Supply & Demand Diversity: Minority-Owned Businesses Are Fighting for a Place at the Table in the Lucrative Higher Education Service Industry

By Galuszka, Peter | Diverse Issues in Higher Education, May 3, 2007 | Go to article overview

Supply & Demand Diversity: Minority-Owned Businesses Are Fighting for a Place at the Table in the Lucrative Higher Education Service Industry


Galuszka, Peter, Diverse Issues in Higher Education


Public universities in Virginia, as in many states, have generally not paid much attention to diversity among their suppliers. For years, state expenditures for outside contracts went to the usual suspects--White contractors from well-established companies. Then, four years ago, former Gov. Mark Warner, a progressive Democrat from the high technology sector, shook things up. He launched a statewide study to determine if there were disparities in how contracts were awarded. Warner didn't like what he learned. While avoiding quotas, he ordered colleges and other agencies that make purchases for the state to make sure that they were including minority and female-owned businesses when they solicited services.

That is where Bill Cooper came in. The publishing industry veteran and entrepreneur was recruited in 2005 by the University of Virginia as a diversity supply officer. He quickly set about collecting information about the university's vendors and their contracts, and created an updated list of minority-owned suppliers who could be contacted when the university invited bids for projects. In December 2006, Cooper organized a "marketplace" event designed to put more than 2,000 university buyers in touch with 45 contractors, including 15 minority-owned firms. "Most universities probably have an interest but haven't acted yet because there's no interest from the top since it might upset the status quo," he says.

Anecdotally, at least, there seems to be some limited progress in minority-owned businesses getting a share of the university market. "Overall, there is an increase in activity, and it seems to be a growing thing" says Harriet Michel, president of the National Minority Supplier Development Council.

State governments and universities seem to be overcoming the fallout of California's controversial Proposition 209, the 1996 ban on racial quotas at state institutions. Although Prop. 209 has legal clout only in the Golden State, its impact has been felt nationally.

Estimates vary, however, about just how much progress is being made. "There really isn't a lot of data. It's actually quite variable" says Dr. James Renick, senior vice president for programs and research at the American Council on Education.

One problem is that higher education funding fluctuates from year to year. Another is that colleges often don't centralize their purchasing. Before any assessment can be made of how many minority-owned firms are getting opportunities, universities must do a basic job of getting a handle on their buying. The purchasing is far flung, involving cafeteria food, laundry services, construction, book sales, landscaping, accounting and computer system consulting, among other goods and services.

Some estimates of university buying run as high as $320 billion a year, but other experts say the total is much smaller. Whatever the amount, it is clear that minorities still aren't getting a very big piece of the pie.

Reginald Williams, a supply chain consultant who has studied minority sales for 32 years, says he can't put a number on total higher education spending, but he believes that minority and women-owned firms represent less than 3 percent of the purchases. That's even smaller than the same groups' shares of total private sector purchases, which is a combined 4.7 percent, according to Williams. "There has been a significant decrease in the level of state business going to minority and women suppliers,' he says. "Only recently have these organizations repositioned their procurement activities to withstand legal scrutiny while at the same time increasing diversity."

Cooper, Renick and Williams all agree that minority businesses -which represent about 15 percent of all business--seem to get included only when there is a top-down effort to make it happen, whether from a university chancellor, president or state governor. States with higher educators sensitive to minority contracting include Georgia, Ohio, North Carolina, Illinois, Virginia and Maryland, experts say. …

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