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The Los Angeles, CA DWP is a supporter of supplier diversity
“Our suppliers come from all over the country
as well as many parts of the world,” says
Albert Stephens, director of supply chain services
 The Los Angeles Department of Water and Power (LADWP) is a municipally-owned utility. In 1983, then-mayor Tom Bradley issued Mayoral Directive 1-B, followed by Mayoral Directive 1-C in 1989, establishing the groundwork for the City’s current supplier diversity program.
Albert Stephens, director of supply chain services, explains that as a municipally-owned utility, LADWP relies on certification from the City of Los Angeles Department of Public Works’ bureau of contract administration, which is the central certifying agent for diverse vendors for the City of Los Angeles. “Our suppliers come from all over the country as well as many parts of the world,” Stephens says. He notes that LADWP now also accepts certification by reciprocal  certifying agencies.
Phyllis Palomino, compliance officer and manager of supplier diversity, administers and oversees the program at LADWP. She and her staff ensure that LADWP managers and contract administrators as well as potential M/WBE suppliers understand the goals of the LADWP program.
Doing business
“At the beginning of the outreach program we had no specific goals, we just did it,” Stephens says with a smile. When the first goals were set, they called for 12 percent MBE and 4 percent WBE participation, but soon they were raised to the current 15 percent MBE and 7 percent WBE.
How does LADWP seek out diverse suppliers? There’s an extensive outreach program that includes supplier diversity expos and networking receptions for potential diverse firms, and connections with the Southern California Minority Business Development Council (SCMBDC), the local branch of the National Minority Supplier Development Council (NMSDC). Stephens
has served on the board of the SCMBDC for a number of years.
LADWP also has relationships with other trade associations, and takes advantage of a database managed by the bureau of contract administration and the mayor’s office of minority business opportunity.
Promoting debundling
The business world in general tends to favor larger contracts with fewer contractors. “It’s a natural kind of industry occurrence,” Stephens says. But not so much for LADWP: “Over the last decade or so our board of commissioners has consistently promoted debundling larger contracts into smaller portions. We want to make bidding more attractive to small and medium size firms that may have a limited capacity for bonds and insurance.
“Once capability and capacity to perform are defined and specified, we look for firms that can fill that need. Our work is open to MBEs, WBEs, and in some cases small business enterprises in general, depending on the scope of the engagement.”
Engineering their own
A lot of the work on construction projects is not contracted out at all, Palomino notes. “LADWP is essentially an engineering company as well as a public works company. We have a substantial base of professional engineers at various levels, so a lot of design and engineering work is done in-house. We’re also a collective-bargaining-impacted utility and just about everyone here is represented by some employment association.” So a lot of the hardcore construction work of a new substation or transmission line would be done by the utility’s own employees.
For example, Stephens points out, “We are soon going to commission our first wind farm.
That project was done partially in-house and partially by outside contractors, with labor forces brought in through the local unions.” In general, he says, “There are many opportunities.”
Who does the work may depend on the size and scope of the project and sometimes the level of expertise required in various disciplines.
Mirroring the ratepayers
LADWP is sensitive to the business value of its supplier diversity program. “It goes far beyond just compliance,” Palomino explains. “In many cases our suppliers are also our ratepayers
and we try to mirror that. It’s good business to do business with people who are doing business with us.”
Meet Nelson Chui of Vistec Consulting
 Nelson Chui is president and CEO of Vistec Consulting (Los Angeles, CA), a company he started in 2000. Vistec offers Southern California quality services in planning, implementing and administering IT. It’s currently in the process of getting certified by the Southern California branch of NMSDC.
How the company came to work for LADWP “is a good story,” Chui says with a smile. He was working as a contractor for another consulting company while starting up his own, and was sent to help LADWP design an e-procurement system.
“They really liked my work. I built a team for them and besides design I also did the development part.” It was very successful, but because of contract problems it was never finished.
“So LADWP put the project out to bid again, but they liked my work so much that they put me in touch with all the companies that were bidding on the RFP, nine or ten of them. Eight of them named me specifically in their proposals!”
Today that new contract is in its third year of development. Chui is working as a direct contractor to LADWP as a technology and business consultant “because they wanted to keep me on the project,” he says, but another sub is doing the actual development.
Going strong
Vistec has about twelve techies on its fulltime staff, with more IT pros brought in as needed; the company’s principals have about forty-six years of collective IT experience. The firm’s prime strengths are technology consulting and development, and Chui adds some management consulting work with private businesses.
Vistec is also working for the Southern California cities of Monterey Park and Calexico, hosting their websites and email, writing some programs and helping them manage their IT.
Starting out
Chui was born in Hong Kong. He moved to Canada for the last two years of high school and went on to Simon Fraser University in British Columbia, Canada. He got his MBA from City University of Seattle (Bellevue, WA).
When he completed the MBA he went to work in Dallas, TX as a business analyst for a Toronto-based distribution company. The firm sent him to California to set up systems back when EDI was first coming in; eventually Chui became VP of ops.
But the job kept him traveling between Dallas, Toronto and California; finally he quit that job and took his IT and business expertise into consulting in California.
Next came his work for LADWP and the after-hours launch of Vistec. His jobs with LA and
other Southern California cities have netted him a list of happy clients to give him sparkling references. “But no matter how much business you have,” Chui concludes, “you’re not just relying on contacts. You have to establish your own credibility.”
D/C
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