Local businesses seek share of University spending
U.Va. trails VA schools in minority-owned business contracting
Protests by the Living Wage Campaign in the past several years have placed a new spotlight on the University’s use of contracted workers, a group made up of mostly low-income employees. Ridge Schuyler, who helped to author a report titled the Orange Dot Project focusing on poverty in Charlottesville, sees the University’s contracting operations as an opportunity to fight poverty.
The 2011 report proposed the creation of a “hub” to connect the needs of the University to the services provided by area businesses, aiming to foster self-sufficiency among low-income contract workers. Two years later, the University and community leaders have made only partial progress toward this goal.
Schuyler, the Director of the Charlottesville Works initiative, a group attempting to implement the Dot Project’s findings, said that since the report was published, the University has been “very receptive” and “is willing to listen.”
“I see the fact that the University of Virginia purchases $650 million [worth of goods and services] … I look at that as an opportunity,” Schuyler said. “An opportunity, not an obligation … To the extent that I work for the community, we recognize that the University has to get value for the money that they spend.”
To take advantage of that opportunity, Charlottesville companies must better understand the University’s purchasing habits, Schuyler said.
“The next stage is to better understand the market,” Schuyler said. Then, the community needs to produce it “realistically, affordably [and] with quality.”
Toan Nguyen, the chief executive officer of C’ville Central, said in an email that it was challenging for small businesses to land contracts with organizations as big as the University. C’ville Central, a corporation founded this year, attempts to help give small, minority-owned businesses the ability to compete for large contracts, serving as the type of hub Schulyler described in his report.
“The problem is more on the small businesses side,” Nguyen said. “They don’t have the manpower to deal with a large institution with the bidding and collecting process. C’ville Central [exists] to solve this problem, acting as the hub between the large companies and the small businesses. We take care of the marketing, sales and accounting for the small businesses.”
The University already has a large base of small business vendors. Following an executive order in 2006 by then-Gov. Tim Kaine, all government departments, colleges and universities were strongly encouraged to spend 40 percent of their budget by working with small businesses, defined as those with 250 or fewer employees and $10 million or less in annual revenue. Last year, the University spent 33 percent of its discretionary spending with small businesses.
At the state level, the University has received recognition for its efforts in reaching out to minority-owned businesses, earning several awards in the last five years. Ida McPherson, Director of the Department of Minority Business Enterprises, said the University and the department have a “great relationship” and work together to increase the number of contracts awarded to these types of businesses.
“[The University is] much a leader and supporter of the SWaM [Small, women and minority business] program,” McPherson said.
But minority owned-businesses receive a smaller percentage of the University’s contracts in dollar value than George Mason University, Radford University, James Madison University, Old Dominion University, Radford, Virginia Commonwealth University and William & Mary. Conversely, the University falls behind only ODU and Virginia Military Institute in the percentage of contracts going to women-owned businesses and behind JMU, ODU, Radford and VCU in contracts going to small businesses. Statistics were not available for Virginia Tech.
Additionally, GMU, Radford and VCU won 2012 achievement awards from the Virginia Department of Minority Business Enterprise for minority-owned, women-owned and small business contracting. The University was not on that list.
McPherson said the size of the budget and institutional needs are to blame for the University’s below-average minority-owned and small business contractor spending. Smaller institutions, like Radford, are able to spend much of their budget with smaller businesses because the needs are smaller. According to McPherson, among universities with comparable spending, the University is above average.
The University declined to comment for this article.