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Minority contractors resistant to ‘green purchasing’ policy

Wednesday, June 3, 2009 by Austin Monitor

The WBE/MBE Advisory Committee presented a lot more opposition than Austin  Senior Buyer Aidan Cohen might have predicted upon hearing his presentation Tuesday night on a potential green purchasing policy that will go to Council on June 11.

Austin’s small and minority businesses have been hit hard by the recent recession. Cohen’s pronouncement that another layer might soon be added to city contracts – to make sure that purchases add “green value” to the city – was not welcome. Groups such as the Austin Black Contractors Association expressed serious misgivings about the policy, which could shut them out of potential contracts.

Contractor Carol Hadnot urged Cohen to delay his presentation to Council. This was the first time that minority contractors had heard of a green policy. Cohen called the green purchasing strategy – to minimize waste and purchase environmentally sensitive products – to be a significant shift in purchasing.

“It’s a new industry. It’s going to create new kinds of companies,” Hadnot said. “To be competitive, we’ve got to get involved and learn the technology. This is new, and people need to get a lot of information that they’re going to have to learn it.”

Cohen insisted the resolution to Council on June 11 simply would support the creation of the policy. It would include training options for all small businesses but apply across the board to all vendors. And, yes, the inclusion of small- and minority-owned businesses was crucial to the success of the program, Cohen said.

Contractors, however, feared the increased cost and effort of regulation, which could leave smaller vendors at a possible disadvantage to larger businesses.

“Someone has come up with a policy that we know nothing about,” said Chair Adrian Lopez Neely. “Right now, we’re at a disadvantage as far as small and minority businesses are concerned. We need to know how it works, how it affects us.”

In his presentation, Cohen noted that the green purchasing policy was only one part of an overall approach by the city to support sustainable initiatives. Other efforts include the city’s climate protection program, along with its zero waste goal and commitment to LEED standards of at least silver for commercial buildings.

And while Cohen noted that many industries already had compiled “green friendly” ratings similar to appliance “Energy Star” ratings, small businesses at the meeting saw an unanticipated cost and a learning curve to master.

Commissioner Roel Zambrano argued that a “green friendly” approach for business might end up costing local small business on the front end, with profits and cost savings a number of years into the future.

“Those initial costs could be a factor in whether a minority-owned business or woman-owned business participates,” Zambrano said. “It would effectively eliminate a lot of participation. It is a de facto decision by Council that will make it more expensive, initially, to participate than the cost savings seen in the long run.”

The goal was that green products would cost no more than other products; simply that those deemed to be environmentally friendly would be given an advantage, Cohen said. The city’s intention is to choose, whenever possible, a product that is effective but has a positive impact on the environment.

Cohen agreed that small business participation was key in the creation of any type of green policy. And he added that a “green policy” was simply a catalyst to support better practices. At this point, however, the drafting of an ordinance had yet to begin and would be based upon the Council’s decision. That made the MBE/WBE committee worried about what might result from the effort.

“It just doesn’t feel like enough prep work,” Neely said. “How can we support something that will be significant impact without knowing the details?”

At the end of the day, the MBE/WBE policy advisory commission would like a seat at the table in the oversight of the drafting of the policy. The policy, Cohen said, would be created among the six or seven departments that have some kind of sustainable interests. The city expends about $850 million a year in various contracts.

The MBE/WBE board likely will continue to oppose the policy until members know more about its implications.

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