AN ACT TO ELEVATE THE SUPPLIER DIVERSITY OFFICE TO ENSURE EQUAL OPPORTUNITY IN STATE CONTRACTING.
Be it approved pursuant to Article LXXXVII of the Amendments to the Constitution, and by the authority of the same, as follows:
SECTION 1. Chapter 7 of the General Laws is hereby amended by striking out sections 57 to 59, inclusive, and inserting in place thereof the following 4 sections:-
Section 57. It is the policy of the commonwealth to promote and facilitate the fullest possible participation by all citizens in the affairs of the commonwealth and to foster an inclusive marketplace that offers competitive opportunity for businesses as diverse as the people of the commonwealth. Minority, women, veteran-owned, service-disabled veteran-owned, disability and lesbian, gay, bisexual and transgender business enterprises frequently face systemic obstacles to achieving viable economic status. Various public and private programs have been initiated to assist these business enterprises, where applicable, to achieve economic viability, though many businesses have not been adequately informed of these programs because of inadequate coordination and communication efforts, with the result that many services available are never adequately delivered to those who need them. The state government has a special responsibility to see that all available services and programs are put to the best use. These steps are necessary to guarantee the fullest participation by all citizens of the commonwealth in the economy of the state and to guarantee the fullest benefits to citizens of programs and services available for assistance.
Section 58. As used in sections 57 to 61, inclusive, of this chapter, the following words shall have the following meanings, unless a contrary intent is clearly indicated:-
“Affirmative marketing program”, the program focused on increasing minority and women owned business participation in construction and design projects created pursuant to section 6 of chapter 7C with additional obligations set forth in section 61 of this chapter.
“Agency” or “state agency”, a legal entity of state government established by the general court or by executive order as an agency, board, bureau, commission, council, department, office or division within the executive branch of the commonwealth with a specific mission and which is subject to the control of the governor.
“Certified business enterprise” and “certified business”, a business certified pursuant to section 61.
“Disability-owned business enterprise” or “DOBE”, for the purpose of receipt of services from SDO means a business enterprise that is both owned and controlled by one or more individuals with disabilities who have invested in an ongoing business free of conversion rights.
“Disadvantaged business enterprise”, a disadvantaged business enterprise as defined by the United States Department of Transportation in 49 C.F.R. § 26 et seq. and as certified by the Massachusetts Department of Transportation.
“Diverse business”, a minority business enterprise, women business enterprise, veteran business enterprise, service-disabled veteran-owned business enterprise, disability-owned business enterprise or lesbian, gay, bisexual and transgender business enterprise, and any other certification category as established by statute or executive order.
“Diversity program” or “Diversity programs”, state diverse procurement programs as defined herein, including the supplier diversity program, the affirmative marketing program and the MassDOT M/WBE program.
“Executive director”, the head of the supplier diversity office.
“Lesbian, gay, bisexual and transgender business enterprise” or “LGBTBE”, for the purpose of receipt of services from SDO means a business enterprise that is both owned and controlled by one or more LGBT individuals who have invested in an ongoing business free of conversion rights.
“MassDOT M/WBE Program”, the Massachusetts Department of Transportation contract award process for horizontal construction projects using only state funding.
“Minority business enterprise” or “MBE”, for the purpose of receipt of services from SDO, means a business enterprise that is owned and controlled by one or more socially or economically disadvantaged persons. Such disadvantage may arise from cultural, racial, chronic economic circumstances or background or other similar cause. Such persons include, but are not limited to, African Americans, Cape Verdeans, Western Hemisphere Hispanics, Asians, American Indians, Eskimos, and Aleuts.
“SDO”, “Office”, or “Supplier diversity office”, the commonwealth’s supplier diversity office as designated by section 58A and section 61. The office is the successor to the state office of minority and women business assistance.
“Secretariat”, an executive office established pursuant to section 2 of chapter 6A and the agencies organized therein.
“Secretary”, the secretary of administration and finance.
“Service-disabled veteran-owned business enterprise” or “SDVOBE”, a business that is verified by the federal government’s Department of Veterans Affairs pursuant to the Veterans Benefits, Health Care, and Information Technology Act of 2006, Pub. L. 109–461, and determined to be a service-disabled veteran-owned small business concern in accordance with 38 CFR Part 74 and Pub. L. 111–275.
“Small business purchasing program”, the program in section 22O and established by executive order to support the existence and growth of small businesses by providing them with special consideration within the commonwealth’s procurement process for goods and services required by state agencies.
“Supplier diversity program”, a program to promote equality in, and to encourage the participation of, diverse businesses in procurements and contracts for goods and services as further defined by executive order.
“Veteran business enterprise” or “VBE”, for the purpose of receipt of services from SDO means a business enterprise that is both owned and controlled by one or more veterans, as defined in section 7 of chapter 4, who has invested in an ongoing business free of conversion rights.
“Women business enterprise” or “WBE”, for the purpose of receipt of services from SDO means a business enterprise that is both owned and controlled, by one or more women who have invested in an ongoing business free of conversion rights.
Section 58A. There shall be a supplier diversity office which shall be an office within the executive office for administration and finance.
Section 59. SDO shall have an executive director and such other specialists as may be authorized. The executive director shall have all necessary authority, subject to the direction, control and supervision of the secretary of the executive office for administration and finance, to appoint and utilize existing staff within the SDO and to direct the supplier diversity activities within state agencies to effect the purposes of sections 57 to 61, inclusive, and shall have the authority to seek such funds, public or private, as may be available and needed to carry out the intent of those sections.
SECTION 2. Section 60 of chapter 7 of the General Laws is hereby repealed.
SECTION 3. Chapter 7 of the General Laws, as appearing in the 2018 Official Edition, is hereby further amended by striking out section 61 and inserting in place thereof the following section:-
Section 61. (a) SDO shall adopt regulations and policies for the establishment and management of the office’s diverse business certification process, including regulations and policies governing the streamlining, approval, denial or revocation of any such certification and for cross-certification by other recognized certification organizations of diverse businesses.
SDO shall develop and manage a small business certification process consistent with section 22O.
The SDO may also provide other procurement-related business certification services for certification categories and programs managed by other agencies if it would result in greater efficiencies to the commonwealth and the businesses applying for certification.
(b) SDO shall maintain a directory of certified diverse and small businesses within the commonwealth, and shall, from time to time, notify such businesses of the programs and services available to them, whether from public or private sources, or from local, state or federal agencies. SDO may develop a platform for diverse and small businesses listed in the SDO directory to connect with prime contractors and private and public procurement organizations about available business opportunities.
(c) SDO may establish its own programs and policies and seek from any agency information and assistance necessary to carry out its functions and duties, including, but not limited to, mandating that each agency submit to SDO an annual agency spending plan, inclusive of planned procurements, and any requested data or periodic contractor reports; and all agencies shall supply such information or assistance. SDO shall promote upcoming procurement schedules and plans to diverse and small businesses.
Each secretariat and agency shall appoint a liaison to the SDO, which shall serve as their agency’s supplier diversity officer. Each secretariat and agency supplier diversity officer shall directly report to an appropriate level of authority within their respective secretariat or agency and shall be responsible for carrying out the functions and duties of their respective secretariat or agency as provided in this section.
The SDO shall, in coordination with the operational services division, manage the supplier diversity program. The SDO, through the supplier diversity program, shall encourage the participation of diverse businesses in procurements and contracts for goods and services by establishing annual agency spending benchmarks for purchases from diverse businesses and by requiring businesses that bid on state contracts for goods and services above a certain threshold, as such threshold shall be determined by the operational services division, to submit supplier diversity program plans making measurable financial commitments to contract with one or more diverse businesses. The executive director shall consult with the assistant secretary for operational services of the operational services division by March 15 of each year on the SDO’s annual determination of whether to make recommendations to the secretary to change agency spending benchmarks for the supplier diversity program in the next fiscal year. The SDO shall be responsible for issuing policies and procedures consistent with the supplier diversity program benchmarks and thresholds.
The executive director shall also make recommendations by March 15 of each year to the assistant secretary for operational services of the operational services division, based on demographic data for small and diverse businesses and the SDO’s prior year annual report, for the small business purchasing program. The SDO shall be responsible for issuing policies and procedures consistent with the small business purchasing program benchmarks and thresholds.
(d) SDO shall receive assistance from agencies including, where consistent with existing law, commitments that such agencies contract and subcontract with diverse businesses. SDO shall assist diverse businesses in making use of any special programs which may be operated by the state or by various departments and agencies of the federal government.
(e) SDO, through the secretary, shall coordinate its activities with those of other agencies, and shall assist diverse businesses in their dealings with federal agencies and with state agencies. SDO shall coordinate its certification and diverse and small business programming activities with the operational services division, division of capital asset management and maintenance, Massachusetts Department of Transportation and other agencies that manage diversity programs. SDO shall also provide assistance to all secretariats and agencies, in evaluating economic activities of the secretariat to determine how the secretariat may be of assistance in providing fair opportunities for diverse businesses. SDO may coordinate any economic activities with the executive office for housing and economic development and may coordinate activities and events with local chambers of commerce, municipal economic development offices and organizations that represent diverse businesses. SDO may also perform outreach to private businesses and public entities, including political subdivisions and municipalities of the commonwealth, to assist in their development and promotion of their own diversity programs.
(f) SDO may work with state authorities, as defined in section 1 of chapter 29, that perform lending functions, lending institutions, insurance companies and other private businesses in the commonwealth to encourage financing the funding and expansion of diverse businesses. SDO may provide assistance to diverse businesses in their efforts to obtain loan money and operating capital from private and public lenders.
(g) SDO may seek to increase the amount of financial assistance available to diverse businesses from private financial institutions; and may, from time to time, sponsor conferences, workshops or other informational programs.
(h) SDO shall seek to encourage voluntary assistance programs by which nondiverse business employees are loaned to diverse businesses or by which diverse business persons are taken into viable business ventures to acquire training and experience in managing business affairs.
(i) SDO may encourage state contract awarding authorities to seek to increase the incidence of joint ventures between nondiverse state contractors and diverse contractors, by specifically pointing out that such arrangements would constitute one method of partially meeting diversity requirements imposed upon both nondiverse state contractors and the state. SDO shall follow advertisements for construction work by public bodies in the commonwealth, shall notify minority and women and veteran general contractors and subcontractors of the bid opening dates for the approximate amount of the contract and subcontract work being bid, may assist them in securing bonds and in bidding for that construction work and shall initiate a program to help qualified minority persons and women to get started as small business firms in the construction field by helping to arrange joint ventures with qualified general contractors and subcontractors and by arranging for administrative and accounting assistance to help them carry out their subcontract and general contract obligations during the period of contract performance.
(j) SDO shall promulgate regulations to encourage and facilitate participation on public projects for service-disabled veteran-owned businesses and veteran-owned businesses interested in and capable of providing construction and design services on public construction and design projects.
(k) SDO shall, every 3 years and in consultation with the department of veterans’ services, establish goals for participation of service-disabled veteran-owned businesses and veteran-owned businesses in all areas of state procurement contracting, including contracts for public construction, design services and commodities and service. In calculating such goals, the SDO shall base the determination on an understanding of the pool of service-disabled veteran-owned businesses and veteran-owned businesses available for participation.
(l) SDO shall submit by March 15 of each year an annual report to the governor, lieutenant governor, secretariats, and the general court on the prior year performance of all commonwealth supplier diversity and small business programs, including but not limited to the supplier diversity program, the MassDOT M/WBE program, the small business purchasing program and the affirmative marketing program, the SDO’s certification efforts, the diverse businesses which it assists, the type of services which it renders and the difficulties it encounters. The report may include recommendations for legislative or executive action. All agencies shall cooperate with the SDO in the preparation of this report, including providing any requested data or contractor reports to be included in the final SDO report. Said report shall include data and information for construction and goods and services diversity programs, including, but not limited to, data provided by the division of capital asset management and maintenance and the Massachusetts Department of Transportation. All officials, agencies and political subdivisions of the commonwealth shall supply such data, information or assistance as requested by the SDO not later than December 15 of each year.
(m) The SDO shall establish and maintain a compliance unit for the purposes of ensuring certification, contract and program compliance. SDO shall, after notice and an opportunity to be heard, impose administrative penalties on an applicant for certification or recertification that knowingly provides false or misleading information on its application or in support of its application for certification or recertification as a diverse business, or on a person who fails to comply with any provision of any regulation or approval issued or adopted by the agency or of any law which the agency has the authority or responsibility to enforce.
The SDO shall also, after notice and an opportunity to be heard, impose administrative penalties on contractors for knowingly misreporting spending with or the identity of diverse business partners. For agency contracts that are determined by the SDO to be non-compliant with the applicable diversity program, the SDO shall make a recommendation to the agency to take corrective action against the contractor. The agency shall make the determination as to whether to suspend or terminate the contract or take other corrective actions in order to bring the contractor into compliance.
The SDO shall provide assistance to agencies in achieving diversity program goals and benchmarks. The SDO may refer an agency that fails to meet applicable program spending goals or benchmarks or to provide data, information or assistance as requested by the SDO on or before December 15 of each year to the operational services division, the division of capital asset management and maintenance or the appropriate oversight agency for consideration of whether to suspend or limit the procurement authority delegated to such agency or take other appropriate corrective actions.
(n) The executive director shall consult with the commissioner of capital asset management and maintenance on the establishment of the affirmative marketing program. The affirmative marketing program shall be established for the purpose of ensuring the fair participation of minority-owned and women-owned businesses on capital facility projects and state assisted building projects. The commissioner of capital asset management and maintenance, in consultation with the executive director, shall establish participation goals for minority-owned and women-owned business on capital facility projects and state assisted building projects. Participation goals for minority-owned business and women-owned business shall be based upon the broadest and most inclusive pool of available minority-owned businesses and women-owned businesses interested in and capable of performing construction work and design services on such capital facility projects and state assisted building projects. The executive director and the commissioner of capital asset management and maintenance shall meet on a quarterly basis to determine the status of implementation of the affirmative marketing program and what further steps both agencies deem necessary to achieve the purposes of section 6 of chapter 7C and this subsection. For purposes of this section, the terms “capital facility project”, “state assisted building project”, “minority-owned business” and “women-owned business” shall have the same meanings as found in section 6 of chapter 7C.
(o) In connection with the affirmative marketing program, SDO shall regularly review and, where necessary, modify its certification process to ensure that it operates effectively, and shall report annually to the secretary regarding these matters.
(p) SDO shall be responsible for the overall management, monitoring, and enforcement of the affirmative marketing program as it relates to minority-owned businesses and women-owned businesses participation on state assisted building projects. The executive director may appoint a program director to assist in program development, coordination of program operations and compliance with program goals and objectives. The program director shall also have responsibility for monitoring compliance regarding minority-owned businesses and women-owned businesses participation on state assisted building projects, addressing program violations and coordinating enforcement activities.
(q) The executive director shall develop written procedures by which participation goals, for an individual state assisted building project, may be adjusted for minority-owned businesses, women-owned businesses or both; but, the adjustment shall be based upon the actual availability of minority-owned businesses and women-owned businesses, the geographic location of the project, the scope of work of the capital facility project or other relevant factors.
(r) The executive director shall develop a written waiver procedure by which, at any time before the award of a contract, it may be determined that compliance with the participation goals is not feasible and by which the participation goals on a state assisted building project may be reduced or waived. Waiver shall be granted only upon a showing that good faith efforts have been made to comply with the participation goals.
(s) The executive director and the commissioner of capital asset management and maintenance shall by March 15 of each year submit to the joint committee on state administration and regulatory oversight, the house and senate committees on ways and means, the clerks of the house and senate, a report on the performance of the affirmative marketing program for the preceding year. The report shall, at a minimum, show the name and address of each such minority-owned business and women-owned business, its designation as a minority-owned or women-owned business, the contract or subcontract price, a description of the work performed on the contract by class of work, and project type, and shall show separately the total number of contracts awarded to minority-owned and women-owned businesses as a percentage of the total number of contracts awarded and as a percentage of the total contract price.
(t) The executive director shall adopt regulations necessary to implement this section.
(u) The SDO shall, every 2 years and in consultation with the Massachusetts Office on Disability, establish goals for participation of individuals with disabilities in all areas of state procurement contracting. Participation goals may be met by contracting or subcontracting with businesses that are owned by persons with disabilities or that hire, or identify and recruit with the intent to hire, qualified applicants with disabilities. SDO shall provide assistance to the secretariats in determining opportunities for contracting with businesses that hire persons with disabilities to meet the participation goal set forth in this subsection, including contractors and subcontractors providing goods and services under multi-year contracts or grants funded by agencies within the executive offices.
SDO shall include in the annual report set forth subsection (l) an update concerning the progress made toward meeting the participation goals set forth in this subsection.
SECTION 4. (a) Notwithstanding any general or special law to the contrary, this section shall facilitate the orderly transfer of the employees, proceedings, rules and regulations, property and legal obligations of the functions of state government from the supplier diversity office of the operational services division as the transferor agency, to the supplier diversity office as the transferee agency and as its own agency within the executive office for administration and finance.
(b) To the extent that employees of the transferor agency, including those who were appointed before the effective date of this act and who hold permanent appointment in positions classified under chapter 31 of the General Laws or have tenure in their positions as provided by section 9A of chapter 30 of the General Laws or do not hold such tenure, or hold confidential positions, are transferred to the respective transferee agency, such transfers shall be effected without interruption of service within the meaning of said section 9A of said chapter 30, without impairment of seniority, retirement or other rights of the employee, and without reduction in compensation or salary grade, notwithstanding any change in title or duties resulting from such reorganization, and without loss of accrued rights to holidays, sick leave, vacation and benefits, and without change in union representation or certified collective bargaining unit as certified by the state division of labor relations or in local union representation or affiliation. Any collective bargaining agreement in effect immediately before the transfer date shall continue in effect and the terms and conditions of employment therein shall continue as if the employees had not been so transferred. The reorganization shall not impair the civil service status of any such reassigned employee who immediately before the effective date of this act either holds a permanent appointment in a position classified under chapter 31 of the General Laws or has tenure in a position by reason of section 9A of chapter 30 of the General Laws. Notwithstanding any general or special law to the contrary, all such employees shall continue to retain their right to collectively bargain pursuant to chapter 150E of the General Laws and shall be considered employees for the purposes of said chapter 150E. Nothing in this section shall be construed to confer upon any employee any right not held immediately before the date of said transfer, or to prohibit any reduction of salary grade, transfer, reassignment, suspension, discharge, layoff, or abolition of position not prohibited before such date.
(c) All petitions, filings, requests, investigations and other proceedings related to the supplier diversity office and appropriately and duly brought before the transferor agency or duly begun by the transferor agency and pending before the transferor agency before the effective date of this act, shall continue unabated and remain in force, but shall be assumed and completed by the transferee agency.
(d) All duly made orders, rules and regulations related to the supplier diversity office and all approvals duly granted by the transferor agency, which are in force immediately before the effective date of this act, shall continue in force and shall thereafter be enforced, until superseded, revised, rescinded or canceled, in accordance with law, by the transferee agency.
(e) All books, papers, records, documents, equipment, buildings, facilities, cash and other property, both personal and real, including all such property held in trust, related to the supplier diversity office and which immediately before the effective date of this act are in the custody of the transferor agency shall be transferred to the transferee agency.
(f) All duly existing contracts, leases and obligations of the transferor agency related to the supplier diversity office shall continue in effect but shall be assumed by the transferee agency. No existing right or remedy of any character shall be lost, impaired or affected by this act.
SECTION 5. This act shall take effect as soon as it has the force of law under subsection (c) of section 2 of Article LXXXVII of the Amendments to the Constitution.
House of Representatives, December 16, 2020.
Approved (under the provisions of Article LXXXVII of the Amendments to the Constitution and Joint Rule 23A).
Robert A. DeLeo, Speaker.
Steven T. James, Clerk.
Senate, December 28, 2020.
Approved (under the provisions of Article LXXXVII of the Amendments to the Constitution and Joint Rule 23A).
Karen E. Spilka, President.
Michael D. Hurley, Clerk.
Approved, January 4, 2021.