Yes, we do, and I'm going to explain the process that I put -- one of the other processes, 76 11/15/07 - COMMERCE - RES. 070741 internal management control processes, I put in place when I came. When I came, firms were expiring that needed to be recertified, but they were not receiving any notice. And that does cause a problem, because then you do have a lapse, because then the firm expires and then they're really in trouble because then they're not certified. What I did to remedy that, I set up a staff person who was charged with monitoring the directory, monitoring the expiration dates and making sure every month we call each firm prior to their expiration date to notify them that they're about to expire. We send out letters to say, Your expiration date is coming up for your recertification, your reassessment will be due, send in an application. What we did was, we sent out, over a period of a month, we sent out I don't know how many thousand letters to every firm to let them know, Here is an 77 11/15/07 - COMMERCE - RES. 070741 application, here's a certification application, you need to fill this out because your date is coming. And we would keep monitoring that, and we have a staff person that works with firms. Because we understand everybody doesn't calendar, everybody doesn't keep track of their certification dates. So we're very sensitive to monitoring the expiration dates of firms to avoid any disruption, and then further to give primes any assurance they need. We've spoken to primes personally. We've sent letters to prime contractors to let them know that that contractor is certified pending the completion of the recertification process. So we are very sensitive to the recertification dates. And, again, because of understaffing, yes, sometimes time does pass. I'm not going to argue that point. Sometimes more time passes than should pass. I'm not going to sit here and argue that. But what we try to 78 11/15/07 - COMMERCE - RES. 070741 do is make sure that there's no 3 disruption in that firm's certification.
And so the manual steps that you just went to sounds like what you've stated earlier in your testimony; that is, the need for technology, which would remedy this manual tracking of --
What cities do you know currently have technology in place that would address exactly what you just described?
One second. The 1,200 people on the list, how much technology do you need, I mean, to determine who is going to lapse on the certification? Let's be for real about this.
Well, it's 1,200 people, but what I'm trying to say, 79 11/15/07 - COMMERCE - RES. 070741 Councilman, there are 60 people coming in per month putting in new applications.
That has nothing to do with what we're talking about right now.
We're talking about recertification. If there are 1,200 people on the list, the same old 1,200 people on the list, it doesn't change that much. What level of technology do you really need in order to determine when their certification is going to lapse? That's just ridiculous.
Well, it's not just the City side. It's also the federal side.
We're talking about City certification right now. We're talking about 1,200 people on this list.
Well, it's a little more complicated with that, 80 11/15/07 - COMMERCE - RES. 070741 because with the reciprocals, there are very different dates in terms of the expiring, and now all of that has to be monitored. It's not just the 1,200 static people. It isn't. It's constantly -- people are constantly coming and going. It may be 1,200 people, but it's a different 1,200 people. People come and people go. It's not as static as, okay, it's the same 1,200 people, they're certified, then they come back and they become recertified. It's a constant flow of people coming in and out. It's a different group of people coming in and out constantly, not to mention the new certifications that come in every month and apply.
It is not a totally different group of people. It may not be exactly the same 1,200, but it's not a totally different group of people. That's not true.
Well, in order to 81 11/15/07 - COMMERCE - RES. 070741 avoid situations that you've just described, we need to have the technology to avoid people waiting, to avoid people being lost. That's what it takes. It's based on the staffing of people that we have. And I know you're not here to talk about the federal program, but there's a whole other program that needs to be monitored as well. There are applications coming in --
If I ask my question cynically, then maybe I shouldn't ask it cynically, because maybe you didn't think it was a real question. My question was, what level of technology do you really need to track recertification when you've only certified 1,200 people?
There is certification tracking software specific 82 11/15/07 - COMMERCE - RES. 070741 to certification that every top ten city has.
And you should have it and we want you to have it and someone should bring it up at budget time, we'll make sure you have it, but the question is, you really think you don't have the level of technology right now to track who needs to be recertified on a list of only 1,200?
It's more than just the list of 1,200. It's 1,200 -- the tracking doesn't just deal with recertification, Councilman. The tracking deals with new applications.
And I'm saying that the tracking system deals with new certification as well.
And I'm saying for ease -- the maximum ease of process, 83 11/15/07 - COMMERCE - RES. 070741 the certification tracking system would help us avoid the kind of problems that we're talking about. That's all I'm saying.
My question is, are you saying you do not have the technology currently to track who needs to be recertified? Is that what you're saying?
No. What I'm saying is, we do it manually. What I'm saying is, we have to use --
But you don't have to do it manually. Because you don't have that particular software, you still don't have to do it manually. Are you really trying to say you do not have the technical capacity to track recertification on a list that's this small?
The only technology that we have is a ten-year-old tracking system that the -- it has basic information in there. To track the dates 84 11/15/07 - COMMERCE - RES. 070741 that you're talking about, employees have to keep track of those dates in Lotus Notes or in their own computer to be able to get to the firm prior to the expiration date to notify them and to keep that going.
But I'll let Councilwoman Brown finish. I really want to move on in the hearing, but the last issue is really a simple question. Do you know right now how many firms need to be recertified within the next six months?
I have that in the office. I don't have that number in front of me. I can get that to you. I don't want to misquote a number. We do have that number, yes. I don't have it right in front of me.
You know how 85 11/15/07 - COMMERCE - RES. 070741 many --
-- firms need to be recertified within the next six months?
Yes, based on the -- like I said, I have a person assigned to manage that.
I don't have the technology. The person has to do it manually.
Tell me what cities you know currently have technology in place that would address the number of impediments you've discussed during your testimony, like tracking, companies that need to be 86 11/15/07 - COMMERCE - RES. 070741 recertified, separating out those who are in need of recertification versus those who are at the first step of the certification process. What cities have it right?
I can just state simply the top ten cities all have it. I've been able to --
Okay. A few of those cities, the city I've worked most closely with is Houston, Texas. The Director, my counterpart in Houston, has erected specific software. I've contacted that rep. We've actually had discussions.
New York, Chicago, Boston, Phoenix, Los Angeles. Any of the top ten cities just off the top, or even locally, New Jersey, Newark, and any of those cities all have a form 87 11/15/07 - COMMERCE - RES. 070741 of tracking software that I'm talking about.
For the record, Councilman Clarke said I was more than fair.
You're always more than fair, Councilman Goode. I don't have any problem with it.
We're here to answer your questions and move forward. Thank you.
Mr. Mullin, I'm sorry for the wait. I'm going to ask that your testimony be given to the 88 11/15/07 - COMMERCE - RES. 070741 stenographer and incorporated into the transcript, and I have a couple very simple questions.
According to Ms. Nichols' testimony, Econsult has been asked to now do a goal-setting report; is that correct?
But Econsult was not originally asked to set the goals, participation goals?
We were asked to identify goals -- we were looking at the '06 numbers. So the goals for '07, which would follow from '06, the year was already basically done. So we proposed a mechanism for that, but didn't propose specific goals.
I think so, yes. More of a framework. Lee Huang of my shop is here 89 11/15/07 - COMMERCE - RES. 070741 and has talked in more detail on this, but we do want to look at the -- and we have been asked to take a look at setting up a goal-setting report.
So you've been asked to establish the goals for the future?
Only two more questions. The first being, will those goals be based upon regional numbers in terms of capacity or will they be based upon Philadelphia numbers?
The numbers that we have and the data that we have, although we do have some Philadelphia County numbers, most of the numbers and the comparison numbers that we have are metropolitan areas. We could, by the way, look specifically at Philadelphia 90 11/15/07 - COMMERCE - RES. 070741 County.
You don't think that would be better? Just for the record, African-American-owned businesses make up six percent of businesses in the region, but percent of businesses in 8 the City, according to the numbers that 9 were presented by Ms. Nichols. 10 Women-owned businesses make up 26 percent 11 of businesses in the region, and that 12 number is somewhat comparable to the 13 number that was presented in terms of 14 Philadelphia. But in the end, we know that the numbers, particularly as it relates to African-American-owned businesses, Latino-owned businesses, so forth, there's a higher percentage of businesses within the City than there are within the region. And so if you use the metro numbers, then a ten percent goal actually doesn't seem as low, particularly when you look at seven percent participation last year and only six percent of 91 11/15/07 - COMMERCE - RES. 070741 African-American businesses -- only six percent of the businesses in the region being African-American-owned. But when you look at that number within Philadelphia, which I believe may be higher than percent, then you begin to 8 approach new goals across the board. 9 And so I think we simply have 10 to look at Philadelphia numbers rather 11 than metro numbers. But whether we're 12 using Philadelphia numbers or using metro 13 numbers, does it make any sense to ask a 14 consultant to do a disparity study but not ask them to make recommendations on the goals?
They definitely go hand in hand in terms of the amendment to the Home Rule Charter that requested that the Finance Director, not MBEC, but the Finance Director on an annual basis 30 days before the end of the fiscal year submit to the Mayor and 92 11/15/07 - COMMERCE - RES. 070741 Council a disparity study and set annual participation goals. And they were meant to go hand in hand. So these goals, do you believe them to be based upon the disparity study?
Do you believe these goals to be based upon the disparity study?
I think I would say yes, but I would condition that to say loosely, because they weren't the result of any specific number that came out of our disparity study.
I'll let that suffice and suggest that if they were only loosely based upon the disparity study -- and I'm not even sure they were loosely based upon the disparity study. I will accept that they were loosely based upon the disparity study as a reason why we really don't 93 11/15/07 - COMMERCE - RES. 070741 have any need to question you about the disparity study, because in the end, the major purpose for this hearing is to discuss the goals that were set and what they were based upon, and obviously they weren't necessarily based upon the disparity study. So we thank you for coming to testify. Are there any questions from members of the Committee? (No response.)
Millennium 3 Management, Mr. Crawley. Good afternoon. Please state your name for the record and proceed with your testimony.
My name is Bruce Crawley. I'm President of Millenium 3 Management and Board member of the Technical Assistance Center for Emerging 94 11/15/07 - COMMERCE - RES. 070741 Contractors, an organization that focuses on the growth and development of African-Americans who are in the construction industry.
I'm Anthony Fullard, Vice-President of Millennium 3 Management.
Good afternoon, Councilman and Councilwoman Blondell Reynolds Brown. As I've mentioned in previous testimony before this Council, our interest in having the City of Philadelphia develop the job creation and economic development potential of black and minority businesses dates back at least to 1996. Two years after a small group of us established the African-American Chamber of Commerce in the City, we met with the Rendell Administration and with Council President John F. Street and began a process that included a six-month-long analysis of the City's 95 11/15/07 - COMMERCE - RES. 070741 minority procurement efforts. We provided to both men a 15-point plan for improving the operation of MBEC and the effectiveness of what was, even then, a grossly ineffective minority business development program in the City of Philadelphia. Those recommendations, regrettably, received negligible support and sat on the shelf through the last two years of the Rendell Administration. In February 2000, we re-presented those findings and recommendations to then new Mayor John Street, with the naive assumption that a mayor who had been elected with 96 percent of the African-American vote would have a special sensitivity to what was already a glaring missed opportunity for the City's minority business community and for the municipal economy as a whole. Today, there is almost universal recognition of this City's deficiencies in developing its black and 96 11/15/07 - COMMERCE - RES. 070741 minority business potential. The recent Controller's report, together with editorial coverage in the Philadelphia Daily News and Philadelphia Tribune, have played important roles in helping to raise the awareness of the crisis. By now, it is widely known that the City's minority business development processes, its tracking, financing, certification, goal achievement and overall management, have been dramatically substandard and have cost the City's economic and its minority communities in ways that are too numerous to mention. The Controller's report, based on the testimony of a wide range of minority and female business owners, does a powerful and effective job of making those points clear and are, in our opinion, largely irrefutable. The issue now, with the availability of overwhelming evidence, and a City Council and a new Mayor who 97 11/15/07 - COMMERCE - RES. 070741 seem to share a public commitment to finally curing the problem is where we go from here. The Controller's report has made several substantive recommendations, including the reduction in the far too easy granting of waivers to prime contractors, the need to unbundle City contracts to match minority business capacity, the establishment of a minority business-related financing and bonding program, a prompt payment policy, improved compliance enforcement and monitoring, among others. While all these suggestions drawn directly from the testimony of the City's own black and minority businesses are indeed valid, we take issue with the Controller's implication that MBEC itself, the agency which his own report described as having, quote/unquote, "failed in its mission," should be salvaged and somehow restructured. We believe that MBEC's mission 98 11/15/07 - COMMERCE - RES. , it included the assumption that only businesses owned by white males could qualify as prime contractors for the City and that black, Hispanic, Asian, disabled-owned and white female businesses could only participate once the contract was awarded to the white male-owned firm as a subcontractor. Such a posture, among other things, has completely stripped black and minority businesses of any legal standing in negotiating fair participation in City contracts.
That inherent problem has been exacerbated by what appears to be a complete lack of support, other than lip service, from the top of the City Administration, and has sent a signal into the local minority business community across the region and throughout the country that Philadelphia is among the very worst places in the United States of America to establish and grow a minority business. 99 11/15/07 - COMMERCE - RES. 070741 The abysmally low participation percentages, the virtual lack of minority prime contracts, the largely low minority participation levels from the private sector, therefore, are no accident. Given MBEC's flawed structure, perennially inexperienced and inadequate staff and lack of administration support, the agency produced precisely what the leaders of this government have wanted it to produce for minority business owners, virtually nothing. For that, MBEC does not deserve to be restructured. For that, the agency, its mission, its culture and its nationally embarrassing legacy should be abolished, and that should be done as soon as reasonably possible. As we have discussed in an earlier report to the members of City Council, we recommend that a new minority business development agency be created and that it should report directly to the Mayor's Office. With the realization 100 11/15/07 - COMMERCE - RES. 9 billion in 2006, the minority business development agency should also be responsible for maintaining relationships with the private sector to encourage and monitor minority business participation in that arena; that the City demand and institute a sweeping change in the way municipal certifications of minority vendors are done. The current process under MBEC has been a significant negative contributor to Philadelphia's lack of meaningful minority business growth. By way of comparison, in a city with 20,295 minority-owned firms and 18,976 female-owned firms, MBEC claims just 838 certified minority female businesses after years of operation. 23 And I heard them talk in the earlier 24 presentation about 1,200. I've seen that 25 in the formal reports. When we go to 101 11/15/07 - COMMERCE - RES. 070741 their website, we can find 838, unless there's another website somewhere that we don't know about. The Director of the City's new, more effective minority business development agency should be an experienced, credentialed professional, preferably one with a business management degree and with procurement management and diversity management experience. Like those sought to fill other critically important positions, that person should be identified as a result of a professional national search. It is virtually impossible to grow the capability and capacity of the minority business community if those firms are relegated solely to subcontractor status, with the limited project management and narrow margins such participation entails. Therefore, the City should include local economic development criteria for virtually all contracts and unbundle portions of those 102 11/15/07 - COMMERCE - RES. 070741 contracts to meet the capacities of emerging minority and mainstream entrepreneurs. 6 percent of public works contracts. 2 percent of prime professional and personal services contracts. 9 percent prime MBEs and six percent prime WBEs, should be role models for our local initiative. The need for a special emphasis to provide access to financing has been made in the Controller's report and we have long agreed. In 2003, our non-profit, the Technical Assistance Center for Emerging Contractors, established a highly successful accounts 103 11/15/07 - COMMERCE - RES. 070741 receivable-based loan pool with PIDC and local commercial banks. That program now needs to be expanded into professional services and supported by the City, especially in recognition of the local government's historically slow payment practice for all vendors.
Without financing, a slow-paying municipal contract may be the very thing that leads to the cash flow strangulation of an emerging business and to the eventual demise of that business. This will require considerable work. With the national consolidation of the commercial banking industry, municipalities such as Philadelphia are resigned to having to deal with the same financial institutions no matter what their geographic location. To highlight the problem, in a recent analysis we conducted with Councilman Goode on behalf of the entire City Council, we found loan rejection 104 11/15/07 - COMMERCE - RES. 070741 rates for Atlanta businesses as follows: African-American businesses were rejected for loans at a rate of 47 percent. Hispanic businesses were rejected at a rate of 39 percent. White female businesses' rejection rate dropped to 8 percent, and white male businesses were 9 rejected at just 21 percent of the time. 10 Eighty percent of white male businesses 11 that applied for business loans were 12 approved. 13 The applicants were, of course, 14 all adjusted for comparable levels of 15 credit risk. So you didn't have black 16 firms and Hispanic firms with poor credit 17 going up against white male-owned firms 18 with great credit. They had the same 19 level of credit risk. 20 It's clear that there will have 21 to be involvement by local and perhaps 22 state government if this proposed new 23 financing approach is to be successful. 24 It won't happen of its own 25 accord, not even in Atlanta. 105 11/15/07 - COMMERCE - RES. 46 percent of all minority and female businesses in the City. 46 percent of minority and female businesses. If we are to hold the new minority business initiative accountable, its goals should be expanded to include, in addition to the simple business participation percentages, the total number of certified business. That should be a goal. That should be accountable every year. How can you after years of operation have 835 24 certified business, only 575 of which are 25 Philadelphia based? The rest of them are 106 11/15/07 - COMMERCE - RES. 070741 all based in some other state. The percentage of minority prime contractors participating in contracts should be a goal. They should be accountable for that. The new minority business development agency should be accountable for that. The percentage of certified firms that actually receive contracts. We heard you ask that question. That is critically important. Number of clients participation in City-sponsored training programs. We can't assume that people who get contracts have sufficient training, though they be professionals, though they be qualified to do their contract. Business changes every day. Nuances change. Software changes. We need to make sure our people have on-line and in-person training, and we need to monitor the level of that training for those participants. The average monthly number of 107 11/15/07 - COMMERCE - RES. 070741 website visits. Do we have a website that's attractive to and informative to minority business owners and are they going there to find out? Do we have the interface? Number of contract opportunity matches. In a given year, how many businesses are matched with an opportunity, both internal City government and those businesses and external, those businesses with external prime contractors? How many matches are being made every year? And if you don't have that in your accountability profile, then we won't be able to answer the kinds of questions you asked this morning. Number of financing and bonding accommodations facilitated by the City should also be measured and accountability of the new situation, because we know if you don't have the financing, you won't be successful, and we see that the financial services institutions have an inclination as not 108 11/15/07 - COMMERCE - RES. 070741 to provide those financings to minority businesses.
9 percent of professional services and only 58 percent of public works vendors were Philadelphia-based companies. The City should extend a credit in the RFP analysis for local minority participants on a contract. Today only the prime contractor receives a local bid credit. And when you bring that bid package to the table, you should get extra credit for bringing -- if you have subcontractors and they happen to be minority, if they happen to be a local minority, you should get credit for that. We're trying to enhance the local economy. According to the Emerging Workforce of Disabled Entrepreneurs, a 1998 Harris survey found that almost 109 11/15/07 - COMMERCE - RES. 070741 half, 42 percent, of unemployed people with disabilities reported they were unable to find work because employers did not recognize their abilities. One-third, 32 percent, said they had been discriminated against because of their disability. Respondents said they were refused jobs, given less responsibility than co-workers, paid less than co-workers and denied health coverage, promotions and opportunities to be interviewed for jobs. Not surprisingly, therefore, people with disabilities are increasingly choosing small business and self-employment opportunities rather than the option of employment. In 1993, there were 520,000 self-employed workers with disabilities across the country. Workers with disabilities are nearly twice as likely to be self-employed as those who are not disabled. In 1994, more than 14 percent of individuals with disabilities owned or worked in a small business, 110 11/15/07 - COMMERCE - RES. 070741 compared with eight percent of persons without disabilities. According to the DJ Miller study, however, only seven of the 11,355 vendors in the City's Procurement Department vendor file were classified as disabled. That, by any standard, is unacceptable and should be corrected by the new minority business agency immediately. Finally, if we are to ever be truly serious about achieving the job creation and other economic benefits that can accrue from successful minority business development efforts, we will need to track our performance accurately. The Controller's report pointed out that MBEC's most recent participation level report is substantially inflated because the agency never bothered to check whether the minority businesses included in the perfunctory bid process ever actually participated in the 111 11/15/07 - COMMERCE - RES. 070741 contracts. They took the prime's word that they were going to give them the business. They never went back and checked. 9 billion, but that so-called disparity study only covered a review of about 539 million in contracts, about nine percent of the total. Even if you put in the quasi governmental agencies, another 365 million thereabouts, it brings it up to 15 percent. Fifteen percent of the contracts were reviewed. And so the percentages of participation that were claimed, that were promoted, that were publicized represent only ten to 15 percent of the total spend of the City, and so for us, that means the other 91 percent of the City's expenditures, on which they clearly understand involves virtually no minority participation 112 11/15/07 - COMMERCE - RES. 070741 mandate, was not even included. That clearly renders the data in the report not only grossly inflated as a percentage of total business, but also effectively useless. For the good of the entire City economy, for the future of our families and neighborhoods, this kind of game playing and subterfuge has to be ended immediately, on January 2, 2008. In a city whose population is 45 percent African-American, ten percent Hispanic and about five percent Asian, we do the City's overall economy a tremendous disservice if we don't finally make this issue the priority it always deserved to be. S. Department of Commerce report on minority business.
Quote, "Economic growth cannot be sustained without the inclusion of minority businesses and an infusion of 113 11/15/07 - COMMERCE - RES. 070741 capital into those businesses. Absent broad-based institutional investor participation in minority and immigrant business communities, soon to be the new majority of businesses, continued growth in the American economy is impossible, affecting not just minority businesses but putting the nation's macroeconomy at risk. Thank you very much.
Thank you for your testimony, Mr. Crawley. I have one question and then one comment. Question: Do you have a current number for the percentage of Philadelphia businesses that are owned by African-Americans?
Yes, we do. There are 10,576 African-American-owned firms in Philadelphia County; 3,211 Hispanic; 6,337 Asian; 18,976 female. Together they constitute about 58 percent of all the businesses in the City of Philadelphia. 114 11/15/07 - COMMERCE - RES. 070741
Thank you. The only comment is, I completely agree with your testimony, and the simple statement, the purpose of this hearing is to simply describe that which you've always done, you give what you always got. And so that if MBEC exists a couple months from now, nothing will change. And that's my only comment. Councilwoman Brown.
Of the 10,576 African-American-owned businesses, what number are African-American women? Because I find it always difficult to figure out where they're being counted.
That's very difficult, Councilwoman, because the only people who are broken out from these data as women are white women. For purposes of minority participation, when you see a category of female businesses, those are white females. Black females are included with blacks. Hispanic females are included with Hispanics. 115 11/15/07 - COMMERCE - RES. 070741 We can pull that data out of the MBEC certification. We've got that information. In fact, I don't see it in front of me right now, but we've gone through and looked at every single MBEC-certified firm and we know which of those. We can forward you that information. But for purposes of managing at the federal level, at the state level and even at the municipal level, females are lumped into their ethnic category.
Well, the only females that are pulled out separately and given their own goals are white females. I don't know why.
Okay. On of your testimony you mention seven areas where goals should be addressed. Discuss briefly for me this recommendation of bonding accommodations facilitated by the City. 116 11/15/07 - COMMERCE - RES. 070741
One major impediment to primarily construction firms but there are other firms that require bonding, insurance performance, insurance, to give comfort to the person letting or the institution letting the contract that the contract will be fulfilled, and they base that on your track record. So the insurance company comes in, they give you a bond to cover whatever the stated value of the bond is required by the entity letting the contract. And often times a major impediment for minority-owned firms is that there is a bond requirement written in to the RFP. And if they can't qualify for that bond, they can't get the contract. So in addition to working capital financing, there ought to be a really -- and this is a recommendation that the Controller's Department also brought to the table -- that there ought to be a municipal-facilitated bonding 117 11/15/07 - COMMERCE - RES. 070741 capability that has teeth, that works and that is accessible to these contractors.
So is that to suggest, then, that cities like San Antonio and the others that you mentioned have adequately addressed these areas, including maybe the bonding hurdle?
Yes, the two cities that you mentioned in your testimony.
Well, to underscore Councilman Goode's comments, your consistency is there and the clarity and the manner in which you express the gravity of the problem is welcome. Thank you for your testimony.
Thank you again for your testimony. I look forward 118 11/15/07 - COMMERCE - RES. 070741 to working with you in the future. Mr. Philip Migliarese.
Good afternoon, Councilman. Good afternoon, Councilwoman. My name is Philip J. Migliarese, Jr., and for the record, I'm a Commission member of the Mayor's Commission on People with Disabilities and also the Chairman of their Employment Committee, but today I'm here in the capacity of a private citizen and a disabled individual who has made application to MBEC for certification and also to shed some light on the areas that I consider MBEC has been creating barriers for individuals in that process. To begin, I had filed an application with MBEC for certification on October 10, 2006, and we are now 13 months plus some days past that date and I am still not certified, nor have I been denied. Before I proceed further to indicate what I think is the problem with the certification at this point in my 119 11/15/07 - COMMERCE - RES. 070741 case anyway is, I'd like to turn the attention to certification rules and regulations of MBEC and the Mayor's Order 02-05. Certification regulations specifically say that MBEC has 90 days to approve or disapprove or act on an applicant's certification affidavit.
One point of information is -- because I asked about that as well -- is 90 days after all of the paperwork is in. So the agency does not begin to move or take action until the entire application is completed.
Correct. To elaborate on that, a correct application is not an incomplete application. Therefore, if it's an incomplete application and it's not remedied within 15 days of the notice of that deficiency, MBEC is required to send the entire application file back to the applicant. So that act in itself would 120 11/15/07 - COMMERCE - RES. 070741 constitute that there's an incomplete application. The applicant failed to act on the deficiency. Therefore, they're not even in the running at this point for certification, because the application is returned. Now, if the application is not returned, that's a perfect indication that it's still active, and if there is no other notice of deficiency, the time period is running. Now, in my particular case, I filed the application in October of 2006. I did receive a few notices from MBEC in the month of November. At that point, they were remedied immediately, well within the 15 days. From that point on of November, I did not hear from MBEC until April the 9th of 2006 (sic), which was in excess of 134 days from the last paperwork I submitted to them as far as their request was concerned. Now, going back to the rules 121 11/15/07 - COMMERCE - RES. 070741 and regulations, the certification process is, they have 90 days. Now, within 90 days if they don't think that they can complete this application, they are, according to the certification rules, to send a notice to the applicant requesting an extension. The rules also go forward to say specifically that in no 10 case -- and it's very emphatic in the rules -- in no case shall the process exceed 120 days. In my case, the first procedure on my application exceeded 134 days. I never received a letter from MBEC indicating that they need an extension of time. My application couldn't have been incomplete, because it was never returned, and I never had a deficiency notice from MBEC within the 134 days. So, therefore, the application was in, it was active, the paperwork was in order. I did hear from MBEC again in April of that year, 2006 (sic), which exceeded 134 days. When I heard from 122 11/15/07 - COMMERCE - RES. 070741 MBEC at that time, they requested additional information. Most of the additional information they requested was redundant information, information that I supplied to them in October of 2006. Therefore, they came back and said, 134 days later after my initial application, that they're rendering my application incomplete after 134 days because I did not supply certain documents. That was not true. Them documents were supplied. And I did have a discussion with the individuals at that time and they did realize that they did ask me for duplicated information. But at that time, they also posed the question to me and said, But, oh, we need to know that you have a business privilege license. Well, my business privilege license was submitted with my certification affidavit, and I said, You already have that. They said, Yes, but we don't know if you paid for it. 123 11/15/07 - COMMERCE - RES. 070741 So at that point, I was stunned, like, well, I have a license. I don't think the City of Philadelphia would have issued me a license unless it was paid for. Well, in any event, I had to go and supply them with the check, a cancelled check, showing that I paid for my license. So that was the outcome of the inquiry 134 days after I initially submitted my application. From that time until the present, I still have no determination on my application. I still don't know where it's at. I still don't know if I'm certified, not certified. I have not heard from MBEC, except for one instance a young lady in the office who said she took over my case called me, I believe, at the end of September informing me that she now took over my case and that she was in the process of discussing my case with OVR, Office of Vocational Rehabilitation. So I happened to see this young 124 11/15/07 - COMMERCE - RES.
070741 lady in person the next day and I asked her, Why did you go to OVR? She explained that they go by their rules of certification of the person's disability. I says, Well, fine. I says, OVR is on my committee. Who did you speak to in OVR and did they give you what you wanted? So she turned around at that point and told me that, Well, no, I really can't get in touch with anybody at OVR, and if you know anybody at OVR, could you have them call me. I says, Well, sure, I'll do that. So I did have one of the supervisors call, and when the supervisor called, the young lady told the supervisor, I can't talk to you because you know the applicant, and hung up on him. Now, the time limit again exceeded the 120-day period. So here I am not once did it exceed the 134 days, which I did put MBEC on notice that 125 11/15/07 - COMMERCE - RES. 070741 you're not abiding by the rules and regulations, you're not in compliance with the certification regulations and you're outside the parameters of the Mayor's Executive Order. So one time they did it. We talked about it. They went ahead and did it a second time. So here I am months later, two times over 10 the limit, and still nothing is 11 happening. 12 My reason for being here today 13 again is as a private citizen, and none of my remarks or statements are to be construed as that of the Commission, because I turned this evidence over to the Commission not too long ago and they are in the process of reviewing what I've given them, and at some point they will take a position on the matter. But at this time, it's strictly -- my testimony is strictly as an individual and an applicant to MBEC. Now, I just heard a few moments ago the young lady that preceded me gave 126 11/15/07 - COMMERCE - RES. 070741 all the reasons why MBEC is not performing in accordance with the expectations of Council and the public at-large. There are merits to her statements, but I would also like to say that a lot of the reasons why MBEC at this point is behind and they are not producing what they may or could produce is because of the fact, one, they are not following certification regulations; two, they are involving themselves in areas that they don't necessarily belong in or are authorized. And an example is, the documents -- the Mayor's document, Executive Order 02-05, and all of MBEC's literature, all through the literature, you will find where it says that MBEC's duty and sole responsibility and primary reason for its existence is for two reasons: One, to make sure that the person is in fact the owner and is in control of the operations of the business; and, two, that they are disabled, in the case of disabled 127 11/15/07 - COMMERCE - RES. 070741 business owners. MBEC is not supposed to involve themselves in matters of whether the disabled or disadvantaged business enterprise is capable of performing a contract. That is up to the individual agencies. Every individual Philadelphia agency that grants contracts or gives out contracts, at that point that agency will make the determination whether the business owner is qualified to perform the contract and has the technical abilities and financial abilities to do so. What's happening now -- and I've been subjected to the scrutiny -- is that MBEC is involving itself in areas, asking questions as how much money do you have, how much capital do you have, who are you going to use, what are you going to use, and they went so far as to tell me that, Well, you cannot use subcontracts, when I told them, Well, I'll be using subcontractors in my 128 11/15/07 - COMMERCE - RES. 070741 business and I'll be doing things in certain areas. They said, No, you cannot do that. You must be able to do the work yourself. I says, Well, I don't understand that, because I'm a disabled business owner and there are a lot of disabled people behind me waiting to get certified, and most of them -- a lot of them in wheelchairs and are subject to devices that their mobility is almost nil.
I said, What you're telling me is let's assume a gentleman who is a master plumber, he was injured and now he's in a wheelchair, but he's still a master plumber, he's opening up a business and he wants to bid on contracts for the City. You're telling me that you will not consider him for certification because he cannot do the work? They said, Yes. Well, I was shocked. I said, You're telling me that this gentleman or 129 11/15/07 - COMMERCE - RES. 070741 young lady -- they said, Well, we have to know that your business -- and, quote, this is what they told me -- that if someone or an employee in your business doesn't show up on the job, that you must be able to do the work for them. So that's when I posed the question, Well, then let's assume the plumbers didn't show up that day. You expect the gentleman or the young lady in the wheelchair to get out of the wheelchair and go in a ten-foot ditch and install 15-inch cast iron pipe? They said, Yeah. They said, If they can't perform the work themselves, they can't be certified. Well, that's a small part, but the biggest part is, they need not involve themselves in those areas. MBEC should concentrate on what their regulations and what the Mayor's Order dictates, and, that is, your job, first of all and foremost, is to make sure that the individual owns the business and that 130 11/15/07 - COMMERCE - RES. 070741 the individual, in the case of disabled people, is in fact disabled. So what's happening here is, one, they're involving themselves in areas that are not necessary. So they're wasting time. We're going back and forth with paperwork. Another situation is, they have what they call certification affidavit. In that affidavit they state what they require from an applicant. Unfortunately, a lot of the items that are on that affidavit, in my case, I supplied, and I supplied to the letter of the application. Unfortunately, what happens is, MBEC has come back many times and asked for things that are not on that certification affidavit, meaning that they ask you in the first instance you want to supply this paperwork to have a complete application. Thereafter I've gotten letters, notices, phone calls, e-mails, et cetera, asking for things that are not related whatsoever to a 131 11/15/07 - COMMERCE - RES. 070741 certification application. So my thought to MBEC is, you either go with what you have on that certification affidavit or you amend that certification affidavit and put the language in there that you desire to have from an applicant in the first instance, and, therefore, you will not have to waste months and months and days and days, weeks and weeks, so forth and so on, going back and forth asking for now which I consider arbitrary information. They're making things up as they go along. So I have run into that trouble many times with MBEC, and I still as of this day have not resolved certain issues in that respect. But the bottom line -- and not to belabor things and take up Council's time -- is that MBEC in my case -- I can't speak for other people or other cases, but in my case -- have violated the certification regulations not once but twice. Now, someone can 132 11/15/07 - COMMERCE - RES. 070741 violate something or forget or say this was a mistake, but when it's brought to your attention, it's put on the record, there's notification, there's e-mail, there's correspondence, to do it a second time is beyond my comprehension. I don't know how that could be. And last, but not least, to supply an application to a government agency in the City of Philadelphia and after months still not have a reply is 13 incomprehensible. I cannot understand how that could be. Now, I've heard about they need technology. I heard about they need employees, so forth and so on. And, again, I would not challenge that in any way. There's merit in their statements. But what I'm saying, in my particular case it wasn't that I was under the radar or I was obscure. I was right up front.
I was talking with them. I was pointing out things to them. And I did debate with them the issues that why are you 133 11/15/07 - COMMERCE - RES. 070741 asking me for information that is not indicated in your certification affidavit and penalizing me by sending me a notice to say, Your application is incomplete, Mr. Migliarese, because we need this paperwork. Well, in my opinion, that's not the truth, because I gave them a complete application, as stated on their certification affidavit. Every piece of paper they asked me for on that affidavit was submitted to them. One instance they came back to me and said, We can't proceed on your application. It's incomplete because you didn't sign the copies of your tax returns. I says, Well, if I knew I had to sign, quote, "copies" of my tax return, I would have done it, but your application said just submit copies of your tax return, which I did. They stopped the process, sent me a notification, said, We can't proceed any further unless we have signed 134 11/15/07 - COMMERCE - RES. 070741 applications -- I mean signed tax returns. I says, Well, for further reference, I may suggest that you put that on your certification, that an applicant is to give you signed copies of their tax returns. Copies of tax returns is just what it says, a copy. It doesn't necessarily have to be signed. In any event, in the end, I had to swear the truth, that I'm telling them the truth. I had to swear that all the documents I presented were true and correct and I wasn't fraudulent in any way. I had to be notarized. With all that, you're holding my application up on the premise that I didn't sign a copy of a document. But they did it. And another instance they stopped the application because they said, Well, we need an updated resume. I says, When I submitted my application, I gave you my resume and on the top of it it said "to the present," 135 11/15/07 - COMMERCE - RES. 070741 what's going on with me to the present. Now, first of all, that should suffice, because nothing has changed. Second of all, second of all, why would you need an updated resume? And above all, you're the one that exceeded 134 days. So if you think or believe that within the 134 days that my situation changed as far as my resume is concerned, I said, That, I think, would be your burden, not mine, because I'm not the one that exceeded the time limit in accordance with the rules and regulations. You were. In any event, they disregarded that, but they did hold my application up and render it incomplete, because they wanted an updated resume. So what's happening here is, they're actually putting a burden on themselves too by asking for duplication and redundant items that they need not do. If a person submits to you an application, make a determination on what's submitted. If you don't think 136 11/15/07 - COMMERCE - RES. 070741 that their resume is good, if you don't think the qualifications are good, if you don't think this person is the owner of the business, you don't think this person is truly disabled, tell that person, deny them. There's a process. If they were to deny me, I had a process, I had a remedy. I'd go the next level and appeal to the Director. I've been precluded from that opportunity for months. And 12 I can tell you now today, I still have no 13 idea when I may expect results as far as my application is concerned. Now, if they come back to me at this particular point in time, after they exceeded the 120-day period for a second time, and say to me that they need some other additional information and my application is complete, I don't know what to say at that point. But to end it and to come to a conclusion and in closing, I would say that MBEC should pay attention and confine themselves to the certification 137 11/15/07 - COMMERCE - RES. 070741 rules and regulations as stated, as incorporated on their website, so forth and so on, and stay within that parameter.
Stay within the parameters, that their duty above all and in accordance with the Mayor's Executive Order is to determine whether the people own the business and they are truly disabled or they are truly who and what they say they are. That is the actual essence of MBEC, not to dwell on little areas whether I paid for my business privilege tax. That's like, you know, spent time where you don't have to spend it. It's a waste. If I have a license, obviously I paid for it. I don't think I would have got that document without paying for it. That's number one. Common sense. And, number two, if you think that that's the case, deny my application and say, We don't think you have a proper business license. But do something. You don't exceed your time period. Work in 138 11/15/07 - COMMERCE - RES. 070741 accordance with the rules and regulations. And if you need the extra 30 days, send the applicant a notice, We need an extra 30 days. And in no case, and what it says here, in no case shall the process exceed 120 days. In my case, twice it exceeded 120 days.
-- thank you for your testimony. Is there anyone else to testify on this resolution? Mr. Ali. Good afternoon.
Good. Please state your name for the record and proceed with your testimony.
My name is Jihad Ali and I'm a contractor/developer, but I wanted to come down to -- I left my job 139 11/15/07 - COMMERCE - RES. 070741 to come down here to put something on the record. And one of the first things I wanted to acknowledge was one of the former staff of City Council, Howard Rye. Howard Rye worked tirelessly on this issue. And I was shocked, as well as everybody, when he passed, but one of the things that he did, he went beyond a public servant just doing his job. He was really committed to this issue. And I really felt bad, like all deaths, that when things happen, but there's a lot of people that aren't aware of the effort that he put forth on this inclusion thing. And one of the last things we spoke about was some of these City agencies that spend billions of dollars that actually -- like PAID or PIDC, since their existence, they've spent or have dealt out in loans almost $7 billion. If you look at the Redevelopment Authority, almost 700 million. Just those two agencies, they put regulations in place 140 11/15/07 - COMMERCE - RES. 070741 that sometimes MBEC -- sometimes the RDA is a part of something that MBEC might have and MBEC has oversight, but that RDA is really in the driver's seat. Then if you have some conflicts with somebody that might be union and there's some people affiliated with the Board that may be union, that goes absolutely nowhere. So I wanted to commend you and other Councilpeople that are on this Committee. You're on the right course. And also I wanted to have you take an opportunity to go back to read the Bechtel decision. I don't know if those notes of testimony are available, but what's really missing, there's a lot of people that have passed, there's a lot of people that are no longer in business that were affected by this agency over the course of almost 20 years. So if you can go back, read that decision, read some of the notes of testimony, some of the people that testified about some of the things that they went through 20 141 11/15/07 - COMMERCE - RES. 070741 years ago. Here we are today, I think that -- I think eventually we'll get where we're trying to get, but it's going to take the leadership that you're exhibiting. So I wanted to thank you. I really wanted to acknowledge Mr. Rye and I wanted to just put that on the record. Thank you.
Thank you. Is there anyone else to testify on this resolution? (No response.)
Seeing none, this concludes the hearing on this resolution. Thank you very much for coming. (Committee on Commerce and Economic Development adjourned at 3:20 p.m.) - - - 142 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on November 15, 2007, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)