When Bill de Blasio took office as New York City’s mayor in 2014, his administration began to tackle a less-than-flashy issue: How to change who was winning city contracts.
De Blasio had swept the election with a campaign promise of reducing income inequality, and re-directing NYC’s vast purchasing power was one of the wonky cornerstones of his plan to do it. So his administration started looking for ways to strengthen the city’s Minority and Women-Owned Business Enterprise program, designed to help businesses owned by people of color and women bid on, and win, city contracts. It appointed committed staff, integrated the program into housing policies and Hurricane Sandy recovery projects, and launched new online tools for business owners.
It worked. That year, New York City awarded $690 million in contracts to businesses majority-owned by minorities or women, a 57 percent increase from the year before — though still only about 4 percent of the city’s overall $17.7 billion in spending. Since then, de Blasio’s administration hasn’t let up. It’s commissioned an in-depth study of the program, sought changes to state laws that would strengthen it, and set a goal of increasing city awards to minority- and women-owned firms by $16 billion over 10 years.
New York City’s new emphasis on who it does business with is just one of the recent events that’s bringing the often-overlooked power of procurement into the spotlight.
The decision of which firm will get the food service contract at the City Hall cafeteria doesn’t always make it into the news, but local governments spend a lot of money. In towns, counties, and states everywhere, there are roads to be paved, lawyers to be hired, and office supplies to be purchased, and the rules set up to govern those contracts—procurement policies—can be important mechanisms for advancing other public aims.
At least 45 states, plus the District of Columbia, have procurement policies designed to give a preference to businesses that meet certain characteristics, such as those that are owned by veterans, pay certain wages, use environmentally sustainable practices, or manufacture within the state. Of these, about half have adopted an explicit preference for businesses that are small and/or local. These policies vary considerably. Some apply only in narrow circumstances; others are broader. In addition, more than thirty states have policies aimed at steering purchasing to minority- and women-owned businesses. Looking beyond state governments, large numbers of counties, cities, and towns have procurement policies of their own.
In these policies lies the potential for governments to grow their local economies. When dollars are spent at locally owned firms, those firms in turn rely on local supply chains, creating an “economic multiplier” effect. Numerous economic impact studies have quantified this effect on dollars, jobs, and wages. A 2009 study from California State University at Sacramento, for example, found that the State of California generated approximately $4.2 billion in additional economic activity and 26,000 new jobs between 2006 and 2007 by contracting with disabled veteran-owned businesses and local small businesses instead of larger companies.
But while many states and cities have local procurement policies on the books, in a far smaller number of them are these policies delivering on their potential. Continue reading
A widespread overdependence on centralized, far-away and large-scale composting facilities persists, making it harder to return finished compost and the many benefits it provides back to the community for use. Fortunately for us, composting is something that we can start doing immediately at home, schools, institutions, community gardens and farms to start rebuilding our soils —as long as we do so thoughtfully. Continue reading
“Every person ought to have the awareness that purchasing is always a moral – and not simply an economic – act,” Pope Francis announced early this year. How can we spend our money as if our values matter? In some sectors and for some values this is fairly easy. Food is an obvious example. Those… Continue reading
What would it take to power the entire U.S. economy on renewable resources alone? Three big things: Only build wind, solar, or hydro power plants after 2020 Reduce energy use compared to business as usual by 40% Electrify everything It’s the last that may be the most complicated, since it means a complete overhaul of… Continue reading
The Board of Trustees for the city of Firestone, CO is evaluating the feasibility of a new municipal broadband service for this growing town of about 10,000 people that sits just 30 miles north of Denver. This according to a recent report in the Times-Call newspaper in Longmont, Colorado. The feasibility study will compare Firestone’s… Continue reading