DEI is Job 1 in going forward with green energy
Those who supported the Green New Deal claim victory for getting the largest federal investment ever to fight climate change in the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. That means lots of procurement opportunities.
In the Green New Deal Implementation Guide produced by Senator Ed Markey and Congresswoman Alexandria OcasioCortez last year, equitable procurement is overlooked.
This is a mistake because admittingly, the procurement system is broken, but the Biden administration is afraid that if they don’t get the money out the door, and they lose the next presidential election, the next administration could cancel and or “claw back” the unspent billions. There is an urgency to move quickly. The problem is that moving quickly has been positioned as opposite to reforming the procurement system. We must find a way to do both.
During COVID-19 the PPE money distributed to smaller and/or business owners of color improved over time. We need to reform the procurement process for the environment, energy, and labor money allocated to address climate change so more of the money goes to the places most in need, consistent with the goals of Environmental Justice 40 (EJ40). And the money goes to small businesses of color. Here are some things we could do to improve the procurement process.
Here are some things we could do to improve the procurement process.
• Creating a more transparent, accountable procurement process. Make it easier to publicly track contract awards, and hold agencies accountable for meeting DEI goals.
• Breaking large contracts into smaller ones. The government likes larger contracts because they take less work while enabling the government to move more money at once. But the larger the contracts, the fewer the number of small and/ or minority-owned businesses that have the capacity to perform the work.
• Making DEI more important in green procurement decisions. The current government procurement process favors businesses with the most experience and lowest cost, which advantages larger, incumbent, often white firms over diverse firms. Some states consider a bid within 5% to be a comparable price. Diversity, equity, and inclusion must be weighted more heavily when evaluating bids, as in the Massport Model, where diversity goals account for 25% of the score.
• Increasing opportunities for collaboration. Mandate that procurement opportunities be complemented with publicly available lists or forums that encourage partnerships among interested parties. This will enable smaller and less experienced firms to combine forces to bid on projects.
• Changing payment terms.
Currently, the commonwealth’s standard terms and conditions specify a 45-day payment term. Minority business enterprises have historically lacked the capital to afford to accept such extended payment terms. Contracts with MBEs should support progress payments and early payment discounts.
• Providing technical and other assistance to small and/or minority-owned businesses. For example, such businesses might benefit from guidance about the bidding process or help in accessing financing.
• Shifting the focus from employment to ownership. Often, people of color have access to grants for workforce development but not for entrepreneurship. Grants are needed for starting or expanding green businesses and to enable existing businesses to move into adjacent green sectors where there are growing opportunities.
• Fostering inclusive research and innovation by allocating funding specifically for Black researchers, inventors and entrepreneurs in the environmental and energy sectors. This will drive technological advancements and competitive solutions.
• Targeting priority environmental areas at the community level. Currently, 70% to 80% of Boston and 53% of the state is considered an environmental justice community. We need new legislation that establishes and designates Green Zones: communityor neighborhood-based areas facing significant environmental hazards, such as brownfields or high rates of asthma and other chronic illnesses linked to poor environmental air, water, or soil quality.
• Engaging with environmental justice communities early and often to ensure their needs and voices are considered.
• Funding and supporting community-driven and -owned renewable energy projects led by residents of Black communities, to ensure equitable economic participation and access to the benefits resulting from the transition to clean energy.
These reforms will help create a more just and equitable environmental and energy procurement process and prioritize Black and brown environmental justice communities. By taking these steps, we can ensure that all communities benefit from the economic opportunity created by the transition to a clean energy economy.