WASHINGTON SUBURBAN SANITARY COMMISSION COMMISSION SUMMARY AGENDA CATEGORY: SLMBE OFFICE ITEM NUMBER: DATE: June 15, 2016 2015 DISPARITY STUDY PRESENTATION BY SUBJECT MGT OF AMERICA, INC SUMMARY Pursuant to Standard Procedure MBE 11-01, Section VII.E.1 entitled “PERIODIC UPDATE OF FACTUAL PREDICATE” mandates that every four (4) years the Commission undertake an independent assessment of its factual predicate for its MBE Program through the performance of a disparity study. MGT of America, Inc., the Consultant, has completed the 2015 Disparity Study and will make a presentation to the Commission on its findings. The SLMBE Office will present high level changes to its MBE Program based on the findings of the Study. Public Meetings to present the findings of the Study and proposed SPECIAL COMMENTS changes to the MBE Program based on the findings have been scheduled for the evening of Wednesday, June 15, 2016 and the morning of Thursday, June 16, 2016. CONTRACT NO./ N/A REFERENCE NO. N/A COSTS AMENDMENT/ N/A CHANGE ORDER NO. AMOUNT MBE PARTICIPATION N/A General Manager PRIOR STAFF/ General Counsel COMMITTEE REVIEW Deputy General Manager of Administration SLMBE Director SLMBE Project Manager Executive Steering Committee PRIOR STAFF/ Corporate Secretary COMMITTEE APPROVALS RECOMMENDATION TO Endorsement COMMISSION COMMISSION ACTION
Small, Local and Minority Business Enterprise (SLMBE) Programs Introduction by Towanda R. Livingston Director, SLMBE Office Wednesday, June 15, 2016 2
The SLMBE Programs Minority Business Enterprise (MBE) Designed to promote greater availability, capacity development and contract participation for Minority and Women-Owned Business Enterprise (M/WBE) firms (Sections 20-203 through 20-208 of the Public Utilities Article, Md. Code Ann.). Small Local Business Enterprise (SLBE) Designed to encourage the utilization of small local firms located in Prince George’s County and Montgomery County. The SLBE Program is a race-and-gender neutral program (Sections 20-301 through 20- 304 of the Public Utilities Article, Md. Code Ann.). 3
Mission and Strategy The SLMBE Office is dedicated to creating an inclusive purchasing environment while building sustainable relationships; expanding opportunities; and cultivating the growth of small, local and minority business enterprises which adds value to the Commission and the community we serve . The Four Pillars of Excellence - Paving the Road to Supplier Diversity Supplier Supplier Extensive Compliance Development Advocacy Outreach
Evolution of the SLMBE Programs WSSC 2010 Disparity Study- Completed 12/31/10 New MBE Program (SP MBE 11-01) - Effective 5/1/11 New SLBE Program (SP SLBE 12-01) - Effective 8/26/11 Re-authorization of the MBE Program - Effective 7/1/12 New Web-Based Compliance System – Launched 10/30/12 Kick-off for the 2015 Disparity Study – 3/18/15 5
Performance Fiscal Year-To-Date (FYTD) MBE % of MBE % of Total Total M/WBE Contract Contract M/WBE Contract Contract Fiscal Year Awards Awards Payments Payments 2011 $ 133,211,249.00 31% $ 66,853,578.00 27% 2012 $ 129,037,973.00 18% $ 102,281,071.00 28% 2013 $ 186,250,875.00 25% $ 92,133,148.00 20% 2014 $ 228,579,268.00 23% $ 99,965,604.00 20% 2015 $ 187,869,377.00 28% $ 134,409,006.00 25% May 2016 YTD $ 114,853,280.00 24% $ 108,638,105.00 20% Total $ 979,802,022.00 $ 604,280,512.00 Since FY 2011 through May 2016 FYTD, WSSC contract payments to SLBE firms were $87,295,546.00; and WSSC contract awards to SLBE firms were $260,380,316.00. 6
Why A Disparity Study? The Disparity Study was conducted to establish a “Factual Predicate” for the continuation of the MBE Program that is: Legally Sufficient Narrowly Tailored Relevant 7
Introducing 8
Current State To Future State of SLMBE Programs’ Preferences 9
Your Continuous Support is Paramount…Road Ahead Endorse the 2015 Disparity Study Approve the revised MBE and SLBE Program policies - FY 2017 Approve the MBE Program Legislation for the 2017 Legislative Session - FY 2017 Advocate for the reauthorization of MBE Program/Statute (Current Statute expires July 1, 2017) 10
A Special Thank You! 11
WASHINGTON SUBURBAN SANITARY COMMISSION 2015 Disparity Study Report June 15, 2016
MGT of America − Executive Vice President/Technical Advisor Dr. Fred Seamon − Executive-in-Charge (EIC) Reggie Smith − Project Director Vernetta Mitchell − Technical Advisor Dr. Vince Eagan, J.D., Ph.D. − Data Manager Marilyn Wiley, Ph.D., ABD MGT’s Subconsultants − McMillon Communications, Inc. Doris McMillon (MBE, Ft. Washington, MD) − Transformation Consultants Lee Brazzell (MBE, Richmond, VA) − Oppenheim Research Anneliese Oppenheim (WBE, Tallahassee, FL) 2
The primary objective is to assess, quantify, and evaluate the prevalence, 1. magnitude, and extent of marketplace discrimination, if any, against minority-and women-business enterprises (M/WBE). The Study is necessitated in part by the 1989 U.S. Supreme Court’s decision 2. in the case of J.A. Croson v. City of Richmond for M/WBE Programs that imposed legal requirements on jurisdictions to establish a “compelling interest” to support the establishment or continuation of a M/WBE Programs. 3
• Must show a compelling interest with factual Strict Scrutiny predicate evidence. • Remedy must be narrowly-tailored. • Recommendations linked to findings. Narrow-Tailoring • Goals linked to availability. • Limit burden on 3 rd parties. • Private sector disparities linked to public sector can Passive Participant provide a compelling interest. 4
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Determine whether the WSSC, either in the past or currently, engages in 1. discriminatory practices in the solicitation and award of contracts in Construction, Architecture and Engineering, Professional Services, and Goods and General Services to minority- and women-owned business enterprises (M/WBEs). Determine if a legally justified need exists for the establishment of an 2. M/WBE program in accordance with the guidelines set forth by the Supreme Court and relevant subsequent cases. 6
Assessed & Collected Determined Relevant Established Legal Data Geographic Market Framework Assessed the Analyzed expenditure Reviewed legal availability of WSSC’s data to determine framework for prime and WSSC’s Relevant disparity studies, subcontractor study- Market Area. particularly in the 4th related data. Circuit. Collected all available data, included Procurement Cards 7
Conducted Utilization Calculated Disparity Conducted Availability Analysis Analysis Used the percentage Calculated the of availability and Identified the percentage of M/WBE percentage of percentage of firms utilization based on utilization to calculate who: dollars paid to disparity for M/WBE Conducted business • M/WBE firms in the and non-M/WBE with WSSC, WSSC Relevant firms. Were interested in • Market Area. doing business, and/or Could potentially do • business with WSSC. 8
Conducted Private Provided Findings & Collected Anecdotal Sector Analysis Recommendations Evidence Analyzed the Provided conclusions Anecdotal evidence presence (or absence) drawn from the study. included: of passive Provided narrowly- Stakeholder • discrimination. Interviews tailored remedies. Focus Groups • Surveys • Community Meetings • 9
Study Period July 1, 2009 through June 30, 2014 1. Procurement Categories 2. Architecture and Engineering − Construction − Professional Services − Goods and General Services − Utilization analyses based on expenditures or dollars paid to firms. 3. 10
M/WBE Groups − African American − Asian American − Hispanic American − Native American − Nonminority Women Statistical Significance – the likelihood that a result or relationship is caused by something other than mere random chance. Statistical hypothesis testing is traditionally employed to determine if a result is statistically significant or not. This provides a "p-value" representing the probability that random chance could explain the result. In general, a 5% or lower p-value is considered to be statistically significant. 11
Disparity Index – the ratio of the percentage of business utilization and percentage of business availability for a particular demographic group times 100. Underutilization – term used to indicate that there is disparity and the disparity index is less than 100. Overutilization – term used to indicate that there is no disparity and the disparity index is greater than 100. Total utilization – the combined utilization of primes and subcontractors. 12
Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical 1. Area (MSA) plus Anne Arundel County, MD; Baltimore County, MD; Carroll County, MD; City of Baltimore, MD; and Howard County, MD. Spending with all firms located inside the WSSC Relevant Market Area 2. totaled $1.2 billion. 13
Study period July 1, 2009 – June 30, 2014 14
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