Increasing Contracting to Small Businesses
Throughout our conversations with small business owners, we heard from many who would like to do business with the City but have met with various barriers to getting a contract. Processes were too complex or lengthy, contracts were too big for small businesses to take on, or they simply never got chosen because larger, more established businesses were always given the work.
“I’m DBE certified, CERT certified, I’m in the Swift database,” one entrepreneur told us, referencing the multiple different certifications required for small and minority- or women-owned businesses to take advantage of supplier diversity programs. “But you try getting a contract. The City gives all their contracts to big companies that aren’t even based in the City! Then those companies turn around and hire me for a much lower rate than I’d get if the City just gave me the contract directly.”
When our Work Group prioritized procurement as a key area for the Innovation Team to work on, we connected with the City’s Procurement department, which was aware of the challenges and already taking steps to address them. In September 2016, the City Council had passed an ordinance establishing a Target Market Program, which creates a designated marketplace of small businesses for any City purchase under $100,000. This program, based on recommendations from a 2010 disparities study the City commissioned, aimed to address many of the challenges entrepreneurs described with City contracting: simplifying the process of finding out about and responding to opportunities, moving City departments toward “unbundling” contracts into smaller, manageable pieces, and assuring that small businesses compete only against similarly-sized businesses for opportunities.
The Innovation Team knew that, for this new program to be a success, it would have to reach businesses that were not already connected to opportunities to do business with the City. We also knew that we had already built relationships with many business owners and organizations that would be key partners in spreading the word. We got involved in supporting the launch of the Target Market Program to help with communicating effectively about the program and engaging diverse communities to participate.
Once the program launched on January 1, word began to spread quickly! The pool of verified small businesses eligible to compete for City business quickly grew to nearly 800. Our support around community engagement for the Target Market Program continues, helping build ongoing, strong links between City staff and communities that can benefit from the program. A large part of this strategy has involved establishing a Target Market Program presence at community events, from the City’s Community Connections Conference to the SADBOC procurement fair to smaller, neighborhood-based workshops where staff can answer business owners’ questions and assist individually with enrolling in the program.
Procurement also plans, with Innovation Team support, to begin targeting program outreach to industries and groups that are underrepresented in the marketplace. For this and for other reporting purposes, the Innovation Team is helping set up tracking of metrics so the City can evaluate the program, address any gaps, and make data-informed adjustments to the program.
For more information about the Target Market Program (that you can share with others!), check out this brochure.