WA state introduces new policy that aims to increase equity for small, diverse, veteran-owned businesses

October 7, 2022

OLYMPIA, Wash. — On Wednesday, October 5, the Washington State Department of Enterprise Services announced they are introducing a new enterprise supplier diversity procurement policy next year, which aims to increase equity in goods and services contracts for small, diverse, and veteran-owned businesses.

The policy will require all state agencies to include supplier diversity considerations in all aspects of their goods and services procurements.

The department described how the use of small, diverse and veteran-owned businesses by state government has been low for 20 years. Last fiscal year, the state government spent $817 million on goods and services through DES-managed contracts. However, less than 1% of that amount was with businesses that are owned by women, people in racial minorities and veterans, and only 6.8% of that amount was with small businesses.

“What we are doing right now does not work – the data clearly indicates this,” the department said.

The policy’s goal is durable change.

“The success of small, minority-, women-, and veteran-owned businesses makes Washington’s economy and our families more resilient, strengthens our communities and improves the quality of life for all Washingtonians,” the department said.

Key features of the policy include:

• Transparency requirements: Agencies must post their forecasted goods and services procurements for the year on their websites and list the name of the executive leader responsible for supplier diversity work.
• Accountability requirements: Agency leaders are held accountable for complying with the policy and agencies must prove they are complying with the policy to keep their delegated procurement authority.
• Outreach requirements: Agencies must conduct outreach with small, diverse, and veteran-owned businesses. Options include attendance at general outreach events, outreach for noncompetitive procurements, and outreach for competitive procurements.
• Other strategies designed to remove barriers for small businesses such as reserved awards, preference points.

“We collected over 1,400 comments from businesses, nonprofits, diversity and equity advocates, state procurement professionals and others,” the department said. “We would like to thank those who took the time to share their thoughts and experiences with us.”

The policy will take effect on April 1, 2023.