2015 Disparity Study FAQs

Disparity Study Results - FAQs

The state of Indiana and BBC present answers to frequently asked questions regarding disparity studies.

17. What is a Disparity Study?

1. Disparity studies examine whether or not there is evidence of discrimination in the utilization of minority- and women-owned firms. Disparity studies are a way for government agencies to examine whether programs are needed to assist small businesses and/or minority- and women-owned businesses in government contracting and purchasing.

17. Why did the State of Indiana conduct a disparity study?

1. The purpose of the 2015-16 State of Indiana disparity study was to compare the actual number of minority and woman-owned business enterprises (MWBEs) that exist in the state against the actual number of MWBEs being utilized in state government contracts. A disparity exists when there is an underutilization of available MWBEs.
   
   The last State of Indiana disparity study was commissioned in 2009 and completed in 2010. The State has not completed an updated disparity study since then. Per IC 4-13-16.5-2, the State of Indiana is required by law to update its disparity study every 5 years, even though many states update their disparity studies every three to five years. An updated disparity study must be completed in order to establish the legal validity for maintaining an MWBE program.

17. What minority groups are analyzed as part of the study?

1. The following minority groups were examined to determine availability and utilization of minority groups in state contracting: Black American-owned businesses; Hispanic American-owned businesses; Asian Pacific American-owned businesses; Subcontinent Asian American-owned businesses; and Native American-owned businesses

17. What projects or contracts are included in the study?

1. The study examined contract data for construction, professional services and goods and supplies from July 1, 2009 – June 30, 2013

17. Who conducted the study?

1. BBC Research & Consulting completed the 2015-16 Disparity Study after a competitive bidding and selection process.

17. How are these results calculated?

1. As part of the disparity analysis, the study examined the availability of minority- and women-owned businesses for state contracts and compared those data to the actual utilization of minority- and women-owned businesses in state contracting. A disparity index is calculated by dividing the participation of minority- and women-owned businesses, by the availability and multiplying by 100.

17. What is parity?

1. Parity is a disparity index of 100, indicating an exact match between participation and availability for a particular group for a specific set of contracts.

17. What is a substantial disparity?

1. Disparities of less than 80 are described as substantial disparities in the report. Several courts deem a disparity index of below 80 as being “substantial” and have accepted it as evidence of adverse conditions for minority- and woman-owned businesses.

17. What will the State of Indiana do with this information?

1. The Governor’s Commission on Minority & Women’s Business Enterprises will review all findings and information from the 2015-16 Disparity Study to determine participation goals for minority- and women-owned business utilization in state contracting. Per IC 4-13-16.5-2 (8), it is the commission’s responsibility to establish participation goals.

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