SJR 474

Joint Subcommittee Studying State Government Procurement Practices and Procedures

September 20, 1999, Richmond

DGS Policies

The second meeting of the joint subcommittee continued its studying of the state's procurement practices and procedures with regard to the policies aimed at promoting the participation of minority-owned businesses. The Department of General Services (DGS) reviewed these policies and the role the department plays in implementing them. DGS is the state's lead agency over procurement practices and policies and provides assistance and training to state agencies. Under the authority of 2.1-442, DGS publishes the Agency Procurement and Surplus Property Manual, which establishes policies and procedures to be followed by state agencies and institutions in fulfilling procurement responsibilities. The Division of Purchases and Supply administers the manual, which contains provisions for the inclusion of minority-owned businesses in the procurement solicitation process as mandated by the Virginia Public Procurement Act.

These provisions include the requirement that each state agency establish internal procedures to facilitate the participation of small businesses and businesses owned by women and minorities. The manual also provides recommended guidelines on the number of minority firms that should be included in the solicitation process based on set dollar amounts and if there is adequate registration of minority-owned businesses in the commodity. While it does not perform audits, DGS does perform a level of review of agency procurement activities and notes that it found state agencies generally followed the guidelines relating to minority participation.

DGS also reviewed outreach efforts to encourage participation by minority-owned firms in the procurement process. Virginia Business Opportunities, which DGS publishes weekly, provides current business opportunities and is designed to assist in addressing the lack of responses from minority-owned firms in the public procurement solicitation process. In addition, the department is in the process of developing an on-line registration process for its vendors' list to replace the current registration process, which is very labor intensive.

Public Comment

The joint subcommittee also received public comment regarding the Commonwealth's policies pertaining to minority-owned business participation in state procurement. A representative from the Central Virginia Business and Contractors Association expressed the need for stronger support for the Department of Minority Business Enterprises so that the agency may play a stronger role in promoting minority participation in the procurement process. In addition, the need for an enforcement mechanism was cited to ensure that the current statutory requirements are being followed by all state agencies. It was noted that as many as 13 state agencies do not have a written minority business participation plan, which is required by law. Removal of an agency's procurement authority and including minority business outreach in the personnel evaluation criteria of appropriate state officers were suggested as possible enforcement mechanisms. A representative of the Metropolitan Business League also supported the need for stronger enforcement and suggested that the procurement practices should mirror the population of the community in which the agency is located. Other speakers addressed concerns related to the difficulty faced by minority-owned businesses in participation in the process, including the inability of minority subcontractors to interact directly with the end-user state agency and how to effectively measure minority business participation.

Discussion among the members of the joint subcommittee centered on the appropriate enforcement mechanism and the need to improve minority business outreach. At the next meeting, they will review information concerning the components and costs of a disparity study and the experience of other states that have conducted such studies.

The Honorable Benjamin J. Lambert III, Chairman
Legislative Services contact: Amigo R. Wade