Houston changes supply purchase process to benefit minority, women-owned businesses

HOUSTON, Texas (KTRK) -- The City of Houston has changed its supply purchasing process to include more minority and women-owned businesses (MWBEs).

Chief Procurement Officer Jedediah Greenfield told ABC13 that the city currently purchases supplies worth between $5 and $8 million.

Previously, if an MWBE small business wanted to sell to the city, it would have had to purchase supplies from a prime vendor or a wholesaler and then sell them back to that same business at a markup. The city would then purchase those goods from the prime vendor.

Jedediah Greenfield used widgets as an example. If a small business had gotten its widgets from a wholesaler and wanted to work with the city, it would have had to sell those widgets back to the wholesaler at a markup for the city to purchase them.

Greenfield said the city has worked to avoid such transactions because they do not make sense for any party involved.

Now, the second resale transaction is no longer required.

Councilmember Leticia Plummer, At-Large Position 4, who helped enact the changes, said they will save the city money.

Purchase orders can be cut to both the MWBE and prime vendor. The changes strengthen certified MWBE's ability to sell directly to the city.

This week, both MWBEs and prime vendors addressed the council, sharing their excitement regarding the changes.

"I just want to thank you, and lately, there's been a defined amount for those small businesses that we have to make sure that they receive, so that's good for me so that we can make a certain percentage and make sure that they expand their business," MSC Industrial Supply Company's Ralph Walton said.

The company is a prime vendor.

The city has goals and requirements for purchasing from minority- and women-owned small businesses, which vary by sector. Under the previous system, Greenfield said the city had been waiving those requirements. Wednesday was the first date the city implemented an 8% goal.

"Now we're going from zero opportunities to now providing 8% to these small businesses," Greenfield said.

The number was written out on a new contract, and council also voted to amend agreements for previously awarded contracts.

"Initially, an MWBE would not even be a part of this supply purchase because a co-op would do business directly with the city," Plummer explained.

For more updates on this story, follow Shannon Ryan on Facebook, X and Instagram.