U favors minority-owned businesses

University policy suggests contracting target businesses, but other concerns arise.

by Ahnalese Rushmann

Chris Juarez showed off his business’ latest product: a light-enhanced faucet that when turned on, makes cold water appear blue and hot water appear red.

Juarez, president of Electronic Office Environments, said his St. Paul-based furniture supplier is one of only two in the nation that carries it, proof of the competitive products his company offers.

So, he said he was disappointed when his company was ousted out of a deal with the University last summer. The University decided there would only be one dealer on their contract with the manufacturer that used Juarez’s business.

Juarez, who is Hispanic, said he questioned a Board of Regents policy created to encourage the University to work with targeted businesses, those owned and operated by minorities, women and disabled persons, to prevent discrimination.

The manufacturer chose a larger company, he said. Juarez said he felt like his business was just as good as the competitors’ and wondered why he couldn’t catch a break with the University.

“My big concern,” said Juarez, “was when procurement changed their policy, they said it’d be easier (to do business).”

He said he was even more frustrated when he saw low figures for the University’s total business with Hispanic business owners.

According to the Office for Business and Community Economic Development, the University spent more than $800 million with outside businesses in the 2007 fiscal year. Approximately 4.5 percent of that amount was spent with targeted businesses, about a 1 percent decrease from the previous year.

Craig Taylor, director of the office, said this change depends on a number of factors.

There are situations when it financially makes little sense for the University to select a business that may happen to be owned by a minority, woman or disabled person, he said.

Richard Pfutzenreuter, vice president and chief financial officer for the University, said the purchasing department felt it would be easier to deal with one dealer instead of three.

“The concern Mr. Juarez had, had a lot of merit,” Pfutzenreuter said. “The University does care a lot about making sure we’re doing business with targeted-group businesses.”

Pfutzenreuter said he talked to colleagues and Juarez, then decided to overrule the decision, meaning Electronic Office Environments was back in business with the University.

Juarez said limiting the companies on the contract would limit the opportunity to help targeted businesses, he said.

Taylor said the University is one of a few universities with a formal program to help those businesses.

“We put the strategies in place that essentially level the playing field,” he said.

Taylor said the University’s total spending is divided into purchasing expenditures, which covers goods and services and construction projects.

He said he credits a 0.84 percent increase in targeted business purchasing expenditures since last year to the University’s effort to inform businesses of its opportunities.

Taylor’s office also implemented a University spending incentive program last July, which 17 departments participate in, he said.

In addition, all University construction projects have a goal for the general contractor to spend 10 percent of its funds with targeted businesses, Taylor said.

The TCF Bank Stadium construction project has a “groundbreaking” goal of 22 percent, he said.

“We’ve raised the bar considerably on this project.”

Taylor said the University also set goals to include minority workers on the actual stadium construction.

He said he agreed with Juarez that having a manufacturer use multiple dealers increases opportunities for targeted businesses, but added that it’s up to each business to thrive on their own.

“You’ve got 50,000 firms working here,” Taylor said. “We don’t have the manpower, or the resources, to go act as a marketing rep. for all of the different businesses.”

That’s a general principle for all businesses, he said.

Taylor also said the agreement connecting Juarez with the University is like an official endorsement and departments aren’t required to make their purchases with Electronic Office Environments or the other businesses on the contract.

“Once we get you in the door and we get you positioned, it’s your responsibility to prove that you are competent, capable, credible and ethical,” Taylor said.

Juarez, whose business also has contracts with 3M, Medtronic and Wells Fargo, said he was pleased with Pfutzenreuter’s decision.

“Hopefully, they’ll continue to work with this program,” he said.