Because Aqua provides essential water and wastewater services and infrastructure support to customers and consumers, our procurement practices require materials and services that are timely, high-quality and cost effective.
Our purchasing policies and procedures require three bids or a bid waiver for materials or services, and our purchasing department tracks the total amount spent by each Aqua subsidiary and total number of vendors. In 2017, the department monitored national and regional contracts.
Of that collective spend, almost $600 million dollars was distributed locally within the states we serve. This is part of our commitment to a circular economy, based on the understanding that, like water, our business operations should be part of a cyclical process. Being good stewards of water aligns with being good community partners, because water is a local source and so is the community that supports the infrastructure. As a result, most support for our systems are based locally in our communities; Aqua costumers are also our suppliers, contacted support for construction and building material, local design and engineering support.
Amount spent on local suppliers by Aqua in 2017
In addition to working with vendors local to the communities we serve, Aqua is committed to increasing our work with qualified diverse suppliers, which include minority, women, disabled and veteran companies.
We have taken various steps internally to increase our work with diverse suppliers in the procurement process, including regular review of purchase requisitions to expand the use of diverse vendors, updating our internal purchasing website to encourage greater use of qualified diverse suppliers, working with a leading provider of supplier diversity data and enhancing reporting to better recognize our work with such suppliers.
Externally, we encourage diverse vendors to register and become certified in their state to apply for every applicable opportunity, and we reference a commitment to diversity in our supplier code of conduct. The Aqua purchasing department is a member of the Pennsylvania Diversity Council and regularly participates in networking events and follow-up meetings to learn from companies with mature supplier diversity programs.
In 2018, Aqua Illinois is piloting a formal program to better track and report supplier diversity. The program will change Aqua policy to require diverse supplier use or a reason for why a diverse supplier was not included in the bid. It will also track second-tier diversity spends, flowing this reporting requirement to all suppliers. A diversity status report will be submitted to the Illinois Commerce Commission detailing the percentage of the subsidiary’s spend with diverse suppliers in 2019, and a diversity consultant will create a supplier diversity program to increase Aqua Illinois’ diversity program. Our ultimate goal is to then deploy this initiative enterprise wide.
Supplier code of conduct
Aqua established a supplier code of conduct to define the basic requirements for suppliers of goods and services and their responsibilities to the environment and to their stakeholders.
We are committed to purchasing from suppliers that strive to improve the environmental quality of our water and wastewater operations, and that use reasonable efforts to minimize pollution and improve environmental protection and sustainability.
Aqua suppliers are also responsible for the health and safety of their employees, which includes controlling exposure to hazards, taking reasonable efforts and precautionary measures against accidents and occupational hazards, providing education and training in health and safety issues and having reasonable health and safety management systems. We also expect suppliers to subscribe to the principles of nondiscrimination, and to adhere to high standards of business ethics and professional conduct.
We completed a risk assessment for our suppliers with which we spend more than $50,000 annually, which included a screening to meet all Aqua standards for credit reporting, W-9, a global risk assessment, ratification of our supplier code of conduct, and proof of insurance. Of approximately 403 vendors, 231, or 57 percent, passed. Aqua no longer uses the services of some vendors who did not pass the risk assessment, and we will repeat the exercise with suppliers in 2019 with the intent of having 60 percent of vendors pass the assessment.