Massachusetts fell far short of its new goal for hiring LGBT-owned businesses for state contracts last year, according to a recent report from the state’s Supplier Diversity Office.
In 2023, Gov. Maura Healey said she was setting a first ever goal for the state to spend $18 million annually on contracts with lesbian, gay, bisexual or transgender-owned businesses. According to the report, agencies were asked to spend 0.3% of their discretionary budgets with LGBT businesses in fiscal year 2024, which actually bumped the total goal to $22.8 million.
But in fiscal year 2024, state agencies only spent $9 million with these companies.
While that was a big jump over fiscal year 2023, when there was a sharp drop in spending with these companies, the 2024 total was $600,000 less than LGBT vendors were paid by the state in fiscal year 2022.
One reason for the wide fluctuation is that in smaller business categories — like LGBT-owned enterprises — a change in a few contracts can cause more drastic year-to-year changes, according to Bonnie Borch-Rote, executive director of the Supplier Diversity Office.
“The drop in FY2023 is one of the reasons for establishing the benchmark for LGBT-owned companies,” Borch-Rote said in a statement to GBH News.
Borch-Rote said that a common roadblock for small and diverse businesses is the awareness of public contracts and the opportunities they offer. “As a solution, we are currently researching and creating new networking events with buyers and municipalities,” she wrote.
The Supplier Diversity Office is hosting two events next week for small and diverse business owners — one in Framingham on June 16 and another in Chelsea on June 17.
Along with the announcement of the benchmark in 2023, the state unveiled an interactive dashboard to help contractors find diverse businesses to hire in their area.
“We are currently working with the SDO Small and Diverse Advisory Board, which has a representative from the Massachusetts LGBT Chamber of Commerce, to identify barriers for small and diverse businesses in public contracting,” Borch-Rote said.
Borch-Rote also said the agency will work with the board to expand its network of diverse businesses to work with. There are 1,218 certified LGBT-owned businesses available to do business with the state; there were only 375 back in 2022.
“We are also working with state leadership and agencies to look for more ways to remove obstacles and bring more of these businesses into the state bidding process,” Borch-Rote said.
The Supplier Diversity Office became a standalone agency in 2020 following a GBH News investigation that the value of contracts awarded to minority-owned firms declined over two decades.
The state also missed its spending goal for veteran-owned businesses in fiscal year 2024. However, the state exceeded its goal for contracts with disabled business owners, which was announced alongside the benchmark for LGBT-owned businesses.
