The City of Philadelphia is home to numerous world-class universities and health systems. They are significant contributors to the local economy. They are often referred to as “anchor institutions,” in that their identity is inextricably linked to that of their geographic location. They are known for their commitment to and partnership with their immediate neighborhoods and the City as a whole. Procurement represents one facet of their contribution to the local economy, as they procure billions of dollars of goods and services each year, and each procurement decision represents an opportunity to choose a Philadelphia-based vendor and support economic activity and job creation within the City. It is in the City’s interest to know the benefits associated with local spending by anchor institutions.
The purpose of this report, in addition to highlighting some local and national best practices, is to explore the current and potential impact on the Philadelphia economy of local procurement by anchor institutions. It is estimated that anchor institutions in Philadelphia have a total annual operating budget of about $14 billion, of which about 38 percent, or $5.3 billion, is non-payroll spending and therefore represents procurement opportunities for which a local vendor may be used. Of that $5.3 billion in annual procurement opportunities, currently about 52 percent, or $2.7 billion, is with local vendors.