SHELB COUNTY LEGAL ANAL YSIS AND DISPARITY sruny February 3, 2016 MASON TILLMAN ASSOCIATES, LTD PRESENTATION AGENDA • Describe Study Objectives • Present Study Findings • Outline Race and Gender-Conscious Remedies • Present Administrative Recommendations • Outline Next Steps 2 DISPARITY STUDY OBJECTIVES • Analyze Prime Contract and Subcontract Awards and Payments • Determine Extent of Any Prime Contract or Subcontract Disparity • Assess How County Procurement Practices Affect Any Documented Disparity • Evaluate Effectiveness of LOSB Program • Provide Program Recommendations 3 STUDY PROFILE Study Period: January 1, 2012 – December 31, 2014 Construction Professional Services, including Architecture and Engineering Commodities and Services 4 BUSINESS SIZE BY EMPLOYEES Shelby County State of Tennessee United States Less Than 5 Employees 44.38% 48.75% 54.63% Less Than 10 Employees 65.04% 69.66% 73.50% Less Than 20 Employees 79.88% 83.80% 86.21% 3.50% 2.87% 2.31% Minority-owned Businesses 35.62% 12.51% 21.26% Women-owned Businesses 30.77% 25.94% 28.76% Businesses Over 100 Employees Source: U.S. Census: County Business Patterns 2012; Survey of Business Owners 2007 5 SHELBY COUNTY BUSINESSES BY ETHNICITY AND GENDER Ethnicity Percentage African American 48.52% Asian American 3.38% Hispanic American 2.75% Native American 0.75% Caucasian 44.59% 100% Source: U.S. Census, 2012 Survey of Business Owners 6 DISTRIBUTION OF PRIME CONTRACT DOLLARS BY MARKET AREA Market Area: Shelby County Total Dollars Within Market Area $85,952,652 41.66% Outside Market Area $104,558,555 58.34% 7 DISTRIBUTION OF ALL PRIME CONTRACT DOLLARS VENDOR Total Dollars Total Utilized Vendors $190,511,207 998 Total Prime Contracts 8,771 BY Vendor Total Dollars Awarded Percent of Dollars Number of Contracts Percent of Contracts 14 Vendors Received $94,924,886 50% 264 3% 25 Vendors Received $114,803,824 60% 550 6% 47 Vendors Received $133,217,524 70% 1,644 19% 951 Vendors Received $57,293,683 30% 7,127 81% 8 DISTRIBUTION OF ALL PRIME CONTRACT DOLLARS BY ETHNICITY AND GENDER Ethnicity/ Gender Percent Available Expected Dollars Dollars Awarded Dollars Lost Percent Dollars Awarded Contracts Awarded African Americans 26.85% $51,143,948 $11,059,092 -$40,084,856 5.80% 1,286 Asian Americans 2.18% $4,155,446 $624,960 -$3,530,486 0.33% 67 Hispanic Americans 1.01% $1,917,898 $44,859 -$1,873,039 0.02% 21 Native Americans 0.76% $1,438,424 $713,301 -$725,123 0.37% 34 Caucasian Females 12.92% $24,613,025 $9,809,450 -$14,803,575 5.15% 797 Non-minority Males 56.29% $107,242,466 $168,259,546 $61,017,080 88.32% 6,566 9 PRIME CONTRACT DISPARITY: CONSTRUCTION Ethnicity/ Gender Percent Available Percent of All Dollars Awarded Disparity Percent of Dollars Awarded Under $5,000 Disparity African Americans 30.54% 5.06% Yes 25.71% Yes Asian Americans 1.08% 0.01% Yes 0.22% Yes Hispanic Americans 0.81% 0.01% No 0.37% No Native Americans 0.81% 0.00% No 0.00% No Caucasian Females 9.19% 3.48% No 9.69% No Non-minority Males 57.57% 91.44% --- 64.01% --- --- denotes overutilization 10 PRIME CONTRACT DISPARITY: PROFESSIONAL SERVICES Ethnicity/ Gender Percent Available Percent of All Disparity Dollars Awarded African Americans 26.37% 3.60% Asian Americans 4.98% Hispanic Americans Percent of Dollars Awarded Under $5,000 Disparity Yes 7.35% Yes 0.76% Yes 0.79% Yes 1.49% 0.00% Yes 0.10% Yes Native Americans 1.49% 0.85% No 0.44% Yes Caucasian Females 13.93% 7.34% No 13.27% No Non-minority Males 51.74% 87.44% --- 78.06% --- --- denotes overutilization 11 PRIME CONTRACT DISPARITY: COMMODITIES AND SERVICES Ethnicity/ Gender Percent Available Percent of All Dollars Awarded Disparity Percent of Dollars Awarded Under $5,000 Disparity African Americans 26.19% 8.71% Yes 9.35% Yes Asian Americans 0.53% 0.40% No 1.28% No Hispanic Americans 0.88% 0.06% No 0.15% No Native Americans 0.53% 0.48% No 0.14% No Caucasian Females 13.81% 5.56% Yes 10.00% Yes Non-minority Males 58.05% 84.79% --- 79.08% --- --- denotes overutilization 12 SUBCONTRACT DISPARITY: CONSTRUCTION Ethnicity Percent Available Percent of Dollars Disparity African Americans 28.13% 6.91% Yes Asian Americans 0.96% 0.00% No Hispanic Americans 0.96% 0.17% No Native Americans 0.72% 0.00% No Caucasian Females 9.62% 2.65% No Non-Minority Males 59.62% 90.28% --- TOTAL 100.00% 100.00% --- denotes overutilization 13 SUBCONTRACT DISPARITY: PROFESSIONAL SERVICES Ethnicity Percent Available Percent of Dollars Disparity African Americans 26.23% 5.28% Yes Asian Americans 5.15% 0.00% No Hispanic Americans 1.47% 0.00% No Native Americans 1.47% 0.00% No Caucasian Females 13.97% 0.00% Yes Non-minority Males 51.72% 94.72% --- TOTAL 100% 100.00% --- denotes overutilization 14 RE COMMENDA TIONS MASON TILLMAN LTD RACE/GENDER CONSCIOUS RECOMMENDATIONS • Prime Contract Remedies • Bid Discounts on Low Bid Contracts • Incentive Credits on Professional Service Contracts • Subcontract Remedies • Goals on Construction and Professional Services Contracts • Goals for Ethnic and Gender Groups with Disparity • Establish M/WBE Program Function • Expand EOC Office Responsibility • Retain Staff to Manage M/WBE Services • Appoint M/WBE Advisory Committee 16 RACE/GENDER NEUTRAL RECOMMENDATIONS • Locally Owned Small Business Program • • • • Revise Gross Receipt Eligibility Requirement Implement Small Contracts Rotation Process Apply Bid Discount/Evaluation Credits to LOSB Primes Mandate LOSB Subcontract Goals on All Contracts • Sole Source Contracts • Require EOC Review of Requisitions Before Approval • Apply LOSB/MWBE Goals on All Contracts • Purchase Orders Under $5,000 • Solicit LOSB and M/WBE Quotes on Small Contracts 17 ADMINISTRATIVE RECOMMENDATIONS • Target Advertising of Contracts Under $50,000 to LOSBs and M/WBEs • Provide Technical Supportive Services • Publish Intent to Award Notices • Establish Formal Bid Protest Procedures • Implement Post Award Debriefing Process • Post Prime Payments on Website 18 TRACKING AND MONITORING RECOMMENDATIONS • Commission Should Track, Verify and Report Awards to All Subcontractors, Truckers, and Suppliers at Bid Opening • Commission Should Publish Quarterly M/WBE and LOSB Compliance Reports • Prime Contractors Should List Subcontractor Payments with Each Invoice • Penalties Should Be Assessed When Prime Contractors Fail to Meet M/WBE or LOSB Subcontract Goals 19 NEXT STEPS • • • • Prepare Draft Final Report Respond to County Comments on Report Submit Final Report to County Commission County Commission Approves Report and Authorizes: • M/WBE Policy • Modifications to LOSB Program • Procurement Policy Amendments to Include M/WBE Program Components • County Commission Launches M/WBE Program 20 guuystb,? 4! Merci! c?m 0?11! THANK iGraCIas!