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On April 14, 2016 a Superior Court judge ruled in Federal Concrete, Inc. v. Executive Office of Administration & Finance et al. No. 1684CV00627 to grant an injunction to remove the minority classification for Portuguese-owned businesses in Massachusetts.

According to the Operational Service Division (OSD) of the Executive Office of Administration and Finance the change in the status from Portuguese-owned Minority Business Enterprises (MBEs), as certified by the Supplier Diversity Office (SDO) will no longer be considered MBEs but will now be considered Portuguese Business Enterprises (PBEs). The loss of the minority status exempts the businesses from special bidding for work on certain public construction projects.

For purposes of certification under the SDO’s regulations 425 CMR §2.02, Portuguese means: “All persons having Portuguese origin. Portuguese persons shall only be included in the definition of minority if specifically set forth in programs funded by state transportation bond statutes which include such persons as eligible participants.”

Federal Concrete, Inc. owner Janet Butler said that Portuguese-owned businesses “are being afforded a bidding preference that they are not otherwise entitled to by regulation or statute, which puts minorities and women at a disadvantage.” The Federal Concrete case also claims that the SDO “has wrongfully certified 106 firms as minority business enterprises on the ground (sic) that they are owned by persons of Portuguese origin.”

The changes to the classification will impact companies and employees, stated several owners of Portuguese-owned businesses to South Coast Today. The business owners also stated that “the loss of minority status for Portuguese-owned construction firms could make it harder for general contractors to meet state diversity requirements and, as a result, send construction costs through the roof.”

The OSD Memorandum instructed all public awarding authorities are advised that for any bids submitted by a prime bidder after April 12, 2016, the SDO will not recognize an MBE certification issued to a Portuguese-owned firm.

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