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.
Between this program, and requirements to hire consultants who meet MBE/FBE set-aside goals nearing or exceeding 25% of the total contract value, it has become increasingly difficult and next to impossible for small firms lead by Caucasians to land such contracts.
Per our discussion, I believe that if the State of Illinois is going to continue to implement legislation that gives priority selection to perceived dis-advantage companies, then they need to be aware that the state is creating disadvantaged businesses in the process. I believe that the state should also implement a Small Business Set Aside program statewide to address issued caused buy this legislation.
I wanted to share a recent situation that lead to me contacting you. We received notification that the State of Illinois, Higher Education Board, was soliciting proposals for masonry facade restoration at an Illinois University. We have the staff and experience to exceed the qualifications necessary for this project. This particular solicitation required that we give 3% of the contract value to a VBE consultant. As we started to develop our proposal and response to the solicitation, we began calling the few firms in the State that we would need to team up with. One firm was unaware of the project, but said they would look into it and call us back. Upon receiving the return phone call, we were informed that they have decided to respond to the solicitation with a different larger firm who they work with often. No firms agreed to work with us if we were awarded the contract, meaning we couldn’t meet the goal, and were precluded from responding. Our inability to secure a consultant that satisfied the requirements of the solicitation prevented us from responding.
I certainly would hope that this wasn’t the intent of the program. We are struggling to respond to or successfully be awarded state contracts because the hurdles imposed by these laws. I hope that the state can figure out a way to be small-business friendly again.
If you have any questions or desire any further information, please don’t hesitate to contact me.
Jacob J. Carlile, AIA
Principal and Managing Member
Carlile Architects LLC