A $1 Billion Milestone in Fair Business Practices

January 28, 2015

University Health System’s award-winning Supplier Diversity Program celebrates $1 billion in spending with small, women, minority and veteran-owned business

Jane Gonzalez launched MEDwheels, a medical supply company, after moving back to her hometown of San Antonio from Philadelphia in 2005. Despite some success in providing medical equipment directly to patients, she soon grew discouraged with the complex process of bids and contracts with large public entities.

“I was frustrated,” she acknowledged. “One of the challenges that I faced is that the barriers to entry were difficult and challenging.”

Eventually she connected with University Health System and its award-winning Supplier Diversity Program, which reaches out to small, women, minority and veteran-owned business enterprises — known in business circles as SWMVBE. The program provides training and assistance with the Health System’s procurement processes, throws in a little old-fashioned encouragement, and holds group sessions where interested business owners can meet face-to-face with buyers and ask questions.

In recent years, University Health System has won accolades for the diversity of its vendors and contractors, racking up awards from groups such as the Hispanic Chamber of Commerce, the Hispanic Contractors Association de San Antonio and the Minority Business Development Agency.

But in October 2014, the Health System reached a truly remarkable milestone in fair business practices for an organization its size — one that took even some members of its leadership team by surprise. Since the Supplier Diversity Program began in 2004, the Health System has spent a whopping $1 billion with SWMVBE firms. The amount was confirmed this month.

To put that sum into context, the total budget of University Health System — which includes a large, nationally recognized teaching hospital and outpatient network of more than 20 primary care and specialty clinics, and more than 6,000 employees — is in the neighborhood of $1 billion.

“This is an incredible milestone for an organization our size,” said Francine Wilson, senior vice president of supply chain management at University Health System. “It speaks to the commitment of everyone from the Board of Managers and leadership team to our procurement staff that we’ve been so inclusive in how we do business, and aggressive in cultivating a group of suppliers and contractors that represent the diversity of our wonderful community.”

About a third that $1 billion figure stemmed from University Health System’s $899 Capital Improvement Project, the largest building project in Bexar County history. It included construction of the million-square-foot Sky Tower at University Hospital, and a six-story outpatient center at the historic Robert B. Green Campus downtown. About 68 percent of construction dollars went to local businesses and contractors, and 39 percent to SWMVBE firms.

In 2013, University Health System spent $408 million with vendors on contracts that were eligible for bids (not all of them are; some are exempt or sole-source, in the case of certain kinds of highly-specialized equipment or professional services). Of that, 40 percent went to SWVMBE firms. That’s almost double the percentage of other local public agencies.

In comparison, another large San Antonio healthcare system spent a similar amount as University Health System, with only 8 percent going to diverse vendors.

Another effective tool University Health System helped launch a few years ago is the Small Business Academy, in partnership with a number of local government and public agencies. The academy accepts a limited number of small business owners who apply to attend the three-month course, which features seminars led by purchasing directors, small business loan specialists and others.

“It’s almost like a crash college course on how to do business with all of these organizations,” Ms. Wilson said.

Jane Gonzalez attended the academy, which served to demystify the process. She learned about bidding, how to register as a vendor, and how to conduct business with various agencies. Just as importantly, she had a chance to introduce herself and her company to agency representatives and other business owners. Becoming a familiar face is important, she said.

“One of my mistakes was underestimating the importance of business relationships,” Ms. Gonzalez said. “At the academy, not only did we create these strong business relationships, but they also brought in the various procurement specialists to discuss the procurement process.”

MEDwheels was awarded a contract with University Health System — becoming one of more than 3,300 SWMVBE firms doing business with the Health System since 2004. That gave her a track record, and led to other contracts with the city of San Antonio, Bexar County, the San Antonio Water System and CPS Energy, VIA, Alamo Colleges and the military.

Now her business, with 10 employees, is quickly outgrowing its modest, near-East Side headquarters. And she’s set some lofty goals for future growth. She said she is grateful to God for her success and to University Health System for giving her an opportunity to reach for that success.

And she believes that keeping many of those dollars in the community raises the quality of life for everyone who lives here.

“By issuing contracts to local companies, the money stays inside the community,” Ms. Gonzalez said. “It allows MEDwheels to mentor future employees, who otherwise face very challenging barriers. We understand some of the cultural behaviors, the bilingual needs — and even skills deficiencies. We understand all that, because we are part of the same community.”