Delivering equity through public realm procurement

4 insights to purchasing with greater impact

By Alexa Bush and Kyle Kutuchief

Fourth Bluff Park in Memphis, pictured during a Grizzlies playoff watch party, utilized 80% minority and women-owned business enterprises (MWBE) for its revitalization. Image courtesy of Memphis River Parks Partnership.

Procurement — the act of sourcing and purchasing goods and services in order to do the work of an organization — can seem like a fairly cut-and-dried process. Big or small, from the scale of city government to a neighborhood-based non-profit, a feature of our capitalist system is that all individuals and organizations purchase things.

Yet this act of purchasing goods and services, when done thoughtfully and with intention, can be a powerful tool for promoting more equitable economic development, particularly for small and minority and women-owned businesses. Local governments purchase $1.5 trillion in goods, services and construction every year, dollars that can lift up small businesses and support wealth creation in historically disinvested communities.

This is a critical time for public sector organizations to consider developing and implementing a more equitable procurement system, as communities across the country work to deploy federal funding from the American Rescue Plan Act and the Infrastructure Investment Act designed to create recovery and resiliency from COVID-19. However, without a strategy at the local level, it is unlikely that adding more resources into your existing system will yield different outcomes.

To meet the opportunity of this moment, organizations and particularly local governments need to look clearly at how they deploy funding, implement procurement and eliminate the barriers to participation for contractors and suppliers traditionally left out of existing systems. Doing this systems-level work can improve equity beyond the scope of federal programs by improving the way cities do business over the long-term.

Memphis River Parks Partnership has committed between 38 and 66% of its operating budget each quarter to MWBE spending. Tom Lee Park, currently under construction, has achieved over 44% participation. Image courtesy of Memphis River Parks Partnership.

Representatives from cities in the Reimagining the Civic Commons network recently sponsored a conversation about equitable procurement with experts from the fields of local government, contracting, nonprofit management and research to reflect on how federal, state and local funds are being invested more equitably in public space, physical and civic infrastructure, and community development. The conversation elevated a few best practices on improving procurement equity:

Set goals and accountability measures

Those responsible for procurement answer some core questions: do the current purchasing choices reflect the makeup of the local community? Do they reflect the aspirations of leadership and the community? Where are the gaps? This exercise alone helps increase awareness and intentionality to break out of business as usual.

The progress made via collaborative efforts in the Memphis Medical District. Image courtesy of Memphis Medical District Collaborative.

Inclusive procurement collaboratives in Buffalo, Memphis and Milwaukee have long put these theories into action. By leveraging the purchasing power of diverse cohorts of public, private and not-for-profit employers, they are able to collectively drive more spending opportunities to racially and ethnically diverse businesses within their communities. Commonalties across these collaboratives include a commitment to using data to foster accountability and drive action plans. Annually collected data is used to set reasonable yet aspirational goals and customized analytics guide strategies to achieve best outcomes.

Build capacity and advocacy muscles within your organization

Start with current data about purchasing in your organization, and possibly compare with peer organizations, to determine if purchasing decisions align with your organizational values. Identify allies, people who support your goals and can build a coalition with you and advocates, those with implementation and decision-making authority. Allies can help support your work by providing you with information or data necessary to make your case, while advocates can help make the institutional changes stick over time.

An equally important task is to increase the size and diversity of your supplier network to provide more competitive pricing, mitigate risk, promote innovation and collaboration, attract and retain local talent, and increase trust with the community. While changing procurement systems and processes at a large and bureaucratic institution may sound daunting, don’t underestimate the power of influential and mission-aligned advocates who can advance the work.

In Akron, Mayor Dan Horrigan saw an opportunity to use his city’s purchasing power to provide better services to constituents through engaging diverse vendors who were more representative of residents overall. This led to a detailed plan in the city’s Procurement and Inclusion Report. One recommendation of the report was a dedicated staff person at City Hall focused every day on these issues. In March of 2021, Sheena Fain was named Akron’s first Contract Compliance and Supplier Diversity Officer. In the press release announcing her new role, Fain was quoted as saying, “I view supplier diversity as an inherently logical and smart business strategy, not a social policy.”

Akron’s contract compliance and supplier diversity officer Sheena Fain is working to increase access to opportunity and reduce barriers to participation in city purchasing and construction. With significant upcoming investments in public spaces such as Lock 3, the time is now. Image credit: Tim Fitzwater.

Grow the network of suppliers

A typical request for services can go out through a public portal, maybe the local legal or business news, or possibly directly to an in-house list of existing suppliers and vendors. Changing the system requires building new relationships, but the benefits may greatly outweigh the short-term discomfort of change.

Ways to find new suppliers may include directly getting out into the community to identify new businesses, including those who may not be formally certified as diverse or small businesses. Recognize the power of word-of-mouth, and connecting with front line staff about their networks in the community. Consider non-traditional events to share opportunities, whether happy hours, festivals, or community walks. Be intentional about meeting people and directly invite suppliers who haven’t submitted before to participate. Question preconceptions and ask businesses why they may not want to work with a diversity certification program or to do business with your organization, whether due to cumbersome and obscure processes, slow payment, biases or past experiences of discrimination.

Macon’s Downtown Diversity Initiative is one example of capacity building and growing new businesses and suppliers. Image courtesy of NewTown Macon.

Simplify and transform the process

Reflecting on the conversations with new potential businesses, are there barriers identified that can be removed, or additional assistance provided to suppliers? Many policies intended to reduce risk perpetuate structural racism, including credit availability, bonding capacity, certifications, union requirements, among others, and by re-evaluating these requirements can open more opportunities for all. Consider where your organization can remove performance bond requirements, secure owner-controlled insurance coverage, or delay proof of insurance or bonding until the project is awarded.

Consider breaking large contracts into smaller sizes or into sections by trade, to increase competitiveness from emerging and micro businesses. Evaluate where you have discretionary or pre-authorized contract minimum thresholds for new opportunities for MWBE, small or geographically targeted firms.

Lastly, do some internal evaluation. How accessible are your procurement websites or call for proposals? How many clicks does it take to register? In one instance, Open Contracting Partnership counted 95 steps to register as a vendor. How do you view the Request for Proposal? Where do you submit a bid?

The Detroit Civic Commons team approached the work in Ella Fitzgerald Park with a mutual agreement to buy local, finding success in procuring supplies from small businesses and contracting. Image credit: Nadir Ali.

Purchasing happens at many scales, so these recommendations are not an exhaustive list of steps, but a place to start for organizations across different sizes and sectors. The good news is you do not have to complete an overhaul of your existing systems to make real progress toward greater equity. While some of these ideas might take longer to implement than the entire window of opportunity for current federal funding, each step can move your organization and community toward improved outcomes and systems that are more closely aligned to your values for every purchase you make going forward. The best time to start is now.

A special thanks to our guest speakers who provided valuable insights to this discussion: Sheena Fain, City of Akron contract compliance and supplier diversity officer, Kaye Sklar, Open Contracting Partnership senior Lift program manager, Shea O’Neill, U3 Advisors vice president and Antonina Simeti, Buffalo Purchasing Initiative program director.

Alexa Bush is the program officer for the Detroit Program at the Kresge Foundation and a former design director for the city of Detroit. Kyle Kutuchief is the Akron program director for the John S. and James L. Knight Foundation.

Reimagining the Civic Commons is a collaboration of The JPB Foundation, the John S. and James L. Knight Foundation, The Kresge Foundation, William Penn Foundation, and local partners.