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Leveraging the Buying Power of Cities

In the City Accelerator's new Cohort IV, cities will use innovation to increase procurement and economic opportunity.

Accelerating economic development remains one of the top priorities for mayors around the country, with an increasing focus on intentionally targeting socioeconomic issues, such as income inequality.  Seventy-five percent of mayors highlighted economic development in their 2016 State of the City address, according to the National League of Cities, with 22 percent looking specifically at providing greater support to small businesses and 17 percent mentioning businesses owned by women and people of color.

Few cities are currently embracing the full potential of their procurement spending — the purchasing of goods, services and construction — to achieve a double bottom line that includes inclusive economic opportunity. Even fewer cities are coordinating this kind of effort with private sector companies in their own backyards. Challenges in communities across the country vary, but often include an insular, risk-averse procurement culture that makes it difficult for newer, smaller, often more innovative vendors to provide goods and services to the city; ineffective or confusing communication about procurement opportunities; limited access to capital and capacity development needed for smaller businesses to expand to meet city needs; and systemic underutilization of businesses owned by people of color. 

These challenges can prevent low-income people and communities from fully engaging in a sizeable portion of their city's economy. Simplifying the procurement process and broadening the pool of potential vendors can make procurement processes more competitive, can lead to more innovative or effective solutions, and can open the entrenched bureaucracy to non-traditional and underrepresented bidders. These actions can also catalyze and strengthen similar procurement reforms among anchor institutions and the private sector.

Dynamic city leaders are recognizing the link between the dollars a city spends through procurement and its goals for economic and community development. New Orleans, for example, is working with outside funders to provide the types of flexible capital disadvantaged business enterprises need to be eligible to bid on city services, while also requiring that these businesses – and their subcontractors – are hiring locally. As a result, they are growing local businesses, providing opportunities to entrepreneurs to secure new contracts and fostering job creation in the community, particularly for people of color.

Now is the time to rethink and improve the procurement process at the local level.  We believe that the country and our local economies would benefit greatly from what can be learned from an effort that brings five cities together to take on this challenge and intensely focuses on the innovations, policies and practices necessary to help transform what is often an overlooked and difficult to understand practice.

Through our City Accelerator initiative, which works across cities – and within cities – to promote the spread of promising innovations that will help governments work more effectively to improve the lives of low-income residents, we’ve identified the following cities that over the next two weeks will be sharing their approaches to local procurement processes. We invite you to review each of their pitches, and share your thoughts on their potential to expand city innovation and increase economic opportunity.

Through their participation in the initiative, selected cities will implement and test at least one new strategy to increase the amount of procurement dollars that go to growing local businesses and jobs. They will receive a combination of coaching, technical assistance and implementation resources over one year to leverage procurement to support the growth of local businesses, particularly those owned by people of color, and their hiring of local residents. Coaching and technical assistance will be provided by Griffin & Strong, P.C., a law and public policy consulting firm whose mission and passion for the last 25 years has been to advance equal business opportunities in communities throughout the country.

We are looking for your help to build a network that amplifies and accelerates innovation. Follow these cities through their City Accelerator journey on and join this conversation on social media with the hashtag #CityAccelerator to ask questions and share ideas you find important. Together we can build the practices that create robust, inclusive economies around the country.

Brandee McHale is President of the Citi Foundation and Director of Corporate Citizenship at Citi.
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