City of Portsmouth, Virginia 2015 PROCUREMENT DISPARITY STUDY florida  california  michigan  texas  washington

Presentation Outline  Project Team  Study Background  Legal Framework  Disparity Results  Utilization Comparison  Anecdotal Information  Private Sector  Commendations and Recommendations  Questions and Answers

Disparity Project Team MGT OF AMERICA  Reggie Smith Partner-in-Charge  Vernetta Mitchell Project Manager  Dr. Vince Eagan, J.D. Technical Advisor  Marilyn Wiley Data Manager  Lee Brazzell Transformation Consulting  Anneliese Oppenheim Oppenheim Research CITY OF PORTSMOUTH  Michael Ammons City’s Project Manager

Study Background  Procurement categories included in the study:  Construction  Architecture and Engineering  Professional Services  Other Services  Goods and Supplies  Study period July 1, 2008 through June 30, 2013  This is the City’s first disparity study  Study limitations  No subcontracting data  Minimal subcontractor data in permits

Legal Framework  J.A. Croson, Adarand, et. al.  A Compelling Interest Can Be Found in Private Sector Discrimination  Concrete Works v. City and County of Denver, 321 F (10 th Cir 2003)  4 th Circuit Decision – most recent H.B. Rowe v. Tippett

Disparity Indices  An index of 100 indicates that utilization is perfectly proportionate to availability, therefore indicating the absence of disparity (that is, all things being equal).  Generally, firms are considered underutilized if the disparity indices are between 80 to 100, but not significant  Index below 80 is considered be significantly underutilization.  Index greater than 100 is considered overutilized.

Disparity Results

Utilization Comparison  The following exhibit shows a comparison between the percent of M/WBE utilization for the City of Hampton (2014 study) and the City of Portsmouth (2015 study). The bottom half is the amount by which Portsmouth’s M/WBE utilization exceeds (or falls short of) Hampton M/WBE percent utilization.

M/WBE Utilization BUSINESS OWNERSHIP CLASSIFICATION ConstructionArchitecture and Engineering Professional Services Other Services Goods and Supplies (%) City of Portsmouth Minority Business 1.73%0.00%11.68%17.54%0.54% Nonminority Women 0.05%0.00%0.05%4.62%0.01% Total M/WBE Firms 1.77%0.00%11.73%22.16%0.55% City of Hampton Minority Business 3.70%0.00%4.90%6.91%2.35% Nonminority Women 8.18%0.00%2.43%15.49%13.03% Total M/WBE Firms 11.88%0.00%7.33%22.40%15.38% Portsmouth % - Hampton % (%) Minority Business -1.97%0.00%6.78%10.63%-1.81% Nonminority Women -8.13%0.00%-2.38%-10.87%-13.02% Total M/WBE Firms %0.00%4.40%-0.24%-14.83%

Anecdotal Sampling  Survey of Vendors – 514 participants  Public Hearing – 16 attendees  Focus Group – 17 participants  Personal Interviews – 28 interviewees

Anecdotal Information The biggest concern for was competing with large firms (34.3% of M/WBE primes). Other key issues noted by M/WBE respondents included:  Primes:  Selection process – 15.0 percent  Contracts too large – 15.0 percent  Specifications – 14.8 percent  Subcontractors:  Competing with large firms – 18.7 percent  Contracts too large – 8.2 percent

Anecdotal Information (cont’d.) With respect to disparate treatment, M/WBE respondents reported:  An informal network precluded their firms from obtaining work in the private sector – percent or 81 respondents  Seldom or never being solicited when there were no M/WBE goals – 9.23 percent or 35 respondents  Being dropped from a project after being included to satisfy good faith efforts requirements – percent or 39 respondents

Private Sector  MBE prime contractors won 0.18 percent of prime permit dollars, and WBEs received 1.23 percent of prime permits dollars,  MBE subcontractors were issued 0.68 percent of all subcontracting permit dollars and WBEs 0.54 percent of subcontracting permit dollars.  This result is consistent with the anecdotal finding of the difficulty of M/WBEs securing construction work in the absence of a remedial program

Recommendations RECOMMENDATIONS Vendor Registration Consider combining M/WBE & SBE Program Subcontract Project Goals Aspirational M/WBE Goals Data Management

Questions and Answers MR. REGGIE SMITH MS. VERNETTA MITCHELL