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Associations Now

Supplier Diversity Program Boosts Competition

ASSOCIATIONS NOW, June 2010 Intelligence

Summary: The California Water Association is increasing competition and supplier diversity to its members' benefit.

In any industry, a large and diverse supplier base is good for buyers. Luckily, associations are often well positioned to coordinate the large-scale efforts needed to grow and diversify the supplier pool.

The California Water Association's (CWA) supplier diversity program has helped its member utilities build relationships with new partners throughout the state and chart progress toward the state of California's goals for utilities' spending with diverse suppliers.

"Every year for the last five years, the water utilities have gradually moved up or increased their diverse spending for procurement," says Jack Hawks, CWA executive director. Supplier diversity spending has been mandated by the California legislature for the state's gas, electric, and telephone utilities since 1988. In 2004, CWA's member water utilities signed a memorandum of intent to pursue the same standards voluntarily.

"Because the water utilities are so much smaller than the electric utilities, the water utilities had done all of this under the California Water Association umbrella," says Hawks. "There are definite synergies involved when all of the water utilities get together."

Those synergies extend to the suppliers, too, says Emma Maxey, supplier diversity specialist for CWA member Golden State Water Company and chair of CWA's Utilities Supplier Diversity Program Committee. "We can share information, so if we go out and need a vendor, we can give that information to the other water companies, and that can grow their business. Since we [water utilities] all have the same needs, it's a benefit," she says.

Maxey and her colleagues on the program committee focus on reaching out to business communities throughout the state. "In addition to the [state-sponsored] small-business expos, we have the various chambers of commerce. We have the Latino chambers, the African-American chambers, the Asian chambers, Native American," she says. "We try to encourage them to bring their members into the fold, attend the small-business workshops, and we will go out and help them to get certified in order to get contracting opportunities."

The state's goal for utilities is 21.5 percent spending among the suppliers owned by minorities, women, and disabled veterans, a level many of the larger utilities have only reached in the past few years, says Hawks. In five years, CWA has seen steady, incremental improvement, passing above 10 percent of overall spending last year. "Our goal really has been to try to get here to double digits in the first five years and then just keep making progress," says Hawks.

State-mandated goals aside, Hawks says the association's supplier diversity program has been beneficial for CWA members and the industry at large: "All of this improves the level of competition that exists out there in the supplier community, so that's all a plus."

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