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Committee Hearing, June 4, 2009

Minutes from Philadelphia City Council Committee Hearings, Jun 4, 2009

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COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON COMMERCE AND ECONOMIC3 DEVELOPMENT4 - - -5 Room 400, City Hall6 Philadelphia, Pennsylvania Thursday, June 4, 20097 1:25 p.m. 8 - - - 9 10 PRESENT: COUNCILMAN W. WILSON GOODE, JR., CHAIR11 COUNCILMAN FRANK DiCICCO COUNCILMAN CURTIS JONES, JR.12 COUNCILWOMAN MARIA QUINONES-SANCHEZ COUNCILWOMAN BLONDELL REYNOLDS BROWN13 14 RESOLUTION 080052 - Resolution authorizing the15 Committee on Commerce and Economic Development to hold hearings to review the annual City16 contract participation goals released by the Finance Department pursuant to Title 17 of the17 Philadelphia Code. 18 19 20 - - -21 22 V A R A L L O Incorporated Litigation Support Services23 Eleven Penn Center 1835 Market Street, Suite 60024 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.267025 2 1

Councilman Goode

Good2 afternoon. This hearing is called to3 order. This is a public hearing of the4 Commerce and Economic Development5 Committee on Resolution No. 080052. My6 name is W. Wilson Goode, Jr., Chair of7 the Committee.8 A quorum is present, although9 it's not necessary. To my far left is10 Vice-Chair of the Committee, Councilwoman11 Blondell Reynolds Brown. To my immediate12 left is Councilwoman Maria13 Quinones-Sanchez. To my far right is14 Councilman Frank DiCicco, and to my15 immediate right is Councilman Curtis16 Jones.17 The title of Resolution No.18 080052, authorizing the Committee on19 Commerce and Economic Development to hold20 hearings to review the annual City21 contract participation goals released by22 the Finance Department pursuant to Title23 17 of The Philadelphia Code.24 Our first witness is Michael25 3 1 Bell.2 (Witness approached witness3 table.)4

Councilman Goode

Good5 afternoon, Mr. Bell.6

Mr. Bell

Good afternoon. My7 name is Michael Bell. 10 Good afternoon, Councilman11 Goode and members of the Committee on12 Commerce and Economic Development. This13 is an opportune time to discuss setting14 M/W/DSBE goals for City departments for15 Fiscal Year 2010. July 1st of this year16 presents a starting point for our office17 as it has undergone changes within the18 last eight months. 20 We have begun to monitor selected21 projects. And we have become involved in22 private initiatives like the Comcast23 Diversity summit. 4 We will utilize the disparity5 study as the basis for goal-setting for6 Fiscal Year 2010. We took a different7 approach to completing the study this8 year. One aspect of the study that I9 directed was to have Econsult interview10 randomly selected certified vendors to11 find out why there were a low percentage12 of them bidding on City projects. We can13 set goals of 50 percent MBE and 4014 percent WBE participation, but if our15 vendors are not pursuing opportunities16 with the City of Philadelphia, then this17 process is faulty to begin with. Firms18 in our directory should be ready, willing19 and able to bid on the large number of20 opportunities advertised by the City of21 Philadelphia. We discovered that some22 companies were discouraged by the cost of23 doing business with the City. Insurance,24 bonding and slow payment does play into25 5 1 some firms' decisions to forego City2 opportunities. Also, it was expressed3 that the need for union affiliation4 discouraged firms from participating. 14 Forty percent of the respondents -- and15 this is for individual vendors -- were16 not aware that this process had taken17 place. One respondent thought that this18 was a rebranding and that significant19 changes had not taken place. One20 respondent missed the advocacy provided21 by the former MBEC. And another felt22 that the certification process was23 burdensome and not worth the time. At24 the Office of Economic Opportunity, we25 6 1 are focused on increased outreach. 7 We also asked Econsult to8 investigate why some certified firms were9 not having much success winning City10 business. 19 While these comments are20 painful to hear, they also provide a21 starting point for improvement in these22 areas. We have purged firms from our23 directory that have not actively bid City24 contracts. We also removed a number of25 7 1 firms that let their certifications2 expire. 6 Availability remains a7 challenge. Increasing the number of8 certified firms in the OEO directory is a9 paramount concern. 20 We will be arranging meetings21 with City departments during the months22 of June and July to discuss upcoming23 projects, goals and reporting. We24 already met with some departments in25 8 1 March and were encouraged by the2 cooperation that we have received. The3 Office of Economic Opportunity has gone4 through a transition period. As with all5 City departments, we have had to take on6 increased challenges with less staff and7 resources. In spite of this, we will8 aggressively pursue the goals of 309 percent overall DBE participation10 outlined in the disparity study. We will11 provide quarterly reports to the Economic12 Opportunity Cabinet and be guided in our13 efforts by this body. We will also not14 hesitate to meet with departments who are15 not meeting the goals set forth in the16 study. 24

Councilman Goode

Thank you,25 9 1 Mr. Bell, for your testimony. Just a few2 questions before I open up questions for3 the Committee.4 This disparity study and5 participation goal-setting was defined by6 Bill No. 060855-A, and within it it7 actually breaks out which goals should be8 set, and I'm not sure I found all of9 those goals within the disparity study.10 I know that MBEC and now OEO also11 releases another report that outlines the12 goals, but I want to run through the13 specific goals.14 You mentioned the overall 3015 percent DBE participation goal in16 general, but what is the goal for DBEs17 owned by African Americans?18

Mr. Bell

By African American?19 I don't think that was set in --20

Councilman Goode

It's on Page21 62.22

Mr. Bell

-- the disparity23 study.24

Councilman Goode

It's on Page25 10 1 62.2

Mr. Bell

Okay. I'm on Page3 62.4

Councilman Goode

,5 this chart, Figure 4.9, recommended 20106 citywide participation goals.7

Mr. Bell

Yes. I'm looking at8 the chart, but it's not breaking it out9 by African Americans.10

Councilman Goode

It's Figure11 4.9.12

Mr. Bell

I'm on Page -- oh,13 okay. I'm looking A-61 now.14

Councilman Goode

No. It's15 just in the disparity study.16 It's not A-62.17

Mr. Bell

Okay. Now I'm on18 of the -- I'm looking at the19 African American goals, public works, 620 percent.21

Councilman Goode

No. It's on22 .23

Mr. Bell

Okay. I have in24 front of me what you're looking for.25 11 1

Councilman Goode

The goal for2 African Americans is?3

Mr. Bell

For Fiscal Year '08,4 it was --5

Councilman Goode

It says '08,6 but actually the title of the chart says7 2010 Citywide Participation Goals.8

Mr. Bell

Okay. And what is9 it that you're seeking, Councilman?10

Councilman Goode

The goal for11 African Americans just for the record,12 for all contract types.13

Mr. Bell

It doesn't break it14 out. This is Fiscal Year '08 actual15 achievements, but in terms of the goal16 for African Americans, I'm not looking at17 it on this chart.18

Councilman Goode

I think the19 chart is labeled wrong where it says20 Fiscal Year '08, but on top of that it21 says Recommended 2010 Citywide22 Participation Goals.23

Mr. Bell

Okay. So we need to24 update this aspect of it.25 12 1

Councilman Goode

Are your2 consultants available?3

Mr. Bell

Yes.4 (Witness approached witness5 table.)6

Councilman Goode

Good7 afternoon, Mr. Mullin. Please identify8 yourself for the record.9

Mr. Mullin

Good afternoon.10 My name is Steve Mullin with Econsult11 Corporation.12

Councilman Goode

Mr. Mullin,13 do you have the disparity study in front14 of you?15

Councilman Goode

Do you have17 ?18

Councilman Goode

Are those20 meant to be the 2010 participation goals?21

Mr. Mullin

The goals -- yes.22 They're 2010 based on the latest23 information available, 2008.24

Councilman Goode

So these are25 13 1 the goals for 2010?2

Councilman Goode

So the goal4 for African American-owned businesses?5

Mr. Mullin

Thirteen percent.6

Councilman Goode

The goal for7 Hispanic American businesses?8

Mr. Mullin

Three percent.9

Councilman Goode

The goal for10 Asian American businesses?11

Mr. Mullin

Six percent.12

Councilman Goode

The goal for13 Native American businesses?14

Mr. Mullin

One percent.15

Councilman Goode

The goal for16 women-owned businesses?17

Mr. Mullin

Five percent.18

Councilman Goode

Now, there's19 a goal for disabled persons, businesses20 owned by disabled persons? I believe21 that goal is --22

Mr. Mullin

DSBE.23

Councilman Goode

Yes.24

Mr. Mullin

Point one percent.25 14 1

Councilman Goode

Now, is2 there a goal for DBEs operating within3 the City of Philadelphia?4

Mr. Mullin

I'm sorry?5

Councilman Goode

For DBEs6 operating within the City of7 Philadelphia.8

Mr. Mullin

Yes. For all DBEs9 operating in Philadelphia, 30 percent.10

Councilman Goode

That's for11 all DBEs, period, that do business --12

Mr. Mullin

Yes. I'm sorry.13

Councilman Goode

I'm talking14 about those that are located in the City15 of Philadelphia. There's supposed to be16 a separate goal set for those.17

Mr. Mullin

I'll have to look.18 The number I quoted, 30 percent, is for19 all location, yes.20

Councilman Goode

According to21 the ordinance, there's supposed to be a22 goal set specifically for DBEs that23 operate in the City of Philadelphia.24

Mr. Mullin

And are25 15 1 domicile -- are located in Philadelphia2 firms?3

Councilman Goode

Yes. And4 there's supposed to be a goal set for5 not-for-profit City contracts relating to6 for-profit subcontract opportunities.7

Mr. Bell

Councilman, the goal8 for Philadelphia-based DBEs, is that9 tying into City Council legislation10 relating to the Neighborhood Benefit11 Strategy or is that different?12

Councilman Goode

It's a13 separate ordinance.14 So do we have a goal for15 Philadelphia-based DBEs?16

Mr. Mullin

I'll have to find17 it in here.18

Councilman Goode

Okay. And19 do we have a goal for non-profit?20

Mr. Mullin

I'll also have to21 find it in here.22

Councilman Goode

Okay. I23 guess the question is good for24 Mr. Mullin. So these goals are25 16 1 definitely based upon the disparity2 study?3

Councilman Goode

Because5 they're contained within the disparity6 study.7

Mr. Mullin

I'm sorry. Yes.8

Councilman Goode

And when9 will the disparity study be delivered to10 City Council?11

Mr. Bell

We are in the12 process of having it approved by the13 Administration, and it should be -- after14 we make the changes and the updates that15 you recommend, we can have it within a16 week.17

Councilman Goode

When will it18 be posted on the City's website?19

Mr. Bell

After we have the20 final approval. And I would say less21 than two weeks, but I would say -- like I22 said, once we make these changes and then23 go back and look at the non-profit goals,24 it's just about ready.25 17 1

Councilman Goode

Okay.2 Mr. Mullin, last year we had a discussion3 about the data that the disparity study4 used and whether we were using City or5 regional data.6

Councilman Goode

And this8 disparity study used what type of data?9

Mr. Mullin

We looked at both,10 but the utilization and disparity numbers11 are based on the regional data as the12 denominator.13

Councilman Goode

One more14 question before I turn it over to members15 of the Committee. Do you make16 recommendations within this disparity17 study relating to the certification18 process?19

Councilman Goode

And what are21 those recommendations regarding the22 certification process?23

Mr. Mullin

The primary24 recommendation is to streamline the25 18 1 process and take a look at ways to make2 it easier for certification, with the3 ultimate objective of making more firms4 available.5

Councilman Goode

So that6 would change the availability rate and7 affect the goal setting?8

Mr. Mullin

I'm sorry?9

Councilman Goode

That would10 change the availability rate and change11 the goal setting?12

Mr. Mullin

Not certification13 per se. I think it would ultimately14 change utilization, but not necessarily15 availability, because availability that16 we use in -- the picture is whether firms17 are certified or not. The idea is to get18 more into that.19

Councilman Goode

So the20 utilization, would that affect the goal21 setting?22

Mr. Mullin

I would think --23

Councilman Goode

If you24 streamline the certification process and25 19 1 it improves utilization, that would2 change the goal setting?3

Mr. Mullin

That would4 possibly change the goal setting to the5 extent that our goals are set in sort of6 three sort of three ways. One, if7 utilization is greater than capacity,8 then we say use utilization and continue9 to try to build capacity. Second, if10 capacity is greater than utilization,11 that's the example that you don't want12 and you try to find ways to increase13 utilization when there are firms there.14 By the way, still trying to increase the15 number of firms that are ready, willing16 and able. And then we have what we call17 a stretch goal, where in one case the18 utilization is maybe greater than the19 capacity, but you don't want -- but it20 could be an area where, say, you want to21 try to increase even greater capacity to22 try to -- and the stretch is to say have23 programs, have OEO to try to get more24 firms available and more firms utilized.25 20 1

Councilman Goode

Councilwoman2 Sanchez has a point of information.3

Councilwoman Sanchez

One of4 the things that we've talked previously5 in these hearings have been when we6 talked about streamlining certification7 was looking at the state and this whole8 issue of reciprocity with the counties,9 with the state. I don't hear you talking10 about that as an option.11

Mr. Mullin

Reciprocity for12 certification?13

Councilwoman Sanchez

Yes.14

Mr. Bell

We currently accept15 reciprocal applications from state16 agencies, the Department of General17 Services --18

Councilwoman Sanchez

But19 they're going through a whole new20 application process.21

Mr. Bell

Excuse me?22

Councilwoman Sanchez

But23 they're still going through a whole new24 application process.25 21 1

Mr. Bell

No, no, no. If2 there are situations where we have to3 request additional information, but we4 would -- if you fill out a certification5 affidavit, we will accept the reciprocal6 application without the rest of the7 documentation. But we've had situations8 recently; for instance, an engineering9 firm applied and we didn't know who10 possessed the engineering license, so we11 had to request additional information,12 but the reciprocal application process is13 a much more streamlined process.14

Councilwoman Sanchez

So if15 I'm certified at the state, with this16 additional application, I get certified17 at the City?18

Councilwoman Sanchez

Okay.20

Councilman Goode

I have no21 further questions.22 Councilwoman Brown.23

Councilwoman Brown

Yes.24 Good afternoon, gentlemen. Let25 22 1 me first say how pleased I am to hear2 that you are already thinking and3 anticipating the budget round for 2010,4 because for 2008 we sent a letter to the5 Mayor making it clear that we wanted each6 and every single City department to come7 with their numbers in the body of their8 testimony. And then '09, based on9 discussions, I did not send a letter, but10 there were departments who showed up and11 did not honor the verbal request.12 So we're hearing now, June '09,13 that starting with our budgets in 2010,14 every single City department will come15 prepared to tell us what their MBE, WBE16 participation is, correct?17

Councilwoman Brown

So I don't19 have to do another letter?20

Mr. Bell

Yes. No, you don't21 have to do another letter.22

Councilwoman Brown

Thank you23 for that.24 A couple of questions. One,25 23 1 first paragraph, you state, "We have2 begun to monitor selected projects." Are3 you at liberty to share now what those4 selected projects are?5

Mr. Bell

Yes. The selected6 projects are the Philadelphia Biosolid.7 We have the Verizon project. We have a8 Salvation Army project, which is through9 Cultural and Commercial Corridor funds.10

Councilwoman Brown

Is that11 the one in Councilman Jones' district, do12 you know?13

Mr. Bell

It's on 420014 Wissahickon Avenue?15

Councilwoman Brown

Yes.16

Mr. Bell

And we reached out17 to the Councilman's office when we set up18 a job fair for those individuals. So we19 have reached out and worked with Council20 to meet some of the employment goals.21 But we're monitoring that project also.22 So between those three in terms of -- one23 of the criticisms of the former MBEC was24 that we weren't actively involved in25 24 1 monitoring and enforcement, and in some2 situations our staff is going to do it,3 but we're also going to look for4 increased participation from some of the5 other City departments. But with those6 projects, we're setting up project7 meetings, we're requesting reports, we're8 documenting participation by contracts,9 because, like I said, we also get10 criticized for the fact that we count11 encumbrances and not actual12 participation. And in these ways, we13 want to let people know that we're14 serious about the process. If you set a15 20 percent goal for participation, we're16 going to monitor and make sure that you17 actually actualize that, or we're either18 going to make a recommendation to not pay19 you or to recommend additional20 participation.21

Councilwoman Brown

Very well.22

Mr. Bell

And in those23 situations, with the staff that we have,24 we can do it. We're also in discussions25 25 1 with upgrading our software. So with the2 projects that we can't get out to3 physically, we can monitor payments4 through the software system.5 COUNCILWOMAN BROWN:6 Incrementally along the way.7

Councilwoman Brown

Second9 paragraph, you say that insurance bonding10 and slow payment does play into some11 firms' decisions to forego City12 opportunities.13

Councilwoman Brown

With that15 reality, which we know is not new, we've16 known it forever, has the Department17 begun to think about how the Department18 can provide technical assistance, for19 whatever that means, so that we can20 ultimately minimize these barriers for21 those who do not want to go after City22 opportunities?23

Mr. Bell

Right. The24 neighborhood business services concept is25 26 1 something that is intended to address2 that, and with the technical assistance3 aspect, that's very key. So this is4 just -- from the interviews that were5 done, this came up a number of different6 times, that because the City is a slow7 pay, a lot of people just won't come out8 and bid after projects, because there is9 in some concepts people think that10 there's mobilization money out there, and11 I don't think that is the case. So, like12 I said, once again, your lines of credit13 are going to be key, and we still have to14 just go out and really focus on15 opportunities.16 There are more people bidding17 on our projects because of the economic18 downturn. For instance, right now we're19 in the process of reviewing bids that we20 received for the Youth Study Center21 project and it is showing an increased22 number of people bidding. So in spite of23 this, there are still people interested24 in doing business with the City of25 27 1 Philadelphia.2

Councilwoman Brown

Okay. To3 the question of slow pay, do you think4 that's a fair criticism?5

Mr. Bell

I think so. I mean,6 we've had situations where payments are7 like 60 and 90 days behind, and that8 really is an impediment and a burden on9 smaller companies.10

Councilwoman Brown

And so11 recognizing that is an impediment, have12 you had a chance to begin to think about13 strategically how your department fixes14 that fact?15

Mr. Bell

We're going to need16 cooperation from various City departments17 on this issue.18

Councilwoman Brown

Such as?19

Mr. Bell

So when a voucher20 comes in that is processed without21 delays, as long as there's no work22 related with the application for payment,23 that it could be improved. And that's an24 area that we could look at, because we do25 28 1 hear that. It took me 90 days, it took2 me 120 days. And, like I said, we don't3 point fingers. We want to in this4 situation work in the spirit of5 cooperation with the City departments6 that are processing payments, but it7 seems like it is an area of improvement8 that we need to look at. And this is9 City departments.10

Councilwoman Brown

So that's11 on your hit list for improvement?12

Councilwoman Brown

And those14 other City departments might include? A15 couple of examples.16

Councilwoman Brown

What would18 be examples of other City departments19 that become a factor in this slow pay?20

Mr. Bell

Procurement21 Department, maybe the Law Department.22 We've heard that some vouchers can sit in23 the Law Department for 60 days. So in24 those situations, we just need to focus25 29 1 on those departments in which we can kind2 of speed up the process.3

Councilwoman Brown

Okay. And4 you should know we're taking notes for5 next year's budget testimony.6

Mr. Bell

You got it.7

Councilwoman Brown

Last8 sentence, second paragraph, you say that9 the actual participation rates reveal10 that we are exceeding availability in11 many areas. In many areas such as what?12

Mr. Bell

Oh, in almost all13 City areas. Based on the actual14 availability of the firms, like, for15 instance, African American firms, even16 though we get beat up and recently we've17 had a movement to have like black only18 goals on projects, the actual19 participation rates exceed the20 availability of the certified firms.21 And maybe, Steve, you might22 want to talk about that.23 Because, like I said, this24 being the first year that I've actually25 30 1 had the complete and finished the2 disparity study, the light finally came3 on in my mind. It's like we get4 criticized for what we don't do, but5 based on the participation numbers, it6 shows that we need to increase the number7 of certified firms. We're actually doing8 quite well with the number of firms that9 we have in our database. The goal is to10 increase the number of certified firms11 that are ready, willing and able, and I12 think Steve can talk to that.13

Councilwoman Brown

You may14 want to state your name again for the15 record.16

Mr. Mullin

Steve Mullin again17 with Econsult.18 In that, one of the biggest19 issues has always been you've got a pool20 of certified firms that count and you21 have a pool of DBE, MBE firms that aren't22 certified, but in the big picture, sort23 of normal human being, they should count,24 they should be part of what we're trying25 31 1 to encourage their business growth and2 things. So one question is trying to --3 is how do you make all of the ready,4 willing and able firms sort of get to5 that level where they're certified or6 where they can be counted. And by the7 way, not just can be counted, but can be8 on lists so that when you're looking -- I9 mean, that's a key.10

Councilwoman Brown

Being11 counted means nothing if you don't get12 opportunities.13

Mr. Mullin

When the real14 rubber hits the road, a lot of times it's15 how do we find some opportunities of who16 we might be able to do joint ventures17 with and things like that.18 So we think that our real view19 is that it's that big universe that20 you're really -- that the public policy21 is really after. And so the notion of22 saying, hey, we're doing well with the23 certified firms, is not really what24 you're after. You're after, We're doing25 32 1 well with the entire universe and growing2 the entire universe.3

Councilwoman Brown

Third4 paragraph, you say, And another -- MBE, I5 imagine -- felt that the certification6 process was burdensome and not worth the7 time. So strategically or tactically8 within your department, what are you9 doing to change the burdensome process,10 which is a consistent complaint,11 observation, criticism that we hear from12 MBEs, WBEs?13

Mr. Bell

We are trying to be14 more proactive with regards to15 information that is submitted. Recently,16 unfortunately, our Deputy Director of17 Certification received a layoff notice.18 So I actually had to put my hands on the19 process. And I think one of the things20 that we've done is maybe when an21 application first comes in, we let it sit22 too long. If there's information that23 needs to be requested; for instance, your24 tax returns, your financial statement,25 33 1 your lease agreement, a lot of this is2 information that we can request in a more3 expeditious manner and we can decrease4 the amount of time. With the fact that5 we're still certifying companies for6 ownership and control, there's7 information that we have to have.8 COUNCILWOMAN BROWN:9 Absolutely.10

Mr. Bell

If you're applying11 to become an electrician, if you don't12 own the license and you're not in the13 minority class, then it's going to be14 difficult for you to become certified,15 meaning your company. And in some of16 these situations, rather than letting the17 certification application sit six to18 eight weeks, we're going to be more19 proactive in terms of you need to submit20 this or we need this information, and21 that's what we're trying to do. And I22 definitely think the process can be23 streamlined. I'm thinking within the24 next couple of months your application25 34 1 comes in, we can get to you within a week2 or two to let you know this is3 information that we need, and I think we4 can take that process down to four to six5 weeks to get you certified and less time6 than that on the reciprocal application.7

Councilwoman Brown

That would8 be encouraging, because I've made calls9 to the office prior to your arrival to10 find out where an application was,11 because there's been no feedback.12

Councilwoman Brown

So it goes14 to the point in terms of technology. Is15 there some place on your website where a16 prospective vendor can come and see what17 the specs are for app and and that they18 know even before they send in one that19 they got to have certain documents ready20 to go?21

Mr. Bell

Oh, yes. That22 information is on the website in terms of23 what you need. It's already there. But24 it's just you have a lot of companies,25 35 1 they will piecemeal you with the2 information that you need. And then also3 too recently we had a company that had4 been certified for years. They let their5 certification lapse, but they were on our6 project. It comes down to it, they7 didn't submit all the information that we8 need, and we couldn't just give the9 certification, because I don't think we10 should ever lower the standard to just,11 okay, I know who your company is, but if12 we don't have your updated tax13 information, your updated resumes of the14 principals, we're not just going to give15 a certification away.16

Councilwoman Brown

Sure.17

Mr. Bell

You still have a18 responsibility to give us the information19 so we can determine ownership and20 control.21

Councilwoman Brown

Indeed.22 To that point, Councilman Goode and I23 worked on a matter maybe a year ago that24 reflected some of the characterization25 36 1 you just made, and the question for us2 raised was, is there a separate track3 activity for longstanding companies who4 have been around for 30 years and simply5 want to be recertified? Should they have6 to follow the same --7

Mr. Bell

No. They don't have8 to submit everything. They do have to9 submit what is called a No Change10 Affidavit, that nothing in the ownership11 or control of your business has changed.12 A lot of times companies forget about13 that, like they'll just -- they don't14 think that the certification ever lapses.15 So we would send out notices. Like I16 said, when we went through a purge of the17 directory, one of the criticisms that we18 heard was that there were a number of19 firms in the directory that don't respond20 to phone calls, they don't respond to21 opportunities to bid. And so we felt22 that we had some fluff in there. So,23 like I said, the first hundred companies24 that we actually purged from the25 37 1 directory were companies that received at2 least three letters notifying them, your3 certification has expired, this is your4 second notice, this is your third notice.5 And I don't know if it didn't happen6 before recently, but we removed those7 companies out of the directory, because8 we don't want to get the criticism that9 prime contractors are calling people and10 they're not responsive to bid.11

Councilwoman Brown

Yes.12

Mr. Bell

Because then that13 turns people off. That also turns City14 departments off, because if we have City15 departments that are going to send people16 to our directory and the firms are not17 responsive or interested in bidding on18 City projects, we needed to make19 improvements in that area.20

Councilwoman Brown

So before21 your arrival, the time needed for a22 company to become certified, presuming23 they sent everything in and had24 everything right, the time was what?25 38 1

Mr. Bell

I heard it was like2 90 to 120 days.3

Councilwoman Brown

And now4 under the new leadership and with these5 new measures you're putting in place, the6 goal or expectation is what?7

Mr. Bell

I'm looking at four8 to six weeks, but I can report back to9 you on that as of July 1, because we're10 in a transition period now. I'm11 assessing how the applications have come12 in, how they were assigned to13 specialists, and I'm looking for14 improvements in that area.15

Councilwoman Brown

Okay. I'm16 a little remiss in that I did not bring17 down here -- there were more than four or18 five City departments who when we raised19 questions about MBE, WBE activity and why20 they were not meeting their goals, all21 fingers pointed towards OEO. And then we22 were anxiously waiting for an opportunity23 to revisit that with you, but leadership24 and the Administration made a different25 39 1 decision.2 So I am going to get to you3 those departments who made it clear that4 it's not us, we're doing our job, it's5 all because OEO isn't doing their job.6 And so that's not good, because OEO7 wasn't here to defend themselves, which8 is why we wanted you to come back with9 that department, so we can find out where10 the glitch is.11

Councilwoman Brown

Because it13 wasn't apparent to us simply talking to14 the leadership of that department. So15 I'll finish where I started. We can --16 no; just one final question I put here.17 With the work of Econsult and18 the new objectives of this department,19 are these matters discussed at cabinet20 level?21

Mr. Bell

They could be.22

Councilwoman Brown

Kevin Dow.23

Mr. Dow

I would say yes.24

Councilwoman Brown

They are?25 40 1 Because we believe that to the extent2 that is that high up on the agenda of3 leadership, then the expectation is that4 the needle moves. So we're going to --5 I'd like to finish where I started. Next6 year for budget 2010, it's our7 expectation that every single City8 department will come here with the9 numbers as a part of their testimony, not10 after budget hearings are over and then11 we get miles of paperwork with the12 numbers separate from the actual13 testimony. That includes Community14 College of Philadelphia, SEPTA and the15 courts.16

Mr. Bell

On the Community17 College issue, they reached out to us18 about the Northeast campus expansion, and19 then I had --20

Councilwoman Brown

There's a21 lot of concern and criticism.22

Mr. Bell

Yes. And also one23 of my staff members attended a pre-bid24 meeting today, because they're doing some25 41 1 work on their main campus. So I don't2 know who actually ignited Community3 College to reach out to us, but we sent4 them firms, we notified people about the5 pre-bid opportunities, and I think that's6 a positive development, whoever started7 that.8

Councilwoman Brown

I sent the9 letter.10

Mr. Bell

Thank you so much.11

Councilwoman Brown

Thank you12 very much.13 Thank you, Mr. Chairman.14

Councilman Goode

Quick15 follow-up of Councilwoman Brown before16 Councilman Jones.17 Mr. Mullin, on of the18 disparity study, you discussed how19 coordinating -- how to coordinate goal20 setting in terms of citywide objectives21 and down with department actions. Can22 you explain a recommendation of how the23 overall goals should be communicated to24 departments and the importance of25 42 1 departments being held accountable?2

Mr. Mullin

Yes. Again, Steve3 Mullin.4 We, in working with OEO, looked5 at the -- and you can see in a chart on6 Section 5.5.1 -- the goal-setting process7 flow chart. We start with collecting the8 participation information. That's OEO --9 we did the study to come up with the10 goals that are set, recommended11 participation goals that are determinant12 based on the information looked at,13 always, again, with a one- or two-year14 lag here.15 In the olden days, I guess it16 was Director of Finance but now it's17 Commerce Director developing the citywide18 goals, developed departmental goals,19 again, with -- again now with Department20 of Commerce. So the initial goals for21 overall come from the overall data that22 we collect, and we analyze there. And23 then through the department, we don't go24 as the consultant and look at department25 43 1 by department, but those are set up2 through the Commerce Department there.3 We also note that the -- we say4 when you're looking in the direction --5 we'd say upward and downward here --the6 goal should be set with citywide7 priorities in mind here, and I think --8 it's our view that the creation of the9 Office of -- of OEO and the placement of10 it in the Commerce Department was a11 reflection of that first step, not all12 that they do, but that facilitates that.13 And then we talked about the departments14 being held accountable for their15 adherence to the DBE goals there.16 One of the biggest problems17 with the departmental utilization, in18 some cases when the numbers are in single19 digits, there can be certain types of20 expenditures, and one we're familiar21 with, large expenditures on fleet or22 large expenditures that could be an23 emergency expenditure or something that24 could really throw some of the25 44 1 utilization numbers off. But we believe2 that the departments ultimately should3 be -- if you're not reaching the goals,4 there should be a process, and I think5 OEO is looking at that, why didn't you,6 what's the explanation, what are the --7 and a sort of an overall commitment by8 the entire City government, from the9 Mayor on down and Council saying, Okay,10 if you're not meeting your goals, then11 there should be some corrective action12 taken. And, by the way, you should do13 whatever you can to get one percent more,14 but try to understand what was the15 rationale, why weren't these goals met,16 and to the extent that there are some17 things that are systemic say because of18 this in getting that kind of19 information -- and, again, in some of our20 recommendations, we note this -- are21 there changes in procurement practices22 and procurement processes that can help23 correct examples where there aren't --24 where there are not -- where the goals25 45 1 were not met by departments.2

Councilman Goode

And within3 appendix of the disparity study, I notice4 you did examine things department by5 department, so you did take into6 consideration in terms of the overall7 goals.8

Councilman Goode

Councilman10 Jones.11

Councilman Jones

Thank you,12 Mr. Chairman.13 Good afternoon, gentlemen.14

Mr. Bell

Good afternoon.15

Councilman Jones

My senior16 colleagues know a lot more about the17 history recently with the transition of18 the organization than I do, so what I'd19 like to do is take a step back so that I20 might understand it a little better.21 Tell me who do you report to22 now?23

Mr. Bell

I report to Kevin24 Dow.25 46 1

Councilman Jones

Who is the2 Commerce Director?3

Mr. Bell

Deputy Commerce4 Director.5

Councilman Jones

Well, I may6 be speaking Freudianly, because the7 current Commerce Director is on his way8 to London. That may be in your future.9

Mr. Dow

No comment.10

Councilman Jones

There you11 go.12 And how many staff people do13 you have now?14

Mr. Bell

Fifteen.15

Councilman Jones

And so you16 are physically housed in the?17

Mr. Bell

Municipal Services18 Building.19

Councilman Jones

You report20 in what way to the Economic Development21 Opportunity Cabinet?22

Mr. Bell

I have not met with23 the Economic Opportunity Cabinet24 recently.25 47 1

Councilwoman Jones

When was2 the last time you met with the Mayor's3 Cabinet for Economic Opportunity?4

Mr. Bell

November or5 December.6

Councilman Jones

How many7 times have you met with the Mayor's8 Cabinet for Economic Opportunity?9

Councilman Jones

Once. All11 right. How many --12

Councilwoman Brown

Point of13 information.14

Councilman Jones

Yes, ma'am.15 I yield. I yield.16

Councilwoman Brown

As a17 follow-up to Councilman Jones' question,18 you may not have had an opportunity or19 been given the instructive. So who in20 your team, on your team or your person21 you report to, can they answer Councilman22 Jones' questions?23

Mr. Bell

About what?24