AN OPEN LETTER - Re: State Set Asides
Below, we are sharing our letter sent to Illinois representative Kate Cloonen in response to mandated set-asides for state contracts.
For those of you who don't know, in order for us to be awarded state contracts, often times the requirements of the contract stipulate that we hire minority, women, or veteran business as consultants and share some of the contract value with them for their services. In most cases, we enjoy the opportunity to work with these businesses and find that the level of service and experience of these organizations assist in the delivery of the high level of professional services our clients desire. On the converse side, we are finding that continual mandates for ever increasing set-asides are now preventing us from even responding to state requests for proposals.
Dear Ms. Cloonen (An open letter),
Thank you for taking the time to speak with me regarding set-asides for state contracts as required by Public Act 97-0260 (PROCUREMENT-VETERANS).
As you are aware, this statute requires that 3% of all Illinois expenditures for contracts be directed to service disabled veteran-owned businesses. As a former member of our military, I understand the motivation and reasoning for the goals; to attempt to create a level playing field where one is perceived to not exist. It is however the unintended consequences of such legislation that I want to share with you.
Our business provides professional architectural design and planning services to clients from both private and public sectors. We have been attempting to deliver the same high quality services we provide to clients in the private sector to the State of Illinois. On several occasions, we have reviewed solicitations for professional services which include Minority Business set-aside (MBE), Women Business set-aside (WBE), and Veteran Owned Business set-asides (VBE). In most cases, we find it fairly easy to team up with minority and female consultants in the delivery of services to meet and exceed mandated goals.
However, the requirement for Veteran Owned Businesses is much more challenging. In the entire State of Illinois, only 11 professional services firms deliver services that would align with the solicitation requests we seek. Per the law, this mandates that 11 firms are receiving 3% of all state contracts for professional services. Only approximately 6 of those firms deliver the specialized services we seek most often. As a smaller firm, we find it next to impossible to team up with VBE firms that will allow us to meet the requirements as these firms elect to team up with larger firms who are consistently awarded the projects over and over. Breaking into this system as a small business is next to impossible.
At this time, we have stopped attempting to respond to State of Illinois solicitation requests which include a VBE set-aside.
The unintended consequences of the state legislation is that 3% of all state contracts are given to a small pool of firms who successfully pair up with the VBE firms who meet the procurement requirements. Hundreds of other professional services firms around the state are precluded from even responding, regardless of their qualifications and experience related to the solicitation.