They’re in the ‘Dark Ages,’ S.F. Official Says : Minority Vendors Accuse Utilities of Bias

C. Philip Chen was dumbfounded by the Pacific Bell buyers’ response when he tried to sell them some computer support services two years ago.

“They ask me, ‘Mr. Chen, what do we do if you go back to Japan?’ ” recalled Chen, a Chinese-American who owns Apex Computer Systems in Cerritos.

Ignorance, prejudice and unthinking bureaucracy, minority business people say, continue to muddy the welcome mats of California’s biggest utilities even as they embark on an unprecedented campaign to increase their spending with women and minorities.

“The utilities are really and truly in the Dark Ages,” said Kevin B. Williams, a San Francisco city official who has campaigned for greater use of minority vendors by the state’s big utilities.

Only Casual Attention

Too often, both insiders and critics say, the utilities have relied on established, white-male-owned vendors and paid only casual attention to the help woman- and minority-owned firms may need to sell their products to big, bureaucratic power and phone companies.

“I don’t see it as an intentional exclusion,” said Virginia C. Allen, minority and small business manager for Southern California Gas Co. “In many cases it is merely not an understanding of the real kinds of problems incurred by smaller firms.”

But Allen acknowledged that the utilities will have to change many practices to keep their promise of making 15% of their purchases with minority vendors and 5% with woman-owned companies by 1993.

“We know the goal is certainly a stretch for us,” Allen said. “We know we may not be able in all cases to do business as usual.”

All the major utilities have begun moving away from “business as usual.” They are breaking up large contracts into smaller pieces on which minority and woman vendors are in a better position to bid. They hold seminars to teach would-be suppliers about company procedures. They support minority business groups and sponsor trade fairs at which suppliers can meet company personnel.

Specialized Equipment

Still, utility officials say, a huge portion of their spending is for services and equipment so technical or specialized that it is almost impossible to find qualified minority or woman suppliers.

To fill that gap, some of the utilities have taken minority vendors by the hand, slowly helping them acquire the skills and financial wherewithal to compete on their own.

A decade ago, for example, Southern California Gas gave a small pipeline construction job in Montebello to the Sinclair Corp., a black-owned firm in Compton. After working closely with the utility for 10 months, Sinclair Corp. got more work, enabling it to boost its work force from three to 40. Last year, the firm did about $4 million in business with the gas company.

“If it hadn’t been for the gas company, I wouldn’t be where I am today,” said Baxter O. Sinclair, the firm’s owner, who has won praise for employing gang members on his work teams. “With the gas company, I feel in many ways I am family.”

Chilly Relations

But Sinclair still has chilly relations with some in the Southern California Gas family. His company has worked for only three of the gas company’s 13 divisions. The transmission department of the utility, responsible for moving pressurized gas over longer distances, is particularly cool to doing business with Sinclair, he said.

“The whole intention of the gas company is to do what it can for the minority business enterprise willing to earn their keep,” Sinclair said. “But there still are people in there who would wish we didn’t exist.”

The keys to a successful minority contracting program, most analysts say, are leadership and accountability.

Little will happen, they say, until a firm’s chief executive is enlisted as a vigorous proponent of minority contracting. Black leaders, for instance, say Pacific Bell’s contracting with blacks has skyrocketed since they met last year with Philip J. Quigley, the firm’s president and chief executive.

Top-Level Commitment

“They could have done it all along,” said Williams, the San Francisco official, who took part in the meeting. “But they did it because we sat down and discussed--eye to eye, face to face--the problems that confront minority business.”

In big companies, however, top-level commitment does not always create business for minority vendors.

“When you hear the higher-ups talk about it, I think they’re sincere, but I don’t think they communicate it down,” said a Latino businessman in Santa Fe Springs who has tried, unsuccessfully, to sell his graphics arts services to Pacific Bell. “You go to these minority trade fairs and all this other stuff, and there’s not a person in there who actually signs a purchase order.”

Outside experts have urged the utilities not only to train managers and buyers in the importance of minority purchasing programs, but to make them accountable for their performance.

Developed Tracking Systems

Several of the utilities have responded to such advice by linking managers’ bonuses and front-line workers’ performance evaluations to their success in nurturing non-traditional suppliers. Many have also developed tracking systems that give executives detailed data on individual buyers’ or specific departments’ dealings with minority and woman suppliers.

The vendors, though, say plenty of room remains for progress.

Judith L. Fisher, the owner of an executive search firm in the San Fernando Valley, would just like someone at Southern California Edison to answer the phone.

“I’ve placed numerous calls to the person who’s supposed to be my contact at Edison,” said Fisher, an outspoken member of the National Assn. of Women Business Owners, “and they have never even called back.”