Entergy gives diverse suppliers a boost to success
“They have allowed me to experience the American dream, and to experience things I never would have as a nine-to-five worker,” says the CEO of an MBE supplier
Entergy Corporation (New Orleans, LA), an electric utility company providing power to 2.7 million customers in Louisiana, Arkansas, Mississippi and Texas, contracts with suppliers for everything from office supplies to engineering consulting, says Walter Loyd, the company’s director of supplier diversity.
MBE Higher Ground Electric Company (Little Rock, AR) provides vegetation management and overhead line construction services for the utility.
“Vegetation management and overhead line construction is a major component of our day-to-day operations,” Loyd says. “If the lines aren’t clear and free of debris like overgrown trees and other vegetation, that debris can be a major threat to the continuity of service and the delivery of electricity to our customers during certain types of weather like snow and ice.”
Fate in a flyer
Higher Ground’s CEO Charles Lewis is a former lineman at Entergy who was laid off in the mid-1990s when the company downsized. He says he was sitting at home one day, wondering what he would do next, when he went to the mailbox and found a flyer from Entergy describing its plans to outsource streetlight construction and maintenance.
Lewis had spent four years in Entergy’s internal training school for linemen. He talked to his former boss, who told him that with his experience, he was perfect for the gig. He had no financing or equipment, and just sixty days to acquire what he needed. Entergy offered to help. “We gave him a boost to get his business started and have been nurturing that relationship since then,” Loyd says.
Giving diverse suppliers tools to flourish
Launched in 1995, Higher Ground specializes in wire utility construction services, such as high-voltage infrastructure installation and maintenance, directional boring, street lighting and security lighting. The name Lewis chose for his company is a biblical reference, and reflects his belief that this business opportunity was a divine blessing.
“The company got started with me and one truck,” says Lewis. Today, he has fifty-five employees and sixty bucket trucks in two locations, Little Rock and Lawrenceville, GA. Entergy helped him establish his truck fleet. “We managed to find some hydraulic vehicles in our pool that were scheduled to be auctioned off as part of our asset management strategy, and we were able to sell these vehicles at significantly reduced prices to the owner of Higher Ground,” Loyd says.
Higher Ground was part of the inaugural group of companies participating in Entergy’s mentor-protégé initiative. Through this program, members of Entergy’s sourcing staff guide suppliers as they develop strategies to become competitive bidders on upcoming projects.
In choosing participants, Entergy considers each applicant’s capacity, finances and safety rating, as well as the availability of business opportunities in their specialties, says Rivers Frederick, lead specialist in the tier 2 program at Entergy. “If we don’t have upcoming opportunities, the mentoring wouldn’t be of any benefit,” Frederick says.
A long history of supplier diversity
Over the thirty years that Entergy has been active in supplier diversity, the company has partnered with many businesses like Higher Ground in the communities where it provides services.
According to Loyd, Entergy first began focusing on supplier diversity in the early 1980s, when each of the company’s then-separate operating entities entered into declarations of fair principles with the NAACP to open up more business opportunities to African Americans. The declarations also pledged to boost Entergy’s outreach in the African American community for employment, board membership and philanthropy.
In 1987, when its four separate utilities were consolidated, Entergy repeated the pledge to the civil rights organization, becoming the nation’s first electric utility holding company to enter into such an agreement, Loyd says.
By the early 1990s, Entergy had expanded its supplier diversity initiative to include other ethnic minorities and women. Today, it also includes small disadvantaged businesses, service-disabled veterans, and participants in the federal government’s historically underutilized business zones (HUBZone) program.
When its supplier diversity efforts began, Entergy had roughly twenty minority-owned businesses on its roster of vendors, representing about $500,000 in procurement, Loyd says. Now, the company does 25 to 28 percent of its available spend with diverse suppliers, to the tune of more than $200 million a year. From 1987 to date, the company has spent more than three billion dollars with diverse suppliers, according to Loyd.
How Entergy connects with its suppliers
Entergy’s strategies for locating suppliers include maintaining relationships with the National Minority Supplier Development Council (NMSDC) and the Women’s Business Enterprise National Council (WBENC) and their regional affiliates; accessing federal, state and local registries of diverse suppliers; and participating in its own outreach efforts like advertising.
Doing business with diverse suppliers who in turn provide jobs for others in their community is one way Entergy carries out its commitment to the economic development of its service area, Loyd says. “Entergy has a diversity initiative that goes above and beyond sourcing,” he explains. “It is about inclusion and valuing individuals as well as companies for their contributions to our success.”
Entergy prefers that diverse vendors have third-party certification through NMSDC, WBENC or similar organizations, but Loyd notes that sole proprietors may self-certify in some instances. To do so, they submit a form attesting to their sole ownership, which Entergy files in a registration portal.
Entergy’s agreements with its primary contractors request them to submit subcontracting plans outlining how they intend to utilize diverse suppliers, Frederick says. Entergy receives quarterly reports on those figures from its major contractors. “Some companies we work with may have very sophisticated programs; others we guide to help them establish and grow their supplier diversity programs,” Frederick explains.
Higher Ground’s diversity connections
Higher Ground is certified by the Arkansas-Mississippi Minority Supplier Development Council. The company is also HUBZone and 8(a)-certified, although Lewis says he no longer actively pursues government contracts.
Lewis was named an Entergy Business Partner of the Year in 2002, and an Entergy official recommended Higher Ground to its other major client, Georgia Power Company, the largest subsidiary of Southern Company.
From the beginning of their partnership, Lewis says, Entergy has shown a constant interest in helping his business succeed.
“They have allowed me to experience the American dream. This relationship has allowed me to experience things that I never would have experienced just being a nine-to-five worker,” he says. “The relationship is platinum.”