Improving use of minority vendors

The Pensacola City Council’s Finance Commitee will discuss today the recommendations made by the Small Business Enterprise (SBE) Ad Hoc Committee on MGT of America SBE Report. The MGT report has been out for over a year or, at least a draft was circulating a early as January 2009. MGT recommendations were made in March 2009. The MGT consulting contract was passed in April 2008. So thus issue has been on the city council’s table for year. The Small Business Enterprise Ad Hoc Committee wasn’t appointed until June 2009.

Note the difference in timetables with Councilwoman DeWeese took charge of an issue (90 days – 9 meetings) versus the lethargy of the other council members. At the very least, one of the African-American council members should have been driving this issue since their districts are the most effected by the report.

The report revealed From FY 2005-FY 2007, the City of Pensacola used 1,616 vendors only 12 were minorities (less than 1 percent)- 8 African-American, 1 Asian-American, 1 Hispanic-American, 2 Native Americans. Of the 1542 white-owned vendors, 16 were owned by women and 1 by physically disabled.

If you look at the dollars spent, it’s not much better. For the three year period, the City awarded contracts for $272,272,147 – 98.06% went to white male-owned businesses.

1(a) Debundle Construction Projects (5-2 vote): Allows multiple prime contractors for different construction areas (electrical, masonry, concrete, etc.). Also, employ a construction manager to coordinated the multiple contracts and to purchase materials at volume discounts. Staff: Construction manager, either on staff or outsourced, could increase cost of the project. Wants to do this for projects less than $300,000.

1(b) Request for proposals: Allow evaluation of proposals on criteria other than project cost. Staff wants direction on how to weigh SBE and Woman/Minority Business Enterprise criteria. Also believes this will add time to the bid evaluation process.

2 Bidder Rotation- Professional and other services (5-2 vote) Rotate to limit purchases from majority firms or to reduce habitual purchases. Staff: seems more appropriate for smaller projects in which the City seeks quotes directly.

3. SBE program expansion: Increase W/MBE programs through set asides, bid preferences, department goals and mandatory subcontracting. Staff: Council could adopt a policy that city purchases below a certain dollar value be directed to SBE firms. Mandatory subcontracting needs more research.

4. Annual Aspirational SBE and M/WBE Goals: Set goals for these programs by business categories. Staff sees this feasible and can examine department budgets and compare purchases to the availability of SBE/W/MBE firms.

5. Increase City Manager’s spending authority with SBE firms to $100,000: Although not a recommendation of the MGT report, the committee felt this was another tool to direct business to SBE firms. The limit was raised to $50,000 last spring.