State Law Inhibits Municipal Supplier Diversity

BizGrow, Racial Justice

New Research Finds State Law Inhibits Municipal Efforts to Increase Supplier Diversity 

Over the next five years, cities and towns in Massachusetts will have over $7 billion to spend from the federal recovery and infrastructure bills. However, Massachusetts municipalities are poorly-positioned to invest these dollars equitably, due to constraints imposed by state contracting law. New research from MassINC and Lawyers for Civil Rights warns changes to state law are urgently required; otherwise, this unprecedented infusion of public investment will exacerbate growing inequality.

The new study, supported by Eastern Bank Foundation, looks at best practices that have emerged in the field of inclusive public contracting over the past several decades. It finds that Massachusetts communities are unable to implement many of these approaches due to restrictions imposed by state law. 

“Previous MassINC research shows how changing demographics in regions throughout the state make it essential to position entrepreneurs of color to successfully grow their businesses,” says Ben Forman, Executive Director of MassINC’s Gateway Cities Innovation Institute; “for many small businesses, public contracts are an important source of revenue.” 

“Right now, Massachusetts communities are struggling to implement inclusive contracting best practices,” observes Iván Espinoza-Madrigal, Executive Director of Lawyers for Civil Rights. “This new research suggests outmoded state laws are not the only barrier municipalities face, but they are arguably the most formidable.”  

The report shows that when building public school facilities, state law gives municipalities wide latitude to implement inclusive contracting best practices. However, few cities effectively employ these policies; minority-owned businesses receive only 1 percent of design and construction work on local schools, even in diverse cities like Springfield. 

However, school building projects are relatively uncommon. And cities in Massachusetts are prohibited from using inclusive contracting best practices on roads, sewers, sidewalks, and other public works activities that municipal governments undertake with much more regularity. Most of the federal infrastructure funding that cities will be responsible for deploying will fall in this public works category, where the restraints imposed by Massachusetts state law create unnecessary barriers for municipalities that want to increase contracting with diverse businesses. 

The report calls on the legislature to take proactive measures to ensure that municipal governments are better-positioned to fuel equitable growth with the unprecedented infusion of federal investment headed our way. 

“There is a historical legacy of racial injustice when it comes to federal, state, and municipal infrastructure investment,” says Espinoza-Madrigal. “If we truly want things to be different this time, the legislature must empower municipalities to implement effective inclusive contracting policies. This is critical to close the racial wealth gap.”

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About MassINC
Founded in 1996, MassINC’s mission is to provide the people of Massachusetts with the information they need to participate fully in our democracy. We are a nonpartisan 501(c)(3) and achieve impact through independent research, nonprofit journalism, and civic engagement.

About Lawyers for Civil Rights
Lawyers for Civil Rights (LCR) works with communities of color and immigrants to fight discrimination and foster equity through creative and courageous legal advocacy, education, and economic empowerment. In partnership with law firms and community allies, we provide free, life-changing legal support to individuals, families, and small businesses. LCR | BizGrow provides free legal assistance, business support, and technical assistance to minority, immigrant, and women business owners—ensuring they encounter fewer obstacles and more opportunities.

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