SR-205-002
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-C.1. t.y " oune. 1 ::1eetJ.~g:.arCh 8, 1983
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~Anta ~onJ.ca, Callfornla
~t:J~-002
TO: ~ayor and CJ.ty CouncJ.l
FRO~: CJ.ty Staff
~E: Proposal for Expanded AffJ.r~atJ.ve rlctlon
P~ocure~ent Progra~
Introduc:tJ.on
The CJ.ty of Santa Monica J.S a dJ.verse com~unlty. To ~ore
effectlvely serve the co~unlty,
the Clty Caunc!.l ado9ted a
for~al Afflr~atlve ActJ.on plan to achleve a balanced work force
in the Clty's personnel structure.
It J.S a logJ.cal extension of
thlS responsJ.bJ.llty that the CJ.ty would want to J.nsure full
partJ.CJ.patlon by all reputable businesses J.n the supply of goods
and servJ.ces to the CJ.ty,
regardless of sJ.ze or ownershlp
characterlstJ.cs.
~he accompanYJ.ng report sum~arJ.zes current experJ.ence and
~akes recom~endatJ.ons for J.ncreased efforts by the CJ.ty to
encourage partJ.cJ.patJ.on in the procurement process for supply of
goods and serVlces to CJ.ty departments.
Background
DurJ.ng the 1982-83 budget study sessJ.ons, the Clty Counell
discussed
the
need to lncrease the number of women and
mJ.norlty-owned busJ.nesses sub~lttJ.ng bids to supply needed goods
and servJ.ces to the CJ.ty. These bids/proposals may be for the
provlsion of supplJ.es and equlp~ent, construct~on contracts, or
professional serVlces. Each type of procure~ent has its own set
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~rocedures and requlre~ents WhlCh offer varYlng opportunlt~es
for afflr~tlve actlon enhance~ents.
The followlng approach was employed In preparlng the
accompanYlng dlscussion paper.
1) A standard set of definltlons was complIed from state and
federal agencles' regulatlons.
2) Demographlc data was collected on population and buslness
ownershlp characterlstics 2n the Los Angeles County area.
3) A review of local leglslatlon and eXlsting pollcles
regardlng procure~ent practlces was ~ade.
4) Interviews were conducted wlth Clty staff ~e~ers
lnvo1ved 1n procur1ng goods and serVlces to deter~ine current
purchas1ng practlces and afflr~atlve act10n efforts.
5) Public agencles
regardlng the specific
enterprlse progra~s.
throughout the country were contacted
details of existing ~lnorlty-buslness
6) The City Attorney's off1ce was consulted on several
occaSlons regardlng options and approaches the Clty ~lght
cons1der to pro~ote afflrmatlve act10n 1n procurement.
The lnfor~ation obtalned from all of the above sources was
summarized and consolldated lnto a serles of optlons and
reco~endations for COUDC11 and staff actlon over the next year.
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An 1n1t1a~ draf~ of the report was d1str~buted on December
3, 1982 to the C1ty Counc1l, Department Heads, CO~~lSSlon on
Status of Wo~en, Cha~ber of Com~erce and interested c1t1zens f8r
reV1ew and co~~ent. ~any of ~he responses and suggest10ns have
been 1ncorporated 1n the rev1sed report.
Among
the
co~~ents wTI1ch have been 1ncluded 1n the
reco~~endatlons are:
develop~ent of a ~onltorlng and reporting
syste~~ 1ncreased responslb1llty for Purchasing and other
depart~ents to SOllcit blds from ~inor1ty and women-Owned f1r~si
reV1Slon of the current goals for award of contracts to women and
~lnor1tY-0wned fir~s; inclusion of aff1r~ative act10n provls1ons
1n the C1ty'S purchas1ng procedures, CDBG agree~ents and
construct1on
contracts;
1ilst1tut1on
of
sanct10ns
for
non-compl1ance w1th the City's eventually adopted aff1r~~t1ve
act10n requlrementsi and possibilities for preferenclng of un10n
employers 1n some li~lted purchaslng sltuatlons.
Recommended Actlons
Development of a ~ore formalized aff1rmat1ve action
procurement program lS a complex and time-consu~lng undertaking.
Staff's research has found that there are relat1vely few such
programs 1n eXlstence and that even among those programs, there
1S a w1de dlverslty of legal op1nlon as to what components are
defenslble.
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An lncre~ental approach has Deen
current organlzatlonal capabllltles
prlorltles belng addressed by staff.
reco~~ended
based on
and other
l~portant
It lS fel~
that the
reco~~endatlons
su~~arlZed below =epresent a realist~c and
serlous step to enhanclng Clty perfor~ance In thlS l~portant area
that ~nvolves several ~llllon dollars
l~ taxpayers' funds each
year.
Whlle
eXlstlng staff can undertake the flrst set of
reco~~endatlon5,
It 15 suggested that CounCll assess~ent of the
need for addltlonal staff and ~onetary resources dedlcated to
thlS progra~ be conSldered durlng the 1983-84 budget reVlew. A
sU~~ary of actlons reco~ended at thlS tlme lnclude:
1) Develop~ent of an automated data 5yste~ to collect and
analyze statistlcal performance lnfor~atlon.
2) Increased outreach actlvltles through publlC lnfor~ation;
contact with ~lnorlty buslness clearlnghouses; dlssemlnatlon of
lists of ~lnorlty and wOMen-owned flr~s to both departments and
large contractors for sollCltatlon purposes; particlpatlon in
trade falrSi and sponsorshlp of procurement se~inars.
3) Development of an ad~lnistratlve instructlon outllnlng
criteria for conslderatlon in selectlon of professlonal serVlces
providers to ~nclude afflrmative act~on prov~sions.
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4) For~al ~a~lng of the Clty'S program as the Women and
~lnor1ty BUSlness Enterpr1se Program (~~BE).
5) Develop~ent of afflr~atlve actlon prav1s1ons to be
lncluded 1n constructlon contracts over $100,000.
6) Increased requlre~ents for all deoartments to SOllclt
blds fro~ ~lnorlty and wo~en-owned bUSlnesses.
7) Development of sanct10ns for non-co~pllance with the
Clty'S aff1r~at1ve act10n gU1dellnes.
8) Rev1s1on of eX1stlng and establlshment of add1tlonal
goals for award of contracts to ~lnorlty and wo~en-owned flrms 1n
all three 9rocurernent areas.
9) Further exploration of possiblllt1es for prov1d1ng
purchaslng prlorit1es to union1zed f1r~s.
10) Further exp1oratlon of 2nc1uslon of afflrmatlve actlon
provlsions 1n development agree~ents.
Upon substantlal completion of these tasks, conslderatlon
~ay be given to lustltutlng additlonal co~ponents of thlS
program, such as set-aslde or preference ~echanlsms. It lS
strongly felt, though, that these types of progra~s should not be
undertaken until a strong base lS 1n place to support an
affirmat1ve actlon procure~ent program.
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Recornmendat1on
It lS resectfully reco~mended that the C1ty Counc1l concur
wlth
the
expanded
aff1r'1lat1ve actlon procurement program
act1v1t1es proposed above to promote equal opportun1ty for all
bus1nesses
to
part1cJ.pate
1n the C1ty'S procurement and
contract1ng system.
It 15 further requested that the CouncJ.l
provlde any further suggest10ns or co~ents for staff study
and/or 1mplementat1on 1n the ~onths to corne.
Prepared by: Lynne C. Barrette
Deputy CJ.ty Manager
3ermelJ.nda Rendon
Sr. AdmJ.n1stratJ.ve Analyst
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CITY OF SANTA MONICA
PROPOSAL FOR EXPANDED
AFFIR~ATIVE ACTION
PROCUREMENT PROGRAM
PREPARED BY:
CITY ~ANAGER'S OFFICE
MANAGEMENT SERVICES
DIVISION
DRAFT DECEMBER 3~ 1982
REVISED FEBRUARY 4J 1983
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TABLE OF CONTErITS
I INTRODUCTION 1
II DEFINITIONS 1-3
I I I DEMOGRAPHICS 3-5
IV BACKGROUND - LEGISLATIVE HISTORY 5-6
V CITY OF SANTA MONICA EXPERIENCE AND PRACTICE 7-13
VI MBE PROGRAMS IN OTHER PUBLIC AGENCIES 13-29
III I CONSTRAINTS/PARAMETERS 29-32
VII OPTIONS/LEVELS OF INVOLVEMENT 32-37
IX RECOMMENDATIONS 38-48
X CONCLUSION 48-49
APPENDIX I WMBE RESOURCES AND INFORMATION 50-53
APPENDIX II MINORITY AND WOMEN-OWNED
BUSINESS ENTERPRISES 54-56
APPEND IX I II WMBE DIRECTORIES AVAILABLE IN
THE PURCHASING DEPARTMENT 57-58
APPENDIX IV ORGANIZATIONS AVAILABLE TO
ASSIST WMBE's 59
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I. INTRODUCTION
The C1ty of Santa ~on1ca 15 a dlverse co~un1ty. To ~ore
effect1vely serve the communlty, the C1ty Councll has adopted a
formal Aff1rmat1ve Act10n plan to ach1eve a balanced work force
1n the Clty'S personnel structure. It lS a loglcal extens10n of
thlS responsibll1ty that the C1ty would want to lnsure full
part1clpatlon by all reputable bUSlnesses 1n the supply of goods
and serVlces to the Clty, regardless of Slze or ownersh1p
characterlst1cs.
ThlS report addresses ~eans of lncreas1ng the number of
contracts awarded to mlnorlty and women owned bus1nesses. Due to
rac1al, ethn1C preJudice or cultural bias, these buslnesses ~ay
be economlcally or soc1ally dlsadvantaged. Soclal barrlers ~y
have affected the abl11ty of these indlvldual buslness owners to
effectlvely compete in the free enterprlse system due to
dl~ln1shed cap1tal and credlt opportun1t1es. Issues relatlng to
local. small, non-proflt and unlonlzed employers are also
dlscussed.
II. DEFINITIONS
The
follow1ng
deflnltlons
are
offered
to
provlde
clarification for the reader, and for the purposes of discusslon.
1. Small Business - is deflned by the State Employment
Development Department as one with fifty or fewer employees.
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2. ~lnorlty and Women Owned BUSlnesses - A small buslness
concern \~lch lS owned and controlled by one or ~ore ~~nority
persons or by women.
Owned and controlled ~eans a s~all bus~~ess concern whose
~anagement and dally buslness operatlons are controlled by
~lnor~ty persons or by women; and whlCh lS:
a) a
sole
proprletorshlp
leg~t~mately
owned by an
lndlVldual who is a ~norlty person or a woman:
b) a partnershlp or Jo~nt venture In WhlCh at least 51
percent of the beneflClal ownership lnterest legltlmately is held
by mlnority persons or by women: or
c) a corporatlon or other entlty, lncludlng a publicly
owned business, ln WhlCh at least 51 percent of the votlng
lnterest and 51 percent af the beneflclal awnershlp interest
(loe., stock) legltimately are held and owned by minorlty persons
or by women.
3. Mlnorlty GrouF Persons - Shall ~ean a person of Black,
Hlspanlc, ASlan/Paclflc Islander, Native Amerlcan or Alaskan
raclal orlgln and ldentlty.
4. Women This definltlon shall lnclude all women.
5. Local - A local buslness shall ~ean a business firm wlth
fixed
offices
or
dlstrlbution pOlnts located wlthln the
boundaries of Los Angeles County.
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6. Unlonlzed Em~loyer
A buslness WhlCh has a labor
organlzatlon,
com~lttee or representatlve actlve wlthln lts
structure.
ThlS commlttee/representat1ve represents employees
and eX1sts for the purpose, 1n whole or 1n part, of deal1ng w1th
the employer concern1ng gr1evances, labor d1sputes, wages, rates
of pay, hours of employ~ent, and/or conc1t1ons of work.
7. Non-Prof1t Or9an1zat1on - A group organlzed for purposes
other than generatlng prof1t, such as a charltable, sClentlflC or
literary organ1zatlon.
III. D&~OGRAPHICS
Infor~tlon on the CO~pOS1tlon of local populatlon and
bUSlness enterprlses 1S provlded because thlS data should be
cons1dered in the development of aff1rmatlve actlon plans and
efforts. The Los Angeles County populat1on 1S broken down 1n the
follow1ng ~anner:(l)
Wh1te 3,008,027 (40.23%)
Black 944,009 (12.62%)
Hlspanlc 2,065,727 (27.63%)
Indian 48,158 ( .64%)
ASlan 434,914 ( 5.82%)
Other
~inority
Groups 976,822 (13.06%)
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Total 7,477,657 (100%)
(1) "1980 Populatlon by Race and Spanlsh Origln by Tract", Los
Angeles County Reglonal Plann1ng Department.
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The C~ty of Santa ~on~ca's 1980 popu1at~on of 88,314 was
d~str~buted as follows:
:'Yh~ te
Hispan~c
Black
Amer. Ind~an
ASJ..an
Other
64,191
11,485
3,594
396
3,567
5,081
(72.69%)
(13.00%)
( 4.07%)
( .45%)
( 4.04%)
( 5.75%)
~he total number of bUSlness establ1shments 1n Los Angeles
County (exclud1ng government employees, ra11roads, self-employed,
domest1c serv~ce and far~ workers) ~s 157,046. Of th1S figure,
147,330 are cons1dered small bus1ness estab11shments.(2)
Accord1ng to the most recently ava11able census data, the
total number of ID1nor1ty and female owned bUS1ness 1n Los Angeles
County 1S 86,943.(3)
The breakdown for these businesses 15 the followlng:
Black owned buslnesses
14,699
Hlspan1C owned buslnesses
17,177
ASlan, Indlan and other
~inority owned bUS1nesses 18,382
Female owned buslnesses 36,685
The number of bus~ness enterpr~ses owned by mlnorlty women is
included
~n
both the female owned buslness category and
lnter-spersed
among
the
var~ous
~~nor1ty owned bUS1ness
categories. Thus they are counted tWlce.
(2) Source: "County BUS1ness Patterns", U.S. Bureau of Census.
1978
(3) "1977 Census of M1norlty Owned BUS1ness Enterprise", U.s.
Bureau of the Census.
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It lS noteworthy to ~entlon that we could no~ readlly
ldentlfy fro~ the above lnfor~atlon,
the nu~ber of ~lnorlty and
women owned bUSlnesses that provlde the types of goods and
serVlces that the Clty has a need for.
IV. BACKGROUND - LEGISLATIVE RISTORY
The Clty Charter requlres the establishment of a centrallzed
purchaslng system. The Munlclpal Code sets forth the competltlve
blddlng process for both informal and for~al blds. Accordlng to
the Code, all open ~arket purchases, (which are those of not ~ore
than $5,000), shall be awarded to the person/flr~ offerlng the
lowest and best bld. At the present tlme, purchases of more than
$5,000 requlre a formal bid process. ThlS process requlres
publlcatlon In the offlclal newspaper, specifled tlme frames for
01ddlng and the publlc openlng and declaratlon of blds. Blds are
then tabulated and referred to the Clty ~anager for presentatlon
to the Clty Councll. The Councll then makes the declslon
concernlng the award of the contract.
The Municipal Code does not speclflcally dlSCUSS
afflrmatlve actlon In the Clty'S purchasing and contractlng
efforts. However, on October 27, 1981 the Clty Counell adopted a
reso1utlon wnlch encourages and sets goals for the partlclpatlon
of minorlty and female owned businesses In Federally assisted
constructlon proJects admlnlstered by the Clty. The Mlnorlty
Business Enterprise Program approved at that ti~e establlshed
pol~cy and committed the C~ty to a progra~ administered In
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accordance w1th regulat10ns lssued by the U.S. Depart~ent of
Transportat10n.
W1th1n that program, a citywlde ~lnorlty vendor
part1c1pat10n
goal of 2 percent of the total dollar amount
awarded was also set for the procure~ent of equlpment, ~ter1als,
supplles, and professlonal serV1ces for f1scal year 1981-82.
F1nally,
Department
coltlprehenslve
a budget performance ObJectlve of the Purchaslng
for FY 1982-83 lS to develop and ltla1nta1n a
informatlon base for the Minorlty Business
Enterprlse prograltl.
V. CITY OF SANTA ~ONICA EXPERIENCE AND PRACTICE
The City incurs expendltures for goods and serV1ces 10 three
~aJor areas: supplles and equ1pment, professlonal serVlces and
capltal construction. As lnd1cated above, there has been no
for~llzed aff1~atlve actlon program 1n the procureltlent process.
Thus, data on our past perfor~ance lS very 11mlted. Furthermore,
systems are not currently 1n place to retrleVe all appl1cable
1nformation.
Supp11es and Equipment
In flscal year 1981-82, approxl~tely $20 '1\11110n was spent
for suppl1es and equ1pment. Durlng th1S perlod, 7,793
flxed-price purchase orders were 1ssued. Approxllt\ately $400,000
or 2 percent of the total were expenditures Itlade w1th ~lnorlty
and female owned bus1nesses. Th1S lncludes expendltures Itlade
through both the formal and lnformal bld processes, but does not
reflect expend1tures on open order purchases.
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During the per~od fro~ July I, 1982 to present (January 31,
1983), $10,785,369 was expended for supplies and equ~p~ent. One
thousand, one hundred forty three purchase orders were issued
dur~ng thlS
expendltures
perlod. $211,708 or 2 percent of thlS total were
~de wlth 52 ~lnorlty and fe~ale owned businesses.*
Only th~rteen
$ 5,000. The
services to
~lnorlty vendors recelved awards 1n excess of
serVlces and equlpment purchased ranged from fll~
securlty syste~s, office furnlture, t~res and
pr1ntlng serV1ces. A qu~ck rev~ew of the I1st 1ndlcates that
~ost of these flrms were in the Los Angeles County area.
The Purchaslng Department has 1dent~fled 108 ~lnorlty
vendors Who have done business with the City in the last year.
ThlS 11St lncludes 21 female owned businesses. Purchas~ng ~akes
use of the MBE llst on
informatlon on the C~ty's
sollc1tlng 1nforma1 bids.
every formal bld by ~a11ing vendors
needs. Th1S list lS also used for
During the for~al and lnfor~al bidding processes, flr~s are
requested to co~plete an affidavlt If they feel they quallfy as a
~lnor1ty Buslness Enterprlse. This procedure was l~plemented
over a year ago. Accordlng to the Purchasing Dlrector, the
responses have been relat1vely good. ~ore recently, Purchaslng
has developed a fOllOW-Up letter to the affidavit. This letter
requests further infor~ation on the vendor's ~inorlty status and
18 an attempt to verlfy the status.
* The 1982-83 flgures do lnclude open order expendltures.
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Another aspect of the Purchas~ng Depart~ent's ~BE program lS
the walvlng or lowerlng of bld bond requlrements. The City has a
speclfic bond requ~rement for each purchase. Th1S requ1rement ~s
only for for~al blds and 1S usually 10 percent of the bid amount.
The bld bond guarantees that a company wlll provide the serVlces
at the bld pr1ce. To determlne lf lowerlng or wa1ving of bond
requlrements lS feas1ble, the Slze and type of the purchase are
considered. If it 1S decided to wa1ve or lower the bond
requJ.rement,
this lnfor~at1on J.S sent to all vendors w1th bld
specif1catlons.
B~d bonds have been wa1ved several tlmes in the acquisition
of vehlcles. In other lnstances, when bids have not been
received dur~ng the ln1t1al open time frame, the PurchasJ.ng
Dlrector has elected to waive the b1d bond In an effort to 1nduce
bJ.ds and avoid further delays. ThlS has occurred ln the
purchaslng of shlrts for a 10k race, purchaslng of ceramlC tlle
for the Pollce Department and replacement glass for Clty buses.
There have also been lnstances where the total amount of the
purchase J.S an unknown factor, thus the bond has been reduced to
a finlte amount (e.g., purchaslng of lunches for a Senlor CJ.tJ.zen
Progra~, fuel for City vehlcles, etc.).
Flnally, Santa ~onica has a one percent local vendor
preference pollcy, ConslderJ.ng one percent of the local sales
tax share as a rebate, lf two ldentical low b1ds are submitted
and one of the vendors lS from Santa Monlca, the contract would
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be awarded ~o the local vendor because the net cost of thlS
contract would be the lowest cost to the Clty.
ProfeSSlonal SerVlces
In the area of Professlonal Servlces, $1,061,636 was spent
durlng flscal year 1981-82. From July 1, 1982 to the present
(January 31, 1983), $823,324 has been spent ln thlS category.
The Department of Recreatlon and Parks has expended $406,411
($317,288 of wn1ch lS for lifeguards) and the Department of
Com~unity and Econom1C Development has spent the second largest
amount, $280,031, (over one-th1rd of which 1S for the Land Use
Study). The cltywlde budget for professlonal serV1ces lS
$1,367,440 wlth a balance rema1n1ng of $544,116.
Of the three procurement types discussed 1n this report,
profess1onal serVlces has the least restrlctlve ~unlclpal Code
requlrements. Most slgnlflcantly, it is not requlred to award
contracts to the lowest bldder.
spent
and/or
Data has been collected ~anually to deter~ine the amount
In recent rnonths contractlng for services wlth ~lnorlty
women-owned professional serVlce f1rms. Analysls of thlS
data suggests the fol1owlng:
Of the $823,324 expended during the perlod from July 1, 1982
through January 31, 1983, 8.4 percent or $69,330 was contracted
wlth m1nority and women-owned flrms. The breakdown of dollar
volume expended, between women and rnlnority-owned firrns lS
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$64,690 or 7.8 percent w~th wo~en, and $4,639 or .5 ?ercent wlth
~~nor~ty-owned
~.
~~r~s.
The
Department
of Recreat10n and Parks 15 the only
depart~ent WhlCh contracted Wlt~ ~lnority ~ales. ThlS department
lS un1que in their use of professlonal serVlces. The var10US
recreatlon
lnstructors who teach classes sponsored by the
Department of Recreatlon and Parks are lncluded l~ the flgures.
These contracts are usually small and there 1S generally a
slgniflcant turnover of 1nstructors throughout the year.
Those f1rms that were known to be owned by m1norlty women
(6) were lncluded In the female count. It should be noted that
the ownersh~p status of 36 of the approx1mately 228 profess1onal
serVlce consultant fir~s or 1ndlvlduals we have contracts with in
the current year 1S unknown.
Cltywide, approx1mately 12 of the
contracts were ldentlfled to be wlth publlC agencies. The
expenditures incurred through these contracts are lncluded 1n the
overall total as are the expendltures incurred through two
contracts wlth firms that have female principals (30 percent
ownersh1p), There were two other contracts identifled wlth f1rms
that are 50 percent women-owned.
The amounts expended through
these last two contracts are lncluded ln the flgure Wh1Ch
reflects the dollar volume expended wlth women owned f1rms
($64,690).
ThlS analysls reflects the fact that, although the City has
contracted to some degree wlth women owned flr~s, Santa Mon~ca's
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exper1ence
In contract1ng wl~h ~lnorlt1es for professlonal
servlces has been ~lnlmal.
Caplta1 Construct1on
It was deter~lned after d1Scuss1ons wlth flnanclal staff
that
1n
f1sca1
year 1981-82
(July,
1981
June,
1982)
approxl~ately $5,006,000 was spent 1n the area of Capltal
I~prove~ents.
In the current year,
$6,883,522 15 budgeted for
cap1tal constructlon proJects.
Analysls of constructlon contracts awarded by the Clty
durlng the perlod (October 1, 1980 - Septe~ber 30, 1981), prlor
to the establlshment of the ~BE program for federally funded
Jobs,
dlsclosed
that
only
one subcontract,
representing
approximately 1 percent in dollar value of all contracts was
awarded to a flrm llsted In the CALTRANS ~BE Dlrectory.*
Under current policy, unless a project 1S federally funded,
e~phasls 1S not placed on MBE partlc1patlon. Two ~aJor approved
projects are ellglble for federal fundlng: the reconstruction of
Wllshire
Boulevard,
Wh1Ch 1S currently underway; and the
lnstallatlon of new trafflc slgnals and upgrading of eXlstlng
systems at var10US locat1ons.
* The ~BE program ad~lnlstered by the Department of General
SerVlces is operating on a federal flscal year.
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Because there was no C2ty data base ava2lable to set goals,
the cr2ter2a used to develop the MBE construction program were
prov2ded by Caltrans.
If a construct1on project 15 over $1,000,000, SlX percent of
that amount should go to a minor2ty contractor or subcontractor
and two percent should go to a fe~ale contractor or
subcontractor. The Wilsh1re ProJect is over the $1,000,000 llmlt
and atta2n2ng ltS goals. Infor~at1on that contractors and
subcontractors submlt regard1ng the2r ~inorlty or fe~le owned
status lS ver1fled before approval of pay~ents and ~on1tored on a
~onthly bas1s. It is extremely lmportant that they ~a1ntaln
thelr status throughout the llfe of the proJect because federal
funds would be lost 1f the C1ty were not 1n co~pl1ance wlth
regulat1ons.
Although the Department of Community and Econo~ic
Development has overall respons2bil1ty for the Commun1ty
Development Block Grant Program, CDBG pub12c works constructlon
contracts are adm1nistered by the Department of General SerVlces.
The current contract format 1ncludes an afflr~t1ve act10n
provls1on Which states that the contractor shall comply w1th
Tltle VI of the C1V21 R1ghts Act.
When intervlewed, General Services staff lndicated that
there are no other specif1c affirmatlve act10n requ1rements and
any afflr~tlve action activltles that do eXlst are not
monitored.
12
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e
Contracts do, however,
requ~re that preva~l~ng wages are
pa~d and th~s ~s ~on~tored through a review of a ~onthly
cert~f~ed payroll and lntervlews w~th e~ployees. If lt 1S
deter~~ned that an e~ployee 1S not rece~vlng prevail1ng wages.
the contractor 1S contacted and provlded the opportun1ty to
demonstrate payment of preval11ng wages through check stubs.
Usually, differences are clarlfled or the contractor complies.
If the contractor refuses to comply. the~r name ~s submltted to
HUD. HUD places their na'TIe on a "Debarred" 11st and these
contractors
ent1.tles.
are
not ellgible to contract with govern~ent
VI. ~BE PROGR&~S IN OTHER PUBLIC AGENCIES
Dur1ng the course of this study, lnformat1.on was obta1ned
fro'TI a number of public agenc1.es regard1.ng the1r Minorlty
Bus1.ness Enterprise Programs. A survey of MBE partlc1patlon 1n
state and local governments prepared by the National Inst1tute of
Governmental Purchaslng (NIGP) was also obtalned. The general
f1nd1ngs were that for'TIal MBE programs are not widespread nor
part1cularly well developed.
13
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~BE Partlc1pat1on 1n State and Local Governments
The NIGP report addresses
~lnor1ty buslness part1c1pat1on
the level and character of
1n the est1~ated $280 b1ll1on
state and local government purchas1ng ~arket. It 1S estl~ated
that ~lnorlty bUSlnesses currently obtaln between $300 and $350
~llllon In state and local government contracts, or a llttle OVer
1 percent of the total.
The study revlewed a nu~ber of program operational patterns:
A
~ajor
vehlcle
for lncreas1ng state and local
governmental contract opportunlt1es for ~lnor1ty bUSlnesses is
the s~all purchase. generally contracts of up to $5,000. Some
governments do have ~lnor1ty bus1ness subcontract requlrements
(not related to Federal grants), part1cularly ln construct1on.
Some reVlew specificat10ns to try to break the~ down to enhance
the posslbllity that ~lnorlty businesses can sub~it blds.
- Few purchasLng departments have staff, either full-time or
part-tlme. to help promote ~inorlty buslness opportunltles. but
where such staff do exist they play a ~aJor role. Federal
fundlng for staff ald eXlsts 1n Oakland (one person), San Antonio
(two persons) and PhoenlX (one person). Very few purchaslng
departments have taken steps to help stlmulate buyers to pro~ote
~lnor1ty buslness.
All ~inorlty buslness programs surveyed operate through a
competitive process. Where procure~ents are set-aslde for
~inorltles, the ~lnorlty bUS1nesses co~pete a~ong themselves for
14
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e
the
contracts.
M1nor1ty
bUS1nesses do beneflt fro~ the
appllcatlon of geographlc preferences and avallablllty of s~all
buslness progra~s 1n so~e governments.
Clty of Oakland
The Clty of Oakland has the ~ost extenSlve MBE program
dlscovered 1~ the course of thlS study. To date, there have been
no successful legal challenges of their program.
Before discusslon of the Clty of Oakland's Afflr~tlve
Actlon
Program,
so~e general lnfor~tlon and demographlcs
concern1ng the Clty may prove benef1clal. The C1ty'S operating
budget for f1scal year 1982-83 15 $220 ~lllion. As of June, 1982
the Clty employed 2,875 indlvlduals. The population of Oakland
1S 380,000 and 68 percent of the populatlon 1S minorlty.
Four years ago, the C1ty of Oakland adopted an Afflr~at1ve
Actlon Program for formal purchases of suppl1es and com~odltles.
The 1mplementatlon of this program requlred an ordlnance change.
The Clty's program has a b1d preference mechanlsm for local
mlnorlty suppllers. Th1S ~chanlsm lS only applicable in the
b1ddlng process for purchases of supplles and commod1t1es.
~he program 1n sum~ary:
Establishes a preference of 5 percent for local vendors
and 10 percent for local ~lnority vendors in evaluat10n of all
awards on sealed bids. Th1S is the only local minor1ty vendor
preference program we located in the State of Callfornia.
15
1
.
e
- Establ1shes a ~lnor1ty Suppl1er Development Program. This
lncludes search1ng out and ass1s~lng ~lnorlty suppllers 1~ the
b1ddlng process. A posltlon for ~lnor1ty vendor deve1op~ent was
created 10 the Purchas1ng Depart~ent to carry out th1S effort.
The U.S. Department of Com~erce, Offlce of ~lnor1ty BUS1ness
Enterpr1se has funded thlS pos1t1on.
- Requlres vendors on contracts exceedlng $15,000 to fl1e an
Affir~atlve Action Plan which out1lnes the present work force and
the vendor's plan to achleve populatlon parlty for the area 1n
WhlCh they do business. Th1S ~ust be done to be cons1dered a
responslble bldder.
- Requlres vendors to file notlce wlth unions, when blds are
in excess of $50,000 and when e~ployment in the flr~ exceeds 50.
In 1981-82, the MBE partlcipatlon goal was 15 percent. The
Clty awarded 59 percent of total expendltures to Oakland vendors
and 22 percent to ~inoritles 1n that year. By comparison, Just
two years before, mlnorlty suppliers rece1ved only 10 percent of
the total dollar volume. The amount expended on bid purchases In
fiscal year 1981-82 was $5.4 ~illlon. Based on past perfor~ance,
the five year goal of 26 percent for ~lnorlty suppllers set in
1978 w111 be achleved by the end of flscal year 1982-83.
The fee11ng of staff when lnterv1ewed concern~ng their
success and the effect1veness of the program is that lt has
worked well, perhaps too well, because publlC pressure recently
has been to 1nclude the preference ~echanism 1n the Public Works
16
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e
Program. ThlS would cost the Clty a substantlally greater a~ount
because these contracts are conslderably larger.
In
addltlon
to
their Afflrmatlve Actlon Progra~ In
purchaslng,
the Clty of Oakland also ad~lnisters Afflr~at1ve
Actlon Programs In the areas of capltal 1mprove~ents and
professlonal serVlces procurement.
rhe Capltal I~provements Afflrmatlve Actlon Program was
adopted in Aprll of 1979. The goal for thlS program In 1979-80
was that 22 percent of the total dollar amount expended was to be
awarded to mlnorlty flr~s. In fiscal year 1980-81, 32 percent
was awarded to such flrms and in 1981-82, 48 percent was awarded.
The total dollar amounts expended for these years are the
fo1lowlng: 1979-80, $6.6 ~1111on; 1980-81, $27 ~llllon
(conventlon center built): 1981-82, $8-9 ~llllon. The goals for
this program have been met every year.
In fiscal year 1982-83 $100 ~lll10n 15 budgeted for the
City's Capltal Improvements Program. ThlS 1ncludes a large
re-development proJect. As of July 1, 1982, the Clty Councll
approved the followlng Affir~ative Action goals for constructlon
proJects: 30 percent ~inorlty and 5 percent female. Half of the
30 percent ~st go to small minorlty flr~s and half of the 5
percent ~ust go to small fe~ale owned firms.
The profess1onal services affirmatlve action program was
~mplemented approxlmate1y two years
1981-82, the budget was $3.9 mlll~on.
ago. For f~scal year
Goals establ~shed at that
17
e
tit
t 2 'TIe
were
36
percent
'TIJ.norJ.ty
and
12 percent female
part2cJ.pation. The C2ty ~et the fe~ale partJ.c2patJ.on goal and
fell one pOJ.nt short of meetJ.ng the 'TIJ.norJ.ty part2cipatJ.on goal.
The rev2sed goals for 1982-83 are 40 percent ~J.nor2ty and 15
percent female partJ.cJ.patJ.on.
In all three of the Aff1r~atJ.ve Act20n Programs, pUblJ.c
awareness and support were clted as strong factors for thelr
success. Starf support for these programs has been provlded by
exist1ng staff WJ.th the except10n of the one federally funded
staff positJ.on J.n the ~1nor2ty Supp11er Development Program.
Evanston, I11J.n01s
The populatJ.on of Evanston, Illlnois 1S approxJ.mately 75,000
with the CJ.ty emploY1ng 800 2nd2vlduals. The operat2ng budget
for the City 1S $40 ~illion. This does not include thelr Capltal
l~provements Program.
In late 1973, Evanston passed an 1nnovatJ.ve resolut1on WhlCh
establlshed an Afflrmat1ve ActJ.on PurchasJ.ng Program, known
locally as the "set aS1de" program. The five baS1C ele'1lents of
the progra'1l are the followJ.ng:
- Contracts between the C1ty of Evanston and contractors for
the purchase of goods and/or serVlces contain a clause whlch
commits the contractor to actively SOllCJ.t blds for the
subcontractlng of goods or services fro~ quallfled minorJ.ty
businesses.
18
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The
resolution
also requ~res that the Purchasing
Department establ~sh and ~a~ntaln a current resource llSt of
y!unor~ ty
lncludec.
buslnesses,
~n all
and that appllcable ~lnorlty bUSlnesses be
sollcltat~ons for serVlces and ~ater~als
contracted for or purchased by the Clty.
The Clty ~anager develops an annual purchaslng program
wh~ch sets aSlde speciflc projects and commodltles whlCh are to
be reserved for bidd~ng by small ~BE's. Deter~lnatlon of which
projects are "set aSlde" 15 based upon the avallabll~ty of
competltlon among small minor~ty contractors, and the
avallabillty of contractors able to perform the speclf~c serv~ces
requested.
The resolutlon also states that perfor~nce bonds may be
walved lf the acquis~tlon of the bonds tends to dlscourage
~lnorlty partlclpat1on; When a perfor~ance bond 15 not absolutely
necessary for the Clty'S protect~oni or when an alternatlve means
of protecting the Clty can be used.
Flnally, appropriate ad~lnistratlve departments ~ust give
aSslstance to MBE's ~n the preparatlon and sub~isslon of bids.
In discussion wlth Clty Manager's staff concernlng their
"Set Aside" program, they lndlcated some problems wl.th the
program. The program not only requlres that the vendor or
contractor be a ~lnorlty or female owned flrm, but that the
mlnorityjfemale lnterest actually have a slgniflcant role In
~anagement of the operatlon. Verif~catlon of thlS has been
19
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d~ff~=ulta
The staff also stated that they do not estab11sh
set-as1de goals 1n ter~s of annual dollar a~ounts. Dur1ng the
budget process they review 1te~s that ~ay be amenable to "set
aS1de". Staff support for this progra~ lS prov1ded through
eX1stlng staff.
Clty of Los Angeles
The Clty of Los Angeles has a
The breakdown of the population is
percent h1spanlc, 16.7 percent black,
percent Amer1can Indlan. The current
C1ty is approxl~ately $1.4 bl11ion.
populatlon of 2.9 ~llllon.
47.8 percent whlte, 27.5
6.6 percent ASlan and .56
operatlng budget for the
The Slze of the Clty of Los Angeles proh1bits a deta11ed
discussion of thelr ~any efforts at Aff1rmatlve Actlon. However,
the Mayor's Small, Local, Buslness Program 15 noteworthy.
The Mayor's Office houses a Small, Local, BUSlness Progra~.
This program was establlshed through the adoptlon of an ordlnance
1n June, 1980. This ordlnance establlshed a flVe percent
preferential advantage on bids for clty contracts under $20,000
for small, local businesses. This program is ad~inlstered by a
~anager and an Admlnlstrat1ve Assistant. Although the Clty has
not establlshed performance goals, the followlng lnformatlon
reflects accompllshments dur1ng the flrst full calendar year of
the program.
20
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Dur1ng calendar year 1981, the S~all, Local BUS1ness program
reported a very ~odest level of act1vlty by the Clty'S four
1nvolved departmental procurement authorlt1es wlth only 49 awards
to small firms for a total of $117,205. By contrast, the
ent1re C1ty of Los Angeles awarded over 24,296 contracts
totalllng 8224,000,000 during thlS per1od. Of the 49 contracts
awarded under the program, flve were to mlnor1ty f1r~s who
recelved a total of $30,645 or 26 percent of the total.
Under thlS program, it appears that mlnorlty vendors are
showing a higher rate of partlclpation than was reported dur1ng
1981 1n other procurement programs. Of the $224,000,000 1n
procurement contracts awarded by the Clty overall, less than 1/2
mllllon dollars were awarded to mlnorlty vendors and suppllers.
Com~ents by those departments implementing the ordlnance and
those recelved from lnterested bus1nesses and trade assoclations
1n the greater Los Angeles area seem to lndlcate that 1f the
intent of the program 1S to stlmulate more buslness opportunlt1es
for small buslnesses wlthln the Los Angeles area, the program
should be somewhat amended. Suggested changes lnclude expansion
of the program to lnclude other clties wlthin Los Angeles County~
lncreaslng the $20,000 contract lim~t: and l~ple~entatlon of an
addlt10nal 5 percent preference for those mlnor~ty bUSlnesses and
suppllers who fall wlthin the program definltion of a small
business.
21
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~lnorlty
vendors and suppllers have been partlcularly
crltlcal of the geographlcal ll~ltations of the program and the
$20,000 contract li~lt currently in effect.
Seattle, Washlnston
~he City of Seattle approved an ord1nance 1n June, 1980,
Wh1Ch establ1shed requ1rements for ensurlng full and equltable
opportun1t1es for women and ~lnorlty bUS1ness enterprlses to
provlde goods and serV1ces to the City. C1ty wide annual goals
were establlshed. These goals are expressed 1n ter~s of the
percentage of total dollar value of all contracts awarded by the
C1ty.
In addlt1on, goals were set for the Board of Public Works in
1980-81 of 15 percent for ~lnority bUSlness enterprises and 3
percent for women's bUSlness enterprises. In conversations w1th
staff, we learned that ~BE partlclpat1on, durlng 1980-81, came
very close to ~eetlng the 15 and 3 percent goals. Staff
resources for thlS proJect lnclude the Dlrector of the Department
of Human Rlghts and twu professlonal staff ~e~bers.
Oranse County Transit Dlstrict
The orange County Translt Dlstrlct (OCTD) also admlnisters a
~inority Buslness Enterprlse Program. The objectives of the
program are: to 1dentlfy fir~s owned and controlled by
~inorlties and women wnlch are capable of providing needed
serVlceSi to develop and distr1bute lnfor~atlon, directed towards
famlllarlzlng ~inorlty owned firms of the Dlstrict's contractlng
22
_ e
and procure~ent procedures and requ1rements7 to develop necessary
1nterdepart~ental relatlonshlps
facil1tate i~plementatlon of
WhlCh w1ll
pro~ote, foster and
the progra~7
and flnally, to
contr1bute to the econO~lC stab1l1ty and growth of ~lnor1ty owned
f1r~s 1n the County area.
The OCTD has developed a bid book of ~lnorlty bUSlnesses 10
addltlon to utl11z1ng other d1rector1es and organlzatlons WhlCh
~alnta1n llstlngs of ~lnority buslnesses as references.
Conversat1ons wlth the MBE Offlcer provlded lnfor~at1on on
the success of thelr program and factors to cons1der that ~ay
ensure a ~ore effectlve ~BE program. The MBE Off1cer felt that
thelr program had been qUlte successful. They have always ~et
thelr goals, wnlch he cautloned should always be reasonable and
developed using spec1fic criterla. OCTD establlshed goals In
1982-83 1n three areas:
General SerV1ces (supplles)
Consultants
Construct1on
~BE
7%
2%
12%
WBE
2%
1%
5%
I~lementation of controls to ensure that buyers are
search1ng out ~lnorlty and women owned bUSlnesses and the
attltude of the buyers are key ingredlents to the success of an
~BE program, accordlng to staff. In ter~s of resources allocated
to their MBE program, the MBE offlcer is assigned full-ti~e to
thlS program wlth some support staff.
23
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e
Hartford, Connect~cut
In August, 1977, the C~ty of nartford, Connect~cut ln~t~ated
a Minor~ty Contractor Partlclpatlon Program for competltlvely bld
federally funded constructlon proJects. Th~s program ~ncludes a
10 percent ~lnorlty and women owned bus~ness utl1~zatlon
require~ent. The Cauncll later deter~lned that ~BE partlc~patlon
requ1rements should be expanded to 1nclude all constructlon
contracts funded through the Clty. The 10 percent ut111zation
requ~rement lS now a ~lnl~Um require~ent. D1SCUSSl0ns wlth the
staff person asslgned to thlS proJect indlcate that they have had
diff1culty 1n ~eetlng the 10 percent requ1re~ent.
San Francisco
ThlS Clty does not have a for~al MBE program. However,
accordl~g to staff, buyers are constantly 1n search of ~inor1ty
flrms. Small local bus1ness and MBE particlpat10n 1n the City's
purchaSlng program is also encouraged by local pol1t1cians.
San Jose
The Clty of San Jose establlshed a Contract Compllance
Offlce through the passage of an ordlnance ~n 1970. ThlS office
has developed a MBE D~rectory which ~ncludes small, minorlty and
wo~en owned buslnesses.
The Dlrector of the Contract Compllance Offlce stated that
thelr ~BE partlcipatlon efforts have been informal 1n the past.
Although ~lnorlty particlpatlon has not been a for~al part of hlS
24
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e
progra~, he has concentrated efforts L~ this area w~th the
asslstance of one other staff ~e~ber. Accord~ng to the Dlrector,
the C~ty Councll has recognized the need to for~allze a ~BE
program, and he wlll soon present a ~BE program with establlshed
goals, to the Councll for the~r cons1derat1on.
San Dle90
The C1ty of San D1ego establ1shed the Office of Small
BUS1ness ASs1stance ~n 1977. The baslc goal of the program 15 to
lncrease the a~ount of ~oney the City expends with ~lnorlty and
Women Bus1ness Enterpr1ses. \Vhen the program began In 1978-79
the level of Clty spendlng wlth these k~nds of bUS1nesses stood
at 2 1/2 percent. A goal of 10 percent was establlshed. At the
end of that year, Clty expenditures with ~BE/WBE's stood at 8
percent. The goal was then ralsed to 15 percent where It has
remalned s~nce that t1~e. In flscal year 1979-80, MBE and WBE
flr~s were awarded $8,065,516 or 17 percent of the total dollar
volume. The total amount spent in that year for the purchases of
goods and serVlces, contracts and subcontracts for City
construction proJects and other commerc1al deal1ngs was $47.8
~ll110n.
In flscal year 1980-81, a total of $46.3 ~llllon was
expended in the purchases of goods and services, construct~on
contracts and sub contracts. The goal for ~~nor~ty partlc~patlon
in th~s program was $6.5 ~~ll~on or 15 percent for that year.
Th~s goal was accompl~shed. The Dlrector of the Purchasing
Department stated that the only problem they have encountered
25
.
-
w~th th~s progra~ ~s the verlflcatlon of the ~lnorlty status of
vendors. The Small Bus~ness ?rogra~ also produces a ~BE
Dlrectory. Th~s progra~ lS supported by the Dlrector and one
ad~~nlstratLve staff person.
Another progra~
thelr less for~al
contractors/vendors
Wh1Ch the Dlrector felt was noteworthy lS
Affir~at1ve Act10n effort of reqU1rlng
to lnclude Afflr~atlve Action Progra~s 1n
thelr own personnel strUcture. It 1S the POllCY of the
Purchaslng Department that a vendor ~ust sub~it an acceptable
Afflr~atLve Act~on Progra~ before they can be consldered to be a
responslble b~dder for contracts over $10,000.
Whlle basic purchaslng tenets are stlll the prlnclpal
gUldellnes ln the selectlon of a vendor (lowest bldder usually
chosen), If the lowest bidder does not have an Afflr~atlve Actlon
Program, they are usually requlred to agree to Afflr~atlve Actlon
compllance prlor to award of a contract and generally provlded a
year to show progress. If the vendor has not co~plled, or shown
good faith efforts, they are not usually consldered responsible
bldders for future dealings wlth the Clty. Afflr~ative Action
goals are based upon census flgures and reflect the populatlon
composition of the Clty of San Diego.
State of Californla
The State of Callfornia, Department of General Servlces,
ad~lnlsters a five percent Bld Preference Program for s~all
26
"
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e
OUS1~esses through the1r S~all BUS1ness Off1ce as well as a
~1nor1ty Bus1ness Enterpr1se Program through tne Offlce of
~lnorlty BUSlness Enterprlse (CAL-O~BE).
The flve percent Bld Preference Program was ~andated by the
State legls1ature 1n January 1974 to help small bUslnesses
develop and become ~ore competltlve.
To be consldered a responslble bldder, a business must be
prequallfled and certlfled as a small bU51ness accord1ng to
regulatlons deflned by the department. F1ve percent of the old
lS computed and then the amount of the b1d lS reduced by that
amount for purposes of tabulat1ng the low bld. The contract is
awarded for the actual amount of the orlg1nal bid. Once a flrm
lS certlfied, It 15 lncluded on a listing sent to departments
throughout the State.
The program funct10ns of CAL-OMBE are: to expand
procurement and contract1ng oppor~unities for ~inorlties and
women owned bUSlnesses Who wlsh to particlpate 1n the State's
purchaslng system; to work wlth State agencies 10 asslsting the~
to ldent1fy buslness resources, establlsh POllCY, and 1mplement
an open and equltable purchasing system. The State has not
establ1shed speclf1c goals for th1S program. CAL-OMBE also
maintains a statew1de d1rectory Wh1ch 15 distrlbuted to
lndlvldual State departments.
Staff lndicated that the Small Business Preference Program
has generally been very successful. In 1980-81, approximately
27
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$15 - $20 ~ill1on was spent 1~ the area of construct~on. The B~d
Preference Program played a part approxl~ately 20 percent of the
t Ene.
Durlng thlS same per1od,
approxl~ately $100 ~llllon was
spent for com~odlties.
The preference program cost the State
approxl~ately $400,000-$500,000. Staff also stated that 1t has
been the~r exper~ence that co~pet~t~on In the blddlng process has
lncreased as a result of the preference progra~ and that ~any of
the s~all businesses were also ~lnorlty buslnesses. Speclfic
data from Cal-OMBE was not avallable.
A Survey of MBE Programs ln Other Pub11C Agenc1es
Flna1ly, a local vendor preference survey of other
Ca11fornla publlC agencles conducted by the City of Oakland In
July 1982 provlded the followlng summary information:
Local
Local ~lnorlty
Agency Vendor Vendor Authorlty Com'llents
Berkeley 3% 4% None Reco'lt"Tlendatlon
to City Manager
10/5/82
San Leandro 5% None Charter Use only for
1978 $1,000 to $5,000
CJ..ty of 5% ;:.:Tone Charter Councl1 recommends
Alameda 1930 use
Eureka 5% None Charter Except Servlces
1959
*Long Beach 1% ~one Charter Tax rebate
*Pasadena 1% None Resolutlon Tax rebate
*City of 1% ~one Department Tax rebate
San Dlego POI1CY
*Orange 1% None Charter Tax rebate
*Santa Monlca 1% None Charter Tax rebate
*West Covina 1% None Charter Tax rebate
*San Jose .9% !.'lone Departrnent I'ax rebate
Policy
Baldwln Park None None In reVlew -
C~ ty Manager
considerlng
San Mateo Co. None None
City and County
San Franclsco None )lone
28
",
~
It
Alameda County None ::;rone
Oakland PubllC
Schools ~one None
Clakland Houslng
Authorlty None None
San FranC1SCO
Houslng None None
Authorlty
Port of
Oakland None None
AC Trans1t None :::rone
Bay Area Rapld
l'ransl.t None ~one
East Bay Water
::Jlstrlct None None
Hayward ::;rone None
Emeryvl.lle None None
L.A. School
District None None
L.A. County None None
City of None None
Santa Barbara
South San
Francl.sco None None
*Notation: ~he one and.9 percent local vendor preference
'l1.echanl.s'l1. 1ndl.cated for several clties 15 a local sales tax
rebate. If two vendors sub~l.t 1.dentlcal low bids and one vendor
is located withlu the City Ilmits, then the contract l5 generally
awarded to the local vendor because the net cost of thlS contract
1.S the lowest cost to the City.
VII. CONSTRAI~TS/pARA~ETERS
In
cons1.derl.ng
the development of a more for~alized
Afflrmatlve Actl.on procurement program for Santa ~onica, legal
parameters and constraints should be carefully revlewed and
dlscussed.
Good purchaslng princl.ples requlre the development of falr,
competl.tive lnformal and formal bl.d processes. Exceptl.ons to
these processes should be equl.tably and openly defined and
ad'l1.in1stered (i.e. sole source, professl.onal contracts, emergency
purchases,
waivl.ng
of
bl.d bond requl.re'l1.ents).
Effectl.ve
29
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purchasing pract1ces should 1nsure that the acqu1s1t1on of a
serVlce, supplles, or equ1p~ent 15 ~ade fro~ a respons1ble bldder
at the lowest and best b1d to lnsure that a h1gh qual1ty of
serVlce 1S obtalned for the Clty.
One of our flndlngs early In the process of researching thlS
subJect was the lack of any cons1stent, generally accepted ~eans
of enhanclng afflr~atlve actlon procurement efforts a~ong varlOUS
agency legal staffs.
Staff fro~ Santa Mon1ca Clty Attorney's Offlce have been
consulted regardlng various approaches and shared concerns
addressed by other legal counsels. They have, however, provlded
so~e pre11mlnary gUldance and co~~ents WhlCh are lncorporated 1n
thls dlScuss1on. In general, the City Attorney's staff has
advlsed that any established goals ~ust have a logical
relatlonship wlth the ~eans to reach them. While efforts to
rectlfy past discrl~inatlon ~ay be acceptable, they cautioned
aga1nst adopt1on of any progra~ Wh1Ch ~lght have antl-trust
lmpllcatlons.
B1dd1ng preference ~echanisms should be very carefully
revlewed. Whereas legal oplnions have been rendered in other
Jur1sdictlons allow1ng the appllcat10n of a f1ve percent
preference for~ula for small local bus1nesses, legal oplnlons
have also pointed out that g1ving a preference to vendors on the
baS1S of race or ethnlc background ~ay be a den1al of the due
process provlsions of the Flfth A~end~ent of the U.S.
Const1tutlon. In addlt1on, Santa ~on1ca's C1ty Attorney's staff
30
e It
felt that any geographlc preferenClng of an area less than Los
Angeles County ~lght be questlonable.
Opinlon number 77-8 issued by the Offlce of the Clty
Attorney In Los Angeles stated the followlng w1th regard to that
C1ty'S preferenclng of small, local bus1nesses:
"Here, however, the flve percent preference for small local
businesses would not proh1bit any contractor fro~ sUb~lttlng a
b1d. Rather, the proposal w111 encourage a greater nu~ber of
contractors to SUb~lt b1ds than rnlght be the case w1thout ~hlS
program. The award of such a contract would be ~de to the
lowest small local bUSlness whose bid, 1f not actually the lowest
of all blds, is not more than flve percent above the bid of a
contractor Who is not a small local buslness. Providlng a slight
advantage to small bUSlnesses to compete wlth larger contractors
for quallfying City contracts should stlmulate competltlon by
encouraging more buslnesses to submlt bids."
"Set Aside" programs 'l1ay also pose some legal problems 1.n
that they restrlct blddlng and prohiblt certaln contractors from
submitt1.ng blds. These actions could be lnterpreted as
restrlcting free enterprlse. Recently, 1n an Alabama court case,
the State Supreme Court declared that a "Set AS1de" program 1n a
Clty in Alabama was 1n vlolat1on of the U.S. Constltution.
~eans of addresslng the co~positlon of an employer's
workforce were also discussed wlth City Attorney's staff. While
it may be posslble to lmplement a for~ of Affir~at1ve Act10n
31
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report~ng syste~ on so~e contracts,
lt was not felt to be
feaSlble to cons~der restr~ct~ons or require~ents for an e~ployee
to h~re local resldents or other targeted types of employees.
Further,
lt
was not felt that requ~rement of unlon
~e~bersh1p on the part of a vendor's workforce was posslble.
~~
~~
should be noted that we were unable to locate any agency Wh1Ch
had l~ple~ented a program relat1ng to un~on affil1at1on as part
of an ~BE effort. The program wh~ch per~pherally addresses th~s
lssue 15 the preva~llng wage requlrement 1n ~any constructLon
contracts.
One of the prlnclpal reasons identlrled for absence
of targetlng unlon1zed employers 15 that lt can exclude s~all
~lnor~ty owned flrms.
OPTIONS/LEVELS OF INVOLVEMENT
VarlOus levels of lnvolvement are poss1ble In the City's
effort to atta1n greater aff1rmat1ve actlon 1n the areas of
purchaslng supplies and equ1p~ent,
cap1tal lmprove~ents, and
profess1onal services.
Some of the many optlons that are available are summarlzed
1n thlS sectlon.
1. Outreach and Networking -
Durlng our reV1ew of purchasing and contract1ng procedures
within the C1ty and dlSCUSSlons wlth staff, lt became apparent
that
outreach
to local,
small,
mlnor~ty and women owned
bUS1nesses 15 d1SJointed and sporadic.
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Outreach can occur ~~ var~ous for~s. One poss~b~l~ty would
be for the C~ty to sponsor procure~ent se~~nars to prov~de
information to the publlC on the competltive biddlng process and
purchas~ng procedures. These sem~nars could be publ~c1zed ~n
local papers, trade bulletlns, bll~ngual papers and announce~ents
posted throughout the co~~un~ty. Staff should be available at
these se~~nars to provlde technlcal asslstance and ~nfor~at~on on
future needs for proJects, suppl~es and equ1pment.
Another form of outreach would be to estab11sh for~al
relat~onshlps with S~all and Mlnor~ty BUSlness Clear~nghouses.
These organ~zatlons eXlst in northern and southern California to
connect the consultant/vendor with the buyer as well as provide
support to fir~s to enable them to partlclpate more act~vely ~n
the bidd~ng process. Some of these organ~zat1ons are descr1bed
1n the accompanY1ng appendices.
The use of these networklng approaches would not requ1re any
changes 1n present ordinances and would certainly expand the
City's outreach efforts.
2. Compilatlon of ~BE Directorles and EXFanslon of Santa
Mon~ca's M~nority Vendors L~st
Var~ous types of contracts and purchase orders are s~gned
al~ost da1ly throughout the C~ty. However, affir~at~ve actlon
consideratlons ~n dec1s1on-~ak~ng have occurred on a lim1ted
bas1s.
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The Purchas~ng Department, as was ~ent~oned earl~er, has a
report~ng system ~n place WhlCh ~dent~f~es ~~nor~ty and women
vendors that the C~ty has done bus~ness ~ith. Th~s l~st as well
as other ~BE!WBE d~rector~es could be used by departments to a
greater degree in ~dentlfy~ng small, local, ~lnority and fe~le
owned buslnesses when purchasing suppl~es, serv~ces and
equ~pment. Updates could eas~ly be lncorporated ~nto th~s sytem
and could be d~str~buted on a perlodic bas~s to departments.
Departments us~ng buslnesses ~dentif~ed in the report could be
requested to report their satisfaction or dlssat~sfact~on wlth
the serv~ces recelved.
Th~s w~ll help ~nsure that services
provided to the C~ty are of a quality nature and ass~st in the
~on~tor~ng effort.
3. Affir~ative Act~on Plans
Aff~r~at~ve Action Plan requ~re~ents could be implemented
for selected construction and profess~onal serv~ce contracts.
An Aff~r~at~ve Act~on Plan could be requlred for a f~r~ to be
considered a responsible bidder on proJects ~n excess of a
certain dollar amount. VarlOUS options could be set forth in the
spec~f~cat~ons to enable a contractor to ~eet the Clty'S
Aff~rmative Action requlre~ents. An example of th~s concept is
that profess~onal serv~ces or other contracts awarded to ~aJor
flrms could accept assignment of women or ~inority employees to
the part~cular proJect as be~ng a good fa~th aff2r~atlve action
effort.
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4. Establ~sh~ent of Goals
The establish~ent of targets should eventually be part of
the C~ty's Aff~r~at~ve Act~on proc~re~ent efforts. Factors that
should be cons~dered ~n establlsh~ng goals ~~clude the number of
small, female and ~inor~ty owned bUs~nesse5 ~n the area and the~r
ability to prov~de the specif~c serv~ces needed. Populatlon data
should also be taken into account. The establ~shment of goals
~dentlf~es a POllCY ob)ect~ve and encourages staff to be
conscient~ous ~n their affirmative action efforts.
5. Set Aside Pro9ram
A "Set As~de" Program would ldentlfy spec~f~c proJects and
comrnod~t~es which are to be reserved for b~dding only by selected
bus~ness enterpr~ses.
The deter>n~nat~on of wIn.ch proJects would be "set aside"
would be based upon the ava~labllity of compet~t~on among small
~~nor1ty contractors and the ava~lab~llty of contractors be~ng
able to provide the spec~fic serv~ces required. Of all options
explored to date, a set aside program appears to entail the ~ost
co~plex legal quest~ons - antl-trust concerns belng not the least
of them.
6. Wa~v~ns or Lowerins of Bond Requ~rements
Another tool used to encourage s~allr m~norlty and female
owned businesses to bld for contracts 25 to wa~ve or lower bid
bond requ~rements.
~inority enterpr~ses, because of l~m~ted
35
It tit
track records, and small Job exper~ence often find Lt d~ff~cult
to secure a b~d bond.
Th~s requ~rement has been successfully wa~ved by other
cLtLes when Lt has been deter~ined that Lt was not absolutely
necessary for the CLty'S protectLon or when alternatlve ~eans of
protectLng the City could be e~ployed. Santa ~onica has recently
begun to use thLS tool to encourage ~LnorLty partlcipatLon in
purchas2ng. Performance bond requ2rements ffilght also be reviewed
for posslble ~odlficatlon.
7. Preference
Preferenclng progra~s can be very helpful Ln increasing the
number of small and mlnorlty businesses partlclpatlng in the
biddlng process. As was dlscussed earlier, both the citLes of
Los Angeles and Oakland have employed "Preference Programs" for
small and/or 'TILnorLty bUSlnesses. Under preference programs, a
certa~n percentage 15 deducted from a vendor's bld for tabulatlon
purposes. However, contracts are awarded for the full amount of
the bid. A five percent preference 1S a commonly used factor.
In L~lementing
ensure that posslble
under the 14th and
such programs, care should be taken to
vlolation of the due process provLSlons
5th Amendments of the Constitution of the
UnLted States does not occur. As wlth a set-aslde program, legal
advlce on specLflc parameters of a proposed program would be
necessary prlor to further consLderatlon.
36
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8. Eliglhlllty of Fir~s
Another
tool that Santa ~onlca ~ay wish to conslder
lmplementlng is the use of screenlng references such as the
Debarred, Suspended, Inellglble and Contractors and Grantees 11St
publlshed
by
ilie
U.S.
Department
of
Housing and Urban
to whether other
Develop~ent. Inquirles are belng ~ade
agencles publlSh sl~ilar llstS.
as
It wlll also be lmportant to develop mechanlsms to verlfy
bonaflde minority and women-owned flrms. Criterla could lnclude:
tlme in buslness; contrlbution of tlme or capltal of
~inorlty/women owners; role in ~anagement; and share of risks
and/or proflt.
9. Pa~ent Schedules
Flnally, the Clty could use the optlon of provlding an
advance payment schedule for small mlnorlty and female owned
buslnesses to ease cash flow problems. Information that thlS
optlon eXlsts could be provided by staff at procurement seminars
sponsored by the Clty or be included wlth the specificatlons.
RECOMMENDATIONS
The followlng recommendations are based upon lnterVlews wlth
City offlclals and other indlvlduals knowledgeable about ~inority
Buslnes5 Enterprlse (~BE) programs, as well as an analysls of
Santa Monica's current efforts and capabllitles. Slnce thlS is
an
extremely
complex undertaking,
we are recommending an
37
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1ncre~ental 1~ple~entat1on approach.
The progra~ should be
developed and ~~ple~ented uneer the d~rect~on and support of
staff fro~ the C1ty Manager's Off1ce, Personnel, Purchas1ng and
General Serv~ces.
Per~od~c reV1ew and co~ents by the C1ty
Counc1l, Women's Commission and other bus1ness and com~un1ty
organizat1ons
w1ll
also be 1~portant 1n ref1n~ng program
components.
The recom~endat10ns place emphas1s on
capaC1ty build~ng
act~v1ties for the f1rst year. The activities out11ned below are
proposed to be undertaken by ex~st1ng staff w1th an assessment of
progress and obJect~ve setting for 1983-84 to take place dur1ng
the budget d~scussions.
1) The fundamental component of any aff1rmative action
effort
1S
the ab11ity to collect,
retr1eve
and analyze
stat1stical performance data.
W1thout accurate 1nformat~on,
realist~c goals cannot be estab1~shed nor performance ~onitored.
At th~s t~~e,
the City's capabi11ty to gather 1nformat~on and
comp11e a data base 15 extremely lim1ted and incons1stenc1es have
even been 1denf1t1ed 1n the eX1st1ng report1ng mechan1sms.
As a first step, ~t 1S recommended that the data base be
expanded to include information on: the names of minor1ty and
women vendors; type of serv~ces provided; number of purchase
orders and/or contracts 1ssued to these f1rms;
and dollar
amounts. Th~s inforrnat1on should include open purchase orders and
be d~vided into the three ~aJor areas we expend monies ~n:
supplies and equ1pment,
capital construct~on and professional
38
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serVlces.
Development of regular quarterly reportlng procedures
and a ~onltorlng system by Purchas~ng, General Servlces and other
key departments should be part of the overall system. ~anage~ent
Services wlll take the lead 1n l~plementlng th1S recom~endatlon
w1th staff support provided by the depart~ents of Personnel,
Purchaslng, General SerVlces and Data Processlng.
After the lnit1al system development, staff support required
would be m1nl~al and the informatlon retrleved would be
lnvaluable for reportlng, ~onitorlng and goal settlng purposes.
ThlS system should be developed and operatlng by the end of 1983.
2} It 25 lncumbent upon the City to make greater efforts to
prov1de opportunltles for mlnorities and wo~en to partlclpate 2n
the C1ty'S procurement and contractlng systems. Therefore, It is
recommended that outreach be greatly expanded as part of the
overall capacity bUlld1ng effort. Aggressive outreach is an
essent1al component to any successful afflrmatlve actlon program.
The C1ty'S outreach program wl1l be expanded through
lmplementation of the followlng activltles:
a. Information
dlsseminated to
on the Clty's ~BE
department heads
Program wl1l be
and the pUblic.
Representatlves fro~ the C1ty Manager's Offlce,
Personnel, Purchas~ng and General Services will not only
be actively ~nvo1ved 1n the development of systems and
procedures as described In recomrnendatlon No.1, but
staff may 1ndlvidually or collectively pro~ote, publlclze
and seek suggestlons for the Clty'S ~BE program through
39
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presentatlons to staff, boards, com~lSS10ns and com~unlty
groups.
Outreach will lnclude develop~ent of a brochure
to be used as a tool for thlS actlvlty. ThlS brochure
w~ll be developed wlth the assistance of the Public
Infor~atlon Offlcer and scheduled for completion by the
end of the second quarter In 1983.
b.
developed
for the
For~al and lnfor~al relatlonshlps wlll be
with those organlzatlons WhlCh are established
purpose of provldlng technlcal asslstance and
lnfor~atlon to small, ~lnor2ty and women owned
buslnesses, and that act as inter~edlarles 2n connecting
the vendor and the buyer. ThlS will provlde the City
wlth access to several thousands of ~inorlty/women owned
businesses in the area that prov1de a variety of goods
and serVlces, as well as an lnvaluable technlca1 resource
1n contlnulng the develop~ent of an expanded MBE program.
Contacts will be establlshed with a mlnlmum of four
organizat1ons by the end or the flrst quarter 1n 1983.
The Purchaslng Depart~ent wlll take the staff
responsibll1ty In this area.
c. Lists of s~all ~lnorlty and women owned
constructlon businesses will be ~ade aval1able to fir~s
that the City awards signiflcant contracts to, so that
these bUSlnesses ~ay be provided the opportunity to
SOllcit subcontracts fro~ the s~aller fir~s. The list
developed by the State of California, Department of
40
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.
Transportat~on wl11 be d~sse~~nated to depart~ent heads
by the end of the second quarter in 1983.
d. The posslbl1lty of settlng up booths at Business
Trade Fairs wl11 be explored and a reco~endatlon ~ade by
August 1983. ~h~s recom~endatlon is dependent upon
whether or not BUSlness Trade Falrs wlll be sponsored In
the surroundlng area durlng flsca1 year 1983-84. The
Purchas~ng Department wll1 take staff responslb1l1ty for
this recom~endatlon.
e.
It lS recom~ended that seml-annual se~lnars be
by the Clty to prov1de lnfor~atlon on the
co~pet1tlve b1d process and procure~ent
sponsored
Clty'S
procedures. It would be approprlate to provlde
lnfor~at1on on the possibillties of advance payment
schedules and the lowering or waiv1ng of bld bond
requlrements for ~BE's/WBE'S at these semlnars. LlstS of
organlzatlons that provlde techn1cal and bonding
ass1stance wl11 also be made aval1able to those business
enterprises
des1rlng
to partlc1pate 1n the City's
procurement and contract1ng programs, but requlr1ng
asslstance to compete succesfully. These semlnars should
be well planned, organlzed and publiclzed wlth
announce~ents placed 1n the local papers, w1th co~~un1ty
organizatlons, bl1~ngual newspapers, trade publicatlons
and on local radlo stat1ons. The Purchas1ng Department
will take the lead in lrnplementing thlS reco~~endatlon
41
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wlth staff support provlded by other ~e~bers of the
Afflr~atlve Act~on 1n Purchaslng team. Plannlng for
these semlnars should begin now to ensure that two are
held In flscal year 1983-84. Neighbor2ng cit2es should
be contacted to explore the posslbllity of co-sponsorlng
such se~lnars.
f. All depart~ents should be requlred to SOllCit
clds fro~ the ~inorlty vendors list when purchaslng
supplies on an 1nfor~al basis. The Purchaslng Department
wlll provlde lead staff respons1b1l1ty for expans1on,
updat1ng and d1ssem1nat1on of the ~lnorlty Vendors List
to departments.
g. It 15 also recommended that depart~ent5 be
requ1red to utll1ze the Ilbrary of MBE dlrectorles
located 1n the Purchaslng Department. This collectlon
contains lnforl1lation on 5uppl1e5 and equipment and
professional services offered by women and ~inority owned
bUSlne5S enterprlses. A llstlng of the dlrectorles and a
brief descrlptlon will be developed and distrlbuted, wlth
se~i-annual updates. to Department Heads by the
Purchaslng Department.
3) It
15 recommended that an Admlnistratlve
for selectlon of professlonal services
be developed. Thls instruction wlll establ1sh
and cr1terla to be cons2dered 1n the
Instructlon
provlders
gU2del1nes
consultant
select10n
process.
Afflrmatl.Ve
actlon
42
.
.
ccns~derat~ons
will
be
~ncluded
~n
the pol~cy.
~anage~ent Services is currently prepar~ng a draft of the
instruction for reV1ew. Th~s draft wlll be co~pleted by
the end of February, 1983.
4) A sMall but s~gnif~cant change would be the
additlon of the worj 'women' to the Clty'S ~lnority
Business Enterprise (~BE) program tltle. The progra~
t~tle could be Wo~en and ~inorlty Business Enterprlse
Program (\VMBE).
5) It lS recommended that consideration be g1ven to
reqUlrlng that all capltal construction contracts conta~n
speclflc ~BE requlrements when they exceed $200,000.
Speciflc provls1ons and quantif1able goals should be
developed and reco~ended by approprlate department
heads. It ~s recommended that the folloWlng criterla be
consldered 1n the development of program obJect~ves and
goals. ThlS criteria seems to be the ~ost frequently
used by other citles that have i~le~ented for~al MBE/WBE
programs.
a. The level of particlpatlon by women and ~lnority
bUslness enterprlses on past contracts awarded by the
City which have contalned WBE/MBE requ1rements;
b.
The
level of partlcipatlon by WBE!MBE on
contracts awarded by other governmental agencles ~n the
43
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Los Angeles County area WhlCh have ut1l1zed WBE/st~BE's
requ1rements: and
c. The ava~lab111ty of WBE'/~BE'S WhlCh are capable
of provldlng the goods and SerV1ces needed by the C1ty.
If a proJect 1S slgn1flcant, and subcontracts are
antlclpated, the prlme contractor could be requested as a
WBE/MBE requlre~ent, to deter~lne what types of work
actlvltles wl11 be subcontracted. Once that
deter~lnation 1S ~ade a goal for WBE/MBE particlpatlon
could be establlshed u51ng the above criter1a. (The
~ethodology utl11zed by the State Depart~ent of
Transportatlon to deter~lne MBE partlclpation 15 the same
as that described 1n the precedlng re~arks.)
In developlng these provls10ns, an underlying
assu~tion should be to provlde as ~any optlons as
posslble for contractors to ~eet affir~at1ve actlon
crlterla. Staff from the Clty Attorney's Office lndlcate
that the ~ore flexlble requlre~ents are, the more
defenslble they are. ThlS reco~endat1on should be
implemented durlng flscal year 1983-84.
6) It 1S reco~mended that the followlng afflr~at1ve
action steps should be required of all departments 10
contracting for goods and serVlces.
44
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a. Include qual~f~ed women and ~~nority bus~nesses
on sol~c~tat~on lists;
b. Assure that women and ~lnor~ty bus~nesses are
Sollc~ted Whenever they are potentlal sources;
c. If subcontracts are to be lssued, then the prlme
contractor be required to adhere to the affir~atlve
act~on steps described ln the preced~ng sect~ons.
These
lncorporated
afflr'llatlve
aCtl0n
steps
should
be
ln
the
City's
purchaslng procedure,
Communlty Development Block Grants,
contracts by the end of 1983.
and construct~on
7) The use of sanct~ons should be considered as part
of
the City's Affirmatlve Actlon Program.
As the
contract award~ng authority,
the Clty should have the
ablllty to l~pose sanct~ons or take such other actlons as
are necessary to ensure compliance wlth the afflr~ative
act~on provls1ons of a contract. These sanctions could
include, but not be limited to:
a. refusal to award a contract;
b. wlthholdlng of funds;
c. recision of a contract based upon a ~aterial
breach
of
contract
provislons
pertain~ng to the
utillzatlon of WBE's and MBE's: and
45
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e. disqual1f1cat1on of a contractor, subcontractor.
or other buslness fro~ el1g1bllity for provlding goods or
serV1ces to the C1ty for a per10d not to exceed two
years.
Speclflc sanct10ns can be deter~lned wlth counsel
fro~ the C1ty Attorney's Office. Th~s reco~endation lS
complex and requ1res ~he 1nterfac1ng of several
departments, because of th1S, the lead should be taken by
the Clty ~anager's off1ce. A reco~~ended approach should
be presented by the end of 1983.
8) It 15 recom~ended that the current ~BE goals for
purchaslng suppl1es and equlpment fro~ ~lnority vendors
be revlewed. The City's progress ln thlS area should be
revlewed and the goals potentially revlsed durlng the
budget development process. The followlng cr1terla should
be conS1dered:
a. the level of partlcipatlon of WBE's and MBE's
s~nce the C1ty'S MBE program was adopted~
b. the level of partic1pat1on of WBE's/MBE's in
other ~BE progra~s ln the Los Angeles County area~ and
c. the availability of WBE's!MBE's WhlCh are capable
of provldlng the goods and serVlces needed by the C~ty.
The affidav1t form currently used and ver1flcatlon
efforts should also be revlewed. Informatlon on
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ver~f~cat1on and how to evaluate bona f~de MBE status has
been obta1ned fro~ other c1t1es and the U.S. Department
of Commerce. This ~nfor~ation should be cons1dered 1n
the reV1ew.
9) It has been suggested that we explore the
poss1b1l1ty of encourag1ng or g1vlng prlorlty to
unionized e~ployers as part of an aff1r~at~ve actlon
procurement progra~. Hav~ng d~scussed earlier the legal
constra1nts and the potent1al conflict wlth lncreased
partlc1pation by ~BE'S and WBE's ~n our procure~ent and
contract1ng syste~s, 1t 18 recommended that we cont1nue
the adopted pol1cy of pay~ent of prevailing wages on
construction projects. and pursue the concept of
notlfY1ng appropriate un10ns of large proJects or
purchases pending award of a contract. It lS further
reco~~ended that if a ~lnor1ty or women-owned business lS
not ava1lable to prov1de goods or serV1ces for a spec1f1c
need and a union wage e~ployer is, then these employers
should be so11c1ted. Purchas1ng princ1ples should st1ll
apply and the best and lowest b1dder would be awarded the
contract. It 1S also possible as a ~atter of personal
preference for Counc1l~e~bers and other appo1nted
officials to specify a desire for un1on-affil1ated
compan1es to bid on small purchses below the current $250
compet1t1ve bidd1ng limit.
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10) F~nallYI 1t has been suggested that we explore
~~posit1on of aff1r~at1ve act10n criter1a 1~ the C1ty'S
development agreements. Pre11m1nary d1scuss1ons w1th the
C1ty Attorney's off1ce and the D1rector of Com~unlty and
Econo~lc Develop~ent
further explorat1on,
port1on of proJects.
have prov1ded
part1cularly in
some p01~ts for
the construct1on
CONCLUSION
Numerous opt1ons and act1v1t1es have been presented
for conSlderat1on in the C1ty'S efforts to provide
expanded opportunities for bUS1nesses to partic1pate in
the b1dd1ng process for purchasing, cap1tal construct1on
proJects and professional serv~ces contracts w1th the
C1ty. An incremental approach has been suggested based
on current capabilities of the organ1zation. Capac1ty
buildlng act1v1ties have been stressed for the first
year. Staff intends to encourage and S011C1t continu1ug
publlC dlScussion on thlS subJect In the ~onths to corne
to a1d in the program development process. ~ore speclfic
dlScusslon of staff and ~onetary 1mpacts of 1ncreaslng
emphasls 1n thlS program area w11l occur dur1ng the
1983-84 budget reV1ew.
In sum~ary, any program that is developed should
differentiate between the areas of purchasing, capital
construction and profess10nal services.
Not only do
~unlc1pal Code requ1re~ents vary in each category, but
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the nu~ber of ~~nor~ty and women owned bus~nesses var~es
~n each area and theLr abilLty to provLde the specLfLc
serVlces needed could also vary. Although preference and
set aside progra~s should not be dlscounted for the
future, the need to bUlld our capabilltLes, establlsh a
data base and lmplement aggressive and effective outreach
and networking progra~ is ~ore lm~ediate and will asslst
the Clty In deter~lnlng the effectlveness of lts
afflr~ative actlon efforts and potential areas for future
POllCY decisions.
Flnally, It 15 reco~~ended that the action steps
included In this report be approved by the Clty Council
so that it is a clearly expressed C~ty policy to ~ake
avallable every opportunlty for all bUSlnesses to
participate In the C~ty's procure~ent and contractlng
systems. As future components of the program are
developed, further Councll action will be recom~ended, as
approprlate.
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APPENDIX I
T~BE RESOURCES AND I~FOm1ATION
1. BUS1ness Develop~ent Center of Southern
Cal1forn1a, 2651 South Western Avenue, S1te 300, Los
Angeles, CA 90018, ~r. Cleveland Neil, 213/731-2131.
Th1S f1r~ prov1des ~arketlng ass1stance, explores cap1tal
opportun1t~es
and aids in contract procurement for
~lnority bus1nesses. It also ~a1nta1ns a 11sting of over
400 ~lnor1ty f1r~s 1n the area. Th1s listlng lS not for
publlC distrlbutlon. However, they ~ay be called with a
descriptlon of our needs and other pertlnent infor~at1on.
In return, they alert and provlde this 1nfor~atlon to
their appropriate cllents who ~ay be able to prov1de the
serVlce. Their 11st1ng includes a wide variety of
services.
2. Hawklns/Mark-Tell, P.O. Box 31, 617 Veterans
Blvd., SUlte 107, Redwood Clty, CA 94064, Ms. ~onica
Susko, 415/365-1588. Th1S flr~ provides ~arket1ng
research service to professional consulting fir~s in the
areas of archltecture, zoology, environ~ental SClences,
plannlng, engineerlng, landscape archltecture and simllar
fields. Hawklns/~ark-Tell"s baS1C serVlce is to act as
"eyes and ears" for its clients. identifying new proJects
that ~ay provlde opportunitles for consultant serVlces.
They ~y be provlded with a descrlptlon of agency needs
and other pertlnent informatlon and act as an
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intermed~ary between the~r client and the ent~ty need~ng
the serVlce. They w~ll also hlghlight an agency's
~nterest
~n
recelvlng proposals fro~ ~lnorlty and
women-owned flr~s 10 thelr perlodlc publlcations.
3 .
Cardinal
Bl vd. ,
I'akeda,
:1anagelilent
Su~te 1016, Los
213/385-1335.
AssOclates,
Inc. ,
2500
~'l11shlre
Kenneth
Angeles, CA 90057, Mr.
ThlS flr~ provldes
~arketing asslstance to ~inor1ty businesses. They
~alntain a 11stlng of a wlde variety of businesses in the
area. They ~ay be called with a descriptlon of our needs
and other pertlnent infor~atlon and they act as an
1nter~ediary between their cllent and the organizatlon
needlng the service.
4. Southern Callfornla Regional ~inor~ty Purchas1ns
Council, 650 South Sprlng St., SUlte 1209, Los Angeles,
CA 90014, Mr. Hollis Slilith, 213/622-6123. The Councl1
funct10ns as a lilatchmaker between the buyer and ~lnority
vendor. They have identlfled a data base of 1,900
Southern California ~inority firlilS. Upon request, they
can provide lnfor~ation about prospectlve ~inority
supp11ers. The Councl1 prov~des assistance to ~~norlty
owned companles to enable them to better compete 1n the
lilarketplace. They also ~anage a Minorlty BUSlness
Opportunity Day Where lila]Or flrlils' buyers have an
opportunlty to ~eet qualifled ~lnority vendors.
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5. UlDA,
1541 W~lsh~re Blvd., Su~te 307, Los
Angeles, CA 90017, ~r. Steven Sta~l~ngs, 213/483-1460. A
statew1de bus~ness develop~ent center for lnd~an owned
bus~ness.
They ~y be called w1th a descript~on of our
needs and other pert~nent ~nfor~at~on and they act as an
~n ternediary .
They ~a1nta~n a 11st1ng of approxi~ately
200
bUS1nesses
w~th
e~phas1s
1n
construct1on,
~anufacturlng,
serV1ces, and suppl~es.
The Center also
offers ~anagement,
financial and ~arketlng serv~ces to
s~all Ind1an owned ousinesses.
6. M1nor1ty Contractors Assoc~at1on, 213/737-7952,
Donald
Colller
or George Glass.
Th~s associat1on
5pec~alizes 1n the area of construct~on and lncludes
~lnor1ty and fe~a1e owned bus1nesses in their l15t~ngs.
They ~y be called w1th a descrlptlon of our needs and
pert~nent lnfor~ation and wlll act as an inter~edlary
between the1r ~e~bers and the organization need1ng thelr
serv~ce.
7. Hlspanic Buslness and Professional Associatlon
of
Orange
County,
:-1 r .
Ramon
Najera, Pres1dent,
714/861-2453 or 2722. ThlS aSSoc1at1on is comprised of
approxlmately 60 ~e~ers. The ~e~ership offers a wlde
varlety of professional serV1ces. For a referral, the
president may be contacted wlth a brief descriptlon of
the Clty'S needs.
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8. Equ~ves~-
213/280-1143. Th~s
~~ck~
Brazee,
ProJect Director,
assoc~at~on ~s known as a Program
Aanagement Center and serves as a representative of the
U.S. Department of Transportat~on, Off~ce of Small
D~sadvantaged Business Uti1izat~on. They prov~de
~nformat~on on procure~ent opportunit~es for ~BE'S/WBE's,
provide ~BE's/WBE'S w~th techn~cal ass1stance and
referrals and seek out and obta~n lnvitatlons for blds
and requests for quotatlons from DOT grant reclplents.
They may be used l~ the Clty's Caplta1 I~prove~ents
program ~n ldent~fYlng ~lnorlty and women contractors.
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APPENDIX II
~INORITY AND WO~EN OTNNED BUSINESS ENTERPRISES
1. Carranza Assoc~ates Inc.,
3055 W~lsh~re Blvd.,
Su~te 830, Los Angeles, CA 90010, Daniel Perumean, Senior
Account
Execut~ve 213/385-3411.
Th~s f~~ prov~des
serv~ces ~n ~he following areas: print product~on,
package development, ~ed~a placement, ~arket~ng, publlC
relat~ons, broadcast product~on, print~ng. dlrect
~ail~ngs, promotlonal and business development.
2. Rls En91neerln9 Serv~ces Company, P.O. Box 3762,
Alhambra, CA 91803, 213/283-4051, Ronald ~. Johnson. R/S
Engineerlng Serv~ces Company provldes professlonal
engineer~ng services In the area of stress analys~s,
ther~al, hydraullc and dynamlc tranSlent analys~s, and
p~pe support des~gn and analys~s. The company is set up
to use Adlpipe, Nuplpe, P~pesd. Tr~flex, and Ansys
computer {f~nite elements) programs. The englneers wlth
the company are reglstered profess~onals and have a
~ln~mu~ of e~ght years experience in power plant,
petroleu~ and petroche~lcal industrles.
3. J and Y Precls~on, 3025 Nebraska Ave., Santa
~onica, CA 90404, 213/828-2844, John Rodrlguez. The
owner is a tool ~aker by trade and has owned a small
~achlne shop for three years. They provlde prototype,
tooling, short product~on, Jig and fixture, and assembly
department serv~ces.
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4. Falste~n and Connel1v Com~unicatlons, 11110 OhlO
Ave., SUlte 202, Los Angeles, CA 90025, Sheryl Falsteln,
Cathy Connelly, 213/478-0257. A full service publ1C
relations flrrn, capable of developlng and l~plementlng
publ1C lnfor~atlon and com~unity awareness ca~paigns,
drlves,
on-slte
11alson and publlclty programs,
speclal event ~ndertaklngs fro~
coordlnatlon, and a varlety of
fund ralslng
plannlng to
other related
press
servlces.
5. Bridges and Assoclates, 820 North Hollywood Way,
Burbank, CA 91505 213/841-3373, Blll Bridges. An
envlron~ental i~pact reVlew and planning consultant flr~.
6. Envlronrnenta1 Horizons, Inc., 919 E. Grand Ave.,
Escondldo, CA 92025, 714/741-5760, ~lchael Alberson (51
percent female owned). An envlronrnenta1 l~pact reVlew
and plannlng consultant flr~.
7. Rennard, De1ahousle and Gault, 4929 Wilshire
Blvd., #760, Los Angeles, CA 90010, 213/937-0855. An
envlronmental lmpact review and plannlng consultant fir~.
8. The P1annln9 Group, 1728 Silver Lake Blvd., Los
Angeles, CA 90026, 213/661-1185, Gene Grlgsby. An
envlronmenta1 lmpact review and plannlng consultant flr~.
9. The S. W. Group, 11801~. Olympic Blvd., Los
Angeles, CA 90064, 213/477-1901, Ken Watanabe. An
envlronmental impact reVlew and plannlng consultant flr~.
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10. Paclflc
Plannln9
Groul?'
P.O.
Box
486,
Idyl1wlld, CA 92349, 714/659-2229, Sandra H. Olinghouse.
An
urban
plannlng,
development,
and envlronmental
research consultlng f~r~.
11. Arch I For~, 1201 W. Fourth St., Los Angeles,
CA 90017,
213/481-8378, ~asko BOlssonnault.
A deslgn
flr~ lnvo1ved ~n all aspects of facllltles program~lng,
space plann~ng, and deslgn for co~ercial 1nter10rs.
12. Amerlcan Computer Industrles,
1436 Marcellna
Ave., Torrance, CA 90501,
213/320-6014.
A computer
turn-key
syste~ company Whlch represents and sells
dlverse co~puter products.
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APPE::-IDIX III
WMBE DIRECTORIES AVAILABLE I~ TgE
PURCHASI~G DEPARTMENT
1. 1983 Dlrectory
Or9anizatlons publ1shed by
Counties Women's Yellow
of Women's BUS1nesses and
the Los Angeles and Orange
Pages.
A w1de var1ety of
serv1ces and businesses are listed.
2. Southern Cal1fornla ReSlonal Purchas1ns Counc1l,
Inc., A wide var1ety of serVlces and businesses are
11sted. Indexed by suppller or co~~odity needed.
3. Southern Cal1forn1a 1980 Minorlty Vendor
Dlrectory, Clty of San Diego Offlce of Small Business
Ass1stance. A wide var1ety of serVlces and businesses
are listed. Many are in the Los Angeles area. Th1S 15
the ~ost recent edltion.
4. A Natlonal Dlrectory of Mlnorlty and Wo~en Owned
Companles, publ1shed In 1981 by Source Publications,
E~eryvl11e, CA. A wide variety of services, supplles and
equip~ent are listed ranglng fro~ constructlon compan1es,
~anagement consultants, plumbers, prlnting to co~puters.
This is the most recent editlon and should be used untll
early 1983.-
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5. D1rectory of Mlnor1ty Buslnesses, released by
the Small Buslness Ad~ln~stratlon. Current as of May,
1982. A wlde var1ety of products and prafesslonal
services are l~sted.
6. 1982 Dlrectory of Black Des1sn F1r~s ln the
West, published by the San FranC1SCO Redevelop~ent
Agency. A 11sting of professional eng1neerlng,
archltectural and plannlng services.
7. 1982 D1rectory of ~lnorlty
BUSlness Enterprises, publ1shed by
Nashvll1e, Tennessee. A wlde variety
professlonal serVlces are 11sted.
and Women Owned
Concepts,
Inc.
of products and
8. CALTRANS, ~BE 11stlng of contractors. ThlS 11st
1S kept by the General Services Depart~ent.
9. Women In Business, publ1shed by Women In
Business, Irv2ne, Cal1fornla. A wlde variety of products
and profess1onal serV1ces are 12sted.
10. Minority BUS1ness Dlrectory, Orange
1982, Orange County Reglonal Purchaslng Counc1l.
varlety of goods and serVlces are l2sted.
County,
A wlde
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.
.l\PPENDIX IV
ORGk~IZATIONS AVAILABLE TO ASSIST w~BE'S
1. Bus1ness 0eve1oF~ent Center, see Appendix I
2. Cardlnal
Y1.anage~ent
ASSOc1ates,
Inc - see
Append1x I
3. Los
An~e1es
Re~lonal
)'11non.ty
Purchaslng
Counc1l, see Append1x I
4. BU11ders ~utual Surety Company,
1545 ~,yilsh1re
Blvd., SU1te 516, Los Angeles, CA 90017, 213/413-5330.
The
cornpany
aSs1sts ~1nor1ty bus1ness 1n securlng
necessary bond1ng.
5. Operat1on Second Chance,
314 W. Second St.,
SU1te l, San Bernadino, CA 92401, 714/884-8764. Loan
packaging,
management
and
techn1cal assistance to
mlnority bU51nesses.
6. PASS (SBA's
Procurernent
Automated
Source
Sys tern) .
S~a11 bus1nesses desiring to do business w1th
the government should call 213/688-2946. If a bUS1ness
1S ellg1ble,
they are placed onto SBA's small bUs1ness
data bank so that they are access1b1e to government
agencies.
7. Equivest - see Append1x I.
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