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Leaders from Indiana’s minority and women-owned business community are warning that Gov. Mike Braun’s decision earlier Wednesday to end the procurement program made to ensure those groups have equal access to state contracts could have unintended consequences for the state’s competitive market standing.
Hosted by the Indiana Black Expo on Wednesday afternoon, several community leaders gathered at the Indiana Convention Center to caution state leaders after Indiana Attorney General Todd Rokita and Braun announced Wednesday morning that the state would be winding down the Minority and Women’s Business Enterprises, or M/WBE, program, citing constitutional issues.
“If we’re not careful, we will create opportunities where our thriving businesses and entrepreneurs might consider relocation,” said Tony Mason, president and CEO of the Indianapolis Urban League. “Why wouldn’t you go to a friendlier business climate?”
Rokita said his office had concluded the M/WBE program violated the Equal Protection Clause of the 14th Amendment.
The news came as a shock to members of the Indiana Black Expo, said IBE President and CEO Alice Watson, particularly because the organization is hosting its Summer Celebration this week. Watson noted that Braun had attended IBE’s business conference on Tuesday.
“We will carefully monitor the impact of these policy changes and continue advocating for fairness, transparency and equal access to economic opportunity for every qualified business,” Watson said. “Indiana Black Expo’s mission has been economic empowerment; that mission does not change because state policy changes.”
In the 43-page advisory opinion — which the Governor’s Office requested nearly a year ago to consider the legality of the M/WBE program and the Governor’s Commission on Supplier Diversity — Rokita said the program incites race- and sex-based discrimination against Hoosiers.
“From top to bottom, the program is suffused with discriminatory animus against individuals who are not members of the racial and gender groups the State has decided should receive preferential treatment in state contracting,” the opinion stated.
According to the Attorney General’s Office, the M/WBE program within the state’s Diversity Business Enterprises Program requires state agencies to allocate a minimum percentage of state funds spent on contracts to M/WBE and veteran-owned businesses.
Although Rokita deemed the program’s requirements regarding veteran-owned businesses lawful, the requirements based on race and sex are not, he said.
Denise Herd, co-chair of the government affairs committee of the Indianapolis chapter of the National Association of Women Business Owners, said the association’s greatest concern now is what happens next.
“Women-owned businesses have consistently demonstrated that they can compete and succeed on merit,” said Herd, who shared a statement on behalf of NAWBO. “The issue has never been about capability; it has been about access to opportunity.”
As Indiana transitions away from the M/WBE program, Herd said NAWBO believes the state has a responsibility to “ensure qualified, women-owned businesses do not lose meaningful access to public contracting opportunities as an unintended consequence of this policy change.”
Pushing for merit
The development builds on Braun’s administration’s efforts to move away from Diversity, Equity and Inclusion initiatives and toward Merit, Excellence and Innovation (MEI) ones.
“Indiana has replaced divisive, politically-charged programs with a focus on Merit, Excellence, and Innovation: a level playing field where every single Hoosier has the chance to get ahead with hard work,” Braun said in a press release Wednesday morning.
Several of the business community leaders on Wednesday said they are not directly opposed to the idea of merit-based achievements, but they want to know what the standard, objective criteria are.
“What do you mean by MEI?” said Larry Smith, CEO of Fathers and Families, an Indianapolis-based nonprofit that provides fathers with educational, employment and family stability services at no cost.
“We just want to ensure that the people in power hear us and answer our simple queries,” Smith added. “What do you mean when you use those terms? How are you going to measure, and are you going to hold everyone to that same standard?”
The Governor’s Office said on Wednesday morning that Braun will soon announce a new small-business initiative to help more Indiana businesses compete for state contracts.
“The Indiana Small Business Program will promote and facilitate the use of qualified Indiana small businesses in state procurement,” the office said.
NAWBO’s Herd said the association looks forward to working with the Braun administration as the proposed Indiana Small Business Program takes shape.
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