WASHINGTON SUBURBAN SANITARY COMMISSION Disparity Study Report June 15-16, 2016

Transcription

1 WASHINGTON SUBURBAN SANITARY COMMISSION 2015 Disparity Study Report June 15-16, 2016

2 MGT is a national management and research consulting firm established in National leader in disparity research and litigation support. Provide consulting services to all sectors of government from organizational reviews, strategic planning, facilities planning, performance review, and program evaluations. Successfully managed more than 7,200 client engagements in all 50 states and several foreign countries. Offices located in Tallahassee, FL*, Olympia, WA, Bay City, MI, Austin, TX 2 *Corporate Office 2

3 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) 3

4 1. The primary objective is to assess, quantify, and evaluate the prevalence, magnitude, and extent of marketplace discrimination, if any, against minority-and women-business enterprises (M/WBE). 2. The Study is necessitated in part by the 1989 U.S. Supreme Court s decision 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. 4

5 Strict Scrutiny Must show a compelling interest with factual predicate evidence. Remedy must be narrowly-tailored. Narrow-Tailoring Recommendations linked to findings. Goals linked to availability. Limit burden on 3 rd parties. Passive Participant Private sector disparities linked to public sector can provide a compelling interest. 5

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7 1. Determine whether the WSSC, either in the past or currently, engages in 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). 2. Determine if a legally justified need exists for the establishment of an M/WBE program in accordance with the guidelines set forth by the Supreme Court and relevant subsequent cases. 7

8 Established Legal Framework Reviewed legal framework for disparity studies, particularly in the 4th Circuit. Assessed & Collected Data Assessed the availability of WSSC s prime and subcontractor studyrelated data. Collected all available data, included Procurement Cards Determined Relevant Geographic Market Analyzed expenditure data to determine WSSC s Relevant Market Area. 8

9 Conducted Availability Analysis Identified the percentage of firms who: Conducted business with WSSC, Were interested in doing business, and/or Could potentially do business with WSSC. Conducted Utilization Analysis Calculated the percentage of M/WBE utilization based on dollars paid to M/WBE firms in the WSSC Relevant Market Area. Calculated Disparity Used the percentage of availability and percentage of utilization to calculate disparity for M/WBE and non-m/wbe firms. 9

10 Collected Anecdotal Evidence Anecdotal evidence included: Stakeholder Interviews Focus Groups Surveys Community Meetings Conducted Private Sector Analysis Analyzed the presence (or absence) of passive discrimination. Provided Findings & Recommendations Provided conclusions drawn from the study. Provided narrowlytailored remedies. 10

11 1. Study Period July 1, 2009 through June 30, Procurement Categories Architecture and Engineering Construction Professional Services Goods and General Services 3. Utilization analyses based on expenditures or dollars paid to firms. 11

12 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. 12

13 13 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.

14 1. Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical Area (MSA) plus Anne Arundel County, MD; Baltimore County, MD; Carroll County, MD; City of Baltimore, MD; and Howard County, MD. 2. Spending with all firms located inside the WSSC Relevant Market Area totaled $1.2 billion. 14

15 15 Study period July 1, 2009 June 30, 2014

16 Architecture & Engineering: Prime M/WBE primes received $18.57 million or 7.77 percent of $ million. (Ch. 4, Fig. 4B) Statistical significant disparity for all M/WBE firms. (Ch. 4, Tab. 4-6) Total M/WBE primes and subcontractors received $79.88 million or percent of the total dollars spent in Architecture and Engineering. (Ch. 5, Fig. 5A) Statistical significant disparity for all M/WBE firms. (Ch. 5, Tab. 5-5) 16 Study period July 1, 2009 June 30, 2014

17 Prime Total No prime utilization for Hispanic and Native American firms. No utilization for Native American firms. 17

18 Construction: Prime M/WBEs primes received $91.17 million or percent of $ million. (Ch. 4, Fig. 4C) Statistical significant disparity for all M/WBE firms except Hispanic Americans. (Ch. 4, Tab. 4-7) Total M/WBE primes and subcontractors received $ million or percent of the total dollars spent in Construction. (Ch. 5, Fig. 5B) Statistical significant disparity for all M/WBE firms except Hispanic American firms. (Ch. 5, Tab. 5-6) 18 Study period July 1, 2009 June 30, 2014

19 Prime Total No prime utilization for Asian, and Native American firms. Native American utilization $660,555 or 0.12% 19

20 Professional Services: Prime M/WBE primes received $22.92 million or percent of $ million. (Ch. 4, Fig. 4D) Statistical significant disparity for all M/WBE firms except Hispanic Americans. (Ch. 4, Tab. 4-8) Total M/WBEs primes and subcontractors received $34.55 million or percent of the total dollars spent in Professional Services. (Ch. 5, Fig. 5C) Statistical significant disparity for all M/WBE firms except Hispanic Americans. (Ch. 5, Tab. 5-7) 20 Study period July 1, 2009 June 30, 2014

21 Prime Total No prime utilization for Native American firms. No utilization for Native American firms. 21

22 Goods & General Services: Prime M/WBE primes received $ million or percent of $ million. (Ch. 4, Fig. 4E) Statistical significant disparity African American, Hispanic American, and Native American firms. There was disparity for minority firms as a whole. (Ch. 4, Tab. 4-9) No disparity for Asian American and Nonminority Women firms, and no disparity for the M/WBE group as a whole. (Ch. 4, Tab. 4-9) Total M/WBEs primes and subcontractors received $ million or percent of the total dollars spent in Goods and Services. (Ch. 5, Fig. 5D) Statistical significant disparity African American, Hispanic American, and Native American firms. There was disparity for minority firms as a whole. (Ch. 5, Tab. 5-8) No disparity for Asian American and Nonminority Women firms, and no disparity for the M/WBE group as a whole. (Ch. 5, Tab. 5-8) 22 Study period July 1, 2009 June 30, 2014

23 Prime Total Native American utilization $25,750 or 0.01% Native American utilization $224,187 or 0.07% 23

24 24 The biggest concern for prime contractors was competing with larger firms (58 or 21.7% of M/WBEs). M/WBE subcontractors stated their biggest barrier working with primes on WSSC projects is competing with large firms (35 or 13.1% of M/WBEs). With respect to disparate treatment, M/WBE subcontractor respondents reported: Seldom or never solicit firms on projects (private or public) without M/WBE goals 28.1 percent or 75 respondents. An informal network precluded their firms from obtaining work in the private sector 26.2 percent or 70 respondents Selected to satisfy good faith efforts requirements and then dropped on other public sector/private sector projects 13.5 percent or 36 respondents.

25 Requires the reporting of MBE and SLBE utilization. Validates M/WBE subcontractor utilization through the use of compliance reporting tools. Produces comprehensive annual legislative reports on MBE and SLBE utilization and the activities of the WSSC Small Local and Minority Business Enterprise (SLMBE) office. Accepts certifications from other organizations 25

26 Establish Two-Tier Size Standards. Contracts can be set aside for small and very small firms and goals that included very large SLBEs and M/WBEs can be established on large projects. A standard approach is to use the SBA size standard for small firms and a percentage of the SBA size standard (e.g., 25 or 50 percent) for very small firms. Improve prime contractor compliance with entering non-m/wbe subcontractor data in WSSC s web-based compliance system. Update the WSSC s supplier registration system data, at minimum, every two years. 26

27 MGT of America, Inc Esplanade Way, Suite 210 Tallahassee, Florida