The National Association of Minority and Women Owned Law Firms Urges The Offices of Minority and Women Inclusion to Seize Section 342, and Act

CHICAGO, April 22, 2013 /PRNewswire-USNewswire/ -- The following is a statement by Sheryl L. Axelrod, Esquire, Chair, NAMWOLF Dodd-Frank Ad Hoc Committee:

Section 342 of the Dodd-Frank Act calls for the creation of an Office of Minority and Women Inclusion (OMWI) at each of the federal financial regulatory agencies.  While the OMWIs have been created, and a Director appointed to each, little else in Section 342 mandates has been done. 

Section 342 calls for each OMWI Director to implement procedures "to ensure, to the maximum extent possible, the fair inclusion and utilization of ... minority-owned and women-owned businesses in all business and activities of the agency at all levels, including in procurement, insurance, and all types of contracts."  (Emphasis supplied.)  It has been over 2 years since Section 342 was enacted, and the OMWIs have yet to define the term "fair," let alone to implement procedures ensuring that minority and women-owned businesses are systemically utilized in agency contracts. 

NAMWOLF recommends that the OMWIs define a "fair" percentage spend on minority and women-owned businesses to be at least 10%.  In other words, the OMWIs should define Section 342 to require each agency to spend at least 10% of its contracting dollars on minority-owned businesses, and at least 10% of its contracting dollars on women-owned businesses.  The two may certainly overlap; some businesses can be both minority and women-owned. Further, NAMWOLF recommends that each agency's spend be separated into the field or budgeted line item in which the money is spent , including separating out spend among professional services providers, to ensure the spend on minority and women-owned businesses is well distributed among industries.

While the total spend of all the agencies combined on minority-owned businesses is at 10%, virtually every agency spends less than 10% of its contracting dollars on minority and women-owned businesses and is therefore not at what should be considered a "fair" level.  That is the case for each of the agencies whose numbers are represented in red in the chart below. 

The FDIC's spend on women-owned businesses is not separated from its spend on minority-owned businesses.  For greater visibility, NAMWOLF recommends these figures be separated out and then further separated into the field in which the money is spent, like the spend should be among the other agencies.

NAMWOLF recommends that each of the agencies implement at a minimum  the following 10 procedures to achieve fair inclusion: 

(1)   Create step-by-step procurement brochures explaining how to do business with the agency, and similar online, user friendly, customer supported diversity procurement supplier portals through which all businesses, including minority and women-owned businesses, can easily register with the agencies and bid for work;

(2)   Separate out bid requests (RFPs) by the type of work sought (legal, manufacturing, computer, etc.) and separating out spend in annual reports on the type of work done;

(3)   To the extent permissible by law, set aside work for minority and women-owned businesses;

(4)   Include in RFPs, to the extent permissible by law, a requirement that at least some specified percentage of work be done by minority and women-owned businesses;

(5)   To the extent permissible by law, encourage large contractors to sub-contract with minority and women-owned businesses;

(6)   Provide minority and women-owned businesses with reasonable notice to bid;

(7)   Unbundle legal and other large services contracts so that women and minority-owned businesses can best position themselves to gain contracts;

(8)   Give minority and women-owned businesses the opportunity to pool their resources for bids and assessing pooled bids no less favorably than non-pooled bids;

(9)   Use reliable trade associations such as NAMWOLF, the Women's Business Enterprise National Council, and the National Minority Supplier Development Council that carefully vet and certify member businesses as minority and/or women-owned, and attending events held by such trade associations; and

(10) Educate staff members involved in procurement / diversity supplier programs about the importance of contractor diversity, the value minority and women-owned businesses bring, and the goal of increasing the agency's business with minority and women-owned businesses.

Section 342 also provides for "a component that gives consideration to the diversity of the applicant" for a contract, including "as applicable, [its] subcontractors."  NAMWOLF recommends that the OMWI Directors require potential contractors to prove they spend a fair percentage (defined as 10% of all contracting dollars) on minority and women-owned subcontractors.

OMWI Directors are also tasked with developing standards for "assessing the diversity ... practices of entities regulated by the agency."  To assess the regulated entities' diversity practices, the OMWIs need to review the regulated entities' data.  NAMWOLF recommends that OMWIs interpret Section 342 to require the regulated entities to publish their percentage spend on minority and women-owned businesses.  Fairness would require that the regulated entities spend at least 10% of their contracting dollars on minority and women-owned businesses, and that the regulated entities' vendors do the same.

CONTACT: Sheryl Axelrod, 215.461.1770

SOURCE National Association of Minority & Women Owned Law Firms