UI trustees to review plan to boost diversity in business dealings

UI trustees to review plan to boost diversity in business dealings

CHICAGO — The University of Illinois would boost its goals for doing business with companies owned by minorities, women and people with disabilities under a proposal trustees are set to review next week.

It also would set a goal of awarding 3 percent of state contracts to small businesses owned by military veterans and disabled veterans.

The changes would bring the UI's targets in line with recent changes in the state's Business Enterprise for Minorities, Females and Persons with Disabilities Act, which was created to promote the use of diverse vendors by public agencies. It sets goals to ensure that those businesses are included in the procurement process.

The new state guidelines increased goals for businesses owned by minorities and women from 10 percent to 20 percent of total spending for construction projects, matching the 20 percent goal for non-construction contracts.

The UI's goal would increase from 15 percent to 20 percent at its campuses in Urbana, Springfield, Peoria and Rockford.

At the Chicago campus, the UI goal would be 30 percent for construction projects, the same as Cook County and the city of Chicago. Officials said opportunities there are greater because most vendors certified under the state's Business Enterprise Program are based in Chicago.

The proposal also encourages university administrators to set workforce diversity goals on certain UI construction projects, to expand opportunities for minority and female workers.

The proposal was discussed Monday by the board's Audit, Budget, Finance and Facilities Committee, but officials declined to release it until materials for the Jan. 19 board meeting are posted next week.

It also encourages university administrators to investigate increased use of "sheltered markets" to promote supplier diversity. State statute allows certain contracts to be set aside for businesses owned by minorities, females and persons with disabilities.

The UI recently awarded the state's first sheltered market contracts in information technology after a study found that sectors of that industry were being unfairly excluded from state business. A total of 28 minority- and female-owned companies received three-year contracts to provide information technology services as needed, supplementing the UI's in-house IT staff. The companies will collectively be paid up to $30 million a year, based on the need for services and available funds.

Contract-by-contract goals

The UI has doubled the amount of money it spends on construction contracts with firms covered by the state's Business Enterprise Program since fiscal 2013, from $22.1 million then to $44.8 million in fiscal 2016.

The amount spent on non-construction purchases stayed relatively flat — $27.9 million in 2013 fell to $26.4 million in 2016. The combined total rose from $50 million to $71.2 million.

Sharla Roberts, director of the UI Office of Procurement Diversity, said much of the jump can be attributed to contracts for the State Farm Center project, which she said met or exceeded the existing 15 percent goal.

Roberts said some purchases are exempt from the state program, such as utilities or "sole-source contracts" where there is only one qualified vendor — say, for a piece of medical equipment.

And each project or purchase is evaluated in terms of the availability of minority- or female-owned businesses, said Michael Bass, senior associate vice president for business and finance.

"We put goals on a contract-by-contract basis," Roberts said.

If the UI were to buy a helicopter, for instance, and no minority vendors were available, there'd likely be no goal, she said. But there might be eligible contractors to do maintenance on the helicopter, she said.

The goal is to hit 15 percent overall, "but there will be some asterisks," she said.

'Inclusion in all aspects'

UI figures show the $71.2 million in diversity contracts awarded in fiscal 2016 represented about 6.14 percent of the total $1.16 billion in spending because some of that was exempt, she said.

The university created the Office of Procurement Diversity in 2013 to better track vendor diversity efforts, following the recommendation of a consultant. The Bonner Group of Chicago suggested a staff of seven people to help improve participation in the minority vendor program; so far, it has three employees and a budget of about $322,000, including $265,000 for personnel, Bass said. Another employee may be hired soon.

Underlying these efforts is the UI's commitment to "inclusion in all aspects of what we do," Bass said.

The office has expanded outreach to attract more vendors and help them get certified under the state program, Roberts said.

It also created a web-based system to better track contracts to ensure vendors are complying with the rules and that "diverse firms are utilized, are paid and are serving a useful function."

Trustee: Equal access key

Trustee James Montgomery said oversight is critical.

"There's more chicanery in that process than meets the eye," he said, citing minority vendors who "agree to take a few dollars for a project and do no work," just so the contractor can meet state goals.

Roberts said that "does happen in the industry," though it's not widespread. She's investigated similar allegations at the UI but "they've been unfounded."

"I know at the city of Chicago they've had instances where people have signed on to contracts and have not performed the work," she said.

The law includes enforcement measures for any breach of contract by vendors, Roberts said.

There are no penalties for agencies that don't meet state goals, but the state would work with the agency to try to improve its numbers, she said.

Montgomery, a longtime attorney in Chicago, said equal access to contracts is critical "to the whole future of our community."

"The most degrading problem in this country is the lack of opportunity for minority professionals and businesses. Having been one for 60 years, the game is not completely even in that respect," he said.

Breaking it down

About $33.6 million of UI contracts awarded under the state's Business Enterprise Program went to firms owned by white women, while about $14.6 million went to black-owned firms. A full breakdown

Race/ethnicity/gender of firm owners Amount
Black men $10.75 million
Black women $3.89 million
Hispanic men $6.40 million
Hispanic women $1.45 million
Asian men $8.97 million
Asian women $1.02 million
Native American men $21,235
Native American women $0
White women $33.59 million
People with disabilities $88,212
Sheltered workshops $5.06 million
Total $71.26 million


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
CommonSenseless wrote on January 12, 2017 at 1:01 pm

And what is the amount of excess dollars paid over fair market value bids in order to secure diversity in contracting?

Sancho Panza wrote on January 12, 2017 at 7:01 pm

The Supreme Court banned public universities from using quotas in U. of California vs Bakke.