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Whitmer Calls For More State Contracts For ‘Disadvantaged’ Businesses

January 8, 2019

Gov. Gretchen Whitmer has asked the state to adopt policies to increase the contracts the state awards to “geographically disadvantaged businesses” so as to expand business opportunities in “low-income communities and underutilized business areas.”

In her eighth executive directive issued since she’s taken office, Whitmer said she wants the Michigan Department of Technology, Management and Budget (DTMB) to adopt policies to increase purchases from, and contracts with, these businesses.

In the directive, “geographically-disadvantaged business” is defined in part by a business located in a population census tract that is a low-income community designated as a “qualified opportunity zone” by the federal government.

Asked if Whitmer had gotten a sense of how many businesses like that already have state contracts, she said, “No . . . the answer to that is no,” but she said in conversations with small businesses across Michigan, there’s a desire for them to have an equal opportunity to compete for these contracts.

Asked if the state has data on that, DTMB spokesperson Caleb Buhs said “staff is not able to accurately pull that specific data set based on the information we currently collect.

“Our Procurement team is always looking for ways to increase the vendor base to drive better value for all of Michigan and are looking forward to developing the plan that Governor Whitmer’s Executive Directive calls for,” Buhs said.

Whitmer was asked if this plan could increase costs for the state, but she said it could actually save the state money.

“They don’t need a special place, they just need an equal footing,” Whitmer said, who said later “there’s a sense that the wheels are greased for the people who are incumbent contractors.”

And in response to a question about whether the policy could result in scenarios where a higher in-state bidder gets a contract over a cheaper out-of-state bidder, Whitmer said she couldn’t answer that, but added, “If a Michigan business can compete with . . . the best proposal, then they should get the contract.”

The directive calls for establishing a goal of 3 percent or more of expenditures each fiscal year be made to certified geographically-disadvantaged businesses by 2022-2023.

DTMB Director Tricia Foster has until March 31 to adopt the policies and procedures called for in the executive directive.

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