According to a report by The Greenlining Institute, just under 17% of Utility spend with minority owned businesses went to African American led suppliers in 2016. “The Oakland-based racial and economic justice organization” released its 2017 Supplier Diversity Report Card revealing a total spend of $32 billion among California’s largest utility companies. Of the $32 billion, $6 billion went to minority owned organizations.
According to the Sacramento Observer, the “utility giants evaluated for the study included AT&T Wireless, Sprint Wireless, T-Mobile, Verizon Wireless, Edison, SoCal Gas, PG&E, SDG&E, AT&T CA, Comcast, Cox, Frontier, CalAmWater, Cal Water, Golden State Water, Park/Apple Valley, San Gabriel Valley Water, San Jose Water and Suburban Water Systems.”
While the lack of black businesses included in the minority count is troubling, the percentage does not seem to affect Asian and Hispanic owned businesses which account for 70% of minority owned suppliers receiving Utility contracts. The major issue plaguing black owned businesses is the lack of capital / resources these owners are able to obtain. Generally when dealing with big name Utilities, large amounts of reserve capital is needed to handle larger contracts, and for many black owned businesses this is hard to come by.
California Black Chamber of Commerce, Board of Directors/member Sharon Evans suggested that, in an effort to aid black owned companies, corporations should look to “investment in developing solutions to strengthen their African-American enterprises into areas of opportunity where utilization is low.” Although a good idea in concept, making this a reality is extremely difficult. If utilization is low, finding any business, let along a black owned company can be challenging. Then growing that supplier into a capable solution adds greater challenges.
Black businesses, in situations like this are better off partnering and growing in an effort to win contracts. Growth can come alongside this, but if resources are low currently, partnerships, in my opinion, are the answer.
The 19, the 53-page report outlined, spent 80.27 percent of their contracting dollars with non-minority businesses. The titans spent $9.5 billion on contracts with 978 diverse suppliers including $6.38 billion with minority outfits, $2.84 billion with women firms and $431 million with service-disabled veteran businesses.