A U.S. Army veteran and former executive with USAA and Lockheed Martin has been hired to run the new nonprofit Supply SA, created with the goal of simplifying local procurement processes so that more local businesses can vie for lucrative public and government contracts.
Melanie T. McCoy left USAA in 2023 to start her own consulting firm, Koenig Williams Consulting, which identifies as a woman-, minority- and service disabled veteran-owned small business — meaning she acquired the very certifications she will now help local small businesses earn.
Yet McCoy will be navigating a dramatically changing procurement landscape, as conservative groups across the state and country seek to end all race-based preferences in contracting and procurement with the help of the U.S. Supreme Court.
Former U.S. Secretary of Housing and Urban Development Henry Cisneros acknowledged as much in his remarks Friday morning welcoming Supply SA’s new board of directors to its first meeting.
Cisneros, who as mayor of San Antonio from 1981-1989 made economic development a centerpiece of his agenda, has been leading the two-year-long effort to bring together the City of San Antonio, Bexar County, SAWS, CPS Energy, VIA Metropolitan Transit, Port San Antonio and other taxpayer-funded entities to simplify their procurement processes for San Antonio businesses.
“In this era where DEI is under fire and probably not a policy vehicle we can use going forward, the focus on small businesses and local businesses gets us a long way toward having economic development that reaches deep into the communities,” Cisneros said. “And I’ll be honest with you, it’s now more important than ever.”
As much as $9 billion annually is up for grabs in the region through federal, state and local contracting opportunities, with billions more that could flow into local communities from the $1.2 trillion Bipartisan Infrastructure Act, the $280 billion CHIPS and Science Act and the $411 billion Inflation Reduction Act.
After her introduction at Friday’s meeting, McCoy offered brief remarks. She thanked the board for the opportunity “to pursue my passion for small business owners,” and called the collaboration among San Antonio’s public entities “a tremendous testament to this city, that you would all come to this table and undertake this.”
While Cisneros has emphasized that Supply SA will focus on small local businesses as opposed to relying on preference programs, those programs currently provide a critical leg up to historically disadvantaged businesses vying for contracts.
Procurement under pressure
The City of San Antonio is now in the difficult process of amending its ordinance that governs small and minority-business contracting policies, which it does every five years based on how well it meets its goals to create opportunities for minority- and women-owned businesses to win contracts.
The city spent more than 50% of its contracting dollars with minority- and women-owned businesses from 2014 through 2020, up from 23% over the previous five-year time frame.
Because of that increase, the city planned to narrow the program’s scope, including getting rid of race- and gender-conscious points in its contract-scoring matrices. Doing so helps protect the program from legal challenges, city leaders say.
But the gains were felt unevenly. Hispanic-owned and white women-owned businesses earned the lion’s share of the roughly $330 million the city reported that it spent with local small- and minority-owned businesses in fiscal year 2023. African American, Asian and Native American businesses did not fare as well, nor did businesses owned by minority women.
“Tremendous disparities still exist,” small business owner La Juana Chambers Lawson said in April at a meeting of the Fair Contracting Coalition, during which members pressured the city to leave its ordinance as is.
Several members of the City Council also pushed back on the proposed amendments, sending city staff back to the drawing board. With the ordinance expiring Dec. 31, updated amendments will go back before council before the end of the year, said Assistant City Manager Alex Lopez.
Getting certifications in order
Before businesses even get the chance to compete for city or other public contracts, however, they must first prove they are eligible for more than a dozen possible certifications, including local, state and federal designations for women-, veteran-, disabled-, Hispanic-, African American-, Asian American- and Native American-owned businesses.
McCoy will oversee a recently expanded team of people to shepherd applications through the certification process, thanks to a decision by Supply SA to absorb the South Central Texas Regional Certification Agency (SCTRCA).
Underfunded for years, the SCTRCA had been neglected to the point that it was barely functional. Just two undertrained staff members were reviewing hundreds of applications a month. Small businesses complained of months-long delays, inaccurate decisions and radio silence when they sought answers.
The full scope of those challenges came to light last year. By then, the CEOs of the same public entities that oversaw the agency had been meeting since 2022. While they had at first chosen to remain separate from the SCTRCA, in June they voted to absorb the agency, and to increase their contributions so that additional staff could be hired and trained.
The SCTRCA has since been dissolved, and after her contract was approved at Monday’s Supply SA board meeting, McCoy will now lead a team of eight, including experts to help small businesses navigate the certification and procurement landscape.
An outside firm will be hired to evaluate Supply SA’s results. McCoy hinted at that accountability as well the new organization’s loftiest goal.
“We’re going to have a measurable impact on this community,” she continued, “and we’re going to be able to provide other cities with the framework of what it looks like to grow this economy.”
