Leveraging the Integration of Public Policy to Drive Supplier Diversity and Inclusion

ESI has developed a variety of analyses to help institutions working to ensure equitable distribution of economic and financial opportunities. We are able to marshal data, analytics, and strategic guidance to inform whether and how communities are fairly accessing employment, contract opportunities, and banking services. Learn more about our services here. We also rely on the expertise of senior advisors like Angela Dowd-Burton, who we have the opportunity to work and collaborate with. Angela was appointed by Mayor Michael Nutter and reappointed by Mayor Jim Kenney to serve as Deputy Director of Commerce for the Office of Economic Opportunity in Philadelphia, a position she held until September 2016. This is Part 1 of Angela’s blog series, stay tuned for Part 2 to be released next week!

I recently took the opportunity to speak with procurement professionals during the National Institute of Government Procurement – Pennsylvania Public Purchasing Association Regional Conference. The topic of my presentation was “Leveraging the Integration of Business Development and Public Policy” with the goal of building businesses and putting people to work. Here is a recap of my presentation.

The City of Philadelphia’s “Inclusion Works Strategic Plan”, launched in 2010 by Mayor Michael Nutter’s Administration and expanded in 2016 by Mayor Jim Kenney’s Administration, yielded extraordinary results related to Minority-, Women- and Disabled-Owned Business Enterprise (M/W/DSBE) participation. Public policy and a dedicated legislative agenda were leveraged to grow small businesses.

There are three essential components of the City’s diversity strategy that support the Executive and Legislative branches of government and the business community:

  1. The operating infrastructure put in place to support the supplier diversity strategy;
  2. The culture shift that transformed in-house procurement activity and external markets through the use of legal compliance and accountability tools; and
  3. The metrics used to measure, manage and hold management accountable for their role in the success of the strategy.

The resulting collaborative spirit built between the City of Philadelphia Office of Economic Opportunity, the procurement organization, operating departments, Controller’s Office, the Inspector General’s Office, and City Council is well documented.

There is an inextricable link between the Procurement organization/operating departments and the Office of Economic Opportunity that make their performance and deliverables interdependent. Prior to the introduction of the “Inclusion Works Strategic Plan”, many of the department leaders believed the City’s inclusion goals for M/W/DSBEs were the sole responsibility of OEO. After the Plan was implemented, department heads acknowledged their role as owners of their departmental inclusion goals and reported on their progress not only to the Mayor’s Leadership Council, but to the City Council during budget hearings and legislative negotiations.

We first recognize that there are some challenges to sourcing diverse suppliers. We have addressed many of them in the City of Philadelphia government and there is still a lot of work to do.

Some of the challenges include, but are not limited to the following:

  • Not enough M/W/DSBEs meet goals set by local government — many are pursuing opportunities in the private and/or non-profit sectors where more lucrative contracts are available.
  • They do not have the resources to attract, monitor and report participation — municipalities across the state have limited resources or, in some cases, the will to aggressively pursue the inclusion of small businesses.
  • Small businesses are good performers on a small scale but they don’t have enough capacity to meet institutional demands – partnerships and joint ventures may help in this instance.
  • Disadvantaged businesses are not bidding – the credibility of a fair and equitable process and primes with a reputation for respect and fairness must be established to encourage the participation of M/W/DSBEs.
  • Eligible businesses refuse to get certified – some business owners don’t understand the process or see the value, while others don’t want to divulge their financial status! Businesses must see the value and profitability of the certification in expanding their business.

Significant improvements to diversity and inclusion programs can be made regardless of these obstacles; but one organization cannot do it alone.

Many know that the top three reasons why developing small and disadvantaged businesses are important to local governments include increased employment (JOB), a stronger tax base for better services, and smarter, more productive communities. The U.S. Small Business Administration reports 99.6% of the businesses in PA are small businesses, controlling 46.7% of the jobs and providing 2.5 million people with pay checks to house and feed their families.

A list of major U.S. cities, compiled by ESI, shows the percentage of businesses with more than one employee owned by diverse businesses. 41.6% of the businesses within Philadelphia are minority- and/or women-owned businesses that have more than one employee. Helping these businesses grow can generate revenue and drive the local and state economy.

The City of Philadelphia’s Office of Economic Opportunity (OEO), formerly known as the Minority Business Enterprise Council (MBEC), operated under the jurisdiction of the Finance Department from 1984 through 2010. I had the privilege of physically moving OEO into the Commerce Department based on Mayor Nutter’s Executive Order which enabled OEO staff to be surrounded by business development experts whose mission focuses on business attraction, development, growth and sustainability.

The overall mission of OEO, as reported in their 2017 Annual Report, is “to promote the economic development of Minority-, Women- and Disabled-Owned Businesses through its registration program, contract review and monitoring activity and on-going interaction with other city Departments, quasi-public agencies and the local marketplace.” Here are a few specifics:

  • Facilitate the M/W/DSBE certification and contracting process.
  • Help M/W/DSBEs build capacity through resources within city government and other advocating agencies/organizations like:
  • Establish and pursue realistic stretch goals for M/W/DSBEs participation that can readily be applied based on supply and demand.
  • Grow local businesses and attract firms from outside the metropolitan area to fill the gaps within our marketplace where we have few or no M/W/DSBEs.

 

In Part 2 of this blog series, I will focus on the three key components of the City of Philadelphia’s Diversity Program, discussing the goals, strategies, tools, and tactics used.

Angela Dowd-BurtonAngela Dowd-Burton is President and CEO of DowdBurton Associates, an economic development firm, and is a Senior Advisor at ESI. Angela is an award-winning business professional with over 25 years of diverse business experience and outreach within the community. In 2010, Angela was appointed by Mayor Michael Nutter to serve as Executive Director of the of Office of Economic Opportunity for the City of Philadelphia, where she was responsible for leveraging business services of the Commerce Department to strengthen the capacity of small businesses to successfully contract with the public, private and non-profit sectors.

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