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CITY OF SANTA h?CNICA
PROPOSAL FOR EXPANDED
AFFIRMATIVE ACTION
PROCUREJIENT PROGRAM
PREPARED BY:
CITY P1ANAGER'S OFFICE
~1ANAGEMENT SERVICES
DIVISION
DP.AFT DECEi~'fiER 3, 1982
REVISED FEBRUARY 4, 1983
TABLE OF CONTEPJTS
I INTRODUCTION ],
II DEFINITIONS 1-3
III DEMOGRAPHICS 3-S
IV BACKGROUND - LEGISLATIVE HISTORY S-E
V CITY OF SANTA I~ONICA EXPERIENCE AND PRACTICE 7-13
~dI P1BE PROGRAMS IN OTHER PUBLIC AGENCIES 13-2Q
'I'II 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 P~11NORITY AND WOMEN-OWNED
BUSINESS ENTERPRISES 54-56
APPENDIX III WMBE DIRECTORIES AVAILABLE IN'
THE PURCHASING DEPARTMENT 57-58
APPENDIX IV ORGANIZATIONS AVAILABLE TO
AsstsT WMBE's 59
JAL
I. INTRODliCTION
The. City of Santa Monica is a diverse community. To more
effectively serve the community, the City Council has adcoted a
formal Affirmative Action plan to achieve a balanced work force
in the City's personnel structure. It is a logical extension of
this responsibility that the. City would want to insure full
participation. by all reputable businesses in the supply of goods
and services to the City, regardless of size or owr.ershia
characteristics.
This report addresses means of increasing the number of
contracts awarded to minority and women owned businesses. Due to
racial, ethnic prejudice or cultural bias, these businesses may
be economically or socially disadvantaged. Social barriers may
have affected the ability of these individual business owners to
effectively compete in the free enterprise system due to
diminished capital and credit opportunities. Issues relating to
local, small, non-profit and unionized employers are also
discussed.
II. DEFINITIONS
The following definiticns are offered to provide
clarification for the reader, and for the purposes of discussion.
1. Small Business - is defined by the State Employment
Development Dep artment as one with fifty or fewer employees.
1
2. Minority and Women Owned Businesses - A small business
concern which is owned and controlled by one or more minority
persons or by women.
Owned and controlled means a small business concern whose
management and daily business operations are controlled by
minority persons or by women; and which is:
a) a sole proprietorship legitimately owned by an
individual who is a minority person or a wcr.,an;
b) a partnership or ioint venture in which at least 51
percent of the beneficial ownership interest legitimately is held
by minority persons or by woven; or
c) a corporation or other entity, including a publicly
owned business, in which at least 51 percent of the voting
interest and 51 percent of the beneficial ownership interest
(i.e., stock) legitimately are held and owned by minority persons
or by women.
3. Minority Group Persons - Sha1I mean a person of Black,
Hispanic, Asian/Pacific Islander, Native American. or Alaskan
racial origin and identity.
4. Women This defini±ion shall include all women.
5. Local - A local business shall mean a business firm wit'r.
fixed offices or distribution points located within the
boundaries of Los Angeles County.
2
6. Unionized Employer - A business which has a labor
organization, committee or representative active within its
structure. This committee/representative represents employees
and exists for the purpose, in whole or in part, of dealing with
the employer concerning grievances, labor disputes, wages, rates
of pay, hours of employment, and/or conditions of work.
7. Non-Profit Organization - A group organized for purposes
other than generating profit; such as a charitable, scientific or
literary organization.
III. DEMOGRAPHICS
Informa±ion cr. the composition of local pepula*_ion an_d
business enterprises is provided because this data should be
considered in the development of affirmative action plans and
efforts. The Los Angeles County population is broken down is the
following manner:(1)
White 3,008,027 (40.23°s)
Black 944,009 (12.62°s)
Hispanic 2,065,727 (27.63°s)
Indian 48,158 ( .64°s)
Asian 434,914 ( 5.82%)
other
t4inority
Groups 976,822 (13.06%)
---------- -------
Total 7,477,657 (100%)
(1) "1980 Population by Race and Spanish Origin by Tract", Los
Angeles County Regional Planning Department.
3
The City of Santa ;donica's 1980 popula*_ior, of 88,314 was
distributed as follows:
?Vhite 54,191 (72.09$)
Hispanic 11,485 (13.00$)
Black 3,594 ( 4.07%)
Amer. Indian 396 ( .45$)
Asian 3,567 ( 4.04`x)
Other 5,081 ( 5.75%)
The total number of business establishments in Los Angeles
County (excluding government employees, railroads, =_elf-employed,
domestic service and farm workers) is 157,040. Of this figure,
147,330 are considered sma'_1 business establishments.(2)
According to the most recently available census data, the
total number of minori±y and female owned business in Los Angeles
County is 86,943.(3)
The breakdown for these businesses is the following:
Black owned businesses 14,699
Hispanic owned businesses 17,177
Asian, Indian and other
minority owned businesses 18,382
Female owned businesses 36,685
The number of business enterprises owned by minority women is
included in both the female owned business category and
inter-spersed among the various minority owned business
categories. Thus they are counted twice.
2) Source: "County Business Patterns", U.S. Bureau of Census.
1978
(3) "1977 Census of y inority Owned Business Enterprise", U.S.
Bureau of the Census.
4
It is noteworthy to mention that we could not readily
identify from the above information, the number of minority and
women. owned businesses that provide the types o£ goods and
services that the city has a need for.
iV. BACKGROtitQD - LEGISLATIVE HISTORY
The City Charter requires the estab'_ishment of a centralized
purchasing system. The Municipal Code sets forth the competitive
bidding process for both informal and formal bids. According to
the Code, all open market purchases, (which are those of not more
than $5,000), shall be awarded to the person/firm offering the
lowest and best bid. At the present time, purchases o£ more than
$5,000 require a formal bid process. This process requires
publication in the official newspaper, specified time frames for
bidding and the public opening and declaration of bids. Bids are
then tabulated and referred to the City Manager for presentation
to the City Council. The Council then makes the decision
concerning the award o£ the contract.
The Municipal Code does not specifically discuss
affirmative action in the City's purchasing and contracting
efforts. However, on October 27, 1981 the City Council adopted a
resolution which encourages and sets goals for the participation
o£ minority and female owned businesses in Federally assisted
construction projects administered by the City. The Minority
Business Enterprise Program approved at that time established
policy and committed the City to a program administered in
5
accordance with regulations issued by the U.S. Departmen± of
Transportation. Within that program, a citywide minority vendor
participation goal of 2 percent of the total dollar amount
awarded was also set for the procurement of equipment, materials,
supplies, and professional services for fiscal year 1981-82.
Finally, a budget performance objective of the Purchasing
Department for FY 1982-83 is to develop and maintain a
comprehensive information base for the Minority Business
Enterprise Program.
V. CITY OF SANTA ~SONICA EXPERIENCE AND PRACTICE
The City incurs expenditures for goods and services in three
major areas: supplies and equipment, professional services and
capital construction. As indicated above, there has been no
formalized affirmative action program in the procurement process.
Thus, data on our past performance is very limited. Furthermore,
systems are not currently in place to retrieve all applicable
information.
Supplies and Equi went
In fiscal year 1981-82, approximately $20 million was spent
for supplies and equipment. During this period, 7;793
fixed-price purchase orders were issued. Approximately $00,000
or 2 percent of the total were expenditures made with minority
and female owned businesses. This includes expenditures made
through both the formal and informal bid processes, but does not
reflect expenditures on open order purchases.
6
During the period from July 1, 1982 to present (January 3i,
1983), $10,785,369 was expended for supplies and equipment. One
housand, one 'rundred forty three purchase cyders were issued
during this period. $211,708 or 2 percent of this total were
expenditures made with 52 minority and female owned businesses.*
only thirteen minority vendors received awards in excess of
S5,000. The services and equipment purchased ranged from film
services tc security systems, cffide furniture, *_ires and
printing services. ~ quick review of the list indicates that
most of these firms were in the Los Angeles County area.
The Purchasing Department has identified 108 minority
vendors who have done business with the City in the last year.
This list includes 21 female owned businesses. Purchasing makes
use of the MBE list on every formal bid by mailing vendors
information on the City's needs. This list is also used for
soliciting informal bids.
During the formal and informal bidding processes, firms are
requested to complete an affidavit if they feel they qualify as a
Minority Business Enterprise. This procedure was implemented
over a year ago. According to the Purchasing Director, the
responses have been relatively good. More recently, Purchasing
has developed a follow-up letter to the affidavit. This letter
requests further information on the vendor's minority status and
is an attempt to verify the status.
* The 1982-83 figures do include open order expenditures.
7
mother aspect of the Purchasing Department's MBE program is
the waiving or lowering of bid bond requirements. The City has a
specific bond requirement for each purchase. This requirement is
only for formal bids and is usually 10 percent of the bid amount.
The bid bond guarantees that a company will provide the services
at the bid price. To determine if lowering or waiving of bond
requirements is feasible, the size and type of the purchase are
considered. If it is decided to waive or lower the bond
requirement, this information is sent to all vendors with bid
specifications.
aid bonds have been waived several times in the acquisition
of vehicles. In other instances, when bids have not been
received during t;;^.e initial open time frame, the Purchasing
Director has elected to waive the bid bond in an effort to induce
bids and avoid further delays. This has occurred in the
purchasing of shirts for a lOk race, purchasing of ceramic the
for the Police Department and replacement glass for City buses.
There have also been instances where the total amount of the
purchase is an unknown factor, thus the bond has been reduced to
a finite amount (e. g., purchasing of lunches for a Senior Citizen
Program, fuel for City vehicles, etc.).
Finally, Santa Konica has a one percent local vendor
preference policy. Considering one percent of the local sales
tax share as a rebate, if two identical low bids are submitted
and one of the vendors is from Santa Konica, the contract would
8
be awarded to the local vendor because the net cost of this
contract would be the lowest cost to the City.
Professional Services
In the area of Professional Services, $1,061,636 was spent
during fiscal year 1981-82. From July 1, 1982 to the present
(January 31, 1983), $823,324 has been spent in this category.
The Department of Recreation and Parks has expe.^.ded $406,411
($317,288 of which is for lifeguards) and the Department of
Community and Economic Development has scent the second largest
amount, $280,031, (over one-third of which is for the Land 'use
Study). The citywide budget for professicnal services is
$1,367,440 with a balance remaining of $544,116.
Of the three procuremznt types discussed in this report,
professional services has the least restrictive "9unicipal Code
requirements. Most significantly, it is not required to award
contracts to the lowest bidder.
Data has been collected manually to determine the amount
spent in recent months contracting for services with minority
and/or women-owned professional service firms. Analysis of this
data suggests the following:
Of *_he $823,324 expended during the period from July 1, 1982
through January 31, 1983, 13.7 percent or $69,330 was contracted
with minority and women-owned firms. The breakdown of dollar
volume expended, between women and minority-owned firms is
9
$54,690 or 12.8 percen± with women, and $e,539 or .9 percent with
minority-owned firms.
The Department of Recreation and Parks is the only
department which contracted with minority males. This department
is unique in ±heir use of professional services. The various
recreation instructors who teach classes sponsored by the
Department of Recreation and Parks are included in the figures.
These contracts are usually small and there is generally a
significant turnover of instructors throughout the year.
Those firms that were kro~.m to be owned by minority women
(6) were included in the female count. It should be noted that
the ownership status of 36 of the approximately 228 professional
service consultant firms or individuals we have contracts with in
the current year is unknown. Citywide, approximately 12 of the
contracts were identified to be with public agencies. The
expenditures incurred through these contracts are included in the
overall total as -are the expenditures incurred through two
contracts with firms that have female principals {30 percent
ownership). There were two other contracts identified with firms
that are 50 percent women-owned. The amounts expended through
these last two con±racts are included in the figure w'rich
reflects the dollar volume expended with women owned firms
($64,690).
This analysis reflects the fact that, although the City has
contracted to some degree with women owned firms, San±a Menica's
10
experience in contracting with minorities for professional
services has been minimal.
Capital Construction
2t was determined after discussions with financial staff
that in fiscal year 1981-82 (July, 1981 - June, 1982)
approximately $5,006,000 was spent in the area of Capital
Improvements. In the current year, $0,883,522 is budgeted for
capital construction projects.
Analysis of cons*_ruction contracts awarded by the City
during the period (October 1, 1980 - September 30, 1981}, prior
to the establishment of the MBE program for federally funded
jobs, disclosed that only one subcontract, representing
approximately I percent in dollar value of all contracts was
awarded to a firm listed in the CALTRANS MBE Directory.*
Under current policy, unless a project is federally funded,
emphasis is not placed on MBE participation. Two major approved
projects are eligible for federal funding: the reconstruction of
Wilshire Boulevard, which is currently underway; and the
installation of new traffic signals and upgrading of existing
systems at various locations.
* The MBE program administered by the Department of General
Services is operating on a federal fiscal year.
11
Because there was no City data base available to set goals,
the criteria used to develop the MBE construction program were
provided by Cal*_rans.
If a construction project is over $1,000,000, six percent of
that amount should go to a minority contractor or subcontractor
and two percent should go to a female contractor or
subcontractor. The Wilshire Proiect is over the $1,000,000 limit
and attaining its goals. Informatior. that contractors and
subcontractors submit regarding their minority or female owed
status is verified before approval of payments and monitored on a
monthly basis. It is extremely important that they maintain
their status throughout the life of the project because federal
funds would be lost if the City were not in compliance with
regulations.
Although the Department of Community and Economic
Development has overall responsibility for the Community
Development Block Grant Program, CDBG public works construction
contracts are administered by ±he Department of General Services.
The current contract format includes an affirmative action
provision which states that the contractor shall comply with
Title VI of *_he Civil Rights Act.
When interviewed, General Services staff indicated that
there are no other specific affirmative action requirements and
any affirmative action activities that do exist are not
monitored.
12
Contracts do, however, require tha± prevailing wages are
paid and. this is monitored through a review of a monthly
certified payroll and interviews with employees. If it is
determined that an employee is not receiving prevailing wages,
the contractor is con±acted and provided the opportunity to
demonstrate payment of prevailing wages through check stubs.
Usually, differences are clarified or the contractor complies.
If the contractor refuses to comply., their name is submitted to
HUD. HL'D places their name on a "Debarred" list and the=_e
contractors are not eligible to contrac± with government
entities.
VI. MBE PRCGRA"45 IN OTHER PUBLIC AGENCIES
During the course of this study, information was obtained
from a number of public agencies regarding their Minority
Business Enterprise Programs. A survey of MBE participation is
state and 1oca1 governments prepared by the National Institute of
Governmental Purchasing (NIGP) was also obtained. The general
findings were that formal MBE programs are not widespread nor
particularly we11 developed.
13
MBE Participation in State and Loca~ Governments
The NIGP reaort addresses the level and character of
r,inority business participation in the estimated $280 billicn
state and local government purchasing market. It is estimated
that minority businesses currently obtaln between $300 and $350
million in state and local government contracts, or a little over
1 percent of the total.
The study reviewed a number of program operational patterns:
- A majcr vehicle for increasing state and local
governmental contract opportunities for minority businesses is
the small purchase, generally contracts of up to $5,000. Some
governments do have minority business subcontract requirements
(not related to Federal grants), particularly in construction.
Some review specifications to try to break them down to enhance
the possibility that minority businesses can submit bids.
- Few purchasing departments have staff, either full-time or
part-time, to help promote minority business opportunities, but
where such staff do exist they play a major role. Federal
funding for staff aid exists in Oakland (one person), San Antonio
(two persons) and Phoenix (one person). Very few purchasing
departments have taken steps to help stimulate buyers to promote
minority business.
- All minority business programs surveyed operate through a
competitive process. Where procurements are set-aside for
minorities, the minority businesses compete among themselves for
14
the contracts. Minority businesses do benefit from the
app'_icaticn of geographic preferences and availability of small
business programs in some governments.
City of Oakland
The City of Oakland has the most extensive yBE program
discovered in the course of this study. To date, there have been
no successfu'_ legal challenges of their program.
Before discussion of the City of Oakland's Affirmative
Action Program, some general information and demographics
concerning the city may prove beneficial. The city's operating
budget for fiscal year 1982-83 is $220 million. As of Jure, 1982
the City employed 2,875 individuals. The population of Oakland
is 380,000 and 68 percent of the population is minority.
Four years ago, the City of Oakland adopted an Affirma±ive
Action Program for formal purchases of supplies and commodities.
The implementation of this program required an ordinance change.
The City's program has a bid preference mechanism for local
minority suppliers. This mechanism is only applicable in the
bidding process for purchases of supplies and commodities.
The program in summary:
- Establishes a preference of 5 percent for local vendors
and 10 percent for local minority vendors in evaluation of all
awards on sealed bids. This is the only local minority vendor
preference program we located in the State of California.
15
- Establishes a :minority Supplier Development Program. This
includes searching out and assisting minority suppliers in the
bidding process. A position for minority vendor development was
created in the Purchasing Department ±o carry out this effort.
The U.S. Department of Commerce, Office of :~inority Business
Enterprise has funded this position.
- Requires vendors on contracts exceeding S15,000 to file an
Affirmative Action Plan which outlines the present work force and
the vendor's plan to achieve population parity for the area in
which they do business. This must be done to be considered a
responsible bidder.
- Requires vendors to file notice with unions, when bids are
in excess of $50,000 and when employment in the firm exceeds 50.
Zn 1981-82, the MBE participation goal was 15 percent. The
City awarded 59 percent of total expenditures to Oakland vendors
and 22 percent to minorities in that year. By comparison, just
two years before, minority suppliers received only 10 percent of
the total dollar volume. The amount expended on bid purchases in
Fiscal year 1981-82 was $5.4 million. Based on past performance,
the five year goal of 26 percent for minority suppliers se± in
1978 will be achieved by the end of fiscal year 1982-83.
The feeling of staff when in±erviewed concerning their
success and the effectiveness of the program is that it has
worked well, perhaps too we 11, because public pressure recently
has been to include the preference mechanism in the Public Works
16
Program. This would cost the city a substantially greater amount
because these contrac*_s are considerably larger.
In addition to their Affirmative Action program in
purchasing, the City of Oakland also administers Affirmative
Actior. Programs in the areas of capital improvements and
professional services procurement.
The Capital Improvements Affirmative Action Program was
adopted in April of 1979. The goal for this program in 1979-80
was that 22 percent of the total dollar amount expended was to be
awarded to minority firms. In fiscal year 1980-81, 32 percent
was awarded to such firms and in 1981-82, 48 percent was awarded.
The total dollar amounts expended for these years are the
following: 1979-80, $6.6 million; 1980-81, $27 million
(convention center built); 1981-82, 58-9 million. The goals for
this program have been met every year.
In fiscal year 1982-83 $100 million is budgeted for the
City's Capital Improvements Program. This includes a large
re-development project. As of July 1, 1982, the City Council
approved the following Affirmative Action goals for construction
projects: 30 percent minority and 5 percent female. Half of the
30 percent must go to small minority firms and half of the 5
percent must go to small female owned firms.
The professional services affirmative action program was
implemented approximately two years ago. For fiscal year
1981-82, the budget was $3.9 million. Goals established at that
17
time were 36 percent minority and 12 percent female
participation. The City met the female participatior, goal and
fell one point short of meeting the minority participation goal.
The revised goals for 1982-83 are 40 percent minority and 15
percent female participation.
In all three of the Affirmative Action Programs, public
awareness and support were cited as strong factors for their
success. Staff support for these programs has been provided by
existing staff with the exception of the one federally funded
staff position in the Minority Supplier Developmen*_ Program.
Evanston, Illinois
The population of Evanston, Illinois is approximately 75,000
with the City employing 800 individuals. The operating budget
for the City is $40 million. This does not include their Capital
Improvements Program.
In late 1973, Evanston passed an innovative resolution which
established an Affirmative Action Purchasing Program, Known
locally as the "set aside" program. The five basic elements of
the .program are the following:
- Contracts between the City of Evanston and contractors for
the purchase of goods and/or services contain a clause which
commits the contractor to actively solicit bids for the
subcontracting of goods or services from qualified minority
businesses.
18
- The resolution also requires that the Durchasing
Department establish and maintain a current resource list of
minority businesses, and that applicable minority businesses be
included in all solicitations for services and materials
contracted for or purchased by the city.
- The City Manager develops an annual purchasing program
which sets aside specific projects and commodities which are to
be reserved for bidding by small MBE's. Determination of which
projects are "set aside" is based upon the availability of
competition among small minority contractors, and the
availability of contractors able to perform the specific services
requested.
- The resolution also states that performance bonds may be
waived if the acquisition of the bonds tends to discourage
minority participation; when a performance bond is not absolutely
necessary for the City's protection; or when an alternative means
of protecting the City can be used.
- Finally, appropriate administrative departments must give
assistance to MBE's in the preparation and submission of bids.
In discussion with City Manager's staff concerning their
"Set Aside" program, they .indicated some problems with *_he
program. The program not only requires that the vendor or
contractor be a minority or female owned firm, but that the
minorityffemale interest actually have a significant role in
management of the operation. Verification of this has been
19
difficult. The staff also stated that they do not ~ ~' h
es~an_is
set-aside goals in terms of annual dollar amounts. During the
budget process they review items that may be amenable to "set
aside". Staff support for this program is provided through
existing staff.
City of Los Angeles
The City of Los Angeles has a population of 2.9 million.
The breakdown of the population is 47.8 percent white, 27.5
percent hispanic, 16.7 percent black, 6.6 percent Asian and .~6
percent American Zndian. The current operating budget for the
City is approximately $1.4 billion.
The size of the City of Los Angeles prohibits a detailed
discussion of their many efforts at Affirmative Action. However,
the Mayor's Small, Local, Business Program is noteworthy.
The Mayor's Office houses a Small, Local, Business Program.
This program was established through the adoption of an ordinance
in June, 1980. This ordinance established a five percent
preferential advantage on bids for city contracts under $20,000
for small, local. businesses. This program is administered by a
?danager and an Administrative Assistant. Although the city has
not established performance goals, the following information
reflects accomplishments during the first full calendar year of
the program.
20
During calendar year 1981, the Small, Local Business program
reported a very modest level of activity by the City's four
involved depar*_menta_ procurement authorities with only 49 awards
to small firms for a total of 5117,205. By contrast, the
entire City of Los Angeles awarded over 24,296 contracts
totalling $224,000,000 during this period. Of the 49 contracts
awarded under the program, five were to minority firms wno
received a total of $30,645 or 26 percent of the total.
Under this program, it appears tha± minority vendors are
showing a higher rate of participation than was reported during
1981 in other procurement programs. Of the $224,000,000 in
procurement contracts awarded by the City overall, less than 1!2
mil'_ion dollars were awarded to minority vendors and suppliers.
Comments by those departments implementing the ordinance and
those received from interested businesses and trade associations
in the greater Los Angeles area seem to indicate that if the
intent of the program is to stimulate more business opportunities
for small businesses within the Los Angeles area, the program
should be somewhat amended. Suggested changes include expansion
of the program to include other cities within Los Angeles County;
increasing the $20,000 contract limit; and implementation of an
additional 5 percent preference for those minority businesses and
suppliers who fall within the program definition of a small
business.
21
Minority venders and suppliers have. been particularly
critical of the geographical limitations of the program and the
$20,000 contract limit currently in effect.
Seattle, Washington
The City of
which established
opportunities for
provide goods and
were established.
percentage of tots
City.
Seattle approved an ordinance in June, 1980,
requirements for ensuring full and equitable
women and minority business enterprises to
services to the City. City wide annual goals
These coals are expressed in terms of the
it dollar value of all contracts awarded by the
In addition, goals were set for the Board of Public Works in
1980-81 of 15 percent for minority business enterprises and 3
percent for women's business enterprises. In conversations with
staff, we learned that MBE participation, during 1980-81, came
very close to meeting the 15 and 3 percent goals. Staff
resources for this project include the Director of the Department
of Human Rights and two professional staff members.
Orange County Transit District
The Orange County Transit District {OCTD) also administers a
Minority Husiness Enterprise Program. The objectives of the
program are: to identify firms owned and controlled by
minorities and women which are capable of providing needed
services; to develop and distribute information, directed towards
familiarizing minority owned firms of the District's contracting
22
and procurement procedures and requirements; to develop necessary
interdepartmental relationships which will promote, foster and
facilitate implementation of the program; and finally, to
contribute to the economic stability and growth of minority owned
firms in the County area.
The OCTD has developed a bid book of minority businesses in
addition to utilizing other directories and organizations which
maintain listings of minority businesses as references.
Conversations with the MBE Officer provided information on
the success of their program and factors to consider that may
ensure a more effective MBE program. The MBE Officer felt that
their program had been quite successful. They have always met
their goals, which he cautioned should always be reasonable and
developed using specific criteria. OCTD established goals in
1982-83 in three areas:
MBE WBE
General Services (supplies) 7% 2%
Consultants 2°s 1°s
Construction 12°s 5°s
Implementation of controls to ensure that buyers are
searching out minority and women owned businesses and the
attitude of the buyers are key ingredients to the success of an
MBE program, according to staff. In terms of resources allocated
to their MBE program, the MBE officer is assigned full-time to
this program with some support staff.
23
Hartford, Connecticut
In August, 1977, the City of Hartford, Connecticut initiated
a Minority Contractor Participation Program for competitively bid
federally funded construction projects. This program includes a
10 percent minority and women owned business utilization
requirement. The Council later determined that "d BE participation
requirements should be expanded to include all construction
contracts funded through the City. The 10 percent utilization
requirement is now a minimum requirement. Discussions with the
staff person assigned to this project indicate that they have had
difficulty in meeting the 10 percent requirement.
San Francis
This City does not have a formal MBE program. However,
according to staff, buyers are constantly in search of minority
fires. Sma11 local business and KBE participation in the City's
purchasing program is also encouraged by local politicians.
The City of San Jose established a Contract Compliance
Office through the passage of an ordinance in 1970. This office
has developed a MBE Directory which includes small, minority and
women owned businesses.
The Director of the Contract Compliance Office stated that
their MBE participation efforts have been informal in the past.
Although minority participation has not been a formal part of his
24
program, he has concentrated efforts in this area with the
assistance of one other staff member. According to the Director,
the City Council has recognized the need to formalize a MBE
program, and he will soon present a MBE program with established
goals, to the Council for their consideration.
San_ Diego
The City of San Diego established the Office of Small
Business Assistance in 1977. The basic goal of the program is to
increase the amount of money the City expends with Minority and
women Business Enterprises. [+Then the program began in 1978-79
the level of City spending with these kinds of businesses stood
at 2 1J2 percent. A goal of 10 percent was established. At the
end of that year, City expenditures with ^~IBE/WBE's stood at 8
percent. The goal was then raised to 15 percent where it has
remained since that time. In fiscal year 1979-80, MBE and [dBE
firms 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 services, contracts and subcontracts for City
construction projects and other commercial dealings was $47.8
million,
In fiscal year 1980-81, a total
expended in the purchases of goods and
contracts and sub contracts. The goal for
in this program was $6.5 million or 15
This goal was accomplished. The Dire
Department stated that the only problem
of $46.3 million was
services, construction
minority participation
percent for that year.
:tor of the Purchasing
they have encountered
25
with this program is the verification of the minority s*_atus of
vendors. The .Small Business Program also .produces a MBE
Directory. This program is supported by the Director and one
administrative staff person..
Another program which the Director felt was noteworthy is
their less formal Affirmative Action effort of requiring
contractors/vendors to include Affirmative Action Programs in
their. own personnel structure. It is the policy of the
Purchasing. Department that a vendor must submit an acceAtable
Affirmative Action Program before they can be considered to be a
responsible bidder for contracts over $10,000.
While basic purchasing tenets are still the principal
guidelines in the selection of a vendor (lowest bidder usually
chosen), if the lowest bidder does not have an Affirmative Action
Program, they are usually required to agree to Affirmative Action
compliance prior to award of a contract and generally provided a
year to show progress. If the vendor has not complied, or shown
good faith efforts, they are not usually considered responsible
bidders for future dealings with the City. Affirmative Action
goals are based upon census figures and reflect the population
composition of the City of San Diego.
State of California
The State of California, Department of General Services,
administers a five percent Bid. Preference Program for small
26
businesses through their Sma11 Business Office as we 11 as a
'~inority Business Enterprise Program through the Office of
r:inority Business Enterprise (CAL-OMBE).
The five percent Bid Preference Program was mandated by the
State legislature in January 1974 to help small businesses
develop and become more competitive.
To be considered a responsible bidder, a business must be
prequalified and certified as a small business according to
regulations defined by the department. Five percent of the bid
is computed and then the amount of the bid is reduced by that
amount for purposes of tabulating the low bid. The contract is
awarded for the actual amount of the original bid. Once a firm
is certified, it is included on a listing sent to departments
throughout the State.
The program functions of CAL-OMBE are: to expand
procurement and contracting opportunities for minorities and
women owned businesses who wish to participate in the State's
purchasing system; to work with State agencies in assisting them
to identify business resources, establish policy, and implement
an open and equitable purchasing system. The State has not
established specific goals for this program. CAL-OM BE also
maintains a statewide directory which is distribu±ed to
individual State departments.
Staff indicated that the Sma11 Business Preference Program
has generally been very successful. In 1980-51, approximately
27
$i5 - $20 million was spent in the area of construction. The Bid
Preference Program played a part approximately 20 percent of the
time. During this same period, approximately $100 million was
spent for commodities. The preference program cost the State
approximately $400,000-$500,000. Staff also stated that it has
been their exaerience that competition in the bidding process has
increased as a result of the preference program and that many of
the small businesses were also minority businesses. Specific
data from Cal-OMBE was not available.
A Survev of MBE Programs in Other Public Agencies
Finally, a local vendor preference survey of other
California public agencies conducted by the City of Oakland in
July 1982 provided the following summary information:
Local
Local Minority
Agency Vendor Vendor Authority Comments
Berkeley 3$ 4% None Recommendation
to City Manager
10/5/82
San Leandro 5$ None Charter Use only for
1978 $1,000 to $5,000
City of S°s None Charter Council recommends
Alameda 1930 use
Eureka 5% None Charter Exce_ot Services
1959
*Long Beach 1°s None Charter Tax rebate
*Pasadena 1% None Resolution Tax rebate
*City of 1% None Department Tax rebate
San Diego Policy
*Orange 1$ None Charter Tax rebate
*Santa Monica 1% None Charter Tax rebate
*West Covina 1$ None Charter Tax rebate
*San Jose .9°s None Department Tax rebate
.Policy
Baldwin Park None None In review -
City Manager
considering
San Mateo Co. None None
City and County
San Francisco None None
28
Alameda County None None
Oakland Public
Schools None None
Oakland Housing
Authority None Gone
San Francisco
Housing None None
Authority
Port of
Oakland None None
AC Transit None None
Bay Area Rapid
Transit None None
East Bay Water
District None None
Hayward None None
Emeryville None None
Z.A. School
District None None
L.A. County None None
City of None None
Santa Barbara
South San
Francisco None None
*Notation: The one and .9 percent local vendor preference
mechanism indicated for several cities is a local sales tax
rebate. If two vendors submit identical low bids and one vendor
is located within the City limits, then the .contract is generally
awarded to the local vendor because the net cost of this contract
is the lowest cost to the City.
VZI. CONSTRAINTS/PARAMETERS
In considering the development of a more formalized
Affirmative Action procurement program for Santa Monica, legal
parameters and constraints should be carefully reviewed and
discussed.
Good purchasing principles require the development o£ fair,
competitive informal and formal bid processes. Exceptions to
these processes should be equitably and cpenly defined and
administered (i.e. sole source, professional contracts, emergency
purchases, waiving of bid bond requirements). Effective
29
purchasing practices should insure that the acquisition of a
service, supplies,. or equipment is made from a responsible bidder
at the lowest and best bid to insure that a hick quality of
service is obtained for the City.
One of our findings early in the process of researching this
subject was the lack of any consistent, generally accepted means
of enhancing affirmative action procurement efforts among various
agency legal staffs.
Staff from Santa Konica City Attorney's Office have been
consulted regarding various aparoaches and shared concerns
addressed by other legal counsels. They have, however, provided
some preliminary guidance and comments which are incorporated in
this discussion. In general, the City Attorney's staff has
advised that any established goals must have a logical
relationship with the means to reach them. While efforts to
rectify past discrimination may be acceptable, they cautioned
against adoption of any program which might have anti-trust
implications.
Bidding preference mechanisms should be very carefully
reviewed. t+Thereas legal opinions have been rendered in other
jurisdictions allowing the application of a five percent
preference formula for small local businesses, legal opinions
have also pointed out that giving a preference to vendors on the
basis of race or ethnic background may be a denial of the due
process provisions of the Fifth Amendment of the U.S.
Constitution. In addition, Santa Monica's City Attorney's staff
30
felt that any geographic preferercing of an area less than Los
Angeles County might be questionable.
Opinion number 77-8 issued by the Office of the City
Attorney in Los Angeles stated the following with regard to that
City's preferencing of small, local businesses:
"Here, however, the five percent preference for small local
businesses would not prohibit any contractor frcm submitting a
bid. Rather, the proposal will encourage a greater number of
contractors to submit bids than might be the case without this
program. The awar3 of such a contract would be made to the
lowest small local business whose bid, if not actually the lowest
of all bids, is not more than five percent above the bid of a
contractor who is not a small local business. Providing a slight
advantage to small businesses to compete with larger contractors
for qualifying City contracts should stimulate competition by
encouraging more businesses to submit bids."
"Set Aside" programs may also pose some legal problems in
that they restrict bidding and prohibit certain contrac±ors from
submitting bids. "These actions could be interpreted as
restricting free enterprise. Recently, in an Alabama court case,
the State Supreme Court declared that a "Set. Aside" program in a
city in Alabama was in violation of the U.S. Constitution.
Means of addressing the compcsition of an employer's
workforce were also discussed with City Attorney's staff. While
it may be possible to implement a form of Affirmative Action
31
reporting system on some contracts, it was rot felt to be
feasible to consider restrictions or requirements for an employee
to hire local residents or other targeted types of employees.
Further, it was not felt that requirement of union
membership on the part of a vendor's workforce was possible. It
shoul3 be noted that we were unable to locate any agency eihich
had implemented a program relating to union affiliation as part
of an CBE effort. The program which peripherally addresses this
issue is the prevailing wage requiremen± in many construction
contracts. One of the principal reasons identified for absence
of targeting unionized employers is that it can exclude small
minority owed firms.
OPTIONS/LEVELS OF INVOLVE"4ENT
Various levels of involvement are possible in the City's
effort to attain greater affirmative action in the areas of
purchasing supplies and equipment, capital improvements, and
professional services.
Some of the many options that are available are summarized
in this section.
1. Outreach and Networkin -
During our review of purchasing and contracting procedures
within the City and discussions with staff, it became apparent
that outreach to local, small, minority and women owned
businesses is disjointed and sporadic.
32
Outreach can occur in various forms. One possibility would
be for the City to sponsor procurement seminars to provide
information to the public on the compe±itive bidding process and
purchasing procedures. These seminars could be publicized in
local papers, trade bulletins, bilingual papers and announcements
posted throughout the community. Staff should be available at
these seminars to provide technical assistance and information on
future needs for projects, supplies and equipment.
Another form of outreach would be to establish formal
relationships with Sma11 and Minority Business .Clearinghouses.
These organizations exist in northern and southern California to
connect the consultant/vendor with the buyer as well as provide
support to firms to enable them to participate more actively in
the biding process. Some o£ these organizations are described
in the accompanying appendices.
The use of these networking approaches would not require any
changes in present ordinances and would certainly expand the
City's outreach efforts.
2. Compilation of MBE Directories and Ex ansion of Santa
Monca's Minority Vendors List
Various types of contracts and purchase orders are signed
almost daily throughout the City. However, affirmative action
considerations in decision-making have occurred on a limited
basis.
33
The Purchasing Department, as was mentioned earlier, has a
reporting system in place which identifies minority and women
vendors that the City has done business with. This list as well
as other MBE/WBE directories could be used by departments to a
greater decree in identifying small, local, minority and female
owned businesses when purchasing supplies, services and
equipment. Updates could easily be incorporated into this sytem
and could be distributed on a periodic basis to departments.
Depar*_ments using businesses identified in the report could be
requested to report their satisfac±ion or dissatisfaction with
the services received. This will help insure that services
provided to the City are of a quality nature and assist in the
monitoring effort.
3. Affirmative Action Plans
Affirmative Action Plan requirements could be implemented
for selected construction and professional service contracts.
An Affirmative Action Plan could be required for a firm to be
considered a responsible bidder on projects in excess o£ a
certain dollar amount. Various options could be set forth in the
specifications to enable a contractor to meet the City's
Affirmative Action requirements. An example of this concept is
that professional services or other contracts awarded to major
firms could accept assignment o£ women or minority employees to
the particular project as being a good faith affirmative action
effort.
34
4. Establishment of Goals
The establishment of targets should eventually be part of
the City's Affirmative Action procurement efforts. Factors that
should be considered in establishing goals include the number of
small, female and minority owned businesses in the area and their
ability to provide the specific services needed. Population data
shoul3 also be taken into account. The establishment of goals
identifies a policy objective and encourages staff to be
conscientious in their affirmative action efforts.
5. Set Aside Program
A "Set Aside" Program would identify specific projects and
commodities which are to be reserved for bidding only by selected
business. enterprises.
The determination of which projects would be "set aside"
would be based upon the availability of competition among small
minority contractors and the availability of contractors being
able to provide the specific services required. Of all options
explored to date, a set aside program appears to entail the most
complex legal questions - anti-trust concerns being not the least
of them.
6. Waiving or Lowering of Bond Requirements
Another tool used to encourage small, minority and female
owned businesses to bid for contracts is to waive or lower bid
bond requirements. Minority enterprises, because of limited
35
track records, and small job experience often find it difficult
to secure a bid bond.
This requirement has been successfully waived by other
cities when it has been determined that it was not absolutely
necessary for the City's protection or when alternative means of
protecting the City could be employed. Santa Monica has recently
begun to use this tool to encourage minority participation in
purchasing. Performance bond requirements might also be reviewed
for possible modification.
7. Preference
Preferencing programs can be very helpful in increasing the
number of small and minority businesses participating in the
bidding process. As was discussed earlier, both the cities of
Los Angeles and Oakland have employed "Preference Programs" for
small and/or minority businesses. Under preference programs, a
certain percentage is deducted from a vendor's bid for tabulation
purposes. However, contracts are awarded for the full amount of
the bid. A five percent preference is a commonly used factor.
In implementing such programs, care should be taken to
ensure that possible violation of the due process provisions
under the 14th and 5th Amendments of the Constitution of the
United States does not occur. As with a set-aside program, legal
advice on specific parameters of a proposed program would be
necessary prior to further consideration.
36
8. Eligibility of r^irms
Another tool that Santa Monica may wish to consider
implementing is the use of screening references such as the
Debarred, Suspended, Ineligible and Contractors and Grantees list
published by the U.S. Department of Housing and Urban
Development. Inquiries are being made as to whether other
aoencies publish similar lists.
It will also be important to develop mechanisms to verify
bonafide minority and women-owned firms. Criteria could include:
time in business; contribution of time or capital of
minority/women owners; role in management; and share of risks
aad/or profit.
9. Payment Schedules
Finally, the City could use the option of providinc an
advance payment schedule for small minority and female owned
businesses to ease cash flow problems. Information that this
option exists could be provided by staff at procurement seminars
sponsored by the City or be included with the specifications.
RECOM;~E~DATIONS
The following recommendations are based upon interviews with
City officials and other individuals knowledgeable about Minority
Business Enterprise (MBE) programs, as well as an analysis of
Santa Monica's current efforts and capabilities. Since this ~s
an extremely complex undertaking, we are recommerdina an
37
incremental implementation approach. The program should be
developed and implemented under the direction and support of
staff from the City Manager's Cffice, Personnel, Purchasing and
General Services. Periodic review and comments by the City
Council, Commission on the Status of Women ana other business ana
community organiations will also be important in refining program
components.
The recommendations glace emphasis on capacity building
activities for the first year. The activities outlined below are
proposed to be undertaken by existing staff with an assessment of
progress and objective setting for 1983-84 to take place during
the budget discussions.
1) The fundamental component of any affirmative action
effort is the ability to collect, retrieve and analyze
statistical performance data. Without accurate information,
realistic goals cannot be established nor performance monitored.
?t this time, the City's capability to gather information and
compile a data base is extremely limited and inconsistencies have.
even been idenfitied in the existing reporting mechanisms.
As a first step, it is recommended that the data base be
expanded to include information on: the names of minority and
women vendors; type of services provided; number of purchase
orders and/or contracts issued to these firms; and dollar
amounts. This information should include open purchase orders and
be' divided into the three major areas we expend monies in:
supplies and equipment, capital construction and professional
38
services. Development of regular quarterly reporting procedures
and a monitoring system by Purchasing, General Services and other
key departments should be part of the overall system. Management
Services will take the lead in implementing this recommendation
with staff support provided by the departments of Personnel,
Purchasing, General Services and Data Processing.
After the initial system development, staff support required
would be minimal and the information retrieved would be
invaluable for repor*_ing, monitoring and goal setting purposes.
This system should be developed and operating by the end of 1983.
2) It is incumbent upon the City to make greater efforts to
provide opportunities for minorities and women to participate in
the City's procurement and contracting systems. Therefore, it is
recommended that outreach be greatly expanded as part of the
overall capacity building effort. Aggressive outreach is an
essential component to any successful affirmative action program.
The City's outreach prcgram will be expanded ±hrcugh
implementation of the following activities:
a. Information on the City's MBE Program will be
disseminated to department heads and the public.
Representatives from the City Manager's Office,
Personnel, Purchasing and General Services will not only
be actively involved in the development of systems and
procedures as described in recommendation No. 1, but
staff may individually or collectively promote, publicize
and seek suggestions for the City's MBE program through
39
presentations to staff, boards, commissions and community
groups. Outreach will include development of a brochure
to be used as a tool for this activity. This brochure
will be developed with the assistance of the Public
Information Officer and scheduled for completion by the
end of the second quarter in 1983.
b. Formal and informal relationships will be
developed with those organizations which are established
for the purpose of providing technical assistance and
information to small, minority and women owned
businesses, and that act as intermediaries in connecting
the vendor and the buyer. This will provide the City
with access to several thousands of minority/women owned
businesses in the area that provide a variety of goods
and services, as well as an invaluable technical resource
in continuing the development of an expanded CBE program.
Contacts will be established with a minimum of four
organizations by the end of the first quarter in 1983.
The Purchasing Department will take the staff
responsibility in this area.
c. Lists of small minority and women owned
construction businesses will be made available to firms
that the City awards significant contracts to, so that
these businesses may be provided the opportunity to
solicit subcontracts from the smaller firms. The list
developed by the State of California, Department of
40
Transporta±ion will be disseminated to department heads
by the erd of the second quar*_er in 1983.
d. The possibility of setting up booths at Business
Trade Fairs will be explored and a recommendation made by
August 1983. This recommendation is dependent upon
whether or not Business Trade rr^airs will be sponsored in
the surrounding area during fiscal year 1983-84. The
Purchasing Department will take staff responsibility for
this recommendation.
e. It is recommended that semi-annual seminars be
sponsored by the City to provide information on the
City's competitive bid process and procurement
procedures. It would be appropriate to provide
information on the possibilities of advance oavment
schedules and the lowering or waiving of bid bond
requirements for MBE's/6vBE's at these seminars. Lists of
organizations that provide technical and bonding
assistance will also be made available to these business
enterprises desiring to participate in the City's
procurement and contracting programs, but requiring
assistance to compete succesfully. These seminars should
be well planned, organized and publicized with
announcements placed in the local papers, with community
organizations, bilingual newspapers, trade publications
and on local radio stations. The Purchasing Department
will take the lead in implementing this recommendation
41
with staff support provided by other members of the
Affirmative Ac±ion in Purchasing team. Planning for
these seminars should begin now to ensure that two are
held in fiscal year 1983-84. Neighboring cities should
be contacted to explore the possibility of co-sponsoring
such seminars.
f. All departments should be required to so'_icit
bids from the minority vendors list when purchasing
supplies on an informal basis. The Purchasing Department
will provide lead staff responsibility for expansion,
updating and dissemination of the Minority Vendors List
to departments.
g. It is also recommended that departments be
required to utilize the library of MBE directories
located in the Purchasing Department. This collection
contains information on supplies and equipment and
professional services offered by women and minority owned
business enterprises. A listing of the directories and a
brief description will be developed and distributed, with
semi-annual updates, to Department Heads by the
Purchasing Department.
3) It is recommended that an Administrative
Instruction for selection of professional services
providers be developed. This in struction will establish
guidelines and criteria to be considered in the
consultant selection process. Affirmative action
42
considerations will be included in the policy.
?lanaoement Services is currently preparing a draft of the
instruction for review. .This draft will be completed by
the end of February, 1983.
4) A small but significant chance would be the
addition of the word 'women' to the City's Minority
Business Enterprise {MBE) program title. The program
title could be Women and Minority Business Enterprise
Program {AMBE).
5) It is recommended that consideration be given to
requiring tha± all capital construction contracts contain
specific MBE requirements when they exceed $200,000.
Specific provisions and quantifiable goals should be
developed and recommended by appropriate department
heads. It is recommended that the .following criteria be
considered in the development of program objectives and
goals. This criteria seems to be the most frequently
used by other cities that have implemented formal MBE/WBE
programs.
a. The level of participatior. by women and minority
business enterprises on past contracts awarded by the
City which have contained WBE/MBE requirements;
b. The level of participation by WBE/MBE on
contracts awarded by other governmental agencies in the
43
Los Angeles County area which have utilized WBE's/MBE's
requirements; and
c. The availability of WBE'/MBE's which are capable
o£ providing the goods and services needed by the City.
If a project is significant, and subcontracts are
anticipated, the prime contractor could be requested as a
:4BE/MBE requirement, to de±ermine what types of work
activities will be subcontracted. Once that
determination is made a goal for WBE/MBE participation
could be established using the above criteria. (The
methodology utilized by the State Denartmer.*_ of
Transportation to determine MBE participation is the same
as that described in the preceding remarks.)
In developing these provisions, an underlying
assumption should be to provide as many options as
possible for contractors to meet affirmative action
criteria. Staff from the City Attcrney's Office indicate
that *_he more flexible requirements are, the more
defensible they are. This recomendation should be
implemented during fiscal year 1983-84.
6} It is recommended that the following affirmative
action steps should be required of all departments in
contracting for goods and services.
44
a. Include qualified women and minority businesses
on solicitation lists;
b. Assure that women and minority businesses are
solicited whenever they are potential sources;
c. Zf subcontracts are to be issued, then the prime
contractor be required to adhere to the affirmative
action steps described in the preceding sections.
These affirmative action steps should be
incorporated in the City's purchasing procedure,
Community Development Block Grants, and construction
contracts by the end of 1983.
7) The use of sanctions should be considered as part
of the City's Affirmative Action Program. As the
contract awarding authority, the City should have the
ability to impose sanctions or take such other actions as
are necessary to ensure compliance with the affirmative
action provisions of a contract. These sanctions could
include, but not be limited to:
a. refusal to award a contract;
b. withholding of funds;
c. recision of a contract based upon a material
breach of contract provisions pertaining to the
utilization of WBE's and MBE's; and
45
e. disqualification of a contractor, subcontractor,
or other business from eligibility for providing goods or
services to the City for a period not to exceed two
years.
Specific sanctions can be determined with counsel
from the City Attorney's Office. This recommendation is
complex and requires the interfacing of several
departments, because of this, the lead should be taken by
the City Manager's office. A recommended approach should
be presented by the end of 1983.
8) It is recommended that the current MBE goals for
purchasing supplies and equipment from minority vendors
be reviewed. The City's progress in this area should be
reviewed and the goals potentially revised during the
budge± development process. The following criteria should
be considered:
a. the level of participation of WBE's and MBE's
since the City's MBE program was adopted;
b. the level of participation of WBE's/MBE's in
other MBE programs in the Los Angeles County area; and
c. the availability of WBE'sjMBE's which are caoable
of providing the goods and services needed by the City.
The affidavit form currently used and verification
efforts should also be reviewed. Information on
46
verification and how to evaluate bona fide MBE status has
been obtained from other cities and the U.S. Department
of Commerce. This information shou'_d be considered in
the review.
9) It has been suggested that we explore the
possibility of encouraging or giving priority to
unionized employers as part of an affirmative action
procurement program. Having discussed earlier the legal
constraints and the potential conflict with increased
participation by CBE's and WBE's in our procuremen*_ and
contracting systems, it is recommended that we continue
~he adopted policy of payment of prevailing wages on
construction projects, and pursue the concept of
notifying appropriate unions of large projects or
purchases pending award of a contract. It is further
recommended that if a minority or women-owned business is
not available to provide goods or services for a specific
need and a union wage employer is, then these employers
should be solicited. Purchasing principles should still
apply and the best and lowes± bidder would be awarded the
contract. It is also possible as a matter of personal
preference for Councilmembers and other appointed
officials to specify a desire for union-affiliated
companies to bi3 on small purchses below the current $250
competitive bidding limit.
47
10) r^inally, it has been. suggested that we explore
imposition of affirmative action criteria in the City's
development agreements. Preliminary discussions with the
City Attorney's office and the Director of Community and
Economic Development have provided some points for
further exploration, aarticularly in the construction
portion of projects.
CONCL'J S I CN
Numerous options and activities have been presented
for consideration in the City's efforts to provide
expanded opportunities for businesses to participate in
the bidding process for purchasing, capital construction
projects and professional services contracts with the
City. An incremental approach has been suggested based
on current capabilities of the or ^yanization. Capacity
building activities have been stressed for the first
year. Staff intends to encourage and solicit continuing
public discussion on this subject in the months to come
to aid in the program development process. :fore specific
discussion of staff and monetary impacts of increasing
emphasis in this program area will occur during the
1983-84 budget review.
In summary, any program that is developed should
differentiate between the areas of purchasing, capital
construction and professional services. Not only do
Kunicipal Code requirements vary ir. each category, but
ag
the number of minority and women owned businesses varies
in each area and their ability to provide the specific
services needed could also vary. Although preference and
set aside grograms should not be discounted for the
future, the need to build our capabilities, establish a
data base and implement aggressive and effective outreach
and networking programs is more immediate and will assist
the City in determining the effectiveness of its
affirmative ac±ion efforts and potential areas for future
policy decisions.
Finally, it is recommended that the action steps
included in this report be approved by the City Council
so that it is a clearly expressed City policy to make
available every opportunity for all businesses to
participate in the City's procurement and contracting
systems. As future components of the program are
developed, further Council action will be recommended, as
appropria±e.
49
APPENDIX I
FM BE RESOURCES AND INFORMATION
i. Business Development Center Of Southern
California, 2651 Sou±h Western Avenue, Site 300, Los
Angeles, CA 90018, Mr. Cleveland Neil, 213j731-2131.
This firm provides marketing assistance, explores capital
opportunities and aids in contract procurement for
minority businesses. It also maintains a listing of over
400 minority firms in the area. This listing is not for
public distribution. However, they may be called with a
description of our needs and other pertinent information.
In return, they a1er± and provide this information to
their appropriate clients who may be able to provide the
service. Their listing includes a wide variety of
services.
2. Hawkins/Mark-Tell, P.O. Box 31, 617 Veterans
Blvd., Suite 107, Redwood City, CA 94054, Ms. Monica
Susko, 415/365-1588. This firm provides marketing
research service to professional consulting firms in the
areas of architecture, zoology, environmental sciences,
planning, engineering, landscape architecture and similar
fields. Hawkins/Mark-Tell's basic service is to act as
"eyes and ears" for its clients, identifying new projects
that may provide opportunities for consultant services.
They may be provided with a description of agency needs
and other pertinent information and act as an
50
intermediary between their client and the entity needing
the service. They will also highlight an agency's
interest in receiving proposals from minority and
women-owned firms in their periodic publications.
3. Cardinal 'danaaement Associates, Znc., 2500
Wilshire Blvd., Suite 1016, Los Angeles, CA 90057, fir.
Kenneth Takeda, 213/385-1335. This firm provides
marketing assistance tc minority businesses. They
maintain a listing of a wide variety of businesses in the
area. They may be called with a description of our needs
and other pertinent information and they act as an
intermediary between their client and the organization
needing the service.
4. Southern California Regional Minority Purchasing
Council, 650 South Spring St., Suite 1209, Los Angeles,
CA 90014, Mr. Hollis Smith, 213/622-6123. The Council
functions as a matchmaker between the buyer and minority
vendor. They have identified a data base of 1,900
Southern California minority firms. Upon request, they
can provide information about prospective minority
suppliers. The Council provides assistance to minority
owned companies to enable them to better compete in the
marketplace. They also manage a Minority Business
Opportunity Day where major firms' buyers have an
opportunity to meet qualified minority vendors.
51
5. UIDA, 1541 Wilshire Blvd., Suite 307, Los
Angeles, CA 90017, Mr. Steven Stailinas, 213/483-1460. A
statewide business development center for Indian owned
business. They may be called with a description of our
needs and other pertinent information and they act as an
intermediary. They maintain a listing of approximately
200 businesses with emphasis in construction,
manufacturing, services, and supplies. The Center also
offers management, financial and marketing services to
small Indian owned businesses.
6. Minority Contractors Association, 213/737-7952,
Donald Collier or George Glass. This association
specializes in the area of construction and includes
minority and female owned businesses in their listings.
They may be called with a description of cur needs and
pertinent information and will act as an intermediary
between their members and the organization needing their
service.
7. Hispanic Business and Professional Association
of Orange County, Mr. Ramon Najera, President,
714/861-2453 or 2722. This association is comprised of
approximately 60 members. The membership offers a wide
variety of professional services. For a referral, the
president may be contacted with a brief description of
the City's needs.
52
8. Eguivest - Nicki Brazee, Project Director,
213j280-1143. This association is known as a Program
:Management Center and serves as a representa~ive of the
U.S. Department of Transpor~ation, Office of Small
Disadvantaged Business Utilization. They provide
information on procurement opportunities-for HBE's/WBE's,
provide KBE's/;dBE's with ±echnical assistance. and
referrals and seek out and obtain invitations for bids
and requests for quotations from DGT arart recipients.
They may be used in the City's Capital Improvements
program in identifying minority and women contractors.
53
APPENDIX II
~SINCRITY AND WCMEN OWNED BUSINESS E'_QTERPRISES
1. Carranza Associates Inc., 3055 Wilshire Blvd.,
Suite 830, Los Angeles, CA 90010, Daniel Perumean, Senior
Account Executive 213/385-3411. This firm provides
services in the following areas: print production,
package development, media placement, marketing, public
relations, broadcast production, printing, direct
mailings, promotional and business development.
2. R/S Enaineerin Services Com any, P.C. Box 3762,
Alhambra, CA 91803, 213/283-4051, Ronald '4. Johnson. R/S
Engineering Services Company provides professional
engineering services in the area of stress analysis,
thermal, hydraulic and dynamic transient analysis, and
pipe support design and analysis. The company is set up
to use Adlpipe, Nupipe, Pipesd, Triflex, and Ansys
computer (finite elements) programs. The engineers with
the company are registered professionals and have a
minimum of eight years experience in power plant,
petroleum an3 petrochemical industries.
3. J and Y Precision, 3025 Nebraska Ave., Santa
Honica, CA 90404, 213/828-2844, John Rodriguez. The
owner is a tool maker by trade and has owned a small
machine shop for three years. They provide prototype,
tooling, short production, jig and fixture, and assembly
department services.
54
4. Falstein gad Connelly Communications, 11110 Ohio
Ave., Suite 202, Los Angeles, CA 90025, Sheryl Falstein,
Cathy Connelly, 213/478-0257. A full service public
relations firm, capable of developing and implementing
public information gad community awareness campaigns,
press liaison and publicity programs, fund raising
drives, special event undertakings from planning to
on-site coordination, and a variety of other related
services.
5. Bridges and Associates, 820 Nor±h Hollywood tPay,
Burbank, CA 91505 213/841-3373, Bi11 Bridges. An
environmental impact review and planning consultant firm.
b. Environmental Horizons, Inc., 919 E. Grand Ave.,
Escondido, CA 92025, 714/741-5760, Michael Alberson (Sl
percent female owned). An environmental impact review
and planning consultant firm.
7. Hennard, Delahousie and Gault, 4929 Wilshire
Blvd., #760, Los Anceies, CA 90010, 213/937-0855. An
environmental impact review and planning consultant firm.
8. The Planning Grouv, 1728 Silver Lake Blvd., Los
Angeles, CA 90026, 213/b61-1185, Gene Grigsby. An
environmental impact review and planning consultant firm.
9. The S. W. Group, 11801 N. Olympic Blvd., Los
Angeles, CA 90064, 213/477-1901, Ken Watanabe. An
environmental impact review and planning consultant firm.
55
10. Pacific Pianring Group, P.O. Box 486,
Idyllwild, CA 92349, 714/059-2229, Sand__*a H. Olinghouse.
Ar. urban planning, development, and. environmental
research consulting firm.
11. Arch I Form, 1201 W. Fourth St., Los Angeles,
CA 90017, 213/481-8378, ~lasko Soissonnauit. A design
firm involved in all aspects of facilities programming,
space planning, and design for commercial interiors.
12. American Computer Industries, 1436 ,arcelina
Ave., Torrance, CA 90501, 213/320-6014. A computer
turn-key system company which represents and sells
diverse computer products.
JO
APPENDIX III
AM BE DIRECTORIES AVAILABLE r~T mHE
PURCHASING DEPARTMENT
1. 1983 Directory of Women's Businesses and
Organizations published by the Los Angeles and Orange
Counties Women's Yellow Pages. A wide variety of
services and businesses are listed.
2. Southern California Regional Purchasing Council,
Inc., A wide variety of services and businesses are
listed. Indexed by supplier or commodity needed.
3. Southern California 1980 Minority Vendor
Directory, City of San Diego Office of Small Business
Assistance. A wide variety of services and businesses
are listed. Many are in the Los Angeles area. This is
the most recent edition.
4. A National Directory of Minority and Women Owned
Companies, published in 1981 by Source Publications,
Emeryville, CA. A wide variety of services, supplies and
equipmen± are listed ranging from construction companies,
management consultants, plumbers, printing to computers.
^:his is the most recent edition and should be used until
early 1983.'
57
5. Directory of `Minority Businesses released by
the Sma11 Business Administration. Current as of May,
1982. A wide variety of products and professional
services are listed.
6. 1982 Directory of Black Design Firms in tie
West, published by the San Francisco Redevelopment
Agency. A listing of professional engineering,
archi*_ectural and planning services.
7. 1982 Directory of Minori±v and Women Oc~~ed
Business Enterprises, published by Concepts, Inc.
Nashville, Tennessee. A wide variety of products and
professional services are listed.
8. CALTRANS, KBE listing o£ contractors. This list
is kept by the General Services Department.
9. Women In Business, published by Women In
Business, Irvine, California. A wide variety of products
and professional services are listed.
10. Minority Business Directorv, Orange County
1982, Orange County Regional Purchasing Council. A wide
variety of goods and services are listed.
58
APPENDIX IV
ORG.~;NIEATIONS AVAILABLE TO ASS?Sm W~BE'S
1. Business Develo went Cenrer, see Appendix I
2. Cardinal Mana ement Associates Inc - see
Appendix Z
3. Los Angeles Regional Minority Purchasin
Council, see Appendix I
4. Builders Mutual Surety Company, 1545 Wilshire
Blvd., Suite 516, Los Angeles, CA 90017, 213;413-5330.
The company assists minority business in securing
necessary bonding.
5. Operation Second Chance, 314 W. Second St.,
Suite 1, San Bernadino, CA 92401, 714/884-8764. Loan
packaging, management and technical assistance to
minority businesses.
o. PASS (SBA's Procurement Automated Source
System). Small businesses desiring to do business with
the government should call 213/688-2946. I£ a business
is eligible, they are placed onto SBA's small business
data bank so that they are accessible to government
agencies.
7. Eguivest - see Appendix I.
59