Leveraging Public Sector Contracts for New Manufacturing Jobs

Posted by Carmen Rojas on

What would it look like if the billions of dollars spent by our public agencies to provide services were also leveraged to encourage job creation for low-income people?

Today, we don’t have to look far for one such example.

Just last month, the L.A. County Metropolitan Transportation Authority (L.A. Metro) approved a $305 million contract to New Flyer Industries for 550 clean-fuel buses. While New Flyer is a Canadian-based company, they have manufacturing plants in cities across the US. As a result, L.A. Metro’s bus purchase will directly result in the creation of 200 quality U.S. manufacturing jobs - 50 in Los Angeles and 150 in St. Cloud, Minnesota. This bus purchase is all the more notable because historically, L.A. Metro has awarded bus contracts to a firm that manufactures buses overseas.

How did L.A. Metro make the switch to New Flyer for their buses?

L.A. Metro piloted an innovative approach to the procurement process where they placed public purchasing alongside a policy known as “the U.S. Employment Plan." With the help of Living Cities' grantee Los Angeles Alliance for a New Economy (LAANE), this new model gained federal support to be piloted in Los Angeles. Instead of solely valuing proposals that delivered the lowest-cost buses, the U.S. Employment Plan takes into account the quantity and quality of U.S. jobs that would be created, as well as the firm’s workforce development and training commitments as part of the bidding process. In the case of L.A. Metro’s bus purchase, this model's criteria gave New Flyer a significant edge over competing bids because of their higher wages and benefits for workers.

L.A.’s bus purchase shows the potential for changes in procurement policy to have significant economic impact in the rebuilding of the U.S. manufacturing sector, including the targeted recruitment and development of a trained workforce from low-income and hard-to-hire populations. As infrastructure investments become a national priority, these low cost strategies offer one approach to leveraging government spending for maximum benefit. If the U.S. Employment Plan is enforced beyond the L.A. pilot, many cities across the country with plans to purchase rail cars and buses will be able to reap the benefits of improved services and increased employment.

Living Cities, in partnership with Surdna and Ford Foundation, is proud to support LAANE's development of this innovative national procurement model. For more details, see this post by Linda Nguyen-Perez from LAANE and Michelle Knapik from Surdna.