Why Set a Contract Goal
Contract goals are an important tool to ensure that minority- and women-owned and disadvantaged firms (M/W/DBEs) have full and fair opportunities to compete for your prime contracts and associated subcontracts. Contract goals instruct potential bidders in the efforts required to engage M/W/DBE firms in the bidding process.
While goals can never function as “quotas” or setasides, they should establish the expectations of the contracting entity for what is reasonable and achievable based upon the particular needs of the project. M/W/DBE utilization doesn’t just “happen”; it is the result of targeted efforts. Correct and defensible goal setting is the foundation for ensuring equal contracting opportunities.
Additional reasons for setting defensible contract include:
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Contract goals ensure progress towards meeting a contracting entity’s annual overall goal(s) for spending with diverse firms.
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Defensible goals reduce the need to grant reductions or “waivers” of goals because the bidder is being asked to meet goals that reflect the realities of the market conditions of the project. Arbitrary goals can lead to the granting of unwarranted waivers, underutilization of M/W/DBEs or contract fraud. Correct goal setting supports transparency and integrity in program administration.
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A clearly articulated and documented goal setting methodology is a constitutional requirement. The courts require that goals must be clearly related to the availability of firms to perform on individual contracts. This is the “narrow tailoring” requirement. Agencies that do not have a defensible and documented approach put their programs in potential legal jeopardy.
