Baker Administration Announces Changes to Promote Increased Participation of Women- and Minority-Owned Businesses in State Construction Projects

Gov. Baker

BOSTON – The Baker-Polito Administration filed legislation, An Act to Expand Opportunities for Minority and Women Business Enterprises in Public Construction Projects, and announced a series of administrative changes to promote greater participation of minority- and women-owned businesses in public construction, including small businesses.

These changes will help optimize and improve the Affirmative Marketing Program (AMP), which sets goals for participation by minority-owned businesses (MBEs) and women-owned businesses (WBEs) in design and construction for the state and municipalities with vertical construction.

“We are committed to increasing opportunities for minorities and women across Massachusetts and strengthening the relationship between the Commonwealth and its diverse business community,” said Governor Charlie Baker. “These improvements to the Commonwealth’s Affirmative Marketing Program represent the most significant construction reform since the program began and will lead to a more inclusive economy.”

“Our administration is pleased to continue empowering and supporting women-owned businesses and minority-owned businesses throughout Massachusetts,” said Lt. Governor Karyn Polito. “By increasing the goals for participation by women and minority businesses in state contracts, reducing burdens and costs on smaller contractors and expanding access to more public projects, we can promote increased participation and greater inclusion for all businesses.”

This legislation will help afford new opportunities to MBEs and WBEs in two ways. First, it proposes an increase in the dollar thresholds over which public entities are required to subcontract and bid out specific components of a project. Currently, bids for most subcontracted work over $25,000 are subject to a filed sub-bid requirement, a process that requires interested subcontractors to comply with certification, bonding and other requirements, and to submit bids to the awarding authority. These requirements can discourage smaller MBEs and WBEs from participating in public building projects due to the administrative burden and cost. This proposal would increase the thresholds governing when filed sub-bids would be required, to instead only require them when the subcontracted work costs more than $50,000 and the overall project cost exceeds $1 million.

Second, the legislation expands opportunities for MBEs and WBEs on Division of Capital Asset Management and Maintenance (DCAMM) and other public projects in areas where they have not been readily available. Currently, over 50 percent of public building work is subcontracted out by means of filed sub-bids, yet these sub-bids are not subject to MBE and WBE participation goals. The legislation will allow DCAMM to set MBE and WBE participation goals for this subcontracted work on projects over $5 million.

The administrative changes involve DCAMM splitting the AMP goals for the percentage of spending distributed to MBEs and WBEs so that there are distinct participation requirements for both groups and ensures participation by both MBE and WBE firms. Additionally, the combined annual participation goals will be increased from 10.4 percent to 13 percent in the construction phase, and from 17.9 percent to 21.6 percent in the design phase. These changes will also allow for the establishment of project-specific AMP goals. This enables participation goals for an individual project to be specifically tailored to it prior to procurement, and ensures that goals accurately reflect the availability of contractors and other factors.

“These meaningful reforms and improvements will increase access for minorities and women in public construction projects,” said Administration and Finance Secretary Michael J. Heffernan. “We are pleased to be updating and improving the AMP program to further promote economic growth and equality for all businesses, and we look forward to working closely with our partners in the Legislature to pass this bill into law.”

“This improved AMP combined with our proposed legislative changes will make it easier for MBE, WBE and all size contractor firms to do business with DCAMM,” said DCAMM Commissioner Carol Gladstone. “We are making a concerted effort to help MBE and WBE firms have access to DCAMM procurements with our aggressive recruiting of MBE and WBE contractors, our certification trainings, and our Job Ordered Contracting program.”

“The Affirmative Marketing Program and legislation is a great step forward that has come from the Governor in collaboration with the Massachusetts Black and Latino Legislative Caucus,” said Representative Russell Holmes. “The participation goals and increase in subcontractor thresholds will create many new opportunities for women and people of color.”

The Affirmative Marketing Program, with oversight by DCAMM and the Supplier Diversity Office, manages goals for participation by MBEs and WBEs in design and construction for the state and municipalities regarding vertical construction. Through the AMP, the Commonwealth promotes opportunities for diverse businesses in public construction and ensures goals are met by conducting outreach to minority and women owned businesses and carrying out education and training.