The Board of Commissioners of Memphis Light, Gas and Water Division approved Thursday enhancements to the utility’s Supplier Diversity policy that outline industry-specific goals as well as boost economic development for minority-owned (MBE), women-owned (WBE) and local small businesses (LSB). The changes are effective January 1, 2014.
Based on the recommendations of a recent Disparity Study, MLGW has narrowly tailored its relevant market area to the Memphis metropolitan statistical area and, instead of broad overall goals, it has established specific industry goals within its five primary spending areas: construction, architecture/engineering, professional services, other services and goods/supplies.
“We want our suppliers to be as diverse as our customers,” said Jerry R. Collins Jr., MLGW’s president and CEO. “This gives us a truer picture of spending and the performance in various industries.”
Annually, MLGW spends about $100 million for contracted services, good and supplies; of that, $18 to $20 million is spent through MLGW’s Supplier Diversity program.
Though still bound by competitive bidding laws and applicable city ordinances and policies, MLGW also plans to create a sheltered marketplace much like the City of Memphis, the Memphis-Shelby County Airport Authority and MATA currently have in place. The sheltered marketplace will facilitate the growth and expansion of certified local small businesses via a race-gender neutral procurement process.
The new Sheltered Market Program will require all purchases and contracts under $100,000 to automatically be procured from the Sheltered Market if at least three certified local firms are available. An analysis of spending during the Disparity Study period revealed approximately 20 percent or $109 million of MLGW's purchase orders and contracts were under $100,000.
“This creates a pool of local businesses” that overtime will grow large enough to graduate out of the program, Collins said. “We hope to grow local companies.”
MLGW is the largest three-service public power utility in the nation, serving more than 429,000 customers in Memphis and Shelby County.