PROVIDENCE — A Rhode Island law requires that at least 10 percent of the dollar value of state contracts go to minority- and women-owned businesses. But the state waived that requirement during the pandemic last year, and it has only met the mandate twice in the past six years, legislators say.
So now, the Rhode Island Legislative Black and Latino Caucus is calling for accountability, and legislators have passed a new law prohibiting the state from waiving the 10 percent requirement at any time, including a state of emergency.
Representative Joshua J. Giraldo, a Central Falls Democrat, noted that people of color were disproportionately impacted by the pandemic. Yet Rhode Island chose to ignore the requirement that 10 percent of state contract value go to Minority Business Enterprises (MBEs) during that moment of crisis, he said.
“It’s unacceptable,” Giraldo said Thursday. “They really left our MBEs out to dry. It tells me that we as a state do not value MBEs as much as we say we do and as much as we are supposed to.”
Giraldo said the Rhode Island Office of Diversity, Equity and Opportunity provided him with data showing the percentage of state contract value that went to MBEs over the past six years:
- 2015: 4.07 percent
- 2016: 6.33 percent
- 2017: 7.71 percent
- 2018: 14.69 percent
- 2019: 13.09 percent
- 2020: 7.86 percent
This year’s General Assembly is the most diverse in Rhode Island history, with 21 people of color in the 113-member legislature. And the new chairwoman of the Black and Latino Caucus, Representative Karen Alzate, has vowed to make the group’s voice heard.
In a recent statement, the caucus said it had received a “Disparity Study” detailing the state’s compliance with the Minority Business Enterprise requirement for the period between July 1, 2014, and June 30, 2017.
“The data we were presented with was concerning, frustrating and extremely disappointing,” the caucus said. “The fact is that the state was breaking the law for many years, and there has been no accountability for failing our minority- and women-owned Rhode Island businesses.”
Black and Latino Caucus members said they’ve known the state was falling short but now they hope the official report will make more people pay attention. “The state needs to do better and it needs to follow the law,” the caucus said.
The caucus called for Governor Daniel J. McKee to comply with the law by providing at least 10 percent of contract Minority Business Enterprises.
And when asked about the matter on Tuesday during his weekly news conference, McKee said his administration takes the issue seriously.
McKee, a Democrat who took office in March after Gina M. Raimondo became US Commerce Secretary, said the state should have been able to figure out a way to meet the 10 percent requirement during the pandemic last year. And he said the “Disparity Report” covering the years 2014 through 2017 should have been released sooner.
“I made sure the disparity study that everybody was sitting on was made public recently,” McKee said. “That, unfortunately, was commissioned back in 2019, 2018, and then here it is 2021 and that data only brings you through 2017.”
He said his administration will recommend that the law be amended to require disparity studies more frequently — perhaps every three, five, or seven years. “It can’t be 35 years between the time that a statute is passed and the time you actually do your first disparity study and then we sat on it for too long,” he said.
Also, McKee said he plans to make an announcement next week about an appointment in the Office of Diversity, Equity and Opportunity. That official, whom he did not name, will join Lieutenant Governor Sabina Matos and the Rev. Chris Abhulime, his deputy chief of staff, to form “a trio that I think is going to be very formidable in terms of addressing that issue,” he said.
Last year, the Raimondo administration spent $34 million to build and equip field hospitals in response to the coronavirus pandemic without providing a dime for minority contractors.
At the time, the administration cited the urgency of the public health crisis in waiving the requirement that 10 percent of the value of state purchases and construction projects go to MBEs. But Black and Latino leaders called that decision “inconceivable,” “disappointing,” and “unacceptable.”
“The pandemic highlighted the inequities,” Alzate said this week. “We didn’t have a chance. We were overlooked.”
That episode prompted Senator Sandra Cano, a Pawtucket Democrat, and Giraldo to file the legislation barring the state from waiving the MBE requirements during a declared state of emergency. Both the House and Senate passed that legislation. But McKee did not sign or veto it. Rather, he allowed it to become law without his signature.
In a July 13 transmittal letter, McKee said, “I am committed to abiding by the terms of the MBE program, to the greatest extent possible, even during emergencies.” But he said did not sign the bill “because it purports to categorically limit the state’s flexibility in a declared state of emergency.”
“If there is one thing that we have learned during this pandemic, it is that state government must be given latitude to respond to an emergency,” McKee wrote. “Categorical restraints on the use of emergency power, like the one imposed here, could delay the state’s ability to act and could compromise public safety in an emergency when speed and flexibility is most needed.”
He said his administration plans to work with the bill sponsors and legislative leaders “to amend this law to address their concerns while still giving the state the flexibility to effectively serve the needs of its citizens during a crisis.”
But Giraldo said he does not see how the legislation limits the state’s flexibility, even in an emergency. “The language says if there are minority-owned businesses available, use them, like we are supposed to,” he said. If no minority-owned businesses are available, the state can use a “good faith” waiver, he noted.
But Giraldo noted that Rhode Island lists about 760 Minority Business Enterprises on a state website.
“There should never have been a scenario where we are less than 10 percent,” he said. “And the data show that minority businesses are getting the short end of the stick, even in non-pandemic years.”