UPDATE ON MINORITY SET-ASIDE

MINORITY BUSINESSES; MINORITIES; CONTRACTS; CONTRACTORS;

CONTRACTORS;

OLR Research Report


July 11, 2003		2003-R-0499
MINORITY SET-ASIDE COMPLIANCE

By: Ryan O’Neil, Research Assistant Sandra Norman-Eady, Chief Attorney

You asked for an update on OLR Report 2001-R-0723, which described state agencies’ compliance with statutory requirements in awarding contracts to women- and minority-owned businesses.

SUMMARY

The latest (FY 2001-02) Commission on Human Rights and Opportunities (CHRO) report shows that 43 of 81 state agencies did not meet their goals for contract expenditures with small, minority- and women-owned businesses.

Under the state minority set-aside program, state and quasi-public agencies and political subdivisions, other than municipalities, must set aside 25% of the contracts they let for construction, goods, and services each year for small contractors and to reserve 25% of those contracts for small, minority-owned businesses (or 6. 25% of all contracts). (Municipalities may set aside a percentage of the contracts they award each fiscal year to small minority-owned businesses. ) Like most state contracts, set-aside contracts must be awarded based on competitive bids.

In lieu of setting aside a percentage of all contracts, an agency or political subdivision can require a general or trade contractor that it authorizes to award contracts to set aside a portion of any contract it awards to subcontractors.

CHRO reports to the legislature annually on the level of participation by woman- and minority-owned businesses in state construction and procurement contracts.

MINORITY SET-ASIDE PROGRAM

The law (CGS §§ 4a-60g to 4a-62) requires state and quasi-public agencies and political subdivisions, other than municipalities, to set aside 25% of the contracts they let for construction, goods, and services each year for small contractors and to reserve 25% of those contracts for small, minority-owned businesses.

Agencies are allowed to exempt certain contracts. These include:

1. full-service contracts (the state has three of these in place: US Foods, Eastern Bag and Paper, and Vanguard);

2. contracts for medical and professional services, advertising, telecommunications and electronic data processing services, and insurance services;

3. contractual services from non-profit and community-based organizations;

4. interagency transfers;

5. consulting contracts;

6. insurance services;

7. dues and subscriptions;

8. all purchases made from three “preferred vendors” – BESB, CT Correctional Industries, and CT Community Providers – these three entities have to be approached first to see if they can provide the service at the market value before looking to the open market; and

9. sole source and proprietary source purchases, which require a waiver from OPM.

“Small contractors” are contractors, subcontractors, manufacturers, or service companies that (1) owned and operated their businesses in the state for at least one year immediately before applying for certification by the Department of Administrative Services (DAS) (see below), (2) grossed less than $ 10 million in the most recent year before submitting the application, and (3) are primarily owned (at least 51%) by someone with authority over daily operations, management, and policies and who receives beneficial interests. A “minority business enterprise” means a small contractor owned primarily (at least 51%) by (1) a black American, Hispanic American, Asian Pacific American, Pacific Islander, American Indian, person from the Iberian Peninsula, or a woman; (2) a person with a disability; or (3) a nonprofit corporation run (at least 51%) by a person in one of the above listed minority groups.

The DAS commissioner certifies small contractors and minority business enterprises eligible for set-aside contracts and annually prints a directory of them. The commissioner had certified 2,323 companies as of December 2002.

Each state agency and non-municipal political subdivision must prepare (1) an annual report establishing small and minority business set-aside program goals and submit it to the DAS commissioner, CHRO, and the cochairmen of the Planning and Development and Government Administration and Elections committees and (2) quarterly status reports on their goal implementations and results and submit them to DAS and CHRO.

*State Agency Name*	*Total Reported FY Purchasing Budget*	*Total Reported FY Budget after Set-Aside Program Exemptions*	*FY SBE Program Goal*	*Total Expenditures Reported with SBE Contractors*	*% of Goal Achieved*	*FY S-M/WBE Program Goal*	*Total Expenditures Reported with S-M/WBE Contractors*	*% of Goal Achieved*
Asnuntuck CTC	$ 1,407,239	$ 1,407,239	$ 351,810	$ 204,289	58. 07%	$ 87,952	$ 108,315	123. 15%
Attorney General	1,044,387	531,788	132,947	158,456	119. 91	33,237	52,576	158. 19
Bd. Academic Awards	1,596,262	886,379	221,585	191,496	86. 42	55,399	53,187	96. 01
Bd. Ed. Services to the Blind	5,545,140	4,468,759	1,117,190	135,350	92. 67	279,297	836,788	299. 61
Bd. of Trustees CSU	10,896,741	6,998,129	1,749,532	766,376	43. 8	437,383	373,906	85. 49
Bd. of Trustees CTC	3,777,753	3,777,753	944,438	3,359,313	355. 69	236,110	361,343	153. 04
Board of Firearms Examiners	13,807	12,083	3,021	2,558	84. 67	755	-	0
Board of Parole	5,010,333	177,973	44,493	58,880	132. 33	11,123	41,949	377. 13
Capitol CTC	2,257,918	2,056,017	514,004	255,025	49. 62	128,501	119,139	92. 71
Central CSU	16,874,080	16,874,080	4,218,520	4,739,832	112. 36	1,054,630	1,882,849	178. 53
Comm. Human Rights & Opp.	961,294	927,544	231,886	163,345	70. 44	57,972	36,315	62. 64
Commission on the Deaf	86,349	48,349	12,087	9,342	77. 28	3,022	8,388	277. 58
ConnDot (state)	192,743,455	71,024,930	17,756,233	7,983,402	44. 96	4,439,059	4,999,997	112. 64
Connecticut Development Auth.	10,307,386	901,000	225,250	466,738	207. 21	56,312	-	0
Connecticut Innovations	6,218,000	1,481,000	370,250	68,344	18. 46	92,563	33,118	35. 78
CT. Agriculture Exp. Stat.	936,254	451,273	112,818	323,251	286. 52	28,205	257,000	911. 19
CT. Housing Finance Auth*	2,067,500	1,506,000	376,500	191,855	50. 96	94,100	72,868	77. 44
Dept. Admin. Services (GF)	36,042,312	9,628,975	2,407,244	365,619	15. 19	601,811	101,781	16. 91
Dept. Children & Family	24,297,109	11,166,116	2,791,529	2,818,698	100. 97	697,882	690,113	98. 89
Dept. Consumer Protection	1,083,634	1,083,634	270,909	126,873	46. 83	67,727	49,974	73. 79
Dept. Economic Comm. Devel.	26,596,270	22,889,730	5,722,432	9,470,654	165. 5	1,430,608	3,735,250	261. 1
Dept. Education	40,643,000	23,026,000	5,756,500	2,317,586	40. 26	1,439,125	1,033,520	71. 82
Dept. Environmental Prot.	16,977,316	10,324,965	2,581,241	418,665	16. 22	645,310	47,340	7. 34
Dept. Higher Education	2,128,256	1,044,176	261,044	175,355	67. 17	65,261	77,510	118. 77
Dept. Information Technology	20,159,453	8,255,626	2,063,907	722,846	35. 02	5,159,177	312,604	60. 58
Dept. Mental Health	188,178,747	24,032,817	6,008,204	2,650,498	44. 11	1,502,051	703,421	46. 83
Dept. Mental Retardation	407,983,434	43,579,649	10,894,912	2,971,464	27. 27	273,728	2,682,734	98. 49
Dept. Motor Vehicles	32,186,490	1,024,123	256,031	408,944	159. 72	64,008	301,024	470. 29
Dept. of Agriculture	5,909,728	768,328	196,582	215,633	109. 18	49,149	96,488	196. 33
Dept. of Banking	1,609,794	581,836	145,459	27,843	19. 14	36,365	11,749	32. 31
Dept. of Corrections	51,559,184	20,507,079	5,126,770	6,273,410	122. 37	1,281,693	1,653,074	128. 98
Dept. of Insurance	2,232,862	400,795	100,199	124,401	124. 15	25,050	50,404	201. 21
Dept. of Labor	14,960,850	14,960,850	3,740,213	681,259	18. 21	935,053	456,070	48. 77
Dept. of Revenue Services	10,096,490	1,066,215	266,554	335,650	125. 92	66,638	86,294	129. 5
Dept. Public Health (contr)	35,451,712	7,705,321	1,926,330	-	0	481,583	-	0
Dept. Public Health (purch)	-	-	-	1,634,400	0	-	915,738	0
Dept. Public Safety	23,080,737	7,292,463	1,823,115	822,628	45. 12	455,778	457,326	100. 34
Dept. Public Works (Construction)	160,547,117	160,547,117	40,136,779	44,564,181	111. 03	10,034,195	25,344,195	252. 58
Dept. Public Works (Procurement)	12,290,108	11,429,251	2,857,313	1,935,686	67. 74	714,328	156,852	21. 96
Dept. Social Services	108,506,070	34,444,561	8,611,140	3,750,139	43. 55	2,152,785	-	0
Dept. Veterans Affairs	5,841,628	2,025,811	506,453	439,008	86. 68	126,613	95,921	75. 76
Div. Criminal Justice	4,249,734	1,281,511	320,378	535,666	167. 2	80,094	179,911	224. 62
Div. of Special Revenue	1,596,296	405,765	101,441	196,183	193. 4	25,360	42,104	166. 02
Eastern CSU	7,816,414	7,816,414	1,954,103	888,945	45. 49	488,525	260,928	53. 41
Gateway CTC	3,114,020	2,742,511	685,628	356,193	51. 95	171,407	40,668	23. 73
Historical Commission	113,853	102,666	25,667	12,393	48. 28	6,417	839	13. 07
Housatonic CTC	1,009,939	771,874	192,969	78,569	40. 72	48,242	11,404	23. 64
Judicial Selection Commission	15,067	6,201	1,550	427	27. 57	388	255	65. 77
Manchester CTC	2,978,239	2,485,589	621,397	438,282	70. 53	155,349	283,475	182. 48
Middlesex CTC	1,900,377	17,202,810	430,203	280,477	65. 2	107,551	69,745	64. 85
Military Dept.	12,466,675	9,637,308	2,409,327	1,648,207	68. 41	302,332	781,057	129. 67
Mun. Police Training Coun.	875,290	87,473	21,868	77,161	352. 85	5,467	23,337	426. 86
Naugatuck Val. CTC	3,971,490	1,819,890	454,973	601,968	132. 31	116,743	207,135	182. 11
Northwest CTC	609,128	488,395	122,099	230,064	188. 42	30,525	151,029	494. 77
Norwalk CTC	807,250	2,018,128	504,531	248,942	49. 34	126,133	219,919	174. 35
Office Chief Med. Examiner	563,040	261,698	65,425	31,273	47. 8	16,356	1,924	11. 76
Office of Comptroller	2,520,723	374,466	70,213	122,021	173. 79	23,404	28,129	120. 19
Office of Governor	458,426	140,355	35,089	24,746	70. 52	8,773	14,746	168. 09
Office of Health Care Access	417,362	337,362	84,240	61,291	72. 76	21,085	54,667	259. 27
Office of Lt. Governor	38,398	30,556	7,639	4,968	65. 03	1,910	3,374	176. 67
Office of Policy & Management	3,246,065	1,798,065	449,516	409,230	91. 04	112,379	80,318	71. 47
Office of Prot. & Advocacy	577,771	250,795	62,699	38,439	61. 31	15,675	15,043	95. 97
Office of the Consumer Counsel	326,604	31,486	7,872	16,385	208. 15	1,968	7,746	393. 61
Office of Treasurer	52,539,689	644,546	161,136	220,977	167. 14	40,284	73,819	183. 25
Public Utility Control Auth.	1,414,751	263,789	65,947	102,500	155. 43	16,487	12,368	75. 02
Quinebaug CTC	1,585,313	1,002,056	250,514	161,669	64. 53	62,629	104,188	166. 36
Secretary of State	1,313,310	1,231,131	307,783	533,778	173. 43	76,946	468,078	608. 32
Soldiers, Sailors, & Marines Fund	45,150	28,385	7,096	7,465	105. 2	1,774	1,367	77. 06
Southern CSU	22,537,389	22,421,789	5,605,447	3,086,450	55. 06	1,401,362	535,876	38. 24
State Library	2,228,760	486,824	121,706	438,712	360. 47	30,427	103,099	338. 85
Teachers Retirement Bd.	619,522	109,122	27,281	17,558	64. 36	6,820	16,465	241. 42
Three Rivers CTC	8,500,500	820,800	212,700	366,530	172. 32	53,175	251,913	473. 74
Tunxis CTC	2,553,338	638,335	159,584	342,196	214. 43	39,896	149,470	374. 65
UCONN (construction)	-	-	-	21,935,527	0	-	7,214,090	0
UCONN (purchasing)	199,813,436	187,491,752	46,872,938	2,296,205	4. 9	11,718,235	585,837	5
UCONN Health Center	97,953,626	97,953,626	24,488,407	5,499,526	22. 46	6,122,102	2,525,132	41. 25
Western CSU	13,771,730	10,358,795	2,589,699	4,034,158	155. 78	647,425	524,773	81. 06
Worker Compensation Comm.	1,890,996	1,422,138	355,534	302,107	84. 97	8,888	32,325	36. 37

* CHFA is on a calendar-year budget. Figures reported are for 6 months only of calendar year 2002.

Source: Annual Report to the Connecticut General Assembly Regarding Contract Compliance and Small and Minority Business Utilization, March 2003