-- in terms of -- (Indiscernible; parties talking over each other.)
The underutilization number is a number that we don't have. The only number that we have are the --
I'm asking, would you -- what were you planning to do if you recognized that businesses may be -- disadvantaged businesses may be underutilized, how do you plan on attacking that under your tenure?
You're being non-responsive. 63 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408
I'm trying to answer you. The businesses that are underutilized are businesses that a lot of times have not been brought to our attention. I can't work with businesses that we're not aware of. The only businesses that we can work with are MBEC-certified businesses that are listed in our directory. Those are the businesses that we're working with to get the participation levels and contracts. The only way I can develop capacity or utilization is to work with the business community at-large. You know, because if you're saying companies are underutilized and there are minority businesses that are out there -- in other words, they're not registered with us as MBEC, so probably I'm not aware of that business that's being underutilized. So the only way to reach out to those underutilized businesses is to do 64 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 outreach to reach those businesses, get them certified in MBEC, and get them working on developing their capacity so that they can participate in City contracts. That's the only way I know of to do it.
To become aware of them because you're not aware of them right now.
I'm aware that that problem exists, yes. But am I aware of the specific businesses that are not being utilized --
I wouldn't have a way of being aware of that until we 65 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 outreach to those companies and get them involved with the City.
How did you plan on setting participation goals if not based on an up-to-date Disparity Analysis?
Well, I just said, I agree that we need updated Disparity Analysis. What I don't agree with is an Annual Disparity Study. That's all I'm saying.
So how would you plan on setting participation goals without that up-to-date Disparity Analysis?
The participation 66 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 goals are not based on the disparity; they're based on the what we have in our present directory. That's what the participation goals are based on.
The participation goals should be based on the underutilization as determined by a Disparity Study. So how do you set new participation goals if you don't have any businesses that are being underutilized that are actually qualified?
All I'm saying is the participation goals are not based on what's underutilized and what we're not aware of. The participation goals are what we have in the listing.
But in all fairness, shouldn't -- I mean, I'll say this another way. Shouldn't --
And I'm not disagreeing that utilization needs to be better done; I'm just telling you how it's done right now. 67 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408
But in order to get a picture of where we are today, the Disparity Study would give us that. And in order for us to determine which segments of the contracting available, which segments of business are available to various firms -- minority and majority -- how do we determine where we need to put our emphasis we know we're off?
Now, the only way we know where we're off is by doing the study, having that analysis and that quantifiable information, and then say where, look at our gaps, we're really falling short in, I don't know, in shorts. Or we're really falling short in accounting. Or we're really falling short in buying staplers. Or at any level. And the only way you can figure out where you're falling short and where you need to develop strategies to improve 68 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 those areas is by knowing where we are today.
Disparity studies for me would go further in trying to identify firms that are not in our system that may happen to be women-owned, minority, or disadvantaged.
And then figure out how to go out and get them in the system.
And then our next step is to go out and get them, but I can't --
'Cause I think what we're doing is, if we're just working with the universe that we have right now, obviously, we're not getting it done. And there are firms -- and I'm sure there are firms, many firms, out 69 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 there in the City and in the region that are not certified but are eligible to be certified.
So you can't set the goal -- my opinion is -- two things: You can't set the goals without the study. And, number two, you need to do it more -- you need to do it at least every year in order to get a benchmark for where you are in that year.
Right. And the Disparity Study would show where we need to do the outreach. We do the outreach, we bring them in, and then we could set -- because once the companies become part of our listing, then we could go to the City departments and say we have X, Y, Z. And then we can --
But it needs to be done minimally -- (Indiscernible; parties talking over each other.) 70 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408
I'm not disagreeing that we need to do the Disparity Study --
What you said earlier was the goals -- you did say something and maybe I misunderstood you. That the goals are different than the Disparity Study.
Well, what I said was, the participation goals are not based on companies that are underutilized. What the participation goals are based on -- to use your language -- the presently eligible companies that we already have.
That's just my opinion. I don't how it's going to be successful, and I don't know how you can not quantify your results less than every year. 71 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408
When was the MBEC ordinance first enacted, Miss Nichols?
And how has the capacity of disadvantaged business enterprises changed since then?
I do know that since I've taken over that the Compliance Enforcement Unit is new, and a lot of the issues, for example, raised by Mr. Childress --
My question is: In terms of qualified disadvantaged businesses, next year will be the silver anniversary, the 25th anniversary of the MBEC ordinance. How has the level of capacity of minority, women-owned, and other disadvantaged businesses grown over 72 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 the last quarter of a century?
I don't have all of the historical analysis from 1982 forward.
But what I do know is that the City has done a better job, at least in the last report, which is one reason it took so long and --
I asked the question in the context of the last quarter of a century. The MBEC ordinance 23 was enacted in 1982.
Next year 73 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 marks the 25th anniversary.
How has the capacity of disadvantaged businesses to participate in City contracting grown in the last years? 8
The capacity of 9 companies has grown because we've done a 10 better job of going out and outreaching 11 those companies, including those 12 companies and in evening the playing 13 field during that period of time. 14 During that period of time I 15 know legally there were set-aside 16 ordinances that were knocked out by the 17 Supreme Court, and we had to find another 18 way to set participation levels and 19 goals. 20
Councilman, I 74 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 don't have a specific number over the 25 years. Whether it's doubled --
Let's deal with some specific underutilization issues. In terms of public works contracts, do you believe that the capacity to qualified minority business enterprises exceeds 10.6 percent?
Do I believe that it exceeds 10.6 percent? I do not. I think --
Do you believe that minority business enterprises are only qualified to receive 10.6 percent of public works contracts?
Not that they're qualified. It's the capacity to do prime and joint venture and be able to function as a joint venture. Because the public works contracts are generally very large, there again you have the capacity issues and, I will concede, the utilization issues. So this -- 75 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408
I'm asking you whether percent of minority 4 business participation in public works 5 contacting is at full capacity? 6
I couldn't tell you off the top of my head, Councilman. We work contract by contract. It's not like an overall --
It's supposed to be overall; that's what we're trying to do here.
Well, the ranges are set contract by contract in public works contracts. For example, if you have a $30 million contract, you know, are there minority companies that can step up and be primes? Probably not.
So you have no idea whatsoever what the capacity of 76 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 minority business enterprises that actually participate in public works contracts? (Witness confers with Miss Staton.)
I don't know what you mean by no idea whether the capacity for -- you're asking for the general capacity of --
I'm asking what -- (Indiscernible; parties talking over each other.)
I'm asking what percentage of public works contracts should be going to minority business enterprises? (No immediate response.)
In the last fiscal year, it was 10.68 percent. What should it have been? What's the full potential of minority businesses to participate in those public works contracts? 77 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408
And, again, we go back to utilization. To answer your question, are there companies -- are there minority companies out there that could have participated in public works contracts that didn't participate in public works contracts? Probably so.
I'm asking whether there's a whole lot of them. (Indiscernible; parties talking over each other.)
I'm asking whether you know what percentage of minority business enterprises could have received --
I understand your question. In other words, the report showed 10 percent. You're saying, is that full capacity or not? is what you're saying.
Could we have done better? Yes. Do I know the precise 78 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 number? No, I do not.
Okay. Let's move on to supplies, service, and equipment. It's 8.44 percent for minority business enterprises full capacity in terms of qualified minority business enterprises. Is it even possible that qualified minority business enterprises should only be receiving 8.44 percent? (No immediate response.)
It is possible. I would answer that for SSE, I would answer that for public works, I would answer that for personal and professional services. Have we reached maximum capacity for the minority, women, and disabled-owned businesses in the Philadelphia region to participate in City contracts? No. That's where outreach, that's where that comes in. 79 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 Do I know what the full number would be? No, I do not.
In terms of women business enterprises, is it possible that the qualified women business enterprises should only be receiving 6 percent for supplies, service and equipment?
Well, I would provide the same answers: That yes, it's possible that there are women companies that could have participated that did not participate.
Okay. Let's move on to miscellaneous order purchases. Do you know what the numbers of participation were last fiscal year for minority business enterprises and women business enterprises?
I don't have the reports with me, Councilman. I could get that, but I don't have it in front of me. It's in the Participation Report.
The numbers 80 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 are 4.6 percent for minority business enterprises and 9.53 percent for women enterprises, which is interesting. Is there a reason why the women business enterprise number is at roughly percent but the minority business 8 enterprise number is less than 5 percent? 9 Do you think that reflects actual 10 capacity? I'm not saying that it could not. This is not an is-it-possible question, but this is a -- could those numbers possibly reflect capacity?
No. There's always -- do I know what the actual number capacity should be? No, I don't.
Well, it's just the beginning, Councilman. It's just the beginning.
No. 25 Actually, we are about 14 months into an 81 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 18-month Executive Order, so it's not the beginning of the Executive Order; we're toward the end of the Executive Order.
Well, it -- it- there have been gaps. The nonprofit sector, for example, is addressed in the Executive Order, and we're just beginning to address that. So there are specific areas that should have been addressed and not be.
We're not at the beginning of it; we're at the end of it. So has it been effective? (Ms. Nichols confers with Ms. Staton.)
Why is there 82 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 only one report on participation by the Executive Order?
Instead of the two reports that were required? During 2005, MBEC kind of embarked in a new way of preparing the participation reports. In years past, the reports were nothing but a draw-down from the computer systems with no analysis. This year, in 2005, in order to --
Did the Mayor, or whoever crafted the Executive Order, make a mistake by calling for it for twice a year?
No. We didn't get it done, and we got caught up in reconciling the report, reconciling the 83 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 numbers with the departments.
Why was there no Disparity Analysis done under the period of the Executive Order?
The Executive Order was based on the Disparity Study that I cited earlier. It had been done for the years between 1998 and 2003. That was the basis of the Executive Order.
You said that the Mayor, or whoever crafted the Executive Order, did make a mistake by calling for a report twice a year. A change of twice a year to six months -- I'm not sure I changed the question that much.
What happened during that period of time -- and I understand what you're getting at. I 84 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 think what happened was, the Mayor crafted the Executive Order, and then we went to implement the Executive Order in completing the report; that's when the kind of logistics of gathering this information and verifying its accuracy kind of impacted the ability to submit the report within the appropriate time frame. I don't think that's a reflection on the Mayor; I think it's a reflection on trying to carry it out.
Each department reports to MBEC on a quarterly basis that Councilman Kenney was referring to. This year, in order to obviate one of the issues that was brought up by Mr. Childress in terms of basing it on contract dollars that may not have actually hit minority or women contractors, this year we actually tried to change it to make sure it was based on 85 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 actual --
I'm asking you, going into the future, how often should it occur?
We are hoping that the new system that we have in place, called "Impact," which will track payments that go to subcontractors, we've never had that before.
Okay. This is my last question. According to the City Charter, when is City Council required to pass an operating budget?
No. City Council is required to pass the operating budget 30 years before the end of the 86 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 fiscal year. So why wouldn't a DBE report be ready by that time?
Right. There will be a report June 1st under the new contracting legislation as of February of all the upcoming contracts by June 1st. It will be posted online.
Right. And then a reflective report on the 30th reflecting the subsequent activity.
Just two questions. When you get the information from the departments quarterly, who 87 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 handles them? What happens to those reports?
We see the -- the Enforcement and Compliance Unit looks at them and then meets on a quarterly basis with that department. This year, for the first time, those meetings are also in conjunction with the quarterly budget meetings.
How many people are involved in that enforcement unit?
Wouldn't it make sense in some way to look at the possibility of contracting with an accounting firm or an auditing firm that could be MBEC's internal auditor to actually do this analysis? I'm sure the people at MBEC are very dedicated and qualified, but I know myself, I've been in government for 28 years and I'm not qualified to do an 88 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 audited analysis of these reports. Wouldn't it make sense to just kind of spend the -- get a contract and hire a big-eight accounting firm to come in and figure out what is going on and to give you some direction on you're executive people and enforcement your people on what questions are asked and where things are falling down?
Well, maybe if it's a good idea you could pursue it. I imagine it would be relatively expensive, but certainly the return on that investment would be important and productive because we would have some really strong, verifiable, identifiable numbers to work with. So I would make that suggestion. I mean, there's a large number of very qualified firms within the City, both majority and even minority, who can do that and, I'm sure, would be 89 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 happy to be involved in that. Secondly, have we ever done an audit of the existing companies that have been certified by MBEC to determine whether or not they are actually minority companies or they're simply, as Councilmember Kelly, alluded to kind of setups for majority white men who want to tap into minority opportunities? I know we've had an indictment or something that was involved with a majority owner of the firm who set up what appeared to be a women-owned business, but it was actually his wife. And have we done --
They weren't 90 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 certified by MBEC, so --
Yeah. There are a lot of people that certify WBE. There are even private entities that do that.
Have we been able to determine through some type of an internal audit just who the real people are and who are the people we need to weed out?
Yeah. At the beginning of the process, which is what I was trying to say, the companies that are listed by MBEC as qualified minority, women, and disabled owned business, there's an investigative process before that MBEC certification is granted.
And during that time, there's granting of the MBEC certification or a denial based on those kind of factors. So that should be caught in the beginning of the process. 91 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408
That's going in. Now, once it happens, once the certification is given, do we randomly or do we annually or do we figure out -- do we go back and look if there are companies that have been in business four, five, six years, whether or not the certifications still applies or whether or not --
The certification only last five years. Within that time each year, they're supposed to submit on affidavit of no change.
If there has been a complaint -- and we can't randomly audit. As you already mentioned, we don't have the staff to randomly audit that.
But if there are complaints, which we have had, we have now established a new integrity process with the IG to pass those complaints on 92 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 to the IG's office that actually has much better capacity to do those types of investigations.
Right. I really think that MBEC needs an internal auditor that's hired from outside of the government, independent of the government, to really determine the needs and analyze the facts and give you some direction from an internal standpoint. I really do think it would be important.
And you know what? Let me give you just a word of advice from my perspective.
In this particular area, you need to be a pain in our necks. You need to be a pain in the neck of every business, of every contract of every administration, of every Councilmember, so that we know you're there like a bulldog. Like giving us a hard time all the time and giving us your 93 5/22/06 - LAW AND GOV'T - BILL 060388, RES. 060408 needs all the time. I'm telling you, the only way that this gets done is if somebody has got a mission that they're on, and they're not going to stop on the mission until it's done. And it's not just saying it's a good thing, it's not just saying it's something we really should do, and wouldn't it be wonderful. It's something to hold people's feet to the fire at every level of government and expose it. We need to expose it when it's not being done. I mean, I just think in this particular area, it's the only way that this gets accomplished.
Thank you. That will conclude our public hearing. * * *
We will now convene a public meeting. The Chair recognizes Councilmember Kelly for a motion on Bill 10 060335, with a rules suspension request.
Right. Mr. Chairman, I move that Bill No. 060335 be reported out of this committee with a favorable recommendation and also a request for a suspension of the rules in order that this bill may be heard at the next session of Council. (Motion seconded.)
It's been moved and seconded. All in favor? There are none opposed. Bill 22 No. 060335 is reported out of this committee favorably, and a request will be made for a rules suspension to allow for a first reading at our next Council 95 5/22/06 - LAW AND GOV'T PUBLIC MEETING session. The Chair recognizes Councilmember Goode on a motion to approve the amendment to Bill No. 060388.
Thank you, Mr. Chairman. I move that the amendment to Bill No. 060388 be approved? (Motion seconded.)
It's been moved seconded. All in favor, aye? There are none opposed. The amendments to Bill No. 15 060388 are approved. The Chair recognizes Councilmember Goode for a motion on the amended bill.
Thank you, Mr. Chairman. I move that Bill 060388, as amended, be reported out of committee with a favorable recommendation and that the rules of Council be suspended so as to permit first reading at our next Council session. 96 5/22/06 - LAW AND GOV'T PUBLIC MEETING (Motion seconded.)
It's been moved and seconded. All in favor, aye? There are none opposed. Bill No. 060388 is amended and will be reported out of this committee favorably and a request will be made for rules suspension to allow for first reading at our next Council session. The Chair recognizes Councilmember Goode for a motion on Resolution No. 060408.
Thank you, Mr. Chairman. I have an amendment to Resolution No. 060408 also, and I move that it be approved. (Motion seconded.)
Moved and seconded. All in favor, aye? There are none opposed. The amendment to Resolution No. 25 060408 is approved. 97 5/22/06 - LAW AND GOV'T PUBLIC MEETING The Chair recognizes Councilmember Goode.
Thank you, Mr. Chairman. I move that Resolution No. 6 060498, as amended, be approved. (Motion seconded.)
It's been moved and seconded. All in favor, aye? There are none opposed. Resolution 060408, as amended, is reported out of this committee favorably. That concludes the business of the Law and Government Committee. Thank you very much. * * * 98 C E R T I F I C A T E 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 May 22, 2006, and that this is a true and correct statement of same. __________________________________ JOSEPHINE CARDILLO 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.)