And $27 million of that went to minority, female or disadvantage businesses? 00456 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001
I don't have that 9 for you today, but I will get that for you and 10 forward it to you through our channels. 11
Okay. Have you 12 been getting some of the reports that we've been 13 getting? 14
They're basically 00457 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 different kinds of projects. Where the public work's activity for the City we bought a category of things. We've only had a certain number of items on the stadiums.
Well, let me ask the question a different way; are you saying that you think that the percent number on the 9 Public Works for City work is a good number? 10
Explain for me, in 11 what context? Can I verify the numbers? 12
No, I believe 13 your accounting. I guess, could the number be 14 higher? 15
And why is the number at 15, and what could it be? I mean, are we maximizing the potential of what's out and available in the community?
Well, a lot of it has to do with who's bidding City projects. The bulk of -- well, all of the 15 percent on City works is subcontracts. The work that's been done on the stadiums you will see have some prime contract opportunities. We are not 00458 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 getting a number or satisfactory number of bidders as prime on City work.
Well, when you talk to the market it's due to a number of factors. And the most prominent one is the bonding process that we have. We require bonds on all of our large projects on anything over, I think, $25,000.
Yes, but it's on a larger degree. It's not 25, it's usually several million and a number of the projects just on the Stadium, a number of the contracts that are on the Stadium are joint of interest.
Is that a route that might be pursued on the City work side?
I'm sure we'll 00459 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 have some continued discussion about this and you're going to get a full chart --
Madam President, I've asked Councilman Ortiz if I can do a follow-up?
Mr. Roundtree, you mentioned in your testimony that one hurdle that is apparent is the bonding, 00460 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 the issue of bonding with regards to primes?
How long has that been a problem? How long has that been determined or acknowledged to be a problem?
I think since Pennsylvania was a farm or Philadelphia was a farm. Every opportunity that we've had we try to identify areas where we could be of assistance. And the bulk of the problems that the minority women and disabled disadvantage business community has been in the bonding in the capital areas and they pretty much go hand-in-hand. There's three areas really. The three areas really, that most of the small businesses and more specifically, minority businesses point out are the bonding areas and insurance. As you heard earlier, the City is embarking upon the bonding program that will assist many of our small and disadvantage businesses if it comes to fruition in identifying bonding opportunities for them.
What 00461 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 will be the hurdle for that not becoming real if we know for sure that that is a major hurdle for African-American and women on businesses?
Just the peer financing of it and finding some credit, or the contractors that will be interested in participating in the process.
Councilman Nutter, my concern was what has the City done to alleviate the problem? If we know that's a problem, then what are we doing in a pro-active way to eliminate this hurdle? So now I hear that the City is at tempting to put something tangible in place so that we do not have to discuss -- have this discussion on this particular issue next year.
Well, Councilwoman, remember too that the bulk of our participation in the past has been in the subcontracting market. Where this will be a great assistance to is those individuals who are interested in pursuing -- contracted the City as primes.
Okay, 00462 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 thank you, very much. Thank you, Councilman Nutter. Councilman Ortiz?
Thank you, Councilman Ortiz. I caught you while you were reading a document, but what is this program? Don't give me the long version of it. If it was mentioned earlier, and I missed it, I apologize. If you can just send us the details about this, and then my question is: who has to do what to make a program happen?
The program is being put together between Procurement, MBEC, Risk Management and the Commerce Department. We're using $300,000 of Economic Stimulus money to provide the seed for this program. It will guarantee 90 percent of bonds up to $2 million. There is nothing in the way. We are going full speed ahead and at this point there are no obstacles to getting it done. This is a program which will be in place by the beginning of FYO3, if not, sooner. Our anticipation is 00463 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 that it will be done sometime this year, in fact, FYO2.
I'm usually very brief. Just for the record, I don't know who's here, if the type of institutional memory is necessary, but PCDC has had two contract's assistance programs over the years that date back, maybe a couple of decades. Housing Contractor's Program, The Philadelphia Contract Assistance Program, both of which provide a contract to financing for housing-related activities. Those programs could have been replicated over the last decade or two, particularly with the tens and millions of dollars we spend in Economic Stimulus funds. So this is not a matter of designing programs, it's not a matter of having an entium place that can run the program, it is actually a matter of deciding whether we're going to somehow, put up the money to bond these 00464 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 contractors, is that not correct?
Well, we won't be putting up any money to bond them. We think we have a fairly aggressive approach around it, but we're inviting surety companies as well as the SBA Bond and Guarantee Program as far as participants. And that will be outlined in the literature that we will provide to you.
It was my understanding that we were going to bond contractors in the NTI Program?
It's my understanding that the City won't be bonding them, but they will have a surety company. We will probably get a wraparound bond program similar to the type of wraparound insurance programs that we've had in the past, but the City itself, to my knowledge, in the discussions I've been participating in will not be bonding --
The program you're talking about right now that was referenced first, I heard about today, and I'll be very brief, Councilman Ortiz. It's $350,000, 00465 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 I think you said, I forget how much money you said in Economics Stimulus funds. We actually -- actually, I wasn't here so I won't take credit or blame for it -- sold tax liens on people's homes, poor people's homes, to raise money to give away to big businesses as a matter of economic development strategy. There were already, programs within the City quasi-governmental structure contractor's assistance programs, that could have been replicated for small business purposes or for other purposes. It is a matter of whether we decide we want to do it or not with Economic Stimulus funds, or with community government block grant funds, or with any other source of money. So what I'm asking is what really needs to be done? If we were to find a political will within council to say we want to move on this bonding issue? I'm talking about minority business development issues. Jim, what needs to be done?
Other than formalize the process, then identify some firms that could 00466 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 participate, as well as some actual City contracts that they could bid on those would be three issues.
And where would that program be housed, who would oversee the process of the program?
Commissioner, since they brought Mr. Roundtree up here and they began this line of questioning, I had a lot of questions for you, but obviously, let's finish with this. Mr. Roundtree, what is the Philadelphia Consortium?
Oh, right, right. The Philadelphia consortium -- the City of Philadelphia Parking Authority, School District, 00467 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 the Redevelopment Authority, the Managing Director's Office, the Law Department. SEPTA was an ex facie member, they weren't really a member. They didn't pay into the fund. I'm just naming people that actually paid into the fund. It was ten altogether.
But I think, was it through your office or through this consortium that a study was commenced?
It was really through the managing director's office. The managing director was the chairperson of the committee.
The managing director was a chairperson of the committee. Because this was dealing with the questions Mr. Nutter asked, the follow-up of Blondell Reynolds, and this study dealt with that, did it?
It did not deal with how contracts were awarded in the City of Philadelphia?
And it was participation of minorities or non-participation of minorities?
No, I thought her question was specifically around bonding and who would they benefit.
Well, yes, but it has to do with the problems minority has in acquiring contracts. Bonding is one of the problems that comes up?
But didn't the disparity study really go -- and this is not -- this is a study that was finished, I think, in '98 or '99?
And it goes 00469 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 towards the aspect of how minorities, women are excluded from the process of contracting either through the Procurement process, through the contracting, through the building of edifices that we have in the City of Philadelphia?
Can you get us a copy for every Councilperson of that disparity study?
I have a copy, I don't want to make copies of this. I have a copy.
Then I'm not sure what you have because if you have a copy, you couldn't be sitting at your desk because a copy of it --
I would love to have the two volumes that are available.
That's something that we need to work out with the new finance 00470 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 director and the administration because we --
We've been asking for a copy of that stuff and never received it.
-- in all due respect, when I gave that document to your staff to review it, for them to come back and to give us -- from Council version --
Excuse me, Councilman. It's a shame that Mr. McPherson just left here, but I know that he indicated to me --
I did not get it from staff, but however, all of this discussion --
-- that they had been asking -- Councilman, can I just finish, please. 00471 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001
That we have been asking for a copy of it, but one was never made available. Now, I don't know who you gave that copy to, but if you let me know, I will certainly track it down.
Well, John Macklin had it to review to come back with some comments on behalf of City Council so that we could forward that information to a consultant to finalize it. Since --
We've been asking -- I've been asking for a long time, for the last few years for this data. I think the President has been asking for this data. It has never been forthcoming and it seems that there -- it says is available since 1999. Because all of the discussions that we've had this study goes to the heart of it. And we would like to see it because I think if we see it unvarnished -- that's a word that George Bush uses, "unvarnished" as such I think we will begin to finally get some 00472 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 of the reasons why every time we put MWE, minority participation, why it does not happen. We would begin to find the reasons. And it goes beyond the bonding issue. I asked that of Ms. Janice Davis. It goes beyond, because I've been asking about the bonding and they've been telling me about bonding issues since 1984. And many companies since then have gotten bonding and have not been able to participate. So in essence, I didn't get this from the staff of City Council. But however, I would like to get the two volume report unvarnished as it is without our participation because we would like to read what these consultants found. And you just said that this is very relevant today. And since it is relevant today, it was finished by 1999, I believe this Council is due the respect of at least looking at that, and let us make up our minds, because then we would have some real questions to ask as to why discrimination and exclusion takes place.
I think that study cost somewhere in the vicinity of 00473 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 $2 million.
I mean, I'd like to find out because one of the title's "Historical Conditions Affecting MWBE Utilization". I'd like to find out why Latinos don't participate, why black contractors in the City don't participate. I think we should begin the discussion the next time you come. I would like to have those two reports, Volume I and Volume II. I'm not going to ask you any other questions, because until we get those reports, I will -- because talking about bonding issues and all of that that's all -- that is not substantial. That's really questions that we need to ask. And that does not go to the route of the problem. That's one of the excuses used. Thank you, Madam Chair. I would like to ask questions of the Procurement Commissioner. Fine, I'll come back in the second 00474 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 run, go ahead.
Thank you. Councilman Ortiz, I would submit to you that all you have to do in this city is attend enough political fund-raisers and buy a luxury suite at the new Stadium, maybe you'll get business. Seems to be the way it works. Commissioner Gamble, welcome. Thank you very much for, in your testimony, your discussion of your government experience and your education. I think we've gotten a very good catch with you and we wish you well, and hopefully, you will have a successful term here. COMMISSIONER GAMBLE: Thank you.
Where did you come from before you were here, where were you? COMMISSIONER GAMBLE: (Laughing), that would be my normal response.
What community were you living in prior to coming here? COMMISSIONER GAMBLE: I came from Los Angeles, California. 00475 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001
Directly from Los Angeles? COMMISSIONER GAMBLE: That's correct.
How were you recruited by the City, how did you learn about this position, who approached you and asked you to come and interview? COMMISSIONER GAMBLE: Well, there was an article -- well, an announcement that was placed in the National Institute of Governmental Purchasing, which is the National Governmental Organization, and it listed that this position was open, and they were inquiring or asking individuals who were interested to submit resumes.
Did you live in the City prior to your -- COMMISSIONER GAMBLE: No, I have not.
So you didn't establish residency for a year in Philadelphia and wait for a job offer? COMMISSIONER GAMBLE: No, I did not. 00476 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001
Tongue in cheek, would you have established residency here in Philadelphia for a year prior to being offered a job? COMMISSIONER GAMBLE: Yes, I would.
You would have? You would have moved here and waited? COMMISSIONER GAMBLE: Yes, I would have come here and waited, but that was not the case.
But you would have done that prior to knowing you were going to be hired? COMMISSIONER GAMBLE: Prior to knowing?
Yes. COMMISSIONER GAMBLE: Well, I'm not going to leave a job without having a job.
Okay, but the obvious answer is that without the job offer, you wouldn't have come. COMMISSIONER GAMBLE: Well --
And you wouldn't have moved yourself and your family into the 00477 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 City for a year while waiting to be offered a job. COMMISSIONER GAMBLE: Well, I'm not going to wait for a job. No, I wouldn't have done it without a job offer in hand, yes.
Because you're a highly qualified person that I'm sure is sought after by other municipalities. COMMISSIONER GAMBLE: That's correct, yes, I am.
When you worked in Cleveland, was there a similar requirement that you had to -- COMMISSIONER GAMBLE: No, Cleveland was a little different.
What happened in Cleveland? COMMISSIONER GAMBLE: What happened in Cleveland is that I was working for the state. We were overseeing the Cleveland City School District where they were in -- in state receivership, and I was part of a management team that was responsible for the day-to-day operations of the school district because they, 00478 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 for the past two years, two consecutive years, had requested funding from the state so that they could balance the budget, so we were a group of individuals who --
Sounds familiar, doesn't it? COMMISSIONER GAMBLE: Yes. So the group of individuals was actually recruited to come in and work with the City School District, and I was one of them.
Well, we had had a recent discussion, policy discussion, about an existing rule in Philadelphia where anyone who works for the City government needs to be -- other than someone at your level, needs to establish residency in Philadelphia for a year prior to even being able to submit an application for a job. But we're glad that, for example, the tenth time in this administration's history in two years, they've gone outside the City and brought a competent, qualified person in to run this department and we wish you well. COMMISSIONER GAMBLE: Thank you, 00479 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 very much.
But it's ironic that on one hand there's two different opinions. On one hand, what's good for the administration, is not good for the gander, but that's not your issue. Could you explain a little bit about what you see as a competitive bidding process? What do you think is a fair competitive bidding process and how do you think it should be undertaken? And I would like to get some information from you because you're from outside the City and I would like to get an idea what you think, how this process should work. COMMISSIONER GAMBLE: Well, Councilman, one of the things that we all face in government is the way the City Charter is written in that we have to award to the lowest responses, person or company meeting's specifications. Usually when you start -- when you have that kind of requirement it's very difficult to have companies, especially the small companies and minority companies that 00480 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 would be able to compete with larger companies. They don't have the expertise, they don't have the resources, they don't have --
Not to interrupt you, I want to talk a little bit about majority bidding as opposed to minority participation, which I do support. And I want to get -- COMMISSIONER GAMBLE: No, I'm talking about competitive bidding process, right.
I'm sorry to interrupt you. COMMISSIONER GAMBLE: So with the competitive bidding process, which you are asking, you're looking for the lowest price for the product that you need. And it's basically -- it's straight forward.
In your capacity as a professional in this area, what place do you think the politics play in it or should play in it? COMMISSIONER GAMBLE: Let me say this: in all candor, this is the first city where I worked where politics is a major 00481 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 role-player. Normally, in the bidding process it doesn't happen. You give out the specifications, the bids come in, you evaluate the bids based on what's there, and it's over.
And that's your experience in municipal bidding also? COMMISSIONER GAMBLE: Yes, all my work has been in municipal government.
With all due respect, and just as a word of caution, I'll paraphrase a famous movie: "You're not in Kansas anymore". COMMISSIONER GAMBLE: That's correct. But also, when I started, I said -- you asked me about my professional experience.
One of the things that happens in Philadelphia, which is very, very disconcerting for many of us here, is that often the lowest bidder, most responsible bidder is awarded the job. And for some reason or another, it seems to be a very, very low bid. And then as the process goes on, and the contract is undertaken, and the services are being rendered, we have these things called 00482 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 change orders. And change orders, in some cases in this city, have resulted in a payment that exceeded the highest responsible bidder in the original process. And it seems to be something -- we've had situations like this at the airport, for example, where the City sometimes is directly involved in the bidding process and sometimes not. But we've had an ongoing situation in Philadelphia where the lowest responsible bidder seemingly gets the work and if that lowest responsible bidder has some political connections either through being on a contributor's list or having some political juice, as the contract goes on, there seems to be this need to change the scope of the contract either by reducing the level of services, increasing the amount of the payment. And what happens in the end is the taxpayer winds up paying more than they ever should have for some form of featherbedding which happens in these politically connected contracts. 00483 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 And I offer this to you as a word of warning, but I also would expect that someone from outside the City who has not experienced this kind of situation before would be at least, hopefully standing up to try to stop, but I understand the tidal wave may be too strong at times. But I would hope that you would be able to stand up to some of those practices that has cost the taxpayer money in the City and that has given other contractors, other potential bidders, a very sour taste about doing business with the City. COMMISSIONER GAMBLE: Well, Councilman, let me just say that first of all, I am a taxpayer of the City myself.
Thank you. COMMISSIONER GAMBLE: So when I look at the process, it is my money that we're spending so I am very aware of that. And as far as change orders are concerned, normally you find change orders in construction aspects. Very seldom you find them in the goods and services area. And that's 00484 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 something really, as far as in the construction area, that's normally up to the department who is handling it to approve those types of change orders. But I agree, that is very difficult. A lot of times they are legitimate, but I do not believe in awarding a bid and then not holding the person accountable for what they bidded on.
Fine. We also have a process in Philadelphia here, where -- I don't know if it directly affects your department, but we're required to approve any contracts which are longer than one year. And in the last administration, they created an art form which has continued in this administration of giving a one-year contract with three to five one year options, which is really very -- we really appreciate that in-active way at looking at the law, but that may be subject for a different time. Is someone here dealing with NTI on the demolition bidding that someone would have information on? The minority participation goals for the bidding -- I'm sorry, for the 00485 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 demolition work in the NTI project as it is codified now prior to final passage, is there a percentage associated with what we're trying to attain the way of minority participation solely in demolition?
Currently, the way the NTI information is drafted, there are some ranges for participation being somewhere between 35 to 38 percent minority participation, 12 to percent female participation and to 14 percent disabled. 15
In Bill 020036, Part II, Section "A", demolition "A" employment opportunities, it says "the City of Philadelphia, through representatives of its departments and agencies, works with the contractors involved in the demolition phase so that all the contractors make a good-faith effort to employ a work force equal to goals of 75 percent minority and 10 percent female, of all work hours for each skilled and semi-skilled trade". 00486 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 Is that just the employment complement or is that the contracts?
No, that's the employment complement. They're the actual people who are working on it.
So you could have a majority firm that meets this goal of 75 and 10?
What has been the normal range for your experience when it comes to, there isn't really any similar projects like this, but projects that where there's a majority contractor, and in attempt to expand minority participation within the ranks, what's been the normal number?
Now, understand that demolition is only basically two trays. They are the laborers and the operating engineers. And right now the laborers are somewhere between 80 to 90 percent minority and female and operating engineers have a high level, not quite as high, but that participation range is achievable. 00487 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001
I'm sorry, I'm confused. Are you saying that every person who is a laborer, 90 percent of them are African-American?
No, minority. They can be African-American, Hispanic or Latino, but they have a high concentration of minorities in the laborer tray.
I'm sorry, I'm not finished yet. Just a question: I'm confused as to who you're describing. Are you describing a laborer as a person or are you describing a particular organization?
I'm describing a laborer as a person, but an organization -- the laborer is a union. 332 --
But it doesn't mean that 90 percent of the people in Philadelphia or in the region who are actually laborers -- 00488 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001
Oh, so this is -- and you're talking, when you say "operating engineers" you mean operating engineers union?
So this is solely going to be bid as you have to be a union member to get a job?
-- that's not how it's situated, but in reviewing how you set the target in range you have to take in available market.
Point of order, the Chair recognizes Councilman Goode.
Councilman Kenney asked Mr. Roundtree for a comparable project, why a comparable project does not exist. I think Mr. Roundtree probably can provide that information to Councilman Kenney with regard to the Eagles Stadium project where I believe that 90 percent of the work force hours as regards to 00489 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 laborers probably was 90 percent minority. So I think the type of number he was looking for in terms of whether the NTI numbers are actually realistic in terms of what you can reach in terms of laborers.
The supposition of my question is incorrect. I'm exploring all the areas of information that's available to me. I'd like to understand the definitions, I'd like to understand the numbers. I haven't even gotten to my premise yet, so any presupposition of where I'm going is almost impossible to tell unless you're Kreskin.
Madam Chair, he was speaking about the Economic Opportunity Plan that was attached to the Neighborhood Transformation which was drafted by the same person who did the Economic Opportunity Plan for the Stadium. So maybe he'll get there, but I was trying to help him along.
Well, I've been here going on for over ten years. I'll get myself there.
But you haven't 00490 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 done that much on minority business development.
Well, Madam President, I don't really think that this particular member has a right to judge anybody's record. I think that I voted in all circumstances to support minority enterprise, minority participation and not once have ever voted no. 10 So I think that -- I don't mind the point of information activity here, but it gets to the point where it becomes speech-making, and I would appreciate the Chair's indulgence.
Mr. Roundtree, I'm just trying to get an idea if you are fewer minority or female in the City of Philadelphia and you have lower-end skills, you're not a particular trades person, but you have a strong back and a willing heart and you want to be involved. And the City of Philadelphia is a city resident in this process, in this project. You see an opportunity for three, five, six years worth of work. 00491 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 How does that particular young African-American, young Latino, young Asian-American involve themselves in this process without being the member, an existing card-holding member of a building trades union?
They would first find out what the name of the company is who won the contract and then submit an application to them for work.
And if all of the contractors that are hired are union contractors, how does that person who's not a union member access the work opportunity?
Basically, it's the same no matter which way you go because it's going to be a community initiative. They also have a percentage in there for Philadelphia residents. It's a strong community base, so they are going to be looking for people who live in the community where these activities are taking place.
What if there is, for example, a demolition contractor in the 00492 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 City of Philadelphia who is an African-American family owned business who doesn't happen to be affiliated with either the operating engineers or the laborers union, how does that individual contractor or subcontractor access available work that is coming from City tax dollars?
Well, that part, the only thing he has to do is get on the Procurement business list and he will be sent dissertation, he can actually bid. Any contractor that's interested in pursuing the work could actually bid it, and if they're the lowest responsible bidder, they stand a good chance to get the work.
It doesn't say anything in the specifications that the firm has to be union or non-union.
Okay, I just want to make sure because I was a little confused as to your description. And maybe it was just the issue of terms that we're using that 90 percent of the laborers in Philadelphia 00493 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 are African-American, are minority or other minorities. You were speaking specifically of Local 332?
Okay, fine. That will be all for now, Madam President. Thank you.
Thank you. The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam President. Good afternoon and good afternoon, Commissioner Gamble, welcome to the City of Brotherly Love. COMMISSIONER GAMBLE: Thank you very much. COUNCILMAN DiCICCO: Your experiences in Los Angeles and in Cleveland came to procuring services, supplies, how does that compare to Philadelphia? Are there any 00494 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 similarities outside of the City charter -- which I guess ours is probably unique as you testified to earlier. When an RFP goes out, as an example, are there similarities? COMMISSIONER GAMBLE: Yes, they are similar in that usually LRPs is another vehicle for securing a bid. And RFPs usually are used for personnel service contracts, it's usually when it's done, or for an area where you're not sure what you really -- what's out there in the community. For instance, you'll use it for computerization or looking for software, hardware, a computerized system of some sort then you use an RFP, but it's just another form of using -- getting a bid. COUNCILMAN DiCICCO: Are there caps placed on timlets of what we have where I think up to 13 thousand we can not bid, do you have anything? That's what I'm getting at, from your experiences in those two municipalities, are there things that we can learn here that may make the process more simple? COMMISSIONER GAMBLE: Well, first of 00495 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 all, in Los Angeles when we started talking about formal bids advertising, we started at $100,000. COUNCILMAN DiCICCO: $100,000? COMMISSIONER GAMBLE: Yes. And below $100,000 we don't have the formula to advertising. And the formula of advertising simply means putting it in a newspaper. We can send it out to the bidders on our bid list without going through the newspapers. COUNCILMAN DiCICCO: It seems to be -- it's probably more efficient that way, I would assume. What are the safeguards? Because I think that's one of the reasons that some of these things had been in place in Philadelphia for a long time, that people were concerned that contracts would be awarded to friends and political supporters and things like that. I assume you have some safeguards out there? COMMISSIONER GAMBLE: Right. Well, one of the things is that the City charter in Los Angeles was similar to the City charter here in Philadelphia, but it was changed with the 00496 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 times, where the constituents and council realized that at the time the City charter was written, it was put out to make sure that corruption does not take place and nepotism does not take place in that process. So the people of Los Angeles, they didn't realize that they needed to increase that, and the limits were increased. The guarantees, again, is simply that you award to the lowest responsible bidder and that's basically -- meaning specifications is what it is about and it's not a political process --
Right, it's the lowest. COMMISSIONER GAMBLE: It's the lowest bidder.
It's the lowest and that's where it is. COMMISSIONER GAMBLE: That's where it is.
I've been here about six and a half years, not in Philadelphia, but in City Council, and every year when the 00497 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 former Procurement Commissioner would come before us, we would always get into this discussion about purchasing goods and services, but more so, goods, and trying to see if there are ways in which we could make Philadelphia businesses more -- give them an advantage, if you would, for lack of a better way of saying it. I've even drafted some legislation which I've not been able to introduce because the Law Department continues to tell me that there may be some constitutional issues to changing the way we do business. Whereas, I wanted to create a point system as an example. Could we create a point system that says if you're purchasing vehicles for the Police Department, Sanitation or whatever, and the lowest bid is -- in some cases, I'm told it's actually $10 less if we bought the car in New Jersey than if we bought it in Philadelphia. So since we have to go with the lowest bidder, New Jersey -- a dealership in New Jersey gets the contract. And I wonder that if we did that 00498 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 business in Philadelphia, given the sales taxes and other taxes that would be -- we would see the results of the benefit of shouldn't that somehow play into balance? Would that not make it equal to, if not even more advantageous, to do it here? Is there anything like that that occurs in Los Angeles or even where the county businesses would get a preferential treatment? COMMISSIONER GAMBLE: Well, let me say, that has been discussed, but no, for the simple reason is that when you start putting preferences like that, then you risk the possibility of retaliation, a reciprocal for another jurisdiction. For instance, City Council in Los Angeles were thinking about having a local preference or a state preference actually. And it says that only those businesses located in the State of California could be considered. And then they were told by our City attorney that what we would do is open up Pandora's Box because then other states would then start retaliating against them, which would not make 00499 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 us feasible. But one of the things that the City of Los Angels is looking at is not necessarily a local preference, but a preference for small businesses. And if you're within percent of 7 the low bid, then you could make that award. 8 Now, that's something that we're 9 just starting so how successful, how costly it 10 is, because when you start adding you have to add that onto the cost. So you no longer are dealing with the lowest bidder, but you're paying a 10 percent higher rate.
But my point is, and I'm not going to be argumentative with you obviously, because you're new here and you understand, I think, exactly where I'm going. If you sold 100 vehicles, 100 vehicles were purchased from South Jersey, from a dealership in South Jersey at $10 less than what we would have paid if we bought it at the auto mall in Philadelphia, what about the sales taxes that we would have generated as a result of those sales, would that not had made up the difference of the $10, plus? 00500 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 And actually, what I'm asking is that if you would consider this, drawing from some of those experiences in L.A., I'd like to see if we can do something about that. COMMISSIONER GAMBLE: I'll look into it, Councilman.
Without doing everything in a vacuum -- COMMISSIONER GAMBLE: Right.
-- and getting into this battle between the states, but I'm talking about when you're that close. I'm not talking 50 percent away, I'm talking when you're within a reasonable amount, 5 percent, 10 percent. And that number's debatable; we can always come up with a number. I think it behooves us to do that because we keep more people employed here. We get the wage taxes, we get the sales taxes and a lot of other things that go with it. And we've been talking about this probably, I have, at least for six years. And I would welcome the opportunity to work with you and see if we can come up with some sort of a formula that is 00501 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 legal, as they say. COMMISSIONER GAMBLE: Okay.
You're welcome. The Chair recognizes Councilman Goode.
Thank you, Madam Chair. I want to clarify my point of information earlier. Not even getting back into the issue again, but say simply, that when people discuss minority business and employment participation in this council, quite often it is subjected to a discussion of union politics. The issue of minority business and employment participation is a technical issue, it's an economic issue. And if people are not prepared to discuss that -- they are free to give their opinions politically, but they politically interject their opinions into what needs to be a technical discussion that's an economic reality. 00502 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 I really rather us get down to the technical aspects of why a population which is now a majority of the City, a minority population, is shut out of the process, and I think that Councilman Ortiz has raised that issue consistently has asked for a technical response from Minority Business Enterprise Council in terms of what does the actual study say from the experts. At some point, we have to move beyond purely discussion of union politics. We should discuss the union politics of it, but points have to be made at times when an issue is subjected to a political issue of union politics rather than a technical discussion of economics. Thank you.
I know I haven't been here as long as some other people, but in all the ten budgets or eleven budgets that we're doing now, I never remembered us passing a rule on Council that any subject that we would like 00503 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 to discuss with people sitting at that table should be subject to any particular restrictions or any particular editorial comment. If people want to use this point-of-information process to interject themselves in people's line of questioning, that's certainly fine. And the Chair will rule on whether or not that's appropriate, but I think that each individual member of Council here has the right to ask specific questions without being, at least their motives being questioned or their politics being questioned. I've asked very forthright questions of Mr. Roundtree, the new commissioner here, and I would appreciate the same respect that I give other Council members when they're asking their questions. If someone doesn't like the questions I'm asking, just like the radio you can turn it off or leave the room. But I really do also take great offense at a comment made by the colleague who has just finished speaking relative to my lack of support for minority participation goals in this City. There has not been a case, a piece 00504 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001 of legislation, or an issue, where I've ever raised in the last, more than ten years any questioning that we should or should not be involved in this kind of effort. I think that not enough people in this City participate in the Public Work's projects and other economic development opportunities in the City, especially the minority communities, and the female community. I've always supported affirmative action or goals. I want the record to be clear that that is the case and it will always be the case. I believe that people, if they are given the opportunity to participate, will energize their own neighborhoods where they've grown up and where they live, will buy houses, will get married, will raise their kids and have the money to do so. So any intimation that somehow, I've not been involved in that in my ten years here in Council, I think, is really misleading. And I just wanted to make sure that that was set for the record. Thank you. 00505 2/25/02, COMMITTEE OF THE WHOLE, BILL 02001
Thank you. The Chair recognizes Councilman Ortiz.