County Spends Less With MWBEs

September 24, 2004
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GRAND RAPIDS — While the number of minority- and women-owned enterprises registered to do business with Kent County more than doubled in the last four years, the total dollar amount of purchases the county has made with these firms has fallen nearly a quarter over that same time.

In its latest report, delivered to the county’s Finance and Physical Resources Committee last week, the numbers show that the county has successfully stepped up its recruitment of vendors and suppliers owned by minorities and women since Kent started the program in 2000.

Taken together, the volume of both groups grew by 115 percent last year from four years ago when the county program began. The number of minority-owned firms rose by 135 percent from 2000 to 2003, while those owned by women rose by 73 percent over those same years.

But the amount of total purchases made by the county in 2003 from these firms fell by almost $290,000, or 24 percent, from 2000. Minority-owned vendors and suppliers had their dollar share of county business drop by more than half over the four-year period. But firms owned by women saw their take rise by almost $120,000, or 29 percent.

Kent County Purchasing Manager Jon Denhof gave credit for the growth in numbers to the outreach programs run by the Michigan Minority Business Development Council and Regional Alliance for Diversity in Public Purchasing.

“We do have support from other organizations,” he said.

Denhof also said the materials developed by Kent on how to do business with the county helped to raise recruitment results, as did a standardized application form.

“We were successful in getting them to the table, but weren’t as successful in getting them the bids,” he added.

Denhof said a decline in temporary staffing was most responsible for the drop in dollars spent with minority-owned companies last year. In 2000, temps accounted for 27 percent of total purchases, but represented only 5 percent of those expenditures last year.

The major factor, however, for the reduced overall spending with these companies was a faltering economy. Denhof said tough economic times have forced the county to tighten its fiscal belt by making fewer purchases, about $275,000 less in 2003 than in 2002. But at the same time, business conditions intensified competition for the county’s fewer purchases.

Denhof said the additional bidders have driven down the prices of goods and services the county buys, and the downward pressure resulting from that action has made it difficult for owners of small businesses to be winning bidders.

Even though the county spent 11 percent more in 2003 than in 2000, the share of purchases won by minority- and women-owned firms fell from 20 percent in 2000 to 14 percent in 2003.

Not satisfied with all of the results, Denhof said his department would add five new initiatives to the program to improve opportunities for minorities and women to raise the dollar volume they do with the county. One initiative would be to turn a potentially large contract into a series of smaller ones, giving smaller companies a better chance to submit winning bids.

CountyCommissioner Dean Agee said if the county removed the requirement for Social Security numbers from the program’s application form, more eligible business owners would apply.

Computers, clothing, machinery and equipment are some of the goods the county buys. Kent also purchases services that include advertising, grounds maintenance and janitorial work through the program.        

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