DATA BASE SHRINKAGE FOR AFRICAN AMERICAN SUPPLIERS
FOURTH QUARTER 2008 -- BY DEAN L. JONES, C.P.M.
HONEY, I SHRUNK THE BLACK SUPPLIER DATABASE!
By Dean L. Jones, C.P.M.
The U.S. Census Bureau published special tabulations in 2007 for all minority firms in
California totaling 915,514 active concerns. The number of black business enterprises
totaled 112,815 active firms from this study.
The California Public Utilities Commission (CPUC) publishes an online
database of all minority, women, small disadvantaged, a nd disabled veteran
firms that have received an ownership certification clearance. This database
shows a total number of 3,486 certified firms as of September 24, 2008. The
number of black-owned certified firms (men and women) reflects 299
concerns. This is roughly .3% (strikingly less than one percent) of the total
number of black-owned business doing business in California as reported by
the U.S. Census.
There are currently twenty -two investor-owned utility corporations regulated by the CPUC to
access this database and engage purchasing opportunities to black -owned firms. These
utilities include, but are not limited to, AT&T, PG&E, Sempra Energy, SDG&E, SCE, and
Verizon, that have a collective spend for operational products and services exceeding $18
billion dollars each year.
It should be noted that the black -owned firms operating in California with paid employees
number close to 10,000, with an overall employment of 68,000 people. The gross receipts
for these firms exceed $9 billion dollars each year. This raises an obvious question about
the CPUC database, operated out of San Francisco CA b y Asian Inc., which apparently has
found difficulty with recruiting these qualified black -owned firms to include them into this
supplier resource database.
Even if the CPUC database was able to certify 10,000 black -owned firms instead of its
current 299, it would still only represent 8% of the total black -owned companies in the state.
Worse still is the fact that the 299 certified firms has taken over twenty years to compile, at a
combined cost of $25 million dollars. This dollar expense is derived from the CPUC Supplier
Clearinghouse contract life that began in November 1988. This contract was outsourced to
the Los Angeles based Cordoba Corporation at roughly $3 million dollars in its first year of
operation. Subsequent to this start -up phase, the con tract was awarded to Asian Inc that
was able to reduce the pricing to roughly $1 million per year. All of the investor -owned
utilities contribute to the cost of operating the clearinghouse each year to spread the burden
of this heavy expense.
Initially, the process for CPUC Clearinghouse had each participating utility submit their
purported minority/women suppliers who would be certified in the first five years of the
operating contract. Now, this long term clearinghouse supplier certification contract re ports
verification of a marginal 3,486 firms. This equates to roughly $7,100 per certification over
the CPUC Clearinghouse’s operating life.
In April 2007, the CPUC Supplier Clearinghouse reported 383 black-owned verified
companies in its database. As of today, this data inclusion amounts to only 299 black-owned
firms reported, representing a reduction of 84 firms, or a 22% drop of viable black-owned
firms available for contracting opportunities , in just over the span of one year. Honey,
somebody shrun k the black supplier database!
Questions: Who would want to consider this as a viable supplier resource pool fro a
dwindling total number of firms? How can anyone reasonably expect to have a positive win capture rate of California utility corporate bids among black-owned companies when there so
Page 1 of 3 - Southland Partnership Corporation – www.SupplierInclusion.com – (310) 637-7248
DATA BASE SHRINKAGE FOR AFRICAN AMERICAN SUPPLIERS
FOURTH QUARTER 2008 -- BY DEAN L. JONES, C.P.M.
relatively few firms available to bid on projects? What can possibly be the state of mind of
utility purchasing management personnel whene䀌 ersonnel whene䀌 ersonnel whene䀌
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