And how many women-owned businesses, Philadelphia women-owned businesses, are certified?
About 30 percent of the businesses in the MBEC directory are women-owned businesses, about 30 percent. Now, in that 30 percent, that also includes minority women as well. So there could be an overlap between the African-American and --
What percentage of Philadelphia women-owned businesses are certified? I'm sorry. How many Philadelphia women-owned businesses are certified?
It's probably -- now, there we have a little bit of a higher number of reciprocals in there. So I'll say -- and I'll get the precise 39 11/15/07 - COMMERCE - RES. 070741 numbers to you, but I'll say around 70 or 80 percent of those numbers.
I'm asking how many actually women-owned businesses from Philadelphia are certified.
So 30 percent of 1,200. What's 30 percent of 1,200? About 400. About eighty percent of 400.
So the percentage of African-American and women-owned businesses may be as high as 36 percent?
The percentage of African-American and women-owned businesses in Philadelphia 40 11/15/07 - COMMERCE - RES. 070741 may be as high as 36 percent?
Not African-American-owned businesses. Women-owned businesses.
Listen. The percentage of African-American and women-owned businesses may be as high as 36 percent?
Thirty-six percent of our directory? I'm not understanding the 36 percent you're talking about. I'm not following. I'm sorry.
The percentages of businesses in Philadelphia, the percentage of African-Americans and women-owned businesses may be as high as 36 percent?
You said African-American-owned businesses are 14 percent.
And 22 percent. Correct. Okay. I wasn't following you. 41 11/15/07 - COMMERCE - RES. 070741 Yes.
And there are roughly 23,000 African-American and women-owned businesses?
So how many African-American and women-owned businesses are certified?
As I stated, out of our directory, 1,200, about half are African-American, which includes women, and about --
About a thousand African-American, including women, and women-owned businesses are about 31 percent of our directory.
You really don't understand why I'm frustrated, do you? The only question I asked you was how many black and women businesses are certified in Philadelphia. That's the 42 11/15/07 - COMMERCE - RES. 070741 question I asked.
I don't have the precise numbers in front of me, so I'm just estimating. In the women-owned businesses, there are also minority --
You can take a second, as much time as you want. We'll wait, and then give me a number.
And you want the number of African-American-owned businesses, women-owned businesses that are certified?
I want the number of black and women-owned businesses that are certified, the number of black and women-owned businesses in Philadelphia that are certified.
Okay. Let me take one second to think about it. About a thousand out of the 43 11/15/07 - COMMERCE - RES. 070741 1,200 would be African-American-owned businesses, which would include African-American women, and also women-owned businesses, to the exclusion of minority women. So the number I'm getting, I have numbers in front of me from Econsult, would be about a thousand.
Okay. So these are the numbers we're going to work with right now. These numbers we're going to work with right now. Let's say roughly 36 percent of the businesses are either owned by black people or women, which accounts for about 23,000 businesses, and 1,000 are certified.
My target would be, I think -- we're at 1,200 now. Realistically I would say 2,000 firms should be certified, would be the target. Now, that's not saying that more firms 44 11/15/07 - COMMERCE - RES. 070741 could not be, because just because a business is African-American, women-owned doesn't necessarily want to be certified, but as a target, I would estimate 2,000.
Let me change the question. Of the 23,000 black and women-owned businesses in Philadelphia, how many could be certified? We've concluded roughly a thousand are certified. How many could be certified?
Out of 23,000. Well, based on -- and this is an estimation. Based on the pace of the incoming applications that are coming in --
-- tell you how many want to be certified. 45 11/15/07 - COMMERCE - RES. 070741
Listen, my question is if there are 23,000 businesses owned by black people and women in Philadelphia and 1,000 are now certified, how many could be certified? That's my question. Could be certified.
Any number could be certified, Councilman. The certification is voluntary. It's based on the interest of the business. You're asking me to estimate somebody's interest.
No, I'm not. I'm asking you how many could be certified.
Any number could be certified. Any number could be certified.
Let me move on. I'm almost finished with you. All 46 11/15/07 - COMMERCE - RES. 070741 right? There are 163,000 disadvantaged businesses in the region; is that correct?
There are 163,000 disadvantaged businesses in the region; is that correct?
So out of 163,000 disadvantaged businesses in the region, 1,200 are certified. How many bid on City work annually?
I think the number is a little bit higher. 47 11/15/07 - COMMERCE - RES. 070741 How many are awarded City work annually?
So let's start over. There are 163,000 disadvantaged businesses in the region, 1,200 are certified, 500 to 600 bid, and less than 300 are awarded contracts; is that correct?
So of the 48 11/15/07 - COMMERCE - RES. 070741 163,000 disadvantaged businesses within the region, less than 300 are awarded contracts on an annual basis; is that correct?
Well, in Fiscal Year FY06, yes, that's where the 277 number came from. That number could vary year to year.
Okay. Of the 163,000 disadvantaged businesses within the region, on average how many are awarded contracts on an annual basis?
On average, the ratio has been -- this is just a ratio, because I would have to look at each fiscal year, but on the average, I would say that probably only a quarter --
It may be a 49 11/15/07 - COMMERCE - RES. 070741 little more than that some years, Councilman. It could be a little less than that some years. I would have to look at each year, but I think that's probably accurate.
So it's roughly 300 disadvantaged businesses get contracts every year, roughly?
And that's percent of the 1,200 people you have 13 in your directory. 14
But there 16 are 163,000 disadvantaged businesses in 17 the region. 18
There's 23 absolutely no need for you to exist as an 24 agency if all you do is certify and you 25 have the same directory of about a 50 11/15/07 - COMMERCE - RES. 070741 thousand people and you assume that the same percentages of that same 1,000, 1,200 people in your directory are going to get what they're going to get based upon history, when the bottom line is you have 1,200 businesses certified out of 163,000 in the region. That doesn't make any sense. Can you help that make sense for me?
It doesn't make sense, and that's why we're moving forward, because it doesn't make sense. You get no argument from me that it doesn't make sense.
This is where I sit back and allow you to talk fully. I want you to explain to me how the 163,000 disadvantaged businesses in the region, you only have 1,200 certified, and you then claim that there are only certain levels of participation that are achievable by black-owned businesses and by women-owned businesses, knowing that it's because you're only 51 11/15/07 - COMMERCE - RES. 070741 pulling from the same 1,200 when there are 163,000 businesses out there, when in fact all of them may not want to be certified, all of them may not offer products and services the City can use and/or request. But, clearly, the reason why MBEC doesn't work is because you don't give out the contracts, you only certify the agencies, and you don't do a good job of that. Is that true or not true? I'll let you explain. I'll be quiet for as long as you want me to be quiet.
Well, I can't dispute anything you've just said. My tenure at MBEC has been to move forward away from what you just said. Since you're going to let me talk, I'll talk. When I first came to MBEC, we were so understaffed and underresourced. That's the problem. You want to know why MBEC doesn't work? It doesn't have the resources to work. That's why it doesn't 52 11/15/07 - COMMERCE - RES. 070741 work. I came in there with a budget level of employees with 13, one staff 4 person in certification. Part of my role 5 in my first six months was to fully staff 6 certification. I came in. Employees 7 were doing what they could with what they 8 have. And that's the MBEC story. MBEC 9 does what it can with what it has. And 10 that's not an excuse. That's been what 11 has happened. 12 I came in there. There was 13 almost a year's worth of backlogged files 14 that had to be worked through. We worked 15 through that. We were able to hire four 16 staff people immediately. We're nowhere 17 near -- no, we're not near where we need 18 to be to go after the 165,000 you've just 19 talked about. We're not there. 20 We had to put internal 21 management controls in place to be able 22 to process paperwork so that people aren't waiting for it an inordinate amount of time. We have to install the necessary electronic systems. We are the 53 11/15/07 - COMMERCE - RES. 070741 only top ten city in the United States that does not have an electronic web-based certification tracking and compliance system. That, sir, is the problem. You know, you cannot run around after 50 application certifications that come in per month, which is about the average. So there's a lot of interest in the program. You cannot complete that certification with four people running around tracing files by hand. That's the problem. So the certification cannot be accomplished adequately. That's absolutely true. Because we don't have the staffing, the resources or the technology to do so, and that's only part of it. The other part of MBEC staff has to do bid evaluation, set participation ranges with the same problems, with the same understaffing, with the same lack of technology, working with approximately 500 bids that come out per year in supplies, services and 54 11/15/07 - COMMERCE - RES. 070741 equipment and public works, in addition to professional services contracts. In total in any given city year, you're talking about approximately 5,000 contracts. If you're talking about new contracts, you're talking about amendments and you're talking about renewals. There is no way that that kind of staffing complement can accomplish certification, bid evaluation reviews, set ranges, do compliance, for which there is no official contract compliance staff to be able to manage the compliance so that we can make sure that contractors are doing what they told us they were going to do. We don't have the staffing. We don't have the technology to be able to do that. So part of what I've been trying to do to come in there is try to put the mechanisms in place to be able to address exactly what you're talking about. 55 11/15/07 - COMMERCE - RES. 070741 I don't have any argument with what you've just said. My charge, as long as I'm being allowed to do it or whatever successor agency there may be, is going to have the same issue. You'll be sitting in front of whoever is going to be at this table next year saying, I have problems with you, just like you're saying you have problems with MBEC. It's going to be the same thing if there's not a commitment to fund, support and resource whatever organization that is in this seat, whatever it may be, to carry out that mission. That is the problem. I don't have any disagreement with what you've said. I'm out here a couple of dollars short, late and everything else trying to run around to accomplish this. That's been the frustration of what we've been trying to do.
That's what my tenure has been about for a year and a half, trying to accomplish a mission short in terms of budget, resources. That's what we've 56 11/15/07 - COMMERCE - RES. 070741 been trying to do. That's what it's been. And I'm speaking to you in all sincerity. You can be frustrated with me if you want to, but that's what it is. In all sincerity, we come, all of us -- there are MBEC employees sitting right here that come to the office every day and try to do what they can with what they've got, and that's the bottom line.
Okay. I wanted you to say everything you wanted to say. First, I do know who I'll be talking to next year. It will be Rob Dubow. And this year it should have been Vince Jannetti. The truth of the matter is that the change we made to the City Charter was one that we made on purpose, which was assign the Finance Director the responsibility of doing a disparity study 57 11/15/07 - COMMERCE - RES. 070741 and setting goals, and that responsibility should be at the cabinet level if an Administration takes this issue seriously. So I will be talking to Rob Dubow about the same issues next year, but I'm assuming it will be with a different response. The second thing is, I let you talk as long as you want to talk and I'll let you talk as long as you want to talk again. The question again is, there are 163,000 disadvantaged businesses in the region. They only get roughly 300 contracts a year. Is that because you only have 1,200 certified?
I don't think that's the total reason, no. And part of when Econsult presents, there are non-certified minority and women that do business with the City. In other words, doing business with the City -- certification is not a prerequisite for doing business with the City, and there 58 11/15/07 - COMMERCE - RES. 070741 are firms that can do business with the City without being certified. So I don't -- we don't set forth the predicate that you have to be certified as a minority, women, disabled-owned person, otherwise you can't do business with the City. That's part of the strategy that Econsult recommended to us, that we not limit. Because, as you know, there are going to be firms that are not going to be certified regardless. So we don't want to cut those firms off and say, Okay, well, you're a minority woman and you're not certified, therefore you can't do business with the City. There have to be ways to work with that kind of utilization, because that's still utilization of minority, women-owned businesses or disabled-owned businesses. So we don't want to be limited and narrow in our approach to including these businesses in working with the City. 59 11/15/07 - COMMERCE - RES. 070741
One more time. There are 163,000 disadvantaged businesses in the region. They receive annually roughly 300 contracts. How many contracts could those 163,000 disadvantaged businesses in the region receive? Because it looks as if they're receiving the same 300 contracts, the same rough percentage of the same list of certified people. And, in fact, you said on the record that you even devised the African-American goal and the women goal based upon historical participation and based upon historical participation related to this list of only 1,200 people, 1,200 businesses.
Well, all 165,000 businesses may not want to do business with the City. I can't sit and say --
That's not 60 11/15/07 - COMMERCE - RES. 070741 my question. How many contracts does the City of Philadelphia let on an annual basis?
Bid contracts, it's about -- I believe it's about 500 bid contracts. And like I said before, I don't -- the total is somewhere in the thousands in terms of renewal -- new contracts, renewed and extended contracts, professional services. So it's thousands of contracts. I don't have the precise number of front of me, but it's about 500 at least bid contracts a year, which is SS&E and public works, somewhere in that neighborhood, that are bid annually, new contracts that are bid annually.
Non-bid, Councilman, I don't have the precise number in front of me, because I have a number that includes new contracts, amendments and renewals for the professional services. I've been told 61 11/15/07 - COMMERCE - RES. 070741 it's somewhere in the nature of 5,000, which includes all of that in terms of new contracts.
So roughly how many contracts are let on an annual basis?
I would estimate maybe 1,500 as an estimate. And I'm estimating with the professional services, as I don't have that in front of me. I can certainly get that precise number to you. It's somewhere in that neighborhood, not counting the amendments and the renewals.
So the 163,000 disadvantaged businesses in the region, there are about 1,500 contracts let by the City on an annual basis. How many contracts could be given to disadvantaged businesses?
Again, it would 62 11/15/07 - COMMERCE - RES. 070741 have to be targeted. I would say percent.
I want a 5 number of the 1,500. I don't want an 6 actual percent. 7
Twenty-five 8 percent of 1,500. 9 An estimate of 375, an 10 estimate. 11
Yes. 14 Thank you. 15 Of the 1,000 certified, how 16 many have been certified for this year? 17 How many have been completed over the 18 last ten months? 19
We've completed 20 probably over the past year -- about 300 21 are certified in a calendar year 22 generally. I've been tracking the 23 numbers more closely over the past six 24 months. It's been about a thousand -- 25 I'm sorry; a hundred. So it's about 300, 63 11/15/07 - COMMERCE - RES. 070741 as an average, about 300 per calendar year are certified.
And based on discussions with your office, it takes three months after all the paperwork is in?
Now, your tenure has been, your leadership post, has been for how many months?
Speak to some of the corrective action you say you've taken under your leadership to improve the number of those who seek certification.
Okay. Specifically in certification, one of the first things we did was to hire specialists to be able to handle the application process, because obviously when I came in, there was one person that was available, because of attrition and 64 11/15/07 - COMMERCE - RES. 070741 because of other things. We also set up --
Define what you mean when you say "specialist." Specialist in what?
MBEC specialist that handles the actual application. I'll just say MBEC specialist. It could also be a management trainee that handles the actual physical application. So, first of all, we had to get people in that could handle the applications, because without staff, you have applications coming in, but they can't be processed.
So they sit, and then you get a backlog and everybody gets angry, and understandably so. The second thing we did was set up a deputy of certification. So in addition to having specialists, we have a coordinator, which is kind of a mid-level supervisor, and then a deputy of 65 11/15/07 - COMMERCE - RES. 070741 certification to be able to specifically target certification, because it is the heart of what MBEC does and you needed that leadership to be able to, first of all, handle the massive backlog that had to be handled. On the federal side, we had over 684 federal DBE files that had been improperly grandfathered in the federal system.
Improperly grandfathered in, and we had to work through the review of all of those files under the supervision of PennDOT. And this is at the same time that we're managing the City certification files.
And help me understand why the City was charged with a project of that scale that was federally related.
Well, the City has always been a certifying participant in the unified certification program. 66 11/15/07 - COMMERCE - RES. 070741 The City has always accomplished federal DBE certification, because the City has federal highway funds that flow into Street Department projects and also airport funds.
For those projects, the participants, the firms, need to be federal DBE certified.
And with that responsibility does not come administrative dollars where you hire staff --
I see. Okay, then. Are there any reciprocity agreements between the Commonwealth, 67 11/15/07 - COMMERCE - RES. 070741 Philadelphia and New Jersey or Delaware where small business people if they're already certified in Philadelphia, that that is respected or acknowledged in surrounding areas?
We accept reciprocal certification from other jurisdictions. The surrounding agencies, some of them do and some of them don't. But certainly we've been doing that since 2005.
Ms. Nichols, how long does it take for someone to receive a reciprocal certification?
Well, again, depending on the backlog, we try to set a target of two weeks to process the application. Because of, like I said, backlog and depending on the workflow, 68 11/15/07 - COMMERCE - RES. 070741 anywhere from two to three weeks.
A recertification we set -- recertification certification we have the target of the 90 days. And, again, that's based on workflow because of the amount of applications that are in flow.
Only because of the number of applications that we have. Again, because of the limit of staff, that's why --
So there's no prioritization of people who were once certified and have already done business with the City?
69 11/15/07 - COMMERCE - RES. 070741 Recertification -- a firm remains certified. So even if there's delays because of the backlog, because of understaffing, that firm remains certified, so the new certification -- the new application --
It is not true. Ms. Hitchcock, could you approach the witness table.
It's not true. Ms. Hitchcock, please identify yourself for the record. 70 11/15/07 - COMMERCE - RES. 070741
My name is Candace Hitchcock, Deputy Director of Operations, MBEC.
On average, it can take over a month, again, depending on workflow and the number of people and the applications.
So if a bid is put out and a firm that was once certified is not up to date on their 71 11/15/07 - COMMERCE - RES. 070741 certification and they have applied for recertification and the prime contractor wishes to do business with that firm that has once been certified by the City, has already done business with the City and is simply seeking a recertification, how is that firm dealt with? Are they dealt with as a certified firm?
Yes. If the prime contractor asked that question or even the vendor himself, they are currently certified until such time as they are actually processed through the system. They are not penalized for not having actually been processed.
Was that the case with Beverly Harper recently? Because you know Beverly Harper contacted each and every office.
Councilwoman Tasco's office dealt with it. Councilwoman Brown's office dealt with it. My office dealt with it. And was that the case in that situation?
I'm not sure of the incident. I didn't deal with her. I talked to her, but I didn't handle her file.
I don't know how she was treated. Treated by whom? She's certified. You remain certified --
I didn't talk to 73 11/15/07 - COMMERCE - RES. 070741 your office, no. I talked to several offices, but not your office, I don't believe. I don't think I talked to your office about it.
You didn't speak with my Chief of Staff seated to your right?
You didn't speak to my Chief of Staff seated to your right?
I want to 74 11/15/07 - COMMERCE - RES. 070741 go back to Councilman Goode's initial question. Are those businesses who come in for recertification treated with any level of priority? What is the SOP, standard operating procedure, for treating businesses who come purely and only for recertification?
The standard operating procedure is because these firms are certified, the priority is to certify non-certified firms first. That has always been the priority, because they're not certified at all. Certified firms remain certified until the recertification process is completed so they're not in danger of losing their certification. So what we've done is, when -- prime contractors sometimes do get upset, and I do recognize that, because they look at the certification letter, they see an expiration date and they become concerned. So what we do is, we do provide on a priority basis in-process 75 11/15/07 - COMMERCE - RES. 070741 letters. So that way, we can show the prime or anyone else that's interested in that firm that that firm is certified pending the completion of the recertification process.
So what is the trigger in the system for that -- how did you identify that letter, reprocess?
In-process letter. What's the trigger so that our offices then do not get the calls that they are waiting for weeks for a reprocess letter and they are in jeopardy of losing the opportunity to be a part of that transaction?
The question was also whether you prioritize recertifications.