Governor expands diversity program for businesses

Governor Charlie Baker.Jessica Rinaldi/Globe Staff/File/Globe Staff

Republican Governor Charlie Baker, who was elected a year ago after a campaign that emphasized his political moderation and his outreach to people of color, on Tuesday announced an expansion of a program that helps businesses owned by minorities, women, and veterans gain better access to a portion of an estimated $4 billion a year the state spends buying goods and services.

The changes are expected, in future years, to aid state vendors that contract with businesses certified as being owned by people with disabilities, or lesbian, gay, bisexual, or transgender people.

“We should be a leader, not a laggard when it comes to creating opportunities for diverse businesses to support and service the people of the Commonwealth,” Baker said, with a notably diverse crowd of people — gay and straight; black, brown, and white; women and men — standing behind him on the Grand Staircase of the State House.

Baker, who also announced efforts to streamline the program’s bureaucracy, said he heard on the campaign trail from several communities that when it comes to doing business with the state, success doesn’t necessarily boil down to whether you are good at what you do; it comes down to whether you can fight your way “through the bramble brush associated with the procurement process to get to the end. And it shouldn’t be that way.”

The program — which helps certain groups gain preferential access to state spending — and its expansion may seem at odds with traditional Republican orthodoxy. But speaking to reporters, Baker insisted that it does not give anyone a leg up, but rather just levels the playing field for all.

He said with the expansion of the program, “I believe we’re going to get better value, better pricing, and a better product.”

Baker raised the administration’s target for spending with businesses owned and controlled by people who state law considers socially or economically disadvantaged from 6 percent to 7 percent of a $4 billion chunk of discretionary state funds. Groups of people considered disadvantaged include African Americans, Cape Verdeans, Hispanics, Asian Americans, American Indians, Eskimos, and Aleuts.

Baker also increased the state’s target for spending with businesses owned and controlled by women from 12 percent to 13 percent.

The state has aimed to spend 3 percent of that $4 billion with businesses certified as being owned by service-disabled veterans. But that’s been difficult because there are so few of those companies. So, in an effort to achieve a fairer representation of former service members in state business and be better able to meet that goal, Baker expanded the definition to include all veterans.

To meet the spending targets, the state counts both contracts and subcontracts with veteran-, women-, and minority-owned businesses. But only subcontracts with such businesses are directly incentivized.

For example, if the state needed office supplies, it would put out a request for bids. Perhaps five companies would bid on the job. The state would evaluate criteria such as price and delivery time on a 100-point scale. At least 10 of those points are committed to rating the company’s proposed supplier diversity program.

So a bidder planning to subcontract more with veteran-, women-, or minority-owned businesses would get a boost.

In total, Massachusetts spent $247 million with minority-owned businesses and $575 million with women-owned businesses in the fiscal year that ran from July 2013 through June 2014, according to an official state report.

Administration officials say there are not yet any spending goals for the new categories — companies owned by LGBT or disabled people — so those businesses won’t immediately get a boost in gaining a share of that roughly $4 billion in state spending.

But officials said they hope to expand the number of vendors recognized by the state as being owned by those categories of people and, once more are certified, set spending benchmarks. That will probably happen in a few years, they say.

Stacy Robison, who is president of Northampton-based CommunicateHealth Inc., a 35-employee company that works on simplifying health information so it’s easier for consumers to understand, was one of the business representatives at the Baker announcement who lauded the news.

“There are a lot of traditional mind-sets in state government, and I think being gay isn’t always an asset,” she said. “So, for something like this to happen, it’s great. I’m hoping it will mean more work for us. But I think on a bigger level — I’ve participated in programs as a woman-owned business, but that’s really only part of me. So it’s a big deal to be able to stand up and be recognized as an LGBT business and I hope that maybe other small-business owners will want to identify as LGBT now and not try to hide that.”

Baker, who supports gay marriage and abortion rights, has repeatedly emphasized, implicitly and explicitly, that his brand of Republicanism is different from the national party’s.

A member of the GOP in a state that tends to vote Democratic, Baker is expected to seek reelection in 2018.