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The Public/Private Partnership - Developing the Vendors You Need

Author(s):

Audrey Goins Brichi
Audrey Goins Brichi, Manager, Small Business Programs, Chevron Corporation, San Francisco, CA 94120, (415) 894-2583, www.chevron.com, aego@chevron.com
Darlene L. McKinnon
Darlene L. McKinnon, Deputy District Director, U.S. Small Business Administration, San Francisco, CA 94105, (415) 744-8475, www.sba.gov / Darlene.mckinnon@sba.gov

85th Annual International Conference Proceedings - 2000 

Abstract. Drawing upon unique strengths as well as mutual needs, Chevron Corporation partnered with the U.S. Small Business Administration (SBA) to craft business development training for Chevron's small business subcontractors. Responding to the changing landscape of government and private sector procurement, the organizations brought resources to the partnership in the interest of building stronger small business enterprises.

Chevron partnered with the San Francisco District Office of the SBA in order to support the Agency's vision to strengthen economic development in communities and to support the Company's vision of stronger, more viable suppliers for its contracting needs.

Our objectives are to provide (a) background and history of the partnership (b) examples of training offered (c) measures of success (d) factors necessary to insure replication of the partnership and (e) mutual benefits received.

Background. Chevron and the SBA recognized the important contribution of small businesses to the US and global economies. America's 22 million small businesses employ more than 50 percent of the private workforce, and generate more than half of the nation's Gross Domestic Product. The two organizations were also keenly aware of the changing landscape that affects their ability to develop and partner with small business suppliers.

A May 1998 article in Purchasing Today titled, "The Future of Purchasing and Supply - Where We Are Headed" summarized a study by NAPM and the Center for Advanced Purchasing Studies (CAPS). The study described 18 initiatives that were major concerns in procurement organizations. Among the concerns were Electronic Commerce, Strategic Sourcing, Global Supplier Development, and Strategic Cost Management.

Given this environment, Chevron and SBA focused on the need to build strong small businesses by providing targeted technical assistance, including counseling and business management and technology training.

Examples of Training. SBA provides "hands on" custom-designed training in its Entrepreneur Center, a state-of-the-art training facility sponsored by the private sector Examples of training offered include:

  • Developing Your Website: A one night a week, 9-week course designed to help small businesses understand the value of Internet, develop and market a website, and what to do once the website is posted. At the end of the course, SBA hosts the client's website for 6 months, allowing the client to assess the viability of the web as a marketing tool for their business.
  • 8(a) Showcases: These half-day forums are custom designed to meet the needs of corporate buyers and public sector purchasing agencies. Each showcase features a specific commodity needed by the purchasing organization. SBA representatives counsel entrepreneurs regarding marketing and presentation of their businesses. During a 10-minute presentation, buyers are allowed to assess the capability of the presenting entrepreneur and suppliers have the opportunity to make one-on one connections with buyers. Corporations or other agencies often sponsor these forums.

  • How to Interpret Your Financial Statements: A half day workshop, conducted by SBA's top loan officer, designed to teach entrepreneurs how to read financial statements and assess the health of their business (i. e. liabilities vs. assets, inventory control, sales volume, etc).

  • Meet the Lenders: A half-day forum during which small business owners meet one-on-one with lenders to discuss their financing needs. Lenders are matched to the client by industry, type of loan and geographical location. Lenders review the client's financial statements, discuss appropriate financing resources and provides advice as to what client needs to do to be "bankable." At the end of this session, the client has a clearer understanding of the financing options unique to them as well as the beginnings of a relationship with a lender.

  • Small Disadvantaged Business Certification: The SBA conducted training for Chevron subcontractors, explaining the rules of the program and counseled with them through the completion of their applications. Each participant was registered on-site in the federal Procurement Network (Pro-Net), a database of all small business subcontractors that is widely used by governmental agencies, prime contractors, and the private sector. This program assisted Chevron in meeting a regulatory requirement to register and certify suppliers.

  • Small Business Summit: This half day meeting, hosted by Chevron and the SBA, was designed to convene all economic development agencies and non-profit organizations to discuss issues impacting small business and to develop cooperative strategies.

Benefits of the Partnership. In order to accomplish its mission and add value to its services, the San Francisco District SBA office builds effective partnerships with the private sector. Chevron's Small Business Programs mission is to provide opportunities, contracts, and outreach to small, minority and women-owned businesses. Through this partnership both entities have been able to:

  • Assist an increasing pool of small businesses. Last year, the SBA counseled and trained more than 10,000 small businesses in its Entrepreneur Center. Many of these businesses were Chevron subcontractors.

  • Provide customized training to small businesses allowing them to fulfill increasingly complex and challenging needs of the private sector.

  • Attract additional private sector organizations as a result of the credibility brought by the relationship with Chevron and other partners.

  • Increase its marketing activities. The Chevron partnership was initiated with Chevron underwriting a series of videos promoting the SBA Entrepreneur Center and other SBA programs. These videos are placed in business libraries, aired on cable television and as public service announcements, and used in speaking engagements.

Replicating This Model. Representatives of Chevron and the SBA believe that this model can be replicated, thereby strengthening procurement relationships between small businesses and public/ private sector partners nationwide. The requirements focus on the willingness to be open, innovative and willing to operate within new paradigms rather than doing "business as usual". Some key steps in the replication process are detailed below. Each organization should tailor this process to meet local needs.

Partnership Replication Process:

Identify Partners

Identify Shared Needs

Create Memorandum of Understanding

Launch Partnership

Use and Market Services

Evaluate and Refine Through Feedback

Measures of Success. This partnership has demonstrated tangible benefits for Chevron and the Small Business Administration. The success of the partnership is currently measured by the number of small businesses that have received assistance, as well as the number of new partners that have been attracted to the project. While early statistics for the partnership are unavailable, the latest figures indicate more than 10,000 small businesses have received assistance in the Entrepreneurship Center. Additional participating partners include Compaq, Microsoft, Hewlett Packard, Bay Area Association of Guaranteed Lenders, Cisco Systems, Sun Microsystems, and Fortune Small Business Magazine.

In summary, this partnership has been successful because the participants have shown commitment, teamwork, mutual support and innovation. Small business procurement will be strengthened and communities will benefit from its use and application. We look forward to continued success for this partnership and others that will follow.

BIBLIOGRAPHY

Duffy, Roberta J., "The Future of Purchasing and Supply." Purchasing Today, May 1998, 23-49

Lader, Philip, U. S, Small Business Administration Profile: Who We Are & What We Do 4th edition, October 1996


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