Why Massachusetts May Be Best State for LGBT Business

The first state to legalize same-sex marriage a decade ago is making LGBT history again. The governor of the commonwealth of Massachusetts today said "I do" to LGBT equality in economic opportunity, reports The Republican, a newspaper in Springfield, Mass.

Gov. Charlie Baker issued an executive order Tuesday making Massachusetts the first state to include LGBT-owned businesses in a program that requires contractors bidding on a state project costing more than $150,000 to commit to spending a percentage of the money on diverse subcontractors and suppliers.

"The goal is to provide a much higher quality product by opening up opportunities for others to play who know they can do the work but have been basically shut out because of a series of very complex and in most cases unnecessary barriers to participation," Baker said.

Speaking to a group of reporters, Baker later said the changes are about "leveling the playing field," not about giving a leg up to preferred businesses. "The people who have a leg up are people who have resources and infrastructure to meander their way through a very complex and at times somewhat nonsensical procurement process here in Massachusetts."

The National Gay and Lesbian Chamber of Commerce will certify businesses as LGBT-owned for the state. Jonathan Lovitz, the NGLCC's vice president of external affairs, told Fortune magazine that for a company to be considered, 51 percent or more of the firm must be owned by lesbian, gay, bisexual, or transgender individuals.

Although Baker's order recognizing LGBT-owned businesses is the only statewide initiative of its kind, Fortune reported the NGLCC boasts of several success stories with state agencies and municipalities, including the California Public Utilities Commission as well as Essex County, N.J., and Cleveland.

According to a 2006 report from the Hackett Group, companies that focus heavily on supplier diversity generate a 133 percent greater return on procurement investments than a typical business. About one-third of Fortune 500 companies also recognize LGBT-owned enterprises in their contracting processes, according to the NGLCC.

Massachusetts introduced the supplier diversity initiative in 2010 to provide minority- and women-owned businesses with equal access to state contracts.

Businesses owned by service-disabled veterans were added in 2013, and Baker's executive order expands that to all veterans as well as people with disabilities and companies owned by lesbian, gay, bisexual, and transgender people.