WWee ddoonn’’tt sseerrvvee yyoouurr kkiinndd New Jersey’s Contracting and Procurement Opportunities for MWB Enterprises Fail to Reach LGBT Businesses by Jonathan D. Lovitz and Thomas H. Prol “I have never doubted that equal rights was the right credits for MWBE businesses, with an economic benefit to the direction. Most reforms, most problems are complicated. state of $13.4 billion. 3 But to me there is nothing complicated about ordinary However, the authors believe the effort to create and equality.” expand opportunities for historically disenfranchised commu - —alice Paul, suffragist, activist and co-author of the nities has not yet been extended to the state’s lesbian, gay, equal rights amendment, Burlington county, new Jersey bisexual and transgender (LGBT) community. This is so despite New Jersey being one of the first states in the country to enact anti-discrimination protections for the lesbian and gay community in public accommodations. 4 As discussed or over three decades, New Jersey has been a infra , New Jersey lags behind many states in providing LGBT leader in creating and expanding access to gov - businesses with equality in state and local contracting and ernment opportunities and incentives for women procurement opportunities. The net effect, the authors and minority-owned enterprises (MWBE). 1 This believe, is that the LGBT community continues to languish includes the Grow New Jersey Assistance Pro - under an economic discrimination that is masked by the illu - gram, which provides job creation and retention sion of full equality provided by the New Jersey Law Against business incentives as well as tax credits to those businesses, Discrimination, at N.J.S.A. 10:5-1 et seq ., and other anti-dis - F 2 5 including a new $3 billion enhanced incentive in Jan. 2018. crimination measures. As of July 2017, the New Jersey Economic Development Authority, the state agency that administers the program and Why Procurement Equality Matters other MWBE economic incentive programs, reported that it The rationale for the assistance program legislation and approved 229 projects totaling more than $4.4 billion in tax procurement equality in general is simple: The state’s econo - 72 NEW JERSEY LAWYER | A UGUST 2018 NJSBA .COM my cannot achieve its maximum poten - opportunities and allowing all diverse providing expanded minority set-aside tial without the full participation of communities in New Jersey to thrive. 13 procurement equality to certified LGBT, every citizen in New Jersey. 6 Greater The volume of contracts and oppor - disabled and veteran business enterpris - diversity among suppliers encourages tunity is immense. The New York State es. The proposed legislation (S-1570/A- greater innovation and competition, Comptroller’s Office approves more 3162) 19 “[c]reates certain assistance pro - and greater competition lowers bid than 19,000 total contracts in that state grams for businesses owned by lesbian, prices, resulting in millions of dollars in each year, amounting to more than gay, bisexual, or transgender persons, by taxpayer savings. 7 With New Jersey’s $150 billion. 14 persons with a disability, and by veter - state motto of “Liberty and Prosperity,” ans” 20 and is a revised version of S- it is axiomatic that the state must be MWBE-Targeted Contracting and 3247/A-3891, which overwhelmingly committed to a strategy of inclusion Procurement Works passed both houses of the New Jersey that lifts residents up and provides Contracting and procurement oppor - Legislature in 2017. 21 opportunity to achieve full economic tunities, also known as supplier diversi - The New Jersey State Bar Association potential. ty, are defined as “the commercial tactic supported S-3247/A-3891 because it The National LGBT Chamber of Com - to present diverse suppliers with equal sought to enhance economic opportuni - merce (NGLCC), a not-for-profit advoca - access to commercial sourcing and pur - ties for socially and economically disad - cy organization dedicated to the chasing opportunities.” 15 This contract - vantaged communities. 22 Indeed, the advancement of the LGBT business com - ing gap is more pronounced for the legal profession may be one of the more munity, issued a Jan. 2017 report enti - LGBT community since the 1990s, when immediate beneficiaries of this legisla - tled “America’s LGBT Economy: The Pre - efforts around the country to create and tion and the strategic sourcing it seems miere Report on the Impact of expand supplier diversity opportunities to expand. 23 LGBT-Owned Businesses,” which ana - began focusing on certified 16 MWBE NGLCC also reports that its National lyzed the economic impact of LGBT businesses in providing those communi - Legal Industry Council has doubled its businesses in America. 8 NGLCC conclud - ties with access to a fair share of state number of nationwide law firms and ed that LGBT business enterprises and and local procurement opportunities in certified LGBT business enterprises in owners contribute $1.7 trillion to the business, including legal services. 17 the legal profession. 24 This comes about United States economy, create numerous The public policy supporting MWBE as more law firms develop supplier jobs, innovate industries and build entities was simple: These communities diversity programs to mirror the diversi - wealth while expanding diversity within pay taxes and contribute to the econom - ty practices of their corporate clients. 25 the LGBT community. 9 Referencing for - ic engine of society, so they are able to Firms seeking legal work would be able mer Congressman Barney Franks’ famed enjoy the fruits of their contributions to tout their inclusion of certified equality quip, “If you’re not at the table, through an equal share in government minority legal contractors to enhance you’re on the menu,” the report under - contracts. However, despite New Jersey’s their bids’ value premise, while ensuring took a detailed evaluation of the impact leading role in enacting anti-discrimina - more diverse-owned firms and compa - on LGBT businesses on the United States tion protections in housing, education, nies receive access to contracts and sub- economy, including legal services. 10 employment, and public accommoda - contracts statewide. NGLCC documents that LGBT busi - tions through the Law Against Discrimi - ness enterprises and their owners diversi - nation (LAD) for LGBT, disability and New Jersey’s Legislative Solution for fy local economies and make cities more veteran status, these communities were LGBT/Disabled/Veterans attractive to investment, estimating that largely left out of the procurement ben - In passing S-3247/A-3891 in 2017, 45,000 New Jersey LGBT business owners efits provided to MWBE entities. That is, the New Jersey Legislature declared the statewide could benefit from the bill pas - until now. following: sage. 11 Moreover, the tax revenue created New Jersey is expected to enact legis - by LGBT, disability and veteran-owned lation that will address this historic • The economy of the state of New Jer - businesses contributes to the more than shortfall. Assuming the proposed legisla - sey is vitally dependent upon the $10 billion spent on New Jersey state tion receives Governor Phil Murphy’s health and stability of the small and contracts. 12 Opening those contracts up approval, New Jersey will join Massa - independent businesses in the state; 26 to these communities could cement New chusetts, Pennsylvania, California, 18 sev - • The future welfare of the state Jersey as a national leader in economic eral federal agencies and more than one- depends on the continued existence opportunity, expanding contracting third of Fortune 500 companies in and development of these same small NJSBA .COM NEW JERSEY LAWYER | AUGUST 2018 73 and independent businesses; 27 es owned by LGBT persons, persons with re-bid. 41 It also provides penalties for any • Despite their contribution as major a disability, and veterans.” 34 It stated entity obtaining certification through generators of employment, small that its intent was for the Division of willfully false information and provides businesses are struggling to survive in Revenue, as part of the Department of reporting requirements for data collec - the private sector; 28 the Treasury, “in concert with the tion to ensure the program is properly • Due to a historical legacy of disregard authority, [to] provide a full range of reviewed and evaluated. 42 and discrimination toward lesbian, financial and technical assistance to Through this legislation, New Jersey gay, bisexual, and transgender, or small businesses and businesses owned may create an opportunity to provide LGBT persons, and toward persons by LGBT persons, persons with a disabil - the LGBT, disabled and veteran commu - with a disability, and due to lost ity, and veterans in order to ensure their nities with access to state and local pro - opportunities suffered by veterans, success and their growth.” 35 curement opportunities in business, these groups control a disproportion - In recognizing distinct historic inade - including legal services through supplier ately small fraction of the productive quacies in the opportunities provided to diversity. The legislation appears to resources of the state and are, there - the LGBT, disabled and veteran commu - impose fairness, equality and a level fore, largely excluded from the main - nities, the New Jersey Legislature sought playing field in state and local procure - stream of the overall economy; 29 to ameliorate the harm by creating state ment for those communities, while • Problems of inadequate capital and and local procurement opportunities maximizing the potential of the state’s management expertise that pertain to and set-asides similar to those historical - economy. businesses owned by LGBT persons, ly provided to certified MWBE entities. 36 persons with a disability, and veter - The legislation, and its successor version Jonathan D. Lovitz is senior vice presi - ans are the same problems that per - in the current legislative session, creates dent of the National LGBT Chamber of tain, in varying degrees, to all small a qualification process for certification Commerce, based in Philadelphia.