Minority/Women Business Enterprise Ordinance Recommendations Business Development August 4, 2009

2 Presentation Outline BackgroundBackground M/WBE Ordinance recommendationsM/WBE Ordinance recommendations –Increase business net worth –Allow firms to be certified as a graduate M/WBE –Adjust goals –Revise the sliding scale –Good Faith Effort Revision Broward County case statusBroward County case status Recommendation summaryRecommendation summary

3 Background M/WBE Ordinance implemented in 1998 First disparity study completed in 1993, and updated several times since The latest update was in 2005 The Business Development Division manages the M/WBE ordinance

4 Background Business Development duties –Support small businesses in the Orlando/Orange County area –Certify firms as minority or women owned businesses –Advocate for their inclusion in Orange County procurement opportunities –Participates on all County Procurement Committees –Track goal performance –Community outreach –Facilitate the flow of information between County staff, Commissioners, contractors, M/WBE firms and public –Periodically present recommendations to improve ordinance performance

5 Business Net Worth Definition – Total Business Assets minus Total Business Liabilities If the applicant owns more than one business, all of the businesses are included in the calculation

6 Increase Graduation Program Net Worth to $2.3M AdvantagesAdvantages –Would allow firms more opportunity as they grow –Due to the economy, the graduates feel that they are not receiving any Orange County projects –The $750K net worth was established in 1992 and may need to be revised DisadvantagesDisadvantages –Delays the process of moving those firms that have grown in the program –Strong larger firms may stay in the program longer…to the detriment of smaller firms

7 Certify Large M/WBE Firms as Graduates Advantages –Allows larger minority & women firms to receive certification –Firms will compete for larger projects only –Potentially allows for greater participation in the categories of “goods & commodities” and “other services” –Potentially improves the County’s ordinance performance Disadvantages –Increases certification workload –Graduate M/WBE performance to date has been lacking

8 Re-establish over-all goals on a regular basis, based on availability “Narrow tailoring under the City of Richmond vs. J. A. Croson standard requires that remedial goals be in line with measured availability. M/WBE goals need to be adjusted on a regular basis as well.” – MGT of America, Inc.

9 Overall M/WBE Goals for Each Category Architect & Engineering Services ConstructionOther Services Goods and Commodities Current Overall Goal 24%25%24%10% Revised Overall Goal 27%25%27%10%

10 Recommended New M/WBE Goals African American (%) Hispanic American (%) Asian American (%) Native American (%) Non- minority Women (%) Overall Goal Construction 9.66 (10%) 7.07 (7%) 1.81 (2%).32 (0) 6.25 (6%) (25%) A & E 4.32 (4%) 7.14 (7%) 4.98 (5%).17 (0) (11%) (27%) Goods N/A 10% Other Services 9.5 (10%) 6.17 (6%) 1.87 (2%).09 (0) 9.73 (10%) (27%) *Rounded to nearest percentage

11 Increase Sliding Scale Limits Increase Sliding Scale Limits Contract Amount Previous (Oct. ’98 – Jan. ’02) Current (Jan. ’02 – Present) Proposed New Scale 0 - $100K7.5%08% $100K-$500K5%5.5%7% $500K-$750K3%5.5%6% $750K-$2M3%4%5% >$2M3% 4% ($2-5M) >5M3%

12 Good Faith Effort Process is cumbersome and has not been value added Feedback from Primes & M/WBE have been equally critical BDD has attempted to shorten the process and have steps become more meaningful

13 GFE Recommendation Good Faith Effort - The efforts undertaken by a contractor to obtain minority/women-owned business enterprises participation in a contract, and shall include all the following: Notice – or fax : 7days –Scope of work –How to obtain plans & specs –Bonding information –Bid submittal deadline –24 hr notice for addenda Follow-up Documentation of any shortfalls in the M/WBE goals Documented BDD resource usage

14 GFE Recommendation The following may be substituted for any one of the aforementioned criteria: –Utilize the Disney Entrepreneur Center to host workshops that will inform M/WBE firms on how to better prepare for sub-contracting opportunities; or –Participation in Orange County sponsored “How to do Business” workshops or match maker events to become more familiar with certified M/WBE resources

15 Broward County Case Status The Broward County case was settled out of courtThe Broward County case was settled out of court –Broward agreed to suspend program until a Disparity Study is completed –Until the study is complete, the organizations who sued can operate unencumbered by a M/WBE program –A DBE process can be utilized by the County for Federal projects

16 Additional Recommendation Add a race neutral component to our exiting programAdd a race neutral component to our exiting program –To operate in conjunction with our M/WBE program –Managed and monitored by the Business Development Division –Utilize legal resources, procurement & MWBE organizations to research, plan and implement

17 MWBE Ordinance Recommendations Summary 1.Increase business networth to $2.3M 2.Certify firms as Graduate firms 3.Modify (improve) good faith effort criteria 4.Sliding scale correction 5.Modify the participation goals 6.Implement race neutral, SBE program to run in conjunction to current MWBE program

18 M/WBE Certification Process Applicants attend free certification workshop.Applicants attend free certification workshop. Applications are available on line with instructions in English & Spanish.Applications are available on line with instructions in English & Spanish. Hardcopies of the applications are received and time stamped by BDD, 60 business day cycle time begins.Hardcopies of the applications are received and time stamped by BDD, 60 business day cycle time begins. Information that must be provided and verified:Information that must be provided and verified: –location; net worth; ethnicity; ownership; legally organized; capability to perform; independence; commercially useful. Field Investigation/site visitField Investigation/site visit Application recommendation of approval or denialApplication recommendation of approval or denial

19 Certification Statistics 746 M/WBE firms currently certified746 M/WBE firms currently certified 252 applications were received in fiscal year applications were received in fiscal year applications have been received to date for fiscal year applications have been received to date for fiscal year applications are pending for fiscal year applications are pending for fiscal year 2009 Certification Goal: 90% within 60 daysCertification Goal: 90% within 60 days Attainment: In 2008, 89% within 60 daysAttainment: In 2008, 89% within 60 days

20 Certification Appeal Process If an applicant is denied certification, the following appeal process is used:If an applicant is denied certification, the following appeal process is used: –Applicant submits appeal letter to Business Development within 10 Business Days from receiving the denial letter. –Notify the M/WBE Advisory Committee and schedule hearing. –Hearing before the M/WBE Advisory Committee. –M/WBE Advisory Committee votes to uphold or not uphold staff’s decision.