Can regional businesses and agencies come together to collectively increase contracts with minority businesses by $1 billion each year?
If they can, it might be hard to track.
In May 2011, the St. Louis Minority Supplier Development Council announced that it would facilitate the “Billion Dollar Impact,” an initiative in which corporations collectively commit to do an additional $1 billion of business with MBEs annually by 2014.
So far, MBEs were awarded $275 million in new contracts since 2011, according to the council’s announcement at its May 31 Business Opportunity Fair luncheon.
The council received these numbers from the MBEs themselves, who voluntarily reported their contract amounts. However, only 14 of the council’s 300 MBE members reported new contracts by the May 15 deadline.
It’s not clear whether these were the only MBEs who received more business last year, or if some members just missed the deadline.
Several of the council’s top 25 MBE companies (based on reported sales) did not report their numbers. One of these companies’ leaders, Michael B. Kennedy, president of KAI Design & Build, said he just didn’t get to the paperwork in time.
James Webb, the council’s president and CEO, said the council doesn’t plan to update the amount again until next May. He will start contacting MBE businesses in December to report their numbers.
The 14 MBEs that reported contracts between $1 million to more than $100 million included: David Mason & Associates, EMED, Gonzales Companies LLC, JL Brown Contracting Services Inc., Midwestern Construction, LLC, Rose International Inc., Project Controls Group, Inc., S2 Tech, Signature Packaging, Simms Building Group, Success Promotions Inc., Talisen Technologies, TD4 and World Wide Technology Inc.
There were 24 organizations – from corporations to public agencies – that awarded the $275 million in contracts to MBEs. However, several of the region’s largest corporations were not on the list, although they are supportive of the initiative and are council members.
St. Louis-based Peabody Energy, a $2 billion-coal company, didn’t make the cut this year. Rob Cox, Peabody’s director of supply chain for the Americas region, said that the company awards $50 to $60 million in MBE contracts domestically and about 25 percent of that is in St. Louis. Cox said the company wasn’t recognized by the Billion Dollar Impact initiative because they have not increased spending to MBE companies beyond their annual $10 to $12 million.
Peabody is trying to partner with MBE firms to possibly help with its growing interest in Australia and Asia, he said. Opportunities to increase MBE spending would most likely come from the engineering side, Cox said.
Also absent on the list was Express Scripts – the region’s business with the largest annual revenue and the nation’s largest pharmacy benefit managers. Debra Heck, vice president of corporate procurement for Express Scripts, sits on the council’s board of directors.
The company declined comment to why they were not recognized for awarding new contracts last year, said Brian Henry, spokesman for Express Scripts.
The corporation has had a robust diversity program since 2003, said Mark Graham, Express Scripts’ director of supplier diversity.
Over the course of the past several months, Express Scripts has been working on its merger with Medco Health Solutions. Now with the merger complete, Express Scripts is further developing its procurement process, which includes supplier diversity, Henry said.
“Our commitment to supplier diversity continues to be strong, and we expect that to continue now that the merger is complete,” Henry said.
The council anticipated a slower start this year, Webb said. However, once the initiative is in full swing, it will create 2,000 new jobs, he said.
“It will position St. Louis as a leader in economic growth,” Webb said.
Organizations who provided the $275 million in reported contracts included: Ameren, Barnes-Jewish Corporation, Harrah’s Casino, Illinois Central Management Services, Illinois Housing Development Agency, City of Kansas City, MO, Lumiere Casino, MACO Companies, McCarthy Building Companies, McCormack Baron Salazar, Monsanto Company, Metropolitan Sewer District, Missouri Housing Authority, Missouri University of Science & Technology, Missouri Veterans Home, Mycroft, Nordyne, Proctor & Gamble, State of Missouri, St. Louis Cardinals, St. Louis Public Schools, The Boeing Company, United States Postal Service and Washington University in St. Louis.