Minority chamber leaders: Acknowledging disparity is 1st step

Groups eager to work with state to find solutions to more equitable distribution of government contracts

No one needed to tell Carlos Medina, the CEO of the Statewide Hispanic Chamber of Commerce of New Jersey, that minority groups have long been getting shorted when it comes to state contracts.

The long-awaited release Tuesday morning of the state’s disparity study — one that showed the disparity was even worse than many thought — wasn’t a surprise to Medina. He knew that from his other role: president of Robinson Aerial Surveys, a Hispanic engineering firm.

“We all knew what the numbers were going to be,” he said.

Medina has been fighting the fight for decades. In fact, he was asked to testify during hearings held during Gov. Jim McGreevey’s administration.

The study that was released Tuesday simply confirmed that nothing’s changed.

“This is a complicated issue,” he said.

The 221-page report, prepared by California-based Mason Tillman Associates, reviewed more than 1.2 million records and 240,000 contracts from over 60 contracting agencies, authorities, commissions, state colleges and universities for a 60-month period between July 1, 2015-June 30, 2020.

It examined the awarding of government contracts for seven groups: Black Americans, Asian Americans, Hispanic Americans, American Indians and Alaskan natives, Caucasian females, minority business enterprises and woman business enterprises.

It examined the awarding of prime contracts for:

  • Construction (valued at over $65,000 to $5.71 million);
  • Professional services (valued at over $40,000 to $800,000);
  • Goods and services (valued at over $40,000 to $360,000).

It also looked at subcontracts for construction and professional services.

The numbers were astonishingly bad, estimates for all groups studied (Blacks, Hispanics, Asians, women) showed.

Consider one group for one category. When it comes to professional services (for contracts between $40,000-$800,000), Hispanic-owned companies represent 5.77% of the available firms, but were awarded just 0.99% of the dollars available. A disparity that cost Hispanic-owned businesses $36 million over the time period.

All told, the groups missed out on approximately $300 million in that category and more than $1 billion over all the categories.

For this reason, Medina applauded the governor for having the courage to do the study.

“It was a brave thing to do, because he knew it was going to show negative things that could reflect on him,” he said.

That being said, Medina said he wished the administration offered more thoughts on what it is going to do moving forward.

“It was very vague,” he said.

Officials at the Governor’s Office and the Treasury Department did not return requests for information on future plans Tuesday, but they had said previously that they intended to begin a series of meetings with legislators and business leaders.

In their media release on the study, they noted a number of steps the state already has taken on the issue, including:

  • In September 2021, more than 500 businesses attended six virtual business community meetings held in all regions of the state;
  • In 2021, Treasurer Elizabeth Maher Muoio announced the waiver of the $100 fee required for all business certifications;
  • in January 2023, Treasury launched a statewide web-based Supplier Diversity Management System to collect real-time vendor, contract and diverse spending data. The SDMS will allow for real-time monitoring and analysis of statewide diverse spending data;
  • Last week, Gov. Phil Murphy signed legislation that revises the number of disabled veterans’ businesses required to designate a set-aside contract from three to two.

State officials said that, now that it has been completed, the study will provide a foundation for additional initiatives to address disparities in state contracting.

The heads of other minority groups are eager for answers.

Rajeev Krishna, president of the Asian Indian Chamber of Commerce, said the study highlighted a persistent issue — the inequitable distribution of state contracts.

“With increased transparency and awareness of available state contracts, the Asian Indian Chamber of Commerce can utilize targeted outreach programs to build awareness within its membership of these contracts,” he said. “By collaborating with key stakeholders, the chamber envisions a New Jersey where opportunities flourish for all communities. AICC has taken a proactive stance since 2022, in ensuring that its members have the proper diverse and/or woman-owned business certification to avail these business opportunities.”

Indy Samra, co-chair of the Punjabi Chamber of Commerce, said the study’s findings are deeply concerning.

“They serve as a stark reminder of a longstanding issue — the unfair and inefficient allocation of state contracts,” he said. “This has been a major focus for the Punjabi Chamber of Commerce, who have actively advocated for change.

“The chamber is committed to working with Gov. Murphy and stakeholders to implement concrete solutions, such as improved data transparency and targeted outreach programs.”

Medina is hopeful meaningful change will come out of the study. He said, anecdotally, that he has seen change in some private-sector companies. He named Public Service Enterprise Group and Horizon Blue Cross Blue Shield of New Jersey as two who have made serious efforts in recent years to increase their spend on diversity suppliers and providers.

Medina’s biggest takeaway, however, was that the state finally acknowledged what he and others have known for decades.

“At least people know now — for sure — that this is a real deal,” he said. “Before, it was just conjecture.”

Read the report below.