Massachusetts agencies spent $4.8 billion in 2020, but Black-owned businesses were awarded only $11 million in state contracts and Hispanic-owned businesses got only $12 million, according to a new state report obtained by GBH News.
The Supplier Diversity Office report said that state agencies exceeded their goal of doing 8% of their contracting with minority-owned enterprises. That conclusion relies on counting hundreds of millions of dollars the state spent with minority-led nonprofits, plus work that non-minority firms working for the state passed along to minority businesses. Without those categories, all minority-owned firms combined received about 2% of the state’s spending.
The new report — quietly posted to a state website in the past few days — says that, in fiscal year 2020, the state spent just over $300 million in direct contracts with minority-owned businesses (known as MBEs) but Black-owned firms got just $10.8 million worth of work; Hispanic-owned firms got $11.5 million; and Asian-owned firms got $71.1 million.
You can read GBH News’ full report by investigative reporter Chris Burrell, “Out Of A $4.8 Billion Budget, Mass. Spent Less Than $25 Million With Black And Hispanic Firms Last Year” by clicking on the hyperlink.
In an earlier report this month, an investigation by the GBH News Center for Investigative Reporting found that Massachusetts has redefined compliance with that mandate, so state contractors can meet the goal by paying for goods or services that may have nothing to do with a government contract. And many of the businesses getting paid are outside Massachusetts, are not certified as being minority-owned, or appear to barely exist at all.
In “Baker Administration Inflates Its Claim Of Spending With Minority Businesses”, Interim Executive Editor for GBH News’ Paul Singer looks into the state’s dealings with A&M Business Solutions, owned by a Hispanic woman named Agnes Reed and her business partner. The company based in Florida doesn’t make or install anything; Reed’s three-person team buys plumbing fixtures or safety equipment or computer parts or other products and has them shipped to anybody working on a government contract.
And because of a policy change implemented under Gov. Charlie Baker, every time a white-owned company working on a state-funded contract spends a dollar with A&M Business Solutions, the Massachusetts government gets credit toward its goal of hiring minority-owned businesses.
The state has reported minority business expenditures every year for decades, but this is the first year the spending has been broken out by race. The new data was included in response to reporting in the award-winning GBH News series “The Color of Public Money,” that found the state was intentionally inflating its minority business spending numbers by counting things that were not contracts to minority firms.