Proposed changes to Missouri's Minority/Women Business Enterprise (M/WBE) program could make it easier for businesses to apply for the certification, according to the Office of Administration.
The changes are geared primarily toward aligning Missouri's contractor procurement process with the results of the state's 2014 Disparity Study examining the use of M/WBEs in state contracts.
M/WBE certification allows businesses with a controlling interest owned by a woman and/or minority greater opportunities to bid on state contracts. The Office of Equal Opportunity's (OEO) online Directory of Certified M/WBE Vendors lists and categorizes businesses that have the certification so state agencies and prime contractors seeking subcontractors can easily enlist qualified M/WBEs to achieve diversity goals in state-contracted projects.
"It's important because Jefferson City has a lot of certified women- and minority-owned businesses and a lot of businesses that contract with the state," said Stephanie Bell, an attorney at Blitz Bardgett & Deutsch in Jefferson City, which works with clients to apply for M/WBE certification.
OEO's online directory lists 61 certified M/WBEs in Jefferson City, and many more non-certified businesses seek M/WBEs as subcontractors on state projects in the Capital City.
Gov. Jay Nixon's Executive Order 15-06 last October set the state's annual Aspirational Program Goals for both women-owned and minority-owned businesses at 10 percent of total state agency procurement expenditures. The previous goal was 5 percent M/WBE participation annually.
"The main change with the proposed rules is we will be looking at different goals for each individual contract. It may be more than 5 (percent); it may be less than 5 (percent)," said Renee Slusher, OA deputy director/general counsel.
The proposed changes would allow OA's Facilities Management, Design & Construction (FMDC) division to adjust the percentage goal for individual contracts' M/WBE participation based on better knowledge of regional market availability and M/WBE-provided products and services from the Disparity Study.
So, while individual state contracts may request any percentage of M/WBE participation, FMDC may use varying individual contract goals to help meet the state's overall goal of 10 percent.
Another change involves the way contractors factor in M/WBE use when bidding on a state contract. Previously, contractors would receive "points" for documenting their planned use of M/WBE subcontractors, and FMDC would consider those points along with other factors, Slusher said.
"If the proposed rules go forward, you will either have to achieve the percentage or you'll be deemed nonresponsive - or, if you try to achieve and obtain M/WBE subcontractors but you can't, you can ask for a good-faith waiver."
Good-faith waivers would apply when a sufficient number of qualified and appropriately priced M/WBE subcontractors were not available to the bidding contractor. However, the rules state: "The rejection of a M/WBE solely because its quotation for work was not the lowest received is not a sufficient good faith effort."
The changes should not affect the certification status of current M/WBEs but could affect how non-M/WBEs seek subcontractors, Slusher said.
Other proposed changes seem to clarify OEO's policies and practices regarding the application process, Bell said.
"It does make clear and adds to what you provide for documentation; there's a lot of paperwork that goes into the process," she said, noting the application now requires the business' operating agreement, stock ledgers and certificates, lease and loan agreements and bank signature cards.
"OEO is trying to make sure the minority or woman's interest in the firm is real and substantial, so rather than looking at the face of the documents they're going to look at the actual substance of the entity and the day-to-day operations," Bell said.
And while the rules previously could have been understood to require M/WBE owners have expertise in all areas of the firm's operation, the changes clarify owners have an understanding but not necessarily an expertise in all critical areas.
"It adds a little bit of flexibility," Bell said. "Although the woman or minority has to have an 'exercised actual control' over those areas, they can delegate those areas," given they retain the ability to hire and fire.
The full proposed rules can be read in the May 16 edition of the Missouri Register, accessible on the secretary of state's website at sos.mo.gov/adrules/moreg/moreg.
Residents have 30 days from the date the rules were published - through June 15 - to submit statements in support of or opposition to the proposed changes by mail to Commissioner of Administration, P.O. Box 809, Jefferson City, MO 65102. No public hearing is scheduled.
"I think the most important thing is, if you have the certification or if you're looking at the certification, that you take a close look at it. It might require you to update your categories; it might require you to provide additional documentation," Bell said. "If you have specific questions about your business, you should contact your attorney."