The state of Michigan has claimed it’s a champion for minority-owned businesses within the state and prioritizes them over out-of-state businesses for proposed state-oriented service contracts.
On July 29, Michigan Governor Gretchen Whitmer signed the “Michigan Jobs First” executive directive, which expands the list of factors taken into account for a potential supplier’s bid, such as considering the overall economic impact of a bid, employee compensation, and a company’s track record of labor and environmental compliance. Under this directive, the governor wants to give preference to Michigan businesses on state contracts.
However, the administration’s directive needs to go further for many Michigan businesses, especially minority-business enterprises.
As an attorney representing Michigan-businesses of all backgrounds, I pay close attention to how the state awards contracts for goods and services. Our firm, Levine & Levine, most recently saw the effects of Michigan’s outdated system for awarding contracts. A woman-owned and registered business in the state of Michigan recently lost out on a $30 million, five-year contract by Michigan’s Department of Technology, Management and Budget to a Missouri-based business.
The $3.5 million difference in bids between the Michigan-based and Missouri-based businesses did not take into consider the economic impact of awarding the contract to an out-of-state company. State governing agencies that give contracts to low out-of-state bidders may not only be sacrificing quality for cost, but they are clearly refusing to factor the amount of money the state loses. Michigan-based companies pay state sales tax, payroll tax, spend money on in-state vendors and have in-state employees on their payroll who also spend money and pay taxes in our great state of Michigan.
In our client’s case, 10 Michigan residents lost jobs equaling more than $850,000 in total wages, as well as company bonuses. In addition, approximately $78,000 in sales tax and $29,000 in personal property tax within the state was also lost, annually. The loss to the state over five years equals more than $4.75 million.
The failure to support Michigan based businesses is a detriment to our homegrown businesses, but more so to our state economy. Prior administrations of both parties gave lip service to promoting Michigan-based business, but ultimately buckled to powerful challenges by out-of-state interests. Both former governors, Rick Snyder and his predecessor, Jennifer Granholm, talked about supporting minority-owned business and those located here, but, in the end, contracts were awarded to vendors in other states.
We laud Gov. Gretchen Whitmer’s directive to promote Michigan based businesses and challenge the administration to take a close look at the businesses vying for government projects and services and implement a legislative policy that prioritizes our own in-state businesses, especially minority-business enterprises.
States surrounding Michigan and beyond are already doing this and, even provide incentives to minority owned businesses and businesses located in the subject state. For instance, if our client’s contract had been out for bid in the state of Indiana, points would have been given to our client for being a woman-owned business, as well as having a base of operations in the state. In fact, had our client been given these points for these significant factors in the state of Michigan, then our client’s business would have handily won the bid with the Michigan Department of Technology, Management and Budget.
We urge Michigan Gov. Whitmer and her administration to take steps to implement the directive. Now is the time for Michigan to make this effort a reality for businesses statewide, business owners and employees who contribute daily to a thriving citizenry, and to support Michigan’s overall economy.
—————
Sharan L. Levine is a partner at Kalamazoo-based Levine & Levine Attorneys at Law. In 1987, she was honored by the State Bar of Michigan with the Wade McCree, Jr. Advancement of Justice Award.
- Posted November 07, 2019
- Tweet This | Share on Facebook
Minority-owned businesses left out of Gov. Whitmer's executive directive
headlines Washtenaw County
- National Center for State Courts supports new legislation to protect state court judges from escalating threats
- ABA Commission on Women in the Profession announces five recipients of the 2024 Margaret Brent award
- CDAM Honors
- ACLU launches interactive map that tracks book bans and other forms of censorship in Michigan
- Bodman attorney enjoys ‘code driven’ tax law
headlines National
- New Legalese: You may have heard a deepfake, but what about ‘Twiqbal’?
- From Intake to Outcome: An in-house lawyer’s guide to matter management solutions
- 2 BigLaw firms in merger talks that could produce 1,600-lawyer firm with top 50 revenue
- Send in the paralegals
- Lawyer reprimanded after mistakenly emailing opposing counsel with plan to avoid judge’s call
- ‘I don’t play well’ judge who threatened to track down, jail misbehaving litigant gets tossed from case