The Baker administration has filed legislation to raise the threshold at which public entities are required to bid out contracts, in the hope that it will help more minority- and women-owned construction firms get a slice of the stat’s construction spending pie.
Currently, bids for most subcontracted work over $25,000 are subject to a filed sub-bid requirement, a process that requires interested subcontractors to comply with certification, bonding and other requirements, and to submit bids to the awarding authority. These requirements, the administration says, can discourage smaller minority- and women-owned businesses from participating in public building projects due to the administrative burden and cost, ultimately making it harder for them to grow.
Gov. Charlie Baker’s proposal would increase the thresholds governing when filed sub-bids would be required, to instead only require them when the subcontracted work costs more than $50,000 and the overall project cost exceeds $1 million.
“Our administration is pleased to continue empowering and supporting women-owned businesses and minority-owned businesses throughout Massachusetts,” Lt. Governor Karyn Polito said in a statement. “By increasing the goals for participation by women and minority businesses in state contracts, reducing burdens and costs on smaller contractors and expanding access to more public projects, we can promote increased participation and greater inclusion for all businesses.”
The measure would also allow the state Division of Capital Asset Management and Maintenance to set goals for the participation of minority- and women-owned businesses in subcontracted work on projects worth over $5 million. The combined annual participation goals will be increased from 10.4 percent to 13 percent in the construction phase, and from 17.9 percent to 21.6 percent in the design phase, and will allow DCAMM to set project-specific goals. Over 50 percent of public building work is subcontracted out by means of filed sub-bids, according to administration figures, and are not subject to these goals.
The proposal comes on the heels of Massport’s successful use of enhanced diversity targets on the Omni Seaport hotel project, and its stated intent to repeat the requirement for developers bidding on the Seaport’s parcel 12. Despite these initiatives, leaders of some minority-owned businesses say they face a “glass ceiling” when trying to grow their presence in privately-owned construction projects.
