COLUMBIA — Soon after Maria Clark began her advertising agency, Zuva Marketing, in Kansas City, a former employer reached out.
The company wanted to bid for a state tourism job but needed to subcontract to minority- or women-owned businesses to qualify. Would Clark, who is Latina, be interested in getting certified by the state’s diversity program?
The process was daunting, but Clark did the paperwork to get certified and landed the work. Since then, her state subcontracts and contracts have grown to include six-figure deals managing billboards for Missouri Lottery contractors.
"I was a small business, and when I got certified it was like a shot in the arm," she said. "I was able to make a part-time employee full-time and update our telephones. It was the little boost I needed to make my company grow."
Since 2007, state expenditures on work done by minority-owned firms have risen 6.9 percent, topping $138 million in fiscal year 2016, according to the Office of Equal Opportunity. State funds going to women-owned firms increased 1.3 percent in the same time period to $53.6 million.
Despite the trend, a review committee said in January 2015 that "there is still much work to be done to eliminate the lingering effects of discrimination and ensure a level playing field for all Missouri business owners, especially minority- and women-owned businesses."
The committee’s study found that businesses often had a hard time applying to the program and some agencies had trouble locating diverse contractors.
Several vendors said that while the state’s expenditures have been a boon for small businesses, the money is often funneled through larger, out-of-state agencies that serve as prime contractors.
"I do think that business should stay in the state of Missouri, for economic reasons," said Mary Kay Payne, the owner of Midwest Advertising in Jefferson City and Screenburst Graphics in St. Louis. "It helps keep jobs. It’s trickle-down economics."
Payne started Midwest Advertising 35 years ago as a single mother and took over the silkscreening company in 1995. She has had to work hard, she said, just like any small-business owner.
Her business is convenient for state agencies located in the state capital. She has picked up large orders of plain T-shirts for a workshop in a women’s prison, first-aid kits and "Stream Team" shirts and hats celebrating the 25th anniversary of the Powerball for the departments of Corrections and Conservation and the Lottery.
She would rather see these jobs always go to Missouri businesses, she said, but then again, she has also done business with the states of Idaho and Texas.
Judy Martin, the chief operating and financial officer for the Lottery, noted that some of the Lottery’s procurements are restricted to Missouri firms — the agency’s financial statement auditor, for example, must be licensed and headquartered in Missouri.
"Ideally we’d like to work with Missouri vendors, but some things aren’t available in the state," she said.
For items that aren’t made by any Missouri businesses, like Scratchers tickets, Martin said she and the vendors have gone the extra mile to try to have those services met by diverse companies. Their current primary Scratchers supplier, Scientific Games, subcontracts to Worthington Paper, which is headquartered in Texas.
When Worthington’s minority business enterprise certification lapsed, Martin said, the Office of Equal Opportunity, Scientific Games and the Lottery reminded and encouraged Worthington to renew the certification.
Under an executive order signed in 2015 by former Gov. Jay Nixon, state agencies must strive to meet a goal of 10 percent participation for minority-owned businesses and 10 percent for women-owned businesses.
Nixon’s successor, Gov. Eric Greitens, has left the goals in place; he has not said what he intends to do with the program.
The Lottery runs several complicated contracts that can be done only by large firms — and for those big firms to get the contracts, they have to prove they’ll help the Lottery reach its diversity goals. So a global gaming company such as IGT Corp. creates smaller subcontracts, whether janitorial, staffing or marketing and advertising, for minority businesses like Zuva to do.
Clark, who worked on the tourism account for years, then picked up one of those subcontracts for the Missouri Lottery. She helps IGT Corp. organize billboards for the lottery. For that job, she administers the billboard media plans and works as a subcontractor to IGT Corp., which installs and maintains the outdoor boards.
Vendors can’t sign someone on to just sharpen pencils or file papers to meet diversity requirements, Martin said.
"They have to provide value for the contract, and they have to do work specific to the contract," she said.
Some of the businesses in the program are well-known corporate success stories.
World Wide Technology, based in St. Louis County and owned by David Steward, is the minority-owned business that receives the largest amount from state contracts. The state paid the company $66 million in the 2016 fiscal year, which ended last June 30.
Another technology company, Huber & Associates Inc., which is based in Jefferson City and owned by Elizabeth Huber, was the top women-owned business in the program. It received $7.4 million from the state that year.
Columbia was represented on the top 10 list for women-owned businesses by two companies: Paternity Testing Corp. and Bucket Media Inc.
Paternity Testing held a three-month $328,333 contract with the Department of Social Services to conduct paternity and DNA tests until September 2015, when it was underbid by an out-of-state company, according to its president, Kim Gorman.
Bucket Media, an advertising company, received $3.2 million from seven departments, which included contracts with the departments of Transportation, Conservation, and Health and Senior Services. For the Department of Transportation, Bucket developed a marketing plan to stop distracted driving, which includes creating and placing ads to discourage texting and drinking while driving.
Bucket applied for and received certification shortly after incorporating, said president Keri Tipton.
"It just takes time and dedication and persistence," she said.
Even when contractors are a good fit for the work, they face a complex process to qualify for the jobs.
Kelly Sly, owner of Diggit Graphics in Columbia, said the certification process took him about a year. He pulled out a thick white binder with inches of paperwork, which included his financials, taxes and other information that proved he truly did own and operate at least 51 percent of Diggit. By the end of the process, he said, the employee who helped him compile the binder broke down and cried.
"It’s a really extensive process, and even getting re-certified is a nightmare," he said. "I have a feeling that there are a lot of minority- and women-owned businesses out there that just don’t have the time."
Doug Nelson, who was commissioner of the Office of Administration in 2014 when Gov. Nixon organized a statewide disparity study, said that while the program has been a good step, he’d like to see a comprehensive, statewide certification process.
Nelson’s office helped implement an online portal and directory for diversity contracts, but the process doesn’t include municipal and independent diversity contracting programs.
A business can be certified from any number of organizations or municipalities, but state agencies can only contract out to state-certified businesses, and prime vendors receive credit only if they subcontract out to businesses certified by the state. Streamlining the processes and creating a bridge from city programs to the state programs would help businesses, Nelson said.
Small businesses "don’t know what hoops to jump through, and they don’t have the time to figure it out," Nelson said.
Sly, who identifies as Hispanic-American, said he completed the process because, as he grew his business, he wanted to begin bidding for larger contracts.
Certification has opened the door to jobs with the Lottery and the Isle of Capri casino, he said, pointing to a stack of navy shirts his shop is printing for the Missouri Lottery.
Soon after Sly was certified, he was able to expand to a new, larger building on west Broadway. He has grown his company from a shed-based gig to a full-fledged, high-tech graphics and printing studio.
The program has allowed Sly to bid on huge state contracts with the Lottery and Division of Health and Senior Services, contracts that ask for thousands of navy T-shirts and infant onesies that say "This side up while sleeping." Those contracts, in turn, have allowed him to pick up more business and obtain contracts with related programs, such as the individual casinos.
Sly said he’s glad for the exposure, which has helped him build his business.
But some state jobs take a lot of time and effort. To do large print runs, he has to call in extra employees and truck in containers of shirts.
"They always go to the lowest bidder, which makes sense, but it drives the price down so there’s no profit, and then I’m only making a little bit of money on a job that takes a month to do," he said. "I’ve thought about not bidding on them anymore."
Supervising editor is Mark Horvit, email@example.com.