More often procurement reform is becoming a priority for communities. It’s the idea of changing how public purchasing can reflect a city's economic diversity.
This past June, Memphis was one of five cities accepted into the City Accelerator cohort to increase spending to minority-owned businesses. The other cities are Charlotte, Chicago, Milwaukee and Los Angeles.
“These cities are taking a hard look at how they purchase goods and services for their communities,” said Ed Skyler, executive vice president for Global Public Affairs and Chairman of the Citi Foundation.
As part of the nationwide cohort, Memphis will receive a $100,000 grant to use toward their efforts to boost spending with small, diverse businesses in the area.
In an ideal setting, a city’s procurement process can increase the diversity of local vendors. The public contract can boost supply chains and jolt local employment figures and tax revenue.
“They recognize that there is an opportunity to strengthen their procurement practices—and cities overall—by connecting directly with the diverse businesses and ideas within their communities,” said Skylar.
This is becoming more important as large firms continue layoffs and new growth is coming from small businesses. With an estimated $1.6 trillion in procurement spending nationwide on the local level, there are opportunities out there for those businesses to grow.
Funded by nonprofits Living Cities and the Citi Foundation, the program started four years ago to increase economic activity and employment in low-income areas.
One way Memphis will go about its procurement process reform will be to take a hard look at data. For instance, information gathered from a recent study on disparity in city contracting will be helpful. It points out available minority vendors who are currently not being put to full use.
Memphis’ participation in the program will buoy efforts made to create equal opportunities to flourish economically.
"We know that for our economy to work, it must work for all,” said Memphis Mayor Jim Strickland. “That’s why improving the City of Memphis’ performance with minority and women-owned businesses has been a priority of mine since becoming mayor."
In addition to making the procurement process easier, the accelerator will help local businesses with hiring, access to capital, as well as administrative functions. Public-private partnerships could also be used to foster these initiatives.
Since Mayor Strickland assumed office in 2015, the city’s contract spending with small, minority and women-owned businesses has risen from 12 percent to 20 percent as of this past March.
"We are intentional about growing our business with small, minority and women-owned businesses, and just as intentional about empowering these businesses to grow," said Joann Massey, director of Office of Business Diversity and Compliance with the City of Memphis.
As part of the program, the five cities awarded a grant will work together to develop procurement solutions. Each city will also create at least one new strategy to increase the diversity of vendors and contractors. They will also find ways to increase purchases of goods and services from local minority-owned businesses.
The five communities will meet three times a year. Progress reports will be submitted on the success or failure of their solutions. The gatherings will be collaborative. Consultants from Griffin and Strong P.C., a law and public policy firm in Atlanta, will be on site to help develop plans for each city’s particular needs.
Since the accelerator’s inception in 2013, 12 U.S. cities have taken part. In Philadelphia, the city tried various means to inform seniors of subsidies offering a reduction in their water bills. In San Francisco, the accelerator is being used to develop an economic plan to reinforce the city’s seawall, which protects areas designated for public housing.
“I think there will be a lot of really interesting work that comes out of this,” said Julie Bosland, associate director for public sector innovation at Living Cities and manager of the cohort.
“Part of how we chose the cohort was both their commitment and their readiness to move forward and really push the envelope, and also a constellation of cities and projects that could really provide ideas in some different areas that would be models for other communities.”