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March 26, 1993 - Image 5

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Publication:
The Michigan Daily, 1993-03-26

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The Michigan Daily- Friday, March 26,1993- Page 5

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BUSS

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Through an aggressive
recruiting campaign, the
University has increased the
number of minority- and
women-owned
companies it does
business with flvefold over
the last decade
by David Rheingold
Daily Staff Reporter
sk Tanya Allen why she founded
her company ForeverFresh, and
she'll tell you about countless pairs
of underwear women stain during
their menstrual periods.
So three years ago, Allen began marketing a
brand of disposable panties that a woman could
wear once then throw out.
"There was nothing on the market that could
guarantee her against staining her $15 linge-
rie," Allen explained last week in her office,
located in Detroit's Renaissance Center.
But she didn't expect that the undergarments
would become a hit at University of Michigan
Hospitals among mothers who had just given
birth and needed to restrain their bleeding.
After a successful trial run last fall, Univer-
sity Hospitals bought 4,000 pairs for their
niother/baby unit.
Yet the transaction would not have taken
place if the University had not discovered Allen
at a trade conference in Lansing last year.
University representatives attended the con-
ference as part ofa program that aims to recruit
minority- and women-owned companies to do
business with the University. It is an intense,
quiet campaign the University's purchasing
department has been running for 21 years.
Theintent is to give a fair share of business to
minority- andwomen-owned firms, which rep-
resent a tiny portion of all firms that provide
outside services to the University.
These services encompass dozens of fields,
such as catering, construction, medical supplies
and landscaping.
"You've got a whole group of people out
there that really need some help in getting
started, where the normal business doesn'thave
the same kind of problems and complications,"
said Senior Purchasing Agent Dick Throne,
who has headed the program since the early
'80s. "We come in and we help them get
established at the University."
Over the last decade, the University has
, enlistednearly 500minority-owned businesses
and nearly 1,500 women-owned businesses -
a. fivefold increase overall.
T he increase is a result of an effort that
began when Eugene Ingram wrote an
affimative action policy for the purchasing
department in 1972.
"It was just after the Board of Regents de-
cided they were going to have a policy on
affirmative action for employment, so we
thought we should be doing the same thing in
purchasing," recalls Ingram, now the
University's director of purchasing and stores.
Because the University prefers that its sub-
contractors already have experience, minority-
and women-owned firms were inherently at a
disadvantage when competing for large
projects.
So the University would give them small
projects "as a test or a trial," enabling them to
build experience, Ingram said.
"Initially, the big challenge was finding mi-
nority vendors that could furnish products at a
competitive price. We did have to go through a
lot of effort to get vendors developed to the
point where they could serve the University."
The program evolved in response to federal

legislation requiring acommitment to minority
subcontracting, and today it focuses on making
the University purchasing department user-
friendly.
Throne and a small corps of staff members
seek minority- and women-owned businesses
at trade fairs, through business associations and
over computer networks that list businesses.
But the University will not give them prefer-
ence on the basis of race or gender when they
compete againstotherfimns for aproject, Throne
said.
And that's how some of them like it.
"I don'tliketobelumpedin as aminority....
We feel we can compete with the majority if

The Universityrecruits businesses owned
by women and minorities through a pro-
gram that began in 1972.
This is how it works:
Senior Purchasing Agent Dick Throne
and small corps of staff members seek
minority- and women-owned businesses
at trade fairs, through business associa-
tions and over computer networks that
list businesses.
The University adds these companies
to its overall pool of companies that
provide outside services- such as cater-
ing, construction, medical supplies and
landscaping.
Throne invites the business owners to
campus, where he explains how the Uni-
versity selects a company to provide out-
side services.
When outside companies submit bids
for University work, minority- and women-
owned businesses do not receive prefer-
ence on the basis of race or gender.
But if a minority- or women-owned firm
does not win a contract for University
work, Throne will invite its owner to a
meeting to explain why.
"We don'ttrytoturn anyone away," Throne
said. "If theywalk outof here and they can
do business with us, we want them to
walk out understanding why they can do
business with us - and with a smile on
their face. They're still a part of us. At
some point maybe they can come back
and do business with us."

f

Also under the program:
The University may expedite payments
for small businesses that do not have the
same assets as larger corporations, but-
need money quickly if they are working on
a long-term project.
Fifty-six employees scattered through-
out the University, called "buyers," coor-
dinate bidding for outside services. At a
special year-end dinner, the University
gives plaques to the buyers who have
placed the most business with minority-
and women-owned companies.
A committee of buyers sets annual
goals for the program and gauges the
program's progress.

Above: Tanya Allen, founder, president and CEO of the Detroit-based ForeverFresh, Inc., displays a pair of women's disposable panties, which her
company markets. Allen sold 4,000 pairs to University Hospital in December for mothers who had just given birth.
Below: Dick Throne, the senior purchasing agent who heads the University's minority contracting program.

These are the numbers of minority- and women-owned businesses that provided outside
services to the University in 1983 and 1992.

4
P
rt

Minority-owned businesses

Women-owned businesses

.£684

3'w

683

197
1983

231

1992

1992

given an opportunity," said Coleman Sudduth,
owner of the Detroit-based Colfam, Inc.
Colfam, a fax machine dealership, began
working for the University after Throne invited
Sudduth to campus.
Sudduth disdains minority-contracting pro-
grams that "set aside" work only for minority-
owned businesses because he said they impede
his company's ability to do more work than the
quota requires.
ForeverFresh's Allen said, "We need the
opportunity to get experience, but (the Univer-
sity) didn' ttreatme any better or any worse than
a major vendor.'
Throne credits the University's buyers with
much of the program's growth: In the last 10
years, the University's minority-owned ven-
dors have multiplied from 197 to 683, and the
number of women-owned vendors has soared
from 231 to 1,684.

KRISTOF FEiILLTT 'aily
"We're really very proud ofour program. We
think we've made tremendous strides," Throne
said.
Still, the dollars the University awards to
minority- and women-owned businesses
make up a meager percentage of the total dol-
lars awarded to outside businesses.
In 1992, the University spent $10.4 million
with women-owned businesses and $6.6 mil-
lion with minority-owned businesses - 1.7
percentand 1.1 percent of the total $600million
itspent subcontracting with outside companies.
Throne said the difficulty with these statistics
is that a few companies hold monopolies on
large, multimillion-dollar contracts - such as
heating, water and telephone services - thus
eliminating the chance for competitive bidding.
He said other corporations with minority-
contracting programs will not include these

multimillion-dollar contracts in their statistics
because there areno women- or minority-owned
firms that can compete.
Buthe said the University keeps all its figures
together so it can more accurately gauge its
progress.
"Just to divide the amount of business you're
doing with minority- and women-owned ven-
dors vs. your total dollars doesn't really tell the
whole story. You have to look at where you
have been and where you are going, and what
you are doing to get there. And that's what
we're looking at."
Throne expects the University will see more
minority- and women-owned companies look-
ing for business because of the financially-
strapped Big Three automakers' downsizing.
Max Grayvold, owner of the Birmingham-
based Alpha Data, Inc., called the economy "a
tough business environment."

"Some of my competitors have fallen by the
wayside because a lot of corporations have
changed their purchasing policies - such as;
GM - and that's been a basic downtrend in
business," saidGrayvold,whosecompanyprints
computer forms for the University.
The minority contracting program has re-
cently expanded to include companies owned
by people with disabilities, as a result of the
Americans with Disabilities Act.k
Combined with the minority- and women-
owned vendors coming out of Detroit, the Uni-
versity could see a flood of new businesses.
And, said Throne, it's prepared to handle as
many as it can.
"We've taken the stance that we are notgoing
to shrink our database," he said. "We're going
toletour database grow, and we will work with
all the vendors that can meet the competition in
a level of pricing that we're looking at."

'U'strives for diversity among research subcontracting businesses

by David Rheingold
Daily Staff Reporter

The increasing number of minority- and
women-owned businesses that subcontract with
I the University mirrors a national growth in

that do business with the University cut across
dozens of fields, from advertising companies to
zoological supplies.
Many of these vendors work in professional
fields: publishing, computer software and sup-
.rv. and Ptinentinnai traininga nti enrvics e

"With hi-tech, the potential amount of cus-
tomers is very few, and it requires a large
amount of money to get into it," he said.
Nationally, there were 1.2million minority-
owned businesses in 1987, up from 743,000 in
192. accrdine to the mostrecentU.S. census

Rich Stevens, chief of the research division
for the U.S. Department of Commerce's Mi-
nority Business Development Agency, said,
"Twenty or 30 years ago, minority firms were
in traditional industries-restaurants, drinking
establishments. nersonal services, laundry ser-

can put profiles of their companies on PASS.
Agencies that need an outside service can then
contact companies listed on the network.
'The University of Michigan would benefit
if all research universities had their data in
PASS," Ingram said.

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