Contracting with Latino-Owned Companies Plunges as Energy & Telecom Company Spending with Minority-Owned Firms Drops by $67 Million

Contact: Bruce Mirken, Greenlining Institute Media Relations Director, 510-926-4022; 415-846-7758 (cell)

BERKELEY, CALIFORNIA – Contracting with minority-owned businesses by California energy and telecommunications companies dropped in 2014 and contracting with Latino-owned businesses plunged to its lowest level in the past five years, the Greenlining Institute reports in its latest Supplier Diversity Report Card. While the overall level of contracting with diverse businesses remains high, the drop represents a surprising interruption in years of steady progress.

“With leadership from the Public Utilities Commission, California companies still lead the nation in contracting with businesses owned by people of color, women and disabled veterans, but it’s worrisome to see progress stall this year,” said Greenlining Institute Energy and Telecommunications Policy Director Stephanie Chen. “Supplier diversity brings jobs and business opportunities to underserved communities and helps companies get better products and services at lower cost. Companies that have been leaders need to reenergize their efforts to maintain that leadership.”

Among the report’s key findings:

  • Spending with diverse businesses remains high, with two companies –Southern California Gas and Sprint – doing more than 30 percent of their contracting with minority-owned firms in 2014.
  • Overall, spending with Minority Business Enterprises (MBEs) declined by $67 million.
  • The proportion of spending with Latino-owned businesses dropped by nearly 20 percent to its lowest level in the past five years. Lesser declines were seen in spending with Asian- and African American-owned firms.
  • Sprint set a new record, reporting over 40 percent of its contracting with MBEs.

“With Latinos emerging as California’s largest ethnic group, it’s disturbing to see such a large drop in contracting with Latino-owned businesses,” said Alice Perez, President and CEO of the California Hispanic Chambers of Commerce. “We need to ensure all barriers to contracting opportunities are removed and are working with several companies through our Procurement Mentorship Program to help businesses gain the experience needed to contract with larger companies. Companies can boost value for their shareholders by seeking out the outstanding goods and services that diverse businesses can provide.”

The full report card is available online here.