Target Market Program expands opportunities for small businesses to win city contracts
The new Target Market Program approved by the City Council Sept. 23 aims to make the City of Minneapolis a better and more regular client for local small businesses.
The program creates new opportunities for small, metro-area businesses to bid against other small businesses on city contracts worth $100,000 or less. The Target Market Program was designed to be race and gender neutral, said Deputy City Coordinator Nuria Rivera-Vandermyde, but the demographics of local small business mean women- and minority-owned companies should get a boost.
“We know that the majority of our women and minority businesses live in this small business space, and so by increasing opportunities for all small businesses, we know we are going to be able to effectively add opportunities for women and minority businesses at the same time,” Rivera-Vandermyde said.
It could ultimately save the city money by creating competition and “providing our departments with more and better choices” for contracts, said City Council Member John Quincy (Ward 11), who chairs the council’s Ways and Means Committee, in a city press release.
Rivera-Vandermyde said there are still details to work out before the Target Market Program officially launches Jan. 1, by which time the city aims to have a system for qualifying small businesses to self-identify and get notifications of city contracts available for bidding. The city also plans to develop more detailed instructions for small business owners to participate, she said.
When the program is up-and-running, small businesses will only have to compete against other small businesses on certain city contracts worth up to $100,000. As long as three qualifying vendors bid on a contract, they’ll be shielded from competition from other, larger businesses.
“It’s really about trying to make people consider the city a contractor of choice,” Rivera-Vandermyde said.
Lamont Bowens said contracts under $100,000 are in the “sweet spot” for his Minneapolis-based interior construction business. The company owned by Bowens, who is African American, has contributed work to a number of city projects, including a Minneapolis Police station, and he said the Target Market Program sounded like something that would steer more business his way.
KB Brown of Wolfpack Promotionals, a Minneapolis-based promotional products business, said the company won a city contract to print T-shirts, wristbands and other products for the Minneapolis Promise Zone, a North Minneapolis revitalization program. Prior to that, Brown said, they lost out to a St. Paul company on a contract to print Minneapolis Police safety vests.
While he said the Target Market Program sounded like it would benefit Wolfpack Promotionals, Brown noted the city’s bidding process could be frustrating to navigate. Bidding on small contracts means dealing with individual departments instead of a central city procurement office, he said.
“It’s been my experience as of late that doing business with the city is more difficult than it is easy,” Brown said.
A more detailed analysis of the program’s potential economic impact is pending. But Rivera-Vandermyde’s presentation to the City Council showed, in the area of professional services alone, there were about 400 city contracts of $100,000 or less totaling about $14 million in both 2014 and 2015.
In a recent survey of metro-area small businesses, 45 percent of respondents reported they’d never done business with the City of Minneapolis. More than 60 percent of those surveyed were businesses with annual gross receipts totaling $1 million or less, and 77 percent had fewer than 20 employees. Nearly as many — 74 percent — said they were likely to participate in the Target Market Program.
The Target Market Program was developed in response to city-commissioned 2010 study that found statistically significant disparities in the participation of women- and minority-owned businesses were likely linked to discrimination. Rivera-Vandermyde said the takeaway from that study was twofold: the city first needed to address racial and gender gaps in business, but it should ultimately aim to close those gaps so that future business initiatives could be race and gender neutral.
“Minneapolis is a fast-growing city, and the dynamism of small businesses and immigrant entrepreneurs are driving our growth,” Mayor Betsy Hodges commented in a city press release. “The Target Market program will have a huge impact on expanding opportunity for small businesses, and women- and minority-owned businesses in particular, by making it easier for them to do business with the large employer that is the City of Minneapolis. It’s not only the right thing to do, it’s the smart thing to do to keep Minneapolis growing.”