that the company has it.
Can I bid on state contracts without certification?
You are free to bid on state contracts as an unrepresented business owner without certification. Without certification, however, underrepresented businesses are ineligible to bid on contracts and are not considered underrepresented if the state sets goals for various contracts.
For the record, you can apply for certification by going directly to the OSD website without marking your renewal. But there’s another reason the data being collected can be important: to make the state’s disparity report more accurate and transparent, helping policymakers identify gaps and pain points. The more accurate the data, the more discrepancies can be resolved.
How can lack of transparency affect underrepresented businesses?
In the example that prompted DBCC to support the collection of more information, the Check Protection Program (PPP) In the year In 2020, the data showed that black-owned businesses were the least likely to receive the bailout money, with roughly 41 percent of black-owned businesses going out of business due to the pandemic. It is estimated that only 15 to 20% of black-owned businesses receive PPPs, including many who report being discouraged when they try to apply for aid.
But here’s the thing: We don’t know exactly what the numbers are because the PPP loan application has a section where borrowers voluntarily provide owner demographic information, and 75% of applicants leave it blank.
The federal government and some financial institutions adjusted course slightly in 2021, giving priority to small businesses in the second round of loans. But we still don’t know how big the gap was at the federal or state level.
In Delaware’s 2022 Diversity Report, the state found diversity in all areas, including an accurate analysis of M/W firm usage, with 100% of firms used for construction procurement in 2021 being non-M/W (in other words, white-owned).
That may not mean that every M/W organization is rejected. It is very possible that none of them are implemented. but why? And how many industry related M/W companies are there in the state that do not apply?
What is the goal?
Collecting more comprehensive data for businesses can create a plan that sets aside certain contracts or sets a goal to award a certain percentage of contracts to M/W/V/D businesses based on data analysis of how underrepresented companies are. First of all, in industries such as construction.
As part of Delaware’s 2022 Diversity Report, it listed various states and municipalities that use different methods of segregating government contracts — some based on race, and some in race-neutral ways. Delaware allows race- and gender-based aggregation, but only on a very limited basis; Delaware does not have M/W/V/D quotas and currently requires a race-neutral strategy. Race-neutral strategies are controversial but are widely used as a way to address legal barriers to affirmative action.
_
This report appears as part of a five-part series. In the following chapters, we will examine the use of set-sides, differential goals and strategies; See the certification process at the state and federal level and portals that make it more accessible; And explore how increased supplier diversity is impacting Delaware businesses.
-30-
