City of Portsmouth, Virginia

2015 PROCUREMENT DISPARITY STUDY

florida california michigan texas washington

Presentation Outline

Project Team

Study Background

Legal Framework

Disparity Results

Utilization Comparison

Anecdotal Information

Private Sector

Commendations and Recommendations

Questions and Answers

Disparity Project Team

MGT OF AMERICA

Reggie Smith Partner-in-Charge Vernetta Mitchell Project Manager Dr. Vince Eagan, J.D. Technical Advisor Marilyn Wiley Data Manager Lee Brazzell Transformation Consulting Anneliese Oppenheim Oppenheim Research

CITY OF PORTSMOUTH

Michael Ammons City’s Project Manager

Study Background

Procurement categories included in the study:

Construction

Architecture and Engineering

Professional Services

Other Services

Goods and Supplies

Study period July 1, 2008 through June 30, 2013

This is the City’s first disparity study

Study limitations

No subcontracting data

Minimal subcontractor data in permits

Legal Framework

J.A. Croson, Adarand , et. al.

A Compelling Interest Can Be Found in Private Sector Discrimination

Concrete Works v. City and County of Denver, 321 F.3 950 (10th Cir 2003)

4th Circuit Decision – most recent H.B. Rowe v. Tippett

Disparity Indices

An index of 100 indicates that utilization is perfectly proportionate to availability, therefore indicating the absence of disparity (that is, all things being equal).

Generally, firms are considered underutilized if the disparity indices are between 80 to 100, but not significant

Index below 80 is considered be significantly underutilization.

Index greater than 100 is considered overutilized.

Disparity Results

African American

Native American

Asian American

Hispanic American

Nonminority Women

Non W/MBEs

0.00 20.00 40.00 60.00 80.00 100.00 120.00

63.94

0.00

0.00

0.00

0.76

106.90

CONSTRUCTION

Disparity Index

Substantial Disparity =<80.00

Overutilization =>100

African American

Native American

Asian American

Hispanic American

Nonminority Women

Non W/MBEs

0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00

644.51

0.00

284.96

0.00

2.75

92.73

PROFESSIONAL SERVICES

Disparity Index

Substantial Disparity =<80.00

Overutilization =>100

Disparity Results

Disparity Results

African American

Native American

Asian American

Hispanic American

Nonminority Women

Non W/MBEs

0.00 100.00 200.00 300.00 400.00 500.00 600.00 700.00 800.00

759.40

0.00

0.00

0.00

145.80

83.37

OTHER SERVICES

Disparity Index

Substantial Dispar-ity =<80.00

Overutilization =>100

Disparity Results

African American

Native American

Asian American

Hispanic American

Nonminority Women

Non W/MBEs

0.00 20.00 40.00 60.00 80.00 100.00 120.00 140.00 160.00

0.33

0.00

0.00

137.75

0.42

104.67

GOODS AND SUPPLIES

Disparity Index

Substantial Dispar-ity =<80.00

Overutilization =>100

Utilization Comparison

The following exhibit shows a comparison between the percent of M/WBE utilization for the City of Hampton (2014 study) and the City of Portsmouth (2015 study). The bottom half is the amount by which Portsmouth’s M/WBE utilization exceeds (or falls short of) Hampton M/WBE percent utilization.

M/WBE Utilization

BUSINESS OWNERSHIP CLASSIFICATION

Construction Architecture and EngineeringProfessional

ServicesOther

ServicesGoods and

Supplies

(%) (%) (%) (%) (%)

City of Portsmouth

Minority Business 1.73% 0.00% 11.68% 17.54% 0.54%

Nonminority Women 0.05% 0.00% 0.05% 4.62% 0.01%

Total M/WBE Firms 1.77% 0.00% 11.73% 22.16% 0.55%

City of Hampton

Minority Business 3.70% 0.00% 4.90% 6.91% 2.35%

Nonminority Women 8.18% 0.00% 2.43% 15.49% 13.03%

Total M/WBE Firms 11.88% 0.00% 7.33% 22.40% 15.38%

Portsmouth % - Hampton % (%) (%) (%) (%) (%)

Minority Business -1.97% 0.00% 6.78% 10.63% -1.81%

Nonminority Women -8.13% 0.00% -2.38% -10.87% -13.02%

Total M/WBE Firms -10.11% 0.00% 4.40% -0.24% -14.83%

Anecdotal Sampling

Survey of Vendors – 514 participants

Public Hearing – 16 attendees

Focus Group – 17 participants

Personal Interviews – 28 interviewees

Anecdotal Information

The biggest concern for was competing with large firms (34.3% of M/WBE primes). Other key issues noted by M/WBE respondents included:

Primes:

Selection process – 15.0 percent

Contracts too large – 15.0 percent

Specifications – 14.8 percent

Subcontractors:

Competing with large firms – 18.7 percent

Contracts too large – 8.2 percent

Anecdotal Information (cont’d.)

With respect to disparate treatment, M/WBE respondents reported:

An informal network precluded their firms from obtaining work in the private sector – 21.37 percent or 81 respondents

Seldom or never being solicited when there were no M/WBE goals – 9.23 percent or 35 respondents

Being dropped from a project after being included to satisfy good faith efforts requirements – 10.29 percent or 39 respondents

Private Sector

MBE prime contractors won 0.18 percent of prime permit dollars, and WBEs received 1.23 percent of prime permits dollars,

MBE subcontractors were issued 0.68 percent of all subcontracting permit dollars and WBEs 0.54 percent of subcontracting permit dollars.

This result is consistent with the anecdotal finding of the difficulty of M/WBEs securing construction work in the absence of a remedial program

Recommendations

RECOMMENDATIONS

Vendor Registration Consider combining M/WBE

& SBE Program Subcontract Project Goals Aspirational M/WBE Goals

Data Management

Questions and Answers

MR. REGGIE SMITH

850.386.3191

MS. VERNETTA MITCHELL

704.531.4098

www.MGTofAmerica.com