In 2006, Michigan voters adopted Proposal 2 (Prop 2), the anti-affirmative action ballot initiative that specifically precludes state agencies from “granting preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity or national origin in ... public contracting,” (Michigan Constitution, Art. 1 Sec. 26). The effect of adopting this initiative nullified the little known, or used, state statute, PA 428 of 1980 titled, State Procurement for Minority Owned and Women Owned Businesses (Act). The statute was enacted “to provide for the designation of state procurements of goods, services and construction for minority owned and woman owned businesses.”
Under this Act, the Department of Management and Budget was required to implement the Governor’s established policy to meet procurement goals of contracting with women and minority owned businesses. However, little was done to promote or comply with the provisions of this statute. Today, one of the only state departments legally authorized to comply with established goals for awarding contracts to women and minority owned businesses is the Michigan Department of Transportation (Department).
The Department receives Federal Highway Administration funds and is required to award 9% of those funds to Disadvantaged Business Enterprises (DBEs), otherwise defined as minority and women owned businesses. Sadly, 2017 was the first year MDOT met that 9% set aside. In an effort to increase awareness among DBE vendors, the Department now hosts contracting seminars and procurement trainings sessions across the state. However, even with these efforts, a significant gap still exists between the number of construction contracts that are available and the number of those contracts that are awarded to minority or woman owned businesses.
In early 2000, the Department of Management and Budget, through the Buy4Michigan initiative, began to promote procurement opportunities and educate business owners about the procurement process. Outreach efforts were designed to ensure educational seminars reached women and minority owned business communities, however, they never reached their full potential. Over the past several years these presentations have diminished, and the nuances of state contracting have become more complicated for Michigan businesses.
Bidding on a state contract is not an impossible task. The process follows seven basic steps:
- Register as a Vendor
- On July 31, 2017, the State of Michigan launched a new procurement system called Sigma Vendor Self Service (Sigma VSS or Sigma) designed to merge the contract payment system with the Buy4Michigan program, which was phased out September 30, 2017. Vendors need to familiarize themselves with the new platform and process to submit formal bids and receive payments.
- Determine what category your product or service falls within.
- If you are a vendor that has already registered for a particular category, be mindful that Sigma has made changes to certain categories and you may need to reclassify your product or service.
- Build a relationship with the agency decision makers.
- Most vendors overlook the importance of establishing relationships with key staff within the departments. Work with someone who understands the procurement process and has relationships with agency or department decision makers. This often enables you to get in the agency door and distinguish your product or service from your competitor before a solicitation ever goes out.
- Take the time to research open bids or solicitations.
- Understand your capacity or ability to make a profit after getting the contract award, versus the time, energy and cost you put into the solicitation.
- Make sure you understand what is mandatory and optional, as well as each solicitation’s timeline. This can impact whether your bid is successful or not.
- Prepare and submit your bid.
- Review the language of the solicitation and follow the instructions. Make sure you answer the questions as asked and then review your proposal again. It helps to have a second set of eyes on your finished draft because doing it right the first time saves a lot of time, money and heartache.
- Make sure you submit your bid on time. The new Sigma system is the official point of submission; however, certain solicitations may still require portions of your bid to be mailed. Understand what is required and respond on time. Sigma will not accept late bids and any bid submitted incorrectly will be considered non responsive.
- Take advantage of the bid debrief.
- Whether you win or not, follow up with an agency buyer after the process is completed. They can provide useful information for future opportunities and help establish the foundation to mount a protest to an award if your bid is rejected.
- File a protest.
- Bids are thrown out because of fraud or misrepresentation. It is always in your best interest to consider the legal options available to pursue a rejected bid. Make sure you do the research, follow the appropriate process and keep accurate documents in order to position yourself for a protest action.
Entering the arena of state procurement takes time and money for research, preparation and the willingness to invest in cultivating relationships with state agency decision makers. With a state portfolio of contracts for construction, goods and services of over $53 billion, it is imperative that women and minority business communities properly respond to solicitations and establish key relationships that could impact the bidding process in a positive way.
Monique Field-Foster is an attorney and registered lobbyist at the law firm Warner Norcross & Judd LLP where she counsels business owners in all stages of the state procurement process and assists them with the cultivation of government relationships. She can be reached at email@example.com.