HomeMy WebLinkAboutM2000-032 - 01/25/200022.
MOTIONS- 1/25/00
Motion approving staff recommendations on Disparity Study findings.
ATTEST:
Arm~ecretary
Samuel L. Neal, 3r., May,,o~
City of Corpus Christi
M2000-032
Staff's Response
On the
City of Corpus Christi Disparity Study Proposed Recommendations
Oll November 9, 1999, the City Council a~ked the Staff to respond to
reeomrnendmions derived from the Disparity Study. In order for the Dispari~ Study
Comm~ to l'R~iv~ th~ widest spread of comments
Pl'oposed R~ommendations, we asked all City Department heads to respond to the
recommepam~ons affecting their dep~u'tateut& Below we lmve taken their commems and
responses, and developed them inIo an overall response from Staff:
A. Race and Gender Neutral Measures:
Review City stuff job descritnions to commi~ all st~ff to non-discrlmlnmion ami
equal opportunity policies. Performance evaluations' should make all relevam
personnel accountable for the success of the City's M/WBE and other equal
opportun~ initiatives.
Respouse: Statfagrees with thi~ recommendation.
Implementation: The staff believes this recommendation could be easily
incorporated into our current performance evaluation system without additional
cost by including this commitment as one of the measures that can be included in
the Depa~ tmem Heed's performance evaluation. This measure can begin v: he
next evaluation cycle.
Educate user departments on the City's M/WBE initiatives so that their
purchasing decisions are informed by the City's commitment, and they make
affirmative efforts to level the playing field for M/WBEs to participate in business
opportunities.
Response: Staff agrees with this recommendation.
Implementation: The Human Relations Depar~mem will developmem Waining
materials to educate all department users on equal opporumity ha the selection and
reeruitmem of minority, women and small businesses to be used as venaor:
and/or contragtors. It would be a nominal cost for development and materials.
The training could be a routine part of the Human Relations Training Program.
Additioually, there should be regular reviews on this issue, possible quarterly or
biannually.
3. Evaluate contracts and supply agreements for segmenting into smaller jobs, so
that M/WBEs and other small businesses may more easily participate.
o
Response: Staff agrees with this recommendation on a case by ease basis.
Legal Opinion: This recommendation is not generally a legal problem so long as
a city officer does not "intentionally or knowingly make or attthorize separate,
sequential or eompo, nero pureha~s to avoid th~ competitive bidding
requirements" of state law TEXAS LOCAL GOVERNMENT CODE, Section
252.06(a).
Implementation: The Engineering and Mater~aln ManaEemem Departments will
review projects or purchases on a case-by-case basis and segment portions of
work or orders which could be broken out imo smaller .~and - alone projects or
orders, but which must still be bid.
Ensure that notices of bidding and contractlnE opportunities are widely citculated.
both to M/WBEs and to minority and women-focused media, organi~mions ~nd
fov,m~. User department opportunities should be included in the Materials
Management Depmtment's weekly advertisements. These steps will maximize
oppommities for M/WBEs to obtain work via the competitive bidding process.
Response: This recommendation can be met at a minimal cost to the City.
Implementation: The Materials ManaEemeat Department will begin circulating
a weekly, one (I) page sheet to MBOC. and any other local M/WBE's and media
organi~mions tlmt request to be included on the depml.,eut's m~illng List. The
department will obtain a listing of MJWBE's from the MBOC initially. The
summary sheet would include all formal and informal bid invitations issued by thc
Materials Management Department. We will include on this weekly listing of bid
invitation a general statement informing the public of a centralized phone number
and game of the employee who's responsible for small procurement activities
within each department.
The Engineering Depmlment will include a web-page listing outlining the
following:
I. Public Works construction contracting procedures;
2. 10-Steps for doing business with the City of Corpus
Engineering Services construction projects;
3. Bonding and Insurance requirements for contracts;
4. Bidders Information form;
5. Current weekly Notice of Projects out for bids.
6. Bid Results for past 30-days bid openings.
Christi,
In addition to the current individual Notice to Bidders wceldy mail out,
flee plan holders l/~tinEs MBOC, AGC, Dodge Reports, etc.
Evaluate oppommities for M/WBE$ to participate in sole source a,,d emergency
coutmcts. User depanment~ should take steps to enmme that staff responsible for
those decisions are knnwledgeable about q,aU6ed M/WBEs.
Response: This can be accomplished withom cost since "sole source" by
det%kion would mean the only source, whether M/WBE or not. AccordlnE to the
City Attorney, there is Bo legal irr~. ediment to ~ that ~ for emergency
contracts contain qnali~ed M/WBEs, as well as others.
Implementation: The Materlal~ Management Dep~m and Engineering will
develop a listing of qualified Emergency Coww~'tors that would include both
M/WBEs and others.
Consider setting aside some smaller commodities purchases for bidding only by
small businesses. Size standards for firlns would have to be set; for example,
rinse used by Small Business Admlni-t~ation 8(a) Programs could be adopted.
Response: Staff agrees with this recommendation, since the City Attorney is
unaware of any legal impediments to "small business" set-aside. However, this
will ~-,l,act the Materials Mana. gemeut Department, because it will take anywhere
fi'om six month~ to one (1) year to implement a program
Implementation: EstablL~hing a set-aside program can be developed without
violating any State Statutes regardlnE requirements of contracts and open market
purchases if these purchases are under $15,000.
All Purchases under $15,000 are exerr~ted f~om competitive bidding statutes with
the exception of the HUB (Historically Underutilized Businesses) notification
requirement. The HUB Statute requires the City to notify a rninlmum of
I-KJB's for contracts exceeding $3,000.
To implemem a set-aside program at this time could be costly, and would require
an extensive amount of work since the Materlal~ Management Department
currently uses a manual fling system of suppliers information Also, an analysis
of the type of commodities offered by M/WBE's must first be completed to
determine the targeted commodities that would be included on a set-aside fist.
Finally, due to a shortage in the Materials Managemem Depa~i~uent, monitoring
and enforcement at the depmtment level would prove to be a difficult task since
the Automated Bidder's List that should be shared by all City Departments is not
available. Full implementation of the Purchasing Module is targeted in March
2001.
Materials Managemem Depamm~ Vendor Information Packets should be
revised to include definitions and processes applicable to M/W'BE compliance.
This should include provisions for good faith efforts to meet M/WBE benchmarks
and for waivers where good faith efforts are unsuccessful.
Response: Staff agrees with the first pan of this recommendation. However, we
propose to strcnxgthcm the City's EO pohcies and procedures.
Implementation: Materi~l~ Managemem will modify both its Vendor's List
Information and Bidder's Information Packet to include de6nltions and new
processes as they pertain to M/WBE co~i~liance once the program has been
ident~ed and new procedures are circulated to all depaxtments.
The addition of staff to reach oui to M/WBEs and evaluate compliance with
afflrmmive action policies should be considered.
Response: Staff agrees with thin recommendation, however the expense of
additional stall'to implement and maintain pro-active efforts will be an additional
cost factor.
Implementation: The HOtlsing and Comnlnnky Developmem MBOC believes
that an addition of staff to its current staff of two would have a significant and
positive impact on the development of a race and gender neutral program This
additional staff can focus exclusively on outreach and llnking M/WBEs to City
Depa~t,,~ems. k can also help to address the education of user departments, and
insure that notices of bidding and contracting oppommities are widely circulated.
Finally, tkis additional staff could help address the issue of user depa~tmems
identifying and evaluat/ng opportunities for M/WBEs to participate in sole source
and emergency contracts.
While the Human Relations Departmem believes this is viable, an additional staff
is needed, and this recommendation could take up to one (1) year before it can be
fully implemented, if at all
Currently, the Human Relations Department serves as an advocate while
enforcing equal opportunity compliance citywide in housing, employmem, and
public accommodations. If the City chooses to add an additional ordinance
prohibiting discrimination in contracting, professional services and purchasing,
the departmem can also monitor and enforce compliance in these areas. An
additional staff member would be needed to effectively carry out this additional
responsibility. Cost Decision Packet: Compliance Officer, Grade 27, (Monthly
Salary: $2,547) Annual Salary: $30,564; FICA/Medicare (7.65%): $2.338; TMRS
(10.74%): $3,283. This is viable, as long as sufficient staffis provided.
Review bonding and insurance requirements on all contracts with lower dollar
amounts, to determine if they can reasonably be reduced or waived.
10.
11.
Response: Staff agrees with this recommendation
Implementation: The City presemly reduces some insurance requiremems and
waives other requirements. The City has a two-tier insurance requirement. There
are requirements for small contracts below $15,000. The City waives some
insurance requirements, such a~ Workers: Compensation, for work performed
away ~om City property.
The Engineering Dep~!.,ent will use the lower insurance requirements for
co.~acts less than $15,000, a.d currently do not require bonding.
In addition, the Depat~tment will allow Contractors the option to waive the
Performance and Payment Bond requirements on all coxa~acts of $25,000 to
$100,000 with Lump Sum payment aRer project ao.~-~pmnce.
Consider removing the insurance and bending costs when calculating the lowest
bidder. This will help level the playing field between M/WBEs and small
businesses, on the one band~ alld larger firms that get break on price for these
requirements, on the other.
Response: Staff agrees with thls recommendation.
Implementation: Large firms get volume discounts on everything they purchase,
including insurance. Removing the cost from the bid calculation may subterfuge
the bidding process. We consulted with Legal and were provided with the
following response:
According to lEX. LOCAL GOVT CODE Section 252.043(b) requires the
contact be awarded to the lowest responsible bidder. The City Attorney's opinion
does not believe the bonding costs could be excluded where insurance and
bonding are part of specifications. He believes this can be accomplished to some
degree by not requiriag insmmace and bonding excepts where required by State
law. He further opinioned that this would require balaneillg the risk of having
insurance and bonding against the benefits of encouraging more bidding. Also,
bonding is only required on certain public works contracts.
Require prompt paymem for all prime contractors and require prompt payment of
subconlxacmrs by prime contractors. A maximum number of days by which
subcontractors must be paid after the prime contractors receive payment could be
required by contract.
Response: Staff agrees with the recommendation as it concerns the City.
Currently,. the standard payment terms are thirx~~J,,~"'" ,~,~ ~ ..... ~,,~,'~- *~,.~ ..... ~-v-;'~* of
goods of services or unless negotiated otherwise. Also, the Engineering
Departmem will cominue to require monthly documentation from the General
12.
13.
Contractor that the material supplier sub-contractor, has been paid for materials
delivered to the project site prior to City issuing monthly progress payments to the
General Contractor.
Implementation: It is suggested that all bid invitations should include a clause
asking prime contraexors to make pro~v~ payment to all subcoa'ua~nors. This will
be accomplished by coordinating with the Legal Department for the correct
language to be used and issuing a new purchasing procedure.
Promote program~ to assist with business developu~at factor~ such as technical
a~sigtailce, ne~worJcln~, mnrketinE: ~ estil~g. Sugh service~ could be
adopted on a race ann gender ne~'~ basis. These could be provided through a
public-private parmers~p with existing Corpus Christi agencies.
Response: Staffa?ecs to thi~ recommendation
Implementation: To implement this recommendation totally, k would take
additional training for the lVIBOC staffto develop expertise inproject estimating.
The Continuing Education Department at Del Mar College has developed a
course on Bid Estimating and Bluepri~ Reading that could provide this training
to the MBOC Sta~
For quite sometime the MBOC has been working jointly with the Minority
Business Development Center (MBDC) anti the Small Business Development
Center. The working relatiouship between these organizations has been informal,
however, it recommended that a Memorand-m of Understanding be developed to
ensure that the positive relationship continues. Also, it could spell ouz the
responsibilities for each agency, which will allow for very little overlapping of
services.
Adopt aa anti-discrimination ordinance (similar to that now applicable to
employment public accommodations, and housing), making it illegal to
diseriminate on the basis of race, ethnicity, or gender, in public and private
comxacting. Enforcement could be the responsibility of the Human Relation
Department, perhaps in conjunction with the Legal Department. This would
require training of staff.
Response: Staff agrees with this recommendation so long as it does not violate
federal or state statute.
Implementation: It would require de£ming the scope of the ordinance, and the
cost of providing resources for staff training. This recommendation requires
additional work by the Consultams, which may require up to 90 days for
completion.
14.
15.
16.
17.
ALso, due to the nature of the ordinance, it may require one or more years to
implement.
Adopt an Owner Controlled Insurance Policy program, for participation by city
contractors in larger construction projects. This would relieve the discr~mlnation
and difficulties experienced by MIWBEs and other small fu-ms in obt~ininE the
insurance required for large constructions projects.
Response: Staff agrees with this recommendation. The City has considered
using this program in the past, however, Owner Controlled Insurance Policy
(OCIP) programs are usually set up for projects in excess of 100 millinn dollars.
The City reviewed the Lake Texana Pipeline as a potemial project for OCIP.
Since a large portion of the cost was for the pipe, this project was considered
small. This approach can be used to break up a large project into smaller psojeets.
Unforvmately, we have few of these projects.
Implementation: When approprizae, the City will explore the use of Owner
Controlled Insurance.
Adopt a Linked Deposit Program: whereby banks doing business with the City
agree to participate in co,milerCial bails for City Contractors and vendors,
perhaps using the contract with the City as collateraL
Response: Staff agrees that a program similar to this recommendation is
cu.~utly in place under the City's Community Development Corporation in
cooperation with the Department Housing_ _ad Community Development. The
program is authorized for comxactors partici_e~ing in the City's Rehabilitation
Ptoglam that i.s adl:llinistered HousinE and Comrm~n~y Deveiopmem. ~
Community Developmem Corporaxion does not establish a line of credit, it
finances each project separately. And the contractor cannot have more than a
$25,000 balance outstanding through the Community Development Corporation
an any one time.
Implementation: We need additional time to review this in more detail to see if
we need to implement something along this line in the Engineering Depanmem.
Utili?e the existiag preference for local businesses to the greatest extem possible.
While not a substitute for M/WBE measures, it will provide opporrtmities for
available M/WBEs and create loeat economic development.
Response: This recommendation is akeady in place.
Review data collection procedures by all departments to ensure that accurate
reporting of future M/WBE and non-M/WBE participation is possible. Accounts
payable data maintained by the Finance Department should contain the conlxact or
purchase order identification number associated with each payment. Contract and
purchase order identification numbers should be uniform across departments.
Vendor's identification numbers should also be nnii'orm across depal~ents and
should be linked to state and federal business identification numbers wherever
possible. Payments to "vendors" that are really other public agencies, city
employees, non-profit agencies, interdepaxmaental transfers, and the like should
be readily distinguishable form payments to actual business enterprises. Each
payment (or at least each contract or purchase order identification ~nmber) should
contain a short but accurate description of the type of goods or services being
purchased. Existing object codes are ins~ffieient for this purpose. All
departments with projects th~ have subcontracting oppommities, such as
P-ngineering Services and Community Development, should keep records of all
subcontract activity (M/WBE and non-M/WBE alike). These records should
contain the name and address of each subconwactor, its M/WBE status, the
associated coui~act or purchase order identification number, the original amount
of the subcontract award, the final mount of payment to the subcontractor, and
the type of work performed by the subcontractor. All data should be maintained
in an electronic format to facilitate reporting.
Response: StatT agrees with this recommendation.
Implementation: Material.q Management and Finance agree that the New
PeopleSol~ system has the ability to identify vendors as M/WBE through user
defined codes, and can produce an Automated Bidders' List. This will also assist
Mater/als Management with tracking by M/WBEs. A coordinated effort between
Materials Management, Engineering and Homing and Coiii~iinnlty Development
aild all other contracting depanmems would be requked to establish a uniform
conixact numbering system.
Community Developmem is required by the U.S. Depiatmem of Homing and
Community Developmem (HUD) to record subcontract activity over $25,0000 on
HUD Form 2516, Contract and Subcontract Activity Report and "Summary of
CPD Minorky Business Enterprise Activity" form which is attached. This report
is submitted annually at the end of the program year.
B, Race and Gender Conscious Measures:
Consider adopting the Disparity Study's M/WBE availability estimates as the
City's overall annual benchmark for M/WBE participation. The benchmark could
be set by major procurement categories and/or by racial, ethnic, arid gender
subgroups as delineated in the Study findings. Firms that do business with the
City should be strongly encouraged to make good faith efforts to meet
participation benchmarks. M/WBE participation should he monitored to ensure
that utilization by the City does not consistently fall below measured availability
levels.
8
Response: Staff requires additional time to research and study this
recommendation. A response to this recommendation should take an additional
90 days.
Continue to set M/WBE participation benchmarks for individual construction
comracts and subcontracts, and encourage City contractors to make good faith
efforts to meet these benchmarks. The benchmark on a specific contract could be
based upon the availability of M/WBEs in the relevant categories. Detailed
industry, availability data that the City can use for this purpose have been
produced as part of the Disparity Study. Individual benchmarks based upon the
scopes of work should be considered on contracts and purchases by other
departments as well. Waiver provisions must be included for good faith, but
ultimately unsuccessfuk efforts to meet the benchmarks.
Response: Staff request additional th-ne to study this recommendation before
submitting a response. We should be ready to make such recommendation within
90 days.
Consider a price preference for M/WBEs bidding on commodity pureha_qes. This
was an area of City contracting with large and statistically significant disparities.
Response: This recommendation violates State law regarding purchases in
excess of $15,000. The State statutes are in place to ensure open and fair
competition for the vast majority of dollars contracted by municipalities and to
encourage decision-makers from using impartial criterions when awarding
contracts.
Evaluate professional service propo*.als for M/WBE participation or good faith
efforts. Formalize user departments' outreach to M/WBE professionals. Consider
awarding points for M/WBE participation in evaluating professional services
contracts, where price is not the sole consideration.
Response: Staff agrees that formaliTing procedures for specific services should
be done. However, awarding points may violate the Professional Services Act
which requires selection of the most qualified proposes for engineering,
architectural, accounting, and other services covered by this Act.
Call at least three M/WBEs on all purchases not subject to formal competitive
bidding requirements.
Response: Staffagrees with this recommendation.
Implementation: Section 252.0215 of the TEXAS LOCAL GOVERNMENT
CODE, provides that expenditures between $3,000 and $15,000, a city shall
contact at least two historically underutilized businesses.
9
These recommendations are provided ~hrough the Disparity Study Commi~ee and
City Departments.
Helen R. Gurley, Ph.D.
Director of Human Relations
C~ty M~nng~
10
217