State agencies will need to work towards spending at least $18 million with LGBTQ- and disability-owned businesses during the fiscal year 2024 that starts on Saturday, the Healey administration announced Friday morning.
The state already lays out agency spending benchmarks for businesses owned by veterans, minorities, and women. LGBTQ- and disability-owned businesses are the only categories without established benchmarks even though the state recognizes them in their Supplier Diversity Program, Gov. Maura Healey said.
“Massachusetts is home to so many wonderful diverse and small businesses who are truly the backbone of our communities and our economy,” Healey said in a statement. “Our administration is committed to increasing opportunities for them to do business with the state, which will not only help their businesses grow but will also support the state’s equitable economic development.”
The new benchmark is about $8 million short of the $10 million that state agencies spent with LGBTQ-owned businesses in fiscal 2022 and $12.5 million behind the $5.5 million in spending in the category for fiscal 2021, according to state data.
But state agencies handed over more than $15 million to disability-owned businesses in fiscal 2022 and $12.8 million in fiscal 2021, according to a report authored by the state’s Supplier Diversity Office.
Massachusetts’ Supplier Diversity Program encourages the 73 participating state organizations to award contracts to businesses owned by different groups. And it also requires those agencies to purchase a certain amount of goods from them.
LGBTQ and disability-owned businesses were added to the program in 2015 but benchmarks were not set because “those certification categories were new, and the commonwealth needed to develop certified vendors capacity,” the Healey administration said.
More than 100 businesses that fall into the two categories were recognized by the state in fiscal year 2016 but benchmarks were not set.
The Healey administration also launched a new online map to help state agencies, cities, towns, and others to find certified diverse business partners.
The LGBTQ community has long contributed to the state’s economy, said Grace Moreno, executive director of the Massachusetts LGBT Chamber of Commerce.
“This announcement is yet another step in that direction. It helps LGBTQ businesses grow and thrive in Massachusetts while helping to expand our economy,” Moreno said in a statement provided by the Healey administration.
The state spent roughly $3.2 billion with diverse and small businesses in fiscal 2022, a 15% increase over fiscal 2021, according to the Supplier Diversity Office report. Program participants “exceeded” spending benchmarks for the women-owned, minority-owned, and small business categories, the report said.
But the state fell well behind in the veteran-owned category, spending only 20% with those businesses in fiscal 2022, according to the state.
“The commonwealth continued its efforts to meet its ambitious veteran-owned business benchmark,” the report said. “Although three executive branch secretariats and one constitutional office exceeded their veteran goals, additional vendor capacity is needed to meet the benchmark and make veteran spending stable year over year.”