Commentary: New law a boon for women- and minority-owned firms
From the Washington Post:
"This may be the best time in recent memory to be a minority- or woman-owned contractor seeking to do business with the federal government."
(Actually, I think I would dial that back a little. With concern over government spending growing, it looks like women and minority firms may be getting to the party just as the food and beverages are running out...unless they are defense contractors.)
"A recent article in Capital Business [“Federal Reserve Bank seeks diversity in contractor pool,” May 16] discussed efforts by the Federal Reserve Bank of Richmond to increase contracting with women- and minority-owned firms. This effort is far broader and more significant than the article indicated, however.
Section 342 of the recently enacted Dodd-Frank Act requires nearly 30 agencies that oversee the financial system, including the Federal Reserve, the Treasury Department and the Federal Deposit Insurance Corp., to establish offices of minority and women inclusion to monitor diversity within their ranks and the pool of contractors who provide goods and services to the government.
One of the most important provisions requires the agencies to examine diversity efforts at the 27,000 financial institutions the 30 agencies regulate. Knowing that they are being watched will spur the financial institutions to hire more minority employees and spend more money with minority contractors."
(Actually, I would word this differently now. Financial institutions will be motivated by marketplace pressures related to a customer base that is increasingly diverse, not by government pressure...)
"The government has yet to determine what the penalties will be for financial institutions that fall short of diversity standards. I suspect it mostly will be shame. The bad list will get wide publicity. Financial institutions’ customer bases are more diverse than they were 20 or 30 years ago, and they don’t want to be seen as lacking a sufficient number of minority and women employees and contractors. Being on the bad list will cost them shareholder value and hurt their ability to recruit and retain employees. No one wants to work for a firm that doesn’t get it.
My opinion is that firms that fall short should be fined. I don’t think that will happen but a fine would impact their long-term behavior."
(Again, to reword slightly, fines are probably not realistic. A more likely penalty will be the loss of contracting opportunities for firms that consistently break the law...)
"Section 342 simply aims to bring players with differing backgrounds into the government contracting marketplace. As businesses compete for contracts, they will provide better goods and services at lower cost.
The effort will be good for women and minority contractors and the government. More competition, ultimately, will save the government — and taxpayers — money."
For the full article, see: