Loading...
HomeMy WebLinkAboutMINUTES - 08181987 - 2.7 TO- BOARD OF SUPERVISORS � FROM: Phil Batchelor VIJI ltra County Administrator C,)sta DATE: August 12, 1987 Oio cim' "� �' SUBJECT: Status Report on Policy on Minority- and Women-Owned Businesses SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AMID JUSTIFICATION RECOMMENDATION• Acknowledge receipt of the report of the County Administrator on this subject. BACKGROUND: On August 4, the Board of Supervisors requested a status report on the development of a policy on the use of minority-owned business enterprises (MBE) and women-owned business enterprises (WBE) in construction contracts awarded by the Board of Supervisors. In response to a prior directive by the Board of Supervisors, a policy was drafted in February, 1987. That policy provided for goals for the dollar value of construction contracts to be awarded to MBE/WBE contractors. That draft policy was reviewed by the Advisory Group on the West County Justice Center. The Advisory Group substantially amended the plan and presented a revised policy to the Board and Administration in late March, 1987 . The policy was also circulated to several organizations which either were MBE/WBE contractors or were associated with MBE/WBE contractors. By the time all of those comments were received, staff became aware of a decision by the Federal Circuit Court of Appeals for the 9th Circuit ruling on the adequacy of a similar policy which had been adopted by the City and County of San Francisco. County Counsel was requested to review the County' s draft policy and the amended version presented by the Advisory Group in light of the court' s ruling. County Counsel provided an extensive review of the court' s decision in June. It appears that the court ruled that at least in regard to minority-owned business enterprises any policy which established set-asides or bid preferences for minority-owned business enterprises would probably not withstand a legal challenge. The court' s decision was based on the Constitutional grounds of equal protection and due process. Set-asides, while apparently not defined by the court, are understood to be a situation where a particular portion or dollar value of a CONTINUED ON ATTACHMENT: __ YES SIGNATURE: (! � � Z//4/"L(eG X RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE X APPROVE OTHER S I GNATURE(S 1: ACTION OF BOARD ON August 18, 1987 AT',PROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS (ABSENT AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES. AMID ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. County Administrator cc: public Works Director ATTESTED /�� /�89► General Services Director PHIL BA HELOR, CLERK OF THE BOARD OF Affirmative Action Officer SUPERVISORS AND COUNTY ADMINISTRATOR Advisory Grout/ on West County Justice Q Center c/o Lloyd Madden BY M382/7-83 County Counsel — DEPUTY Page 2 contract is reserved only for minority-owned business enterprises as a mechanism to achieve pre-established goals. Likewise, we understand bid preferences to be a process whereby a minority-owned business enterprise is given a financial incentive or preference in evaluating whether their bid is the "lowest responsible" bid. It was and remains unclear whether goals, in the absence of any real enforcement mechanism, are able to be established within the court' s interpretation of the Constitution. Of interest is the fact that the court apparently did not apply the same due process and equal protection argument to women-owned business enterprise policies, at least in the San Francisco case. On July 23, the Advisory Group wrote to the Board suggesting that their March 20 revision to the staff ' s policy simply be amended to remove any reference to "set-asides" or "bid preferences" and be adopted by the Board of Supervisors. Staff from the County Administrator' s Office met with the leaders of the Advisory Group and indicated that staff would immediately review the July 23 letter from the Advisory Group and determine what course of action to pursue. A meeting of County staff was held the week of July 27 to review the court decision and County Counsel' s opinion. The conclusion of that meeting was that the County' s policy clearly could not include set-asides or preferences for minority-owned business enterprises. On the question of whether "goals" could withstand the legal test of the Circuit Court of Appeals' decision, County Counsel requested time to contact the attorneys in San Francisco who had defended the suit and review the court decision in more detail. Because of vacation schedules during the month of August, it was not possible to reconvene the staff before September 3 and a meeting has been set for that date to review County Counsel' s opinion and decide on the content of a policy. In the meantime, staff has drafted MBE/WBE goals which appear to be defensible for the West County Detention Center Project. These policies were contained in the bid documents approved by the Board August 11 and may well serve as the basis for a countywide policy since they appear acceptable to all concerned parties. An additional meeting is being held with the principals in the Advisory Group prior to the Board meeting on August 18 to review the status of actions to date. It has been, and remains, staff ' s primary concern to draft a policy on MBE/WBE contractors which is both administratively workable and legally enforceable. At this point, it appears likely that a policy similar to that contained in the bid documents for the West County Justice Center will be recommended to the Board. This policy establishes goals for MBE and WBE contractors, but relies heavily on an active outreach and recruitment effort to achieve those goals since other measures appear not to be legally enforceable. We fully intend to return to the Board on September 29 with a policy which we believe to be both administratively workable and legally enforceable. f` M',,FT POLICY ARENTLY UNDER REVIE14 BY COUNTY ONSEL February 19, 1987 PD 000-8704 CONTRA COSTA COUNTY MINORITY AND WOMEN BUSINESS ENTERPRISE PROGRAM FOR CONSTRUCTION CONTRACTS A. PURPOSE AND APPLICATION 1. The general purpose of this program is to help develop and support Minority and Women Business Enterprises (MBE and WBE) by providing opportunities for participation in the performance of Construction Contracts financed entirely with County funds. An MBE or WBE means a business enterprise which meets the criteria specified in Public Contract Code Section 2000. 2. This Program shall apply to construction contracts when the County's estimated contract cost is $75,000 or more, except when a contract is exempt from competitive bidding under Public Contract Code Section 20134, "Emergencies." 3. The County Program shall not apply where contracts are financed in whole or in part with Federal or State funds and the grant, loan or other financing device contains MBE and WBE programs; such programs shall supersede the County program. 4. Since County construction contracts are prepared and administered by the Public Works Department and the General Services Department, each of these two Departments shall prepare standard departmental procedures and contract provisions as required to implement this Program. While such procedures and provisions shall meet the requirements of this Program, details may be tailored to suit the traditions and practices of that type of construction typically managed by each Department. a. Within 45 days of Board approval of this Program, each Department shall submit its proposed departmental procedures and contract provisions to the County Administrator for review and approval . b. The departmental procedures and contract provisions shall be in effect for all bid documents issued after the date of the County Administrator's approval . c. The Departments shall specify in their contract provisions that failure to carry out the County MBE and WBE goals and requirements, as specified in each contract, shall constitute a breach of contract and, after notification by the County, may result in termination of the contract by the County or such other remedy as set forth in the approved departmental contract provisions. Page 1 of 4 ' r B. GOALS 1. To implement the purpose of this Program, at least thirteen percent of the total of all construction contract award amounts in each fiscal year, in each Department, shall be expended for MBE firms and at least two percent shall be expended for WBE firms, starting with fiscal year 1987-88, beginning on July 1, 1987. 2. The Department Head may determine that higher or lower goals are appropriate on a project-by-project basis, where it can be shown that the type, size or location of the project will affect the availability of MBE and WBE firms, so long as the aggregate of all contracts does not lower the annual goals. C. BID DOCUMENTS 1. Bidders shall submit MBE/WBE information with their Bids. Such information shall be subject to verification by the County. The information shall include names of MBE/WBE to be used, and the dollar value of each such MBE/WBE transaction. 2. Contractors, subcontractors, suppliers or . MBE/WBE members of a joint venture intended to satisfy County MBE/WBE goals shall be certified by the State Department of Transportation or shall be listed in another Public Agency registry. The County Department may accept any of the following as alternate sources of certified MBEs and WBEs: a. listing in a Contra Costa County registry established in accordance with Section D. b. Self-certification form for an MBE/WBE, or an MBE/WBE member of a joint venture, not already listed in the Registry or certified by the DOT. c. Evidence of certification or the self certification form shall be submitted to the County on or before the bid opening. D. REGISTRY 1. Each Department may establish and maintain a registry of self-certified Minority Business and Woman-owned Business Enterprises in construction. 2. The purpose of the Registry will be to provide a resource for prime bidders on County construction who intend to solicit bids from MBE and WBE subcontractors and suppliers to meet County MBE and WBE goals. The Registry will not constitute a recommendation or endorsement of any listed firm. 3. The Registry will be developed and maintained by advertising, at least yearly, for letters of interest from MBE and WBE firms wishing to be included in the Registry. Advertisements will be placed in the Daily Pacific Builder and in one or more general circulation newspapers. The certification process will involve submission of a Page 2 of 4 ••r self-certification form similar to "Schedule A" and "Schedule B" which are now required for federal aid construction projects. The submitted form will be subject to approval by the County Department Head or his designee. 4. All MBEs/WBEs will be required, on an annual basis, to update their self-certification form by submitting a new form. Also, when there is a change in the information given on a form, the firm will be required to submit a new self-certification form for approval . 5. The self-certification form shall be reviewed by the Department Head or his designee to determine eligibility in accordance with criteria given in "Federal Requirements for Federal-Aid Construction Projects," Subpart A, Section 23.53, as adopted by each Department. All information submitted by applicants is subject to verification by the Department. E. AWARD OF CONTRACTS 1. If a construction contract is to be awarded it shall be awarded in accordance with the Public Contract Code to the lowest responsible bidder who also does either of the following: a. Meets the County goals and requirements set forth in this Program and in the Contract provisions. If the bidder does not meet the County goals and requirements, the Department head shall evaluate the good faith effort of the bidder to comply with them as provided below. b. Makes a good faith effort to comply with these goals and requirements, before the time bids are opened, in accordance with the criteria set forth in Section 2000 of the Public Contract Code. 2. Where these goals and requirements are not met and a good faith effort is claimed by the apparent lowest responsible bidder, the bidder shall be required to submit documentation before the contract award to show that the criteria for good faith effort have been met. 3. Once a firm is determined to be an eligible MBE/WBE, and before contract award, the total dollar value to be paid to the MBE/WBE shall be evaluated in accordance with the requirements specified in "Federal Requirements for Federal-Aid Construction Projects," Subpart A, Section 23.47 "Counting MBE Participation Toward Meeting MBE Goals, " as adopted by each Department. If the evaluation shows that the bidder has not met or made a good faith effort to meet the contract goals for MBE and WBE participation, the bidder shall be disqualified. F. SUBSTITUTION OF SUBCONTRACTORS If an MBE or WBE subcontractor is to be substituted in accordance with State law, the Contractor shall be required to make reasonable efforts to replace the original MBE or WBE subcontractor with another MBE or WBE subcontractor. Page 3 of 4 G. YEARLY REVIEW 1. Each Department shall submit yearly progress reports to the County Administrator, beginning in July 1988. 2. The County Administrator shall submit a report to the Board of Supervisors in July 1988 and periodically thereafter at his discretion. 3. Progress reports shall include the percentages of the dollar value of all contracts awarded to MBEs and WBEs during the reporting period. If goals were not met, reports shall include recommendations for correcting deficiencies. 00004002.19A RDH:pg Page 4 of 4 CONTRA COSTA COUNTY MINORITY AND WOMEN ENTERPRISE PROGRAM FOR PURCHASING GOODS AND SERVICES A new data processing system for the Purchasing Division is currently on order and should be installed and operational by July 1, 1987 . This system is designed in such a way that it will be capable of producing management reports. Among these will be reports which identify vendors in terms of whether or not each is a minority- or women-owned business. . These reports will allow the County to tabulate on a monthly basis the total value of purchase orders issued and the dollar value of those which have been issued to minority- and women-owned business enterprises . By January 1, 1988, the County will have an adequate base of information on its purchasing policy to establish some baseline data and allow the selection of appropriate and achievable goals which can, thereafter, be tracked on a monthly basis and reported to the Board of Supervisors. It is planned that a self-certification system will be implemented that will allow vendors to identify themselves as minority-owned or women-owned based on a process similar to that recommended for use with construction contracts. In addition, by July 1, 1987 , a proactive recruitment program will be implemented which will actively recruit minority-owned and women-owned business enterprises, encouraging them to apply for consideration by the County. The award of purchasing contracts is a much less formal process than is the awarding of major construction contracts . It, therefore, relies heavily on the awareness of the vendor that the County is interested in purchasing particular services or supplies . The policy relies equally on an awareness by the County' s buyers of minority- and women-owned businesses which are interested in and capable of providing the services and supplies needed by the County. Most purchases do not require the type of competitive sealed bid process which is characteristic of construction contracts . Instead, the buyers generally call several vendors asking for quotations on a particular purchase. Their sole objective is to obtain the best price for the County compatible with the quality and level of service required by the County. Where buyers know that prospective vendors are minority- or women-owned businesses , they can make a particular effort to solicit quotations from such businesses. Page 2 Purchasing Division staff are already informally aware that several of the County' s regular suppliers are minority- or women-owned businesses. Because the process is not one generally controlled by criteria other than obtaining the best price for a given quality of product, the achievement of specific goals for the awarding of purchasing contracts to minority- and women-owned businesses is uniquely suitable as a measure of the success of the purchasing system, given that minority- and women-owned businesses are able to offer competitive prices on products . The soon-to-be-installed data processing system is essential in order to keep track of the volume of purchase orders, which presently runs 2000 purchase orders per month. It should be noted that there are several areas where purchases are generally made directly from suppliers which are national or international publicly held businesses. It is likely that the County will not ask these firms to submit to a self-certification process since the company itself probably is not aware of the racial or sexual composition of its shareholders and it is most likely that the company is not 510 owned by minority or women shareholders. The purchases from such firms will, however, be included in the overall data which is gathered in order to establish baseline data on present purchasing practices . r IA '7 CONTRA COSTA COUNTY MINORITY AND WOMEN ENTERPRISE PROGRAM FOR PERSONAL SERVICE CONTRACTS The County Administrator' s Office will engage in a process of defining what is meant by a personal service contract, evaluating legal constraints to contract awards, and outlining a policy for consideration by the Board of Supervisors on the following timetable: 4/1/87 Examples of personal service contracts will be solicited from County departments. 5/1/87 A definition of personal service contract which is acceptable to County departments will be developed and constraints on the awarding of such contracts will have been researched. 6/1/87 A policy for the recruitment of qualified minority- and women-owned business enterprises in the personal service area will be developed. 7/1/87 A policy for evaluating qualified personal service contractors will be developed and ready to test. 7/1/87- A selective test of intensive recruiting, 8/31/87 evaluating, and awarding of personal service contracts to minority- and women-owned businesses will be tested. 9/1/87- The results of the test will be reviewed and 9/30/87 policies will be developed for presentation to the Board of Supervisors. 10/1/87 A fully developed and workable policy on the award of personal service contracts to minority- and women-owned businesses will be developed for presentation to the Board of Supervisors . COMMENTS: The development of a policy on the recruitment and awarding of personal service contracts is clearly the most difficult and complex of the three areas which include construction contracts , �•ter ► � • Personal Service Contracts Page 2 purchase of services and supplies, and personal service contracts. Nearly every County department at one time or another has reason to retain a personal service contractor. The range of services provided is enormous, including preparation of Environmental Impact Reports, consultation on a particular subject, and the provision of specialized direct services. There are essentially no limits on how the Board of Supervisors may select such contractors. Competitive bidding is not generally required. The ability of a particular firm to perform specialized personal services is difficult to evaluate except on past experience, contact with references, and the content of responses to a "Request for Proposals" where this mechanism is used. Because there are so few limits on the Board' s ability to contract with one firm over another, and because of the tendency to rely on known ability as opposed to the firm' s stated ability, or even quoted price for a given service, this is the area most open to abuse in the use of qualified minority- and women-owned businesses. It is also the area where the least is known about how much progress can be made and, therefore, it is the area where the most background work is needed before formulating policy. It is, however, the area where the greatest change in policy is possible, once definition of terms is clear and evaluation methods are developed.