Finally, U contracts give minority vendors a break

Rick Harris had the experience — more than 30 years in furniture sales and manufacturing in California.

And he'd obtained the certifications needed to become a registered Targeted Business vendor for the University of Minnesota when he moved to the Twin Cities six years ago.

Firms on the Targeted Business list are certified as high-quality vendors owned by people with whom the university wants to do more business, such as women, people of color or persons with disabilities. But for two years, he was unable to win any university contracts.

And then Harris' company, Ideal Commercial Interiors, had a sudden breakthrough. In 2015, he was juggling four university contracts, including the installation of seating in Tate Hall's auditorium and in the new Tashjian Bee and Pollinator Discovery Center in Chaska.

As it turns out, Harris benefited from new attention to minority contracting of goods and services at the U of M.

"Things were bleak for a while, but my future with the university looks promising now," he said.

Harris is an example of how fortunes may be changing for minority, women and vendors with disabilities who offer goods and services, like catering, office supplies and engineering, to the university.

In the 2014-15 budget year, diverse businesses accounted for 30 percent of construction spending at the U. But such firms accounted for less than 3 percent of the university's spending on goods and services.

U officials say vendors are getting more chances at goods and services contracts because of new spending goals and a new approach at the university's supplier diversity program, of which the Targeted Business directory is a part.

As a result, spending with these businesses jumped from $59 million during the 2014-15 fiscal year to $71 million in 2015-16, accounting for 9 percent of the almost $800 million paid for construction, goods and services.

Goods and services expenditures for diverse businesses surged from $16.5 million to $23 million — 3.6 percent of the $636.6 million spent in that procurement category. The U's aiming for 6 percent for the next fiscal year.

And in the case of African-American contractors like Harris, contracts increased dramatically — from $154,464 to $1.8 million.

"We are very proud of the growth," said Darryl Peal, executive director of the university's Office of Business and Community Economic Development, which also houses the diversity supplier program. "But we are far from perfect; we have a lot of work to do."

The U is a part of movement of various levels of government and public organizations that are trying to bring more disadvantaged businesses into their procurement systems, Peal said.

"It's a cultural shift in Minnesota, across the community," he said. "These supplier diversity programs have been around for decades but they are really starting to evolve now. There's been a more aggressive attempt in the Twin Cities in growing them."

For Harris, a former vice president of the National Minority Contractors Association, it's meant a sudden influx of projects — from work on the U.S. Bank Stadium last summer to an apartment complex in St. Paul this fall.

His Minneapolis-based company went from one employee to four in less than two years.

"It is very different from when I first moved here," he said. "There were only goals for construction, but more organizations now have goals for goods and services, and that's why we're growing."

The U's Peal said vendors told him, "Unless we're doing bricks and sticks, it seems the university doesn't see us as viable in professional services." Peal added, "Let's be clear, that was not the posture of the institution. But the reality was they weren't getting any work."

A construction expo for Targeted Businesses has been held for many years, but Peal organized the first goods and services matchmaker event last year to introduce university buyers to vendors. He combined both this year at a sold-out event Thursday at RiverCentre in St. Paul attended by 450 business owners.

The Board of Regents introduced the Targeted Business policy in 1996 as a way to use its purchasing power to improve the economic conditions of diverse businesses.

Peal said the university also became more vigilant about making sure prime contractors hired the Targeted Business vendors for subcontracting work on larger projects and also made sure the subcontractors were paid for their work. Subcontracting thresholds for Targeted Business participation was lowered from $500,000 to $50,000, along with beefed-up outreach efforts and a new database, to get more contracts to vendors.

Peal, who worked on expanding minority contracting in Ohio before coming to the U in 2014, also said working closely with the university's purchasing and construction offices made the difference.

"We're all on the same page," he said. "There cannot be a department that's an outlier, that doesn't believe in it and doesn't want it to work."

Harris moved to Minnesota from San Jose after his wife became president of Minnehaha Academy. After years of no contracts, he added flooring to his business, hoping to become a subcontractor on a construction project. Now both the construction and goods and services parts of his business are flourishing.

"That's a hard feeling on those cold days when it's 30 below and you just can't get anyone to return your call," Harris said. "But it's changed a lot, and I'm today loving Minnesota."