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Minutes

Committee Hearing, June 2, 2004

Philadelphia City Council Committee HearingsJun 2, 2004

People mentioned

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Organizations mentioned

Councilman Goode

In addition to that, you were in budget hearings, I believe, within the last week or two? And I walked over there and asked you whether you were going to testify? 209 040048, 040145, 040414 - 6/2/04

Mr. Williams

Oh, yes; and I said yes.

Councilman Goode

And you said: Yes; absolutely?

Councilman Goode

Okay, Councilman.

Councilman Nutter

Thank you, Mr. Chairman. I mean, I guess, Mr. Williams, what I'm trying to understand is, this is your area. I know you haven't been here that long. But, I mean, you've been around a little bit, and you've been through some parts of our process. What I'm not understanding is, given the heightened attention that's been ongoing, not just in recent times, but ongoing, your arrival on the scene, you're obviously trying to do a number of different things. But I mean, I would only speak as a member of the committee -- the Chair may have his own views on the topic -- I think it is... I think it is not helpful to our 210 040048, 040145, 040414 - 6/2/04 process and to the work that you're trying to get done if we can't even operate at a fundamental level of: A member of this body introduces a resolution related to an issue that is actually administration's work product, Philadelphia 21st Century Review Forum; you're the Director of the agency that is specifically tied to the work at hand; and it sounds like, other than the Councilman sending you a letter and having a sidebar conversation, there did not appear to be much effort on your part to either talk with him about this particular issue, prepare testimony to share with us on this particular issue. And I understand if the Mayor calls the top level people together, and you just can't be here at 9 o'clock -- I mean, 10 o'clock for the start. But I mean, it would appear that you're in a position to be less than prepared to respond to the issues either of the report or the Resolution or a number of other issues that may come up. 211 040048, 040145, 040414 - 6/2/04 Now, you know, I just don't know how we're supposed to have a certain level of confidence about the larger operation if we're not even getting the fundamentals done of... The Council Resolution goes in. I'm sure someone must be transmitting information. They've got, you know, two, three people up here on a regular basis monitoring what we do up here. So, I mean, I'd at least like you to be responsive to: What is your process? If a resolution comes in that's related to your area, what are you going to do about it?

Mr. Williams

Okay, sir.

Councilman Nutter

And how do you plan to be prepared to be responsive to members who may have any number of questions?

Mr. Williams

Actually, I was responsive to Mr. Jones, who works in the Councilman's Office. There are e-mails back and forth from me asking for 212 040048, 040145, 040414 - 6/2/04 clarification. And if the Councilman wants to comment on that, that's fine. But there was conversations back and forth because I wasn't clear about what exactly the Councilman wanted for today. And when I talked to the Councilman, I was ready to testify which is why I came here. But I still -- I still to my satisfaction didn't get enough clarification as to what exactly happened. And I know --

Councilman Nutter

Mr. Williams...

Mr. Williams

May I finish?

Councilman Nutter

There's a report, there's a resolution...

Mr. Williams

Sir, I --

Councilman Nutter

...and I assume that he wants you to be responsive to the issues that are either in the report or to the resolution, about how we move the issue along, and its relationship to your office. I mean, what's the mystery?

Mr. Williams

No mystery, sir. 213 040048, 040145, 040414 - 6/2/04 I contacted the administration because I knew there was not an official response to this. And I didn't feel it would be appropriate for me to make an official response to this report in front of the Mayor. Now, I'm here to definitely testify to my own feelings about the report; but to actually make an official response on the part of the administration, I didn't think that was appropriate for me to do that.

Councilman Nutter

All right. I mean, look, you know, it is the Councilman's Resolution. I think you know that when anyone is called to testify, at least any government person, you're generally not being called to give us your personal views on a topic.

Mr. Williams

Absolutely.

Councilman Nutter

You're on the public payroll. You have a job in the government. When government witnesses come to the table, we expect that they're 214 040048, 040145, 040414 - 6/2/04 representing either their organization or speaking on behalf of the administration.

Mr. Williams

And I'm here to represent my organization.

Councilman Nutter

How you figure that stuff out, and how you guys coordinate your efforts, I mean on a certain level, that's your business.

Mr. Williams

I understand.

Councilman Nutter

But I tend to think that you probably weren't invited just because you happened to be, you know, Michael Williams walking down the street. I think you were invited in your capacity as Director of MBEC, right?

Mr. Williams

Absolutely.

Councilman Nutter

Okay. Councilman.

Councilman Goode

Mr. Williams, can you tell me what conversations you had with any members of the administration regarding this hearing today?

Mr. Williams

I spoke to Janice Davis today about testifying, and that's 215 040048, 040145, 040414 - 6/2/04 the only conversation I've had.

Councilman Goode

You did not have any conversations with anyone from the Mayor's Office?

Mr. Williams

No, I did not, sir

Councilman Goode

You did not have any conversations with Joe Grace?

Mr. Williams

No, sir.

Councilman Goode

Okay. I can tell you that --

Mr. Williams

Not that I can recall.

Councilman Goode

Okay. I can tell you that Joe Grace from the Mayor's Office asked me what was expected of the administration for this hearing. I told him that you would be testifying, and told him that it was directly in response to the findings and recommendations of the report.

Mr. Williams

I did not have a conversation with Mr. Grace, sir. I don't recall that.

Councilman Goode

Okay. Thank you. 216 040048, 040145, 040414 - 6/2/04 Councilman.

Councilman Nutter

I'm done, Mr. Chairman.

Councilman Goode

Thank you, Mr. Williams.

Mr. Williams

Thank you, sir.

Councilman Rizzo

And you'll get that information that I asked for.

Mr. Williams

Absolutely. Absolutely.

Councilman Rizzo

Thank you, sir.

Mr. Williams

You're welcome.

Councilman Nutter

Councilwoman, before you sit down... Mr. Williams, two things.

Mr. Williams

Yes, sir.

Councilman Nutter

One, I sent a letter recently. I don't think too much time has passed, but can I at least get from you... I sent you a letter recently regarding... I think nowhere near as bad as what Councilman Rizzo raised, but I received a notice in the mail recently about a -- I get these notices on a pretty 217 040048, 040145, 040414 - 6/2/04 routine basis. It's a Water Department project in my District. What I was struck by was in the notice it indicated that there were -- In accordance with the most recent executive order, which apparently there's some confusion, I think, as to whether it's 401 or 101 or 104 which it would be nice if you guys would get that straightened out. But what struck me is that in the notice it indicated that there were no 13 minority participation goals attached to that particular contract, in accordance with the executive order. Now, I didn't understand how, in accordance with an executive order that is about minority participation, there could be a provision that there were no MBEC goals attached to that requirement. It's a regular construction contract. It has to do with sewer pipes or something. Do you recall receiving that letter from me?

Mr. Williams

No, I don't, sir, 218 040048, 040145, 040414 - 6/2/04 but...

Councilman Nutter

Within the past... Somewhere within the past couple weeks.

Mr. Williams

Okay. No, sir, it hasn't. I apologize. It hasn't gotten to my desk yet. I haven't seen that. But yet that would raise a bunch of concerns and flags; you're absolutely correct.

Councilman Nutter

Okay. The second is, since you were last with us, can you give us an update on the reorganization?

Mr. Williams

Yes, sir. As you know before this, a consultant was hired before I got there. And I've been working with this consultant. The consultant has a one-year plan. I've been in negotiations with the consultant, saying that we need to have more benchmarks and a lot sooner. We have a high -- Well, I've made an offer to an enforcement deputy to come in to handle our monitoring, compliance and... 219 040048, 040145, 040414 - 6/2/04 monitoring, compliance and enforcement, new department. We have started to take care of our backlog of certifications. We are in the midst of bringing in some temporary folks to help us do that. And we are still working with the consultant to make a global reconstruction of the department. At this point we're in a transition stage. And things that I want to emphasize right now are just getting rid of our backlog to certification, and look into some options to take us out of the certification process. Also looking into working with our vendors. We just had a meeting with about 100 or 120 of our vendors, to work with them on honing their skills... to work on how to get into the bidding process, and how to -- Well, there are a number of things that it did, but we've concentrated on how to get into the bidding process in the City. 220 040048, 040145, 040414 - 6/2/04 I've also set up a meeting with Exelon Corporation, because I want to start a series of events where private sector folks will come in and talk to our vendors that are already certified, and to talk about their contracting opportunities. So, there's a lot of things that are happening over there. And I apologize for rambling on about that.

Councilman Nutter

Okay. Why don't we do this: With regard to the reorganization, why don't you forward, like, an update memo or something.

Mr. Williams

Absolutely. The consultant already give us --

Councilman Nutter

To the Chair of the committee.

Mr. Williams

I'm sorry.

Councilman Nutter

What's the consultant's name? This came up during budget hearings.

Mr. Williams

Mario Travino, Innovative Strategies.

Councilman Nutter

Right. Well, at 221 040048, 040145, 040414 - 6/2/04 the time that you were coming on board, I think that an offer had been made. They were in the process of actually negotiating a contract. Have they, in fact, signed a contract with us?

Mr. Williams

Yes, they have.

Councilman Nutter

The amount of that contract is how much?

Mr. Williams

$150,000.

Councilman Nutter

$150,000?

Mr. Williams

150,000.

Councilman Nutter

What's the term of the contract?

Mr. Williams

One year.

Councilman Nutter

That's convenient. Are there any renewal options?

Mr. Williams

Not that I'm aware of, but I'll have to get back to you on that, sir.

Councilman Nutter

Okay. Thank you.

Councilman Goode

Real quickly, Mr. Williams...

Mr. Williams

Yes, sir. 222 040048, 040145, 040414 - 6/2/04

Councilman Goode

In response to a question I asked earlier, you said you absolutely supported a county and region first procurement policy?

Mr. Williams

Absolutely.

Councilman Goode

Do you not believe that there was a firm within the county or region that could perform that work?

Mr. Williams

I'm sorry, sir?

Councilman Goode

Do you not believe that there was a firm within the county or region that could perform that work?

Mr. Williams

I don't know if there were -- if there was or there was not.

Councilman Goode

But you would be seeking to find out, since it's only a one-year contract, correct?

Mr. Williams

Absolutely.

Councilman Goode

Thank you. Councilwoman Tasco.

Councilwoman Tasco

Good afternoon.

Mr. Williams

Good afternoon. 223 040048, 040145, 040414 - 6/2/04

Councilwoman Tasco

You can talk about the consultant. What is the scope of work of the consultant?

Mr. Williams

The consultant is supposed to come in and look at the entire operation, and to make recommendations based on his investigations, looking at policies and procedures, as it relates to the City's MWDBE's goals and also to look at how this department functions, and its best way to function. So I know it's kind of a broad scope. And he's broken it down in -- in -- in -- in distinct parts.

Councilwoman Tasco

Given the testimony today, what you heard some of, but certainly you have heard from a number of Council members and certainly Howard Rye, who is our minority staff person here, who has minority concerns with Council, there are a lot of issues that have been raised around problems that minorities have, in doing business with the City. Is any of that information taken into 224 040048, 040145, 040414 - 6/2/04 consideration by the consultant to address?

Mr. Williams

Absolutely. I recently have sent out a letter to all department heads, listing their fiscal year '03, their mid year '04 minority participation rates. I've asked them for compliance plans for their Fiscal Year '05 rates. And if they have let out contracts at this point for '05, to list all the minority participation rates on those contracts. That information has gone to our consultant so that he can factor that into our work.

Councilwoman Tasco

Now, do you have an enforcement arm in your department?

Mr. Williams

We didn't have that before. I've made an offer to a person who I think is going to accept the offer; will be in in about a month. And that's going to start our enforcement arm, our enforcement, monitoring, and compliance arm.

Councilwoman Tasco

So what will that consist of, enforcement? What will 225 040048, 040145, 040414 - 6/2/04 that person be responsible for doing?

Mr. Williams

The three main goals of this person: The first one is to ensure that department heads are actually utilizing our vendor database to put people on contracts, by looking at their participation rate. I don't have to tell you that it's not been that great in this City's history, even from the beginning of MBEC, actually.

Councilwoman Tasco

We heard that earlier.

Mr. Williams

I'm sorry?

Councilwoman Tasco

We heard that earlier.

Mr. Williams

Yes. I don't have to belabor that. But that doesn't mean that we shouldn't do anything about this now. And I don't really want to wait on that, which is why I sent those letters out to the department heads. My enforcement deputy will be the person meeting them -- with me on a 226 040048, 040145, 040414 - 6/2/04 quarterly basis, to see where their contracting is and where their participation rates are. It takes that kind of will, I believe, and some teeth behind that, to make sure that the City, the City departments itself are actually utilizing businesses owned by people of color, women and disabled folks. The enforcement person will be heading up that. The enforcement person will also be heading up our on-site inspections. Because of Federal certification requirements, we have to do those. And there are all kinds of situations that can fall -- Because we don't have enough folks to do this at this point, we don't have -- things can fall through the cracks. A prime contractor, for example, can put a subcontractor on a contract but not utilize them or utilize a shell corporation, where you have a minority person taking the money but there's no 227 040048, 040145, 040414 - 6/2/04 participation coming in. So it really is not worth anything. And we don't have the personnel to do that. But we're hiring that. I'm hiring the personnel -- the enforcement person and two people to work for her to do this. The person will also be looking at procedures in our office, because even though I've worked there, and I have not come across anything that would raise anyone's attention to being unethical, still there may be a perception that some things are going on in this department. And the first person will be our ethics guru.

Councilwoman Tasco

Now, what is your enforcement mechanism for those contractors who don't comply with the terms of the contract? If they are -- get a contract, don't utilize or they subcontract to a minority firm, not -- they're not participating, what is your -- do you have an enforcement mechanism to carry out? 228 040048, 040145, 040414 - 6/2/04

Mr. Williams

Well, per the expired executive order which the Law Department is working on at this moment, to introduce another one, there is a mechanism to debar contractors. I don't think it's ever been used here, but I think that it should be used. There's another thing that I would add, Councilwoman, that there are some prime contractors who are very slow payers. And in my view, you can't have a subcontractor who is -- I mean, there's a reason that you're a prime contractor. You've got to pay some money. You're going into this business. You've got some -- You've got money here. You're not going to be dependent upon your payment from the City. However, a subcontractor, they absolutely have to be paid for that. I've been dealing with a lot of those issues, more than I actually thought since I got to the job. Almost every other day I've got someone in my office, that I'm trying to negotiate with prime contractors 229 040048, 040145, 040414 - 6/2/04 or GPUAC or someone, about getting them paid. That's really making me very angry. And I think that to me, that is something that you could use to debar someone if they are -- if they are habitually not paying people. I think that in the City contracts, as it's written right now, there's supervision saying that, well, subcontractors won't get paid unless prime contractors get paid. And I think that's ridiculous. I think that you can't... Because there may be some issues with some minority prime contractors themself, that you can't make a blanket rule. But you could certainly do something about that, and have some language where you could go in and say -- not to be so absolute, to go in and say, no, you really have to do this and you have to pay this person. And if they don't do that, they habitually don't do that, you need to debar 230 040048, 040145, 040414 - 6/2/04 them from getting City contracts. I think that's simple.

Councilwoman Tasco

Well, I hope you're successful in that because that's the only way you're going to stop it because they just ignore the subcontractors. And these major contractors continue to get the same contracts, continue to do business with the City, and still engage in the same practices that put minority businesses out of business.

Mr. Williams

You know, I mean --

Councilwoman Tasco

We saw the little piece. I saw your predatory contractor, right?

Councilwoman Tasco

You see how they do it. So, it's systemic. I mean, it's built in the way the business is done, with this whole contracting business.

Mr. Williams

Absolutely. I mean, I fight with folks now, and I keep telling 231 040048, 040145, 040414 - 6/2/04 them that, yes, the executive order has been expired. But to my knowledge, if they don't do anything, I will move to debar them. You know, if it's going to be right, if there's going to be some kind of challenge, I don't know. But that's not my concern. My concern is getting these people paid and getting them their money. And so far that has been very successful with just confronting them, and telling them that something may happen there. You know, yes, I get in these painful conversations where they have some prime contractors saying that, well, you know, we've got friends on City Council, we've got friends in the government. That just doesn't matter because I think these people have to be paid. And I'm doing everything in my power to make sure they get paid.

Councilwoman Tasco

I think that's very important; and that if we don't begin 232 040048, 040145, 040414 - 6/2/04 someplace it will never end. So I would wish you well. And do you feel that you, having been there such a short period of time, that you will be empowered to proceed in a fashion that you believe will be effective in that department --

Mr. Williams

Well --

Councilwoman Tasco

-- in this --

Mr. Williams

I'm sorry.

Councilwoman Tasco

Go ahead.

Mr. Williams

Well, I think that, based on the fact that I sent these letters out to department heads, have gotten some heat from them. But I've just shot it back and said, it doesn't matter. You're going to have to do this. I know that I need the teeth, the ultimate club from the administration, to do this. And to that extent I've been told that that would be there for me if needed.

Councilwoman Tasco

Okay. Thank you.

Mr. Williams

Thank you. 233 040048, 040145, 040414 - 6/2/04

Councilman Goode

Councilman.

Councilman Rizzo

Again, I have a follow-up question from my earlier question. I won't repeat it. But your mission statement, if you had a mission statement -- I assume you do -- of what your goals and objectives are, it seems as though we've been doing business, you know, in a particular area for a lot of years. Have we... With your restructuring, are you looking out beyond the normal things that we've been kind of focused on? There are other opportunities out there for minority participation. Like, we spend millions and millions and millions of dollars. And again, maybe this is like Motorola, not doable. But how do we get some of the big, big companies that we do business with? We have telephone companies. We have Verizon. We have the energy companies. We have law firms. I heard today Mr. Crawley say that 234 040048, 040145, 040414 - 6/2/04 there are very few black law firms that are -- if any, that are getting any legal work. What about the computer support, and the computers that we buy? Are they areas that we are eventually going to be able to look at or, to be realistic, are there some areas that what your mission is that you're not going to be able to capture or have them get involved and then come aboard with your program?

Mr. Williams

Sir, I don't think I should -- I'll be inhibited by anything. I think that that -- that we'll be able to do everything that we set out to do. I -- The department -- My goal for the department is to move away for something like certification, which I think we do well. But it doesn't go to constituent services. I think constituent services are more marketing our firms internally in the City. And externally I think our -- we should move to enforcement and monitoring, 235 040048, 040145, 040414 - 6/2/04 to compliance, to doing outreach, to getting those folks into the system, and then to make sure they get work through the City and beyond, outside of the City. Okay.

Councilman Rizzo

What do we do when we have a vendor that we spend millions of dollars with? They're not a contractor. They're a vendor. They're providing a service to the City. Are those deals for service come under the umbrella of your organization?

Councilman Rizzo

Well, give me an example. A big supplier of technology to the City. I'll use the name, Verizon. We have probably hundreds of thousands of dollars a month we spend with them. How could you get minority -- How could you get Verizon to have minority participation, other than beyond what they do already within their organization? I mean, how could you get them to... Again, is it not even doable to even think 236 040048, 040145, 040414 - 6/2/04 about those big dollar items that we spend every month? How do you get them involved?

Mr. Williams

Well, the City work, we set ranges for them to meet.

Councilman Rizzo

Have her identify herself, please.

Ms. Hitchcock

Candace Hitchcock. I'm the Deputy Director of MBEC. In response to your question, Councilman, we evaluate every project that comes before us for ranges. We look for the opportunities within those projects. Major equipment purchases, like telephone equipment, and I heard you mention the 800 megahertz... There are some opportunities within there that we have to find, in terms of installation, in terms of whether they have to construct something to put the equipment in. So we evaluate what's available and look for opportunities within those areas. The equipment purchase itself sometimes is a block of money. They spent, actually, about $51 million on the 237 040048, 040145, 040414 - 6/2/04 equipment for the 800 megahertz, but there were some $9 million worth of opportunity there that we could put ranges on for minority and women participation.

Councilman Rizzo

Did it happen?

Ms. Hitchcock

Yeah.

Councilman Rizzo

Given -- Okay. Here's an example of one I'd like you to look at. We're about to put the cellular telephone contract out for bid again. It's going to go out: Verizon, it's going to go to Cingular, it's going to go to Nextel, it's going to go to Sprint. What can you do to get minority participation in that type of an opportunity, where we're going to spend, again, a significant amount of money? What do you do? I mean, what do you do in your organization, when you hear that we're about to rebid possibly for a three-year deal the cell phone service for the City of Philadelphia?

Ms. Hitchcock

Well, there are 238 040048, 040145, 040414 - 6/2/04 various components of the cell phone services. The biggest component would probably be the equipment itself, unless there -- We would look, see if there was a distributor for the equipment, if there's training on how to use it, any area that might be in there. I haven't looked at all the components of it, but that would be the approach to seeking whether or not there would be any opportunity on that project.

Councilman Rizzo

What's interesting: One of the vendors that's going to -- that already does business doesn't even have a presence in Philadelphia, doesn't even have an office in the City of Philadelphia. Forget the minority participation part. They're not even a -- They don't even have a presence here, and we're sending them a check every month. So, now this deal is going out. You're assuring me you're going to take a look at that to see -- 239 040048, 040145, 040414 - 6/2/04

Ms. Hitchcock

Going to take a look at it --

Councilman Rizzo

-- another deal --

Ms. Hitchcock

Yeah, because one of the issues is a service -- he's a service provider. And they can do that, not on site. So we'll have to look at what components compose the activity.

Councilman Rizzo

One of them does not have a presence here. All the others do. But again, how do you bring or require minority participation in a multi-million dollar cell telephone contract? I just don't understand how you're going to accomplish that or what you can do to do that, other than what you just described, that possibly there's a minority distributor that would provide the equipment to us.

Ms. Hitchcock

Well, whatever... Or if there's some training activity within there. There may be some other provisions in there. 240 040048, 040145, 040414 - 6/2/04 You have to look at it to make that determination. We do an evaluation of these projects. Not all the time are we successful; that's true.

Councilman Rizzo

But is this the normal part of doing business? In other words, if I didn't bring this up here today about this bid ready to be put out again, would you -- would your organization even be part of it? Or am I giving you the first heads-up you know about this?

Ms. Hitchcock

No. We would have seen it. We would see it.

Mr. Williams

It would come through us.

Councilman Rizzo

You would see it?

Councilman Rizzo

And do what?

Ms. Hitchcock

Evaluate it for opportunity.

Councilman Rizzo

Okay. It went out three years ago. Do you know what we... Did we have an opportunity three years ago? 241 040048, 040145, 040414 - 6/2/04

Ms. Hitchcock

May have, but I can't tell you because I'm not sure of that one.

Councilman Rizzo

Okay. What I'm basically saying is, I believe that there are a lot of opportunities out there that we aren't focusing on. And I hope that that consultant comes back or to you now. I don't even think we need a consultant. I think you're both bright enough to be able to figure out how to make this thing work.

Mr. Williams

Thank you, sir.

Councilman Rizzo

But I think that we really -- and I hate to use this expression -- start thinking outside the box here, of looking at opportunities. And I think sometimes because they appear to be something that isn't eligible, like cell telephone service or wire line telephone service or the purchase of computers, we just let it get away from us because, you know, it's not like... doesn't fit the mold. Am I making myself -- Am I 242 040048, 040145, 040414 - 6/2/04 expressing myself right? So I think that you should really start looking... We buy a zillion police cars from a particular car dealership a year. They're not even in Philadelphia. They're in New York State. We don't benefit by that. We don't have one mechanic working on those cars. We don't have any... anything... any input there at all. So, it's frustrating for me. It really must be frustrating for you because you're responsible to make it work.

Mr. Williams

And we're responsible after the fact. I mean, department heads, especially in professional services, make these purchasing decisions, and we get things to evaluate ranges on decisions that they've already made.

Councilman Rizzo

Well, you got to fix that, then.

Mr. Williams

Exactly.

Councilman Rizzo

That doesn't work. 243 040048, 040145, 040414 - 6/2/04

Mr. Williams

Our enforcement person will be doing that, along with working with the Law Department, so we can be on top of these.

Councilman Rizzo

The Police Commissioner doesn't have the authority to decide where we buy police cars. It's done by procurement --

Mr. Williams

Exactly.

Councilman Rizzo

-- and the bottom line, cheapest price. That's where those decisions are made. And I know we had this conversation before, where we can't require by basic -- I guess it's the City Charter or some other law, that we can't require the City to do business with City businesses. Do you see any effort to break through that barrier?

Mr. Williams

Unfortunately, I don't see any effort to break through that.

Ms. Hitchcock

But Councilman, may I add a comment to that? On the car deal they had --

Councilman Goode

Excuse me. 244 040048, 040145, 040414 - 6/2/04 Please identify yourself for the record.

Ms. Hitchcock

Candace Hitchcock, Deputy Director of MBEC. On the car deal, they had to put in computers and some other things that they do after they purchased the car. So that's a possibility for getting participation. In fact, we did get some last year.

Councilman Goode

Councilwoman Tasco.

Councilwoman Tasco

One of the issues I'm concerned about -- and I would like for you all to go back and seriously consider again, revealing the provider contracts for nonprofits that go out because you have nonprofit contracts or contracts with the Department of Human Services and the Health Department, and there is no minority participation. We have a company, Warren E. Smith. A contract for $10 million was given out. They gave it out to three majority firms, was forced to do one minority firm. Warren E. Smith, the other 245 040048, 040145, 040414 - 6/2/04 majority -- minority -- majority mental health provider, doing business in the community now has to divest itself from a part of the program, and send their clients all over the City. And it's just not right, because there's nobody monitoring those contracts. Have you, in your capacity, contacted the Department of Social Services or the Health Department or was that part of your...

Mr. Williams

Absolutely, it's part of the...

Councilwoman Tasco

I understand at some point that MBEC stopped doing nonprofits.

Mr. Williams

Yeah, MBEC stopped looking at nonprofits, the reason being is that the certification process is different than the approval process. They're approving folks to...

Councilwoman Tasco

When did you stop doing nonprofits, by the way?

Ms. Hitchcock

It was effective 246 040048, 040145, 040414 - 6/2/04 last year.

Councilwoman Tasco

So when did --

Ms. Hitchcock

In 1994 there was an attempt by the current Health Commissioner to try and lend some participation to the number of nonprofit contracts that were -- and the dollars that were spent with nonprofits. It kind of turned into something like a certification process. And you cannot, under the Federal regulations, certify nonprofits. So that we had to adjust that and not get into an approval process of nonprofits as minority, women or disabled. The criteria was established outside of the Federal regulations. At the time we were using the Federal regulations for certification processes. We cannot certify a nonprofit. Even though we use the word approval, we use a different criteria, but it still did not fall within the boundary of the Federal guidelines. So we stopped doing approval 247 040048, 040145, 040414 - 6/2/04 processes for nonprofit organizations.

Councilwoman Tasco

And you're doing -- Go ahead; I'm sorry.

Ms. Hitchcock

We are looking at nonprofits, because they do buy goods and services, to develop something similar to an equal opportunity plan, that can have them provide to the MBEC how they buy their goods and services because they do do other things with the money that they get from the City and other sources.

Mr. Williams

And for me, Councilwoman, there's a -- I'm sorry.

Ms. Hitchcock

Go ahead.

Mr. Williams

I was going to say, for me that doesn't get to the point of these departments not utilizing these firms. Just because we don't -- at this moment aren't counting nonprofits doesn't mean that department heads can go out and not look at firms that target or nonprofit firms that target -- yes, or provide services to people of color to this 248 040048, 040145, 040414 - 6/2/04 community. I think that's a different question. And that's something that I think that they have looked at sort of as a loophole. At least that's what my impression is. I haven't had to sit down to talk with them. They've received my letter showing, both these departments, they've had very low participation rates. They want to meet with me talk to me about that. And I'm sure we'll be able to get information from them as to what this is. My point is that if we don't even count these folks, it doesn't matter. You still have organizations, nonprofit entities, that service or targeted or are made up primarily by people of color. And you should be using them, and particularly in these communities. You have majority firms working in West Philadelphia, in North Philadelphia coming in these contracts because they know someone in these departments. That's just 249 040048, 040145, 040414 - 6/2/04 untenable. And that situation should be rectified. And to my extent of talking with them, sitting down and letting them know that I want to see better numbers from that, that that will happen.

Councilwoman Tasco

Not only in terms of it's important, that the departments... These social service departments contract with nonprofit groups that are also minority.

Councilwoman Tasco

And that the majority contractors, providers, have minority employees.

Councilwoman Tasco

So that is a very lucrative, lucrative business. And because we don't provide the services -- we contract all our services out -- we need to know who we're doing business with, and what kind of return is coming back to the community from those companies. So, I think it's a serious way, if 250 040048, 040145, 040414 - 6/2/04 you all can find a way to be inclusive, to include them in some reportable way, and some enforcement way, and to make them be more inclusive. It would be very, very helpful to us.

Mr. Williams

Yes, ma'am. And we are working on that. We're working on that mechanism to do that. I think part of this is just letting people know that we are looking into this, to start getting some movement.

Councilwoman Tasco

Thank you.

Mr. Williams

Thank you.

Councilman Goode

Councilman Nutter.

Councilman Nutter

Mr. Williams, very quickly. In a letter that I mentioned to you -- it's a letter dated May 24, 2004 -- you were over in the MSB in Room 330?

Councilman Nutter

Okay. That's where we sent it. I received this notice from the 251 040048, 040145, 040414 - 6/2/04 Water Department regarding a relay of water mains: Woodbine Avenue, from 58th to 59th; Wynnefield Avenue, from 50th to 51st; and 58th Street from Malvern to Woodbine. The second location is literally about a block and a half away from my house. Gentlemen, you are hereby notified to proceed with relay of water mains for the area I mentioned. There are no MDBE, WDBE or DSDBE `participation ranges under Executive Order 1-03 for this bid. Bidders are encouraged to seek participation by disadvantaged, minority, women and disabled business owned... disadvantaged, minority, women and disabled owned business enterprises, but are not required to submit a solicitation and commitment form with this bid. A copy of the certification of insurance must be submitted to Bill Credle [sic], Aramark, second floor, et cetera. Limit of contract, $429,000. And 252 040048, 040145, 040414 - 6/2/04 it's signed by Bill Credle. Do you have any idea why a contract for this kind of work will go out with a letter to the contractor, indicating that there were no participation ranges for minority businesses or female or disadvantaged businesses, under Executive Order 1-03 for this bid?

Mr. Williams

No, sir, I can't tell you why that would. But I will look into that, sir.

Councilman Nutter

Well, under the Executive Order, are you allowed to not have participation ranges for construction work?

Ms. Hitchcock

No. It could be an emergency letter bid, though. Is it?

Councilman Nutter

Well, doesn't say it's an emergency. And I live a block down the street from the one location, and I know the other locations very well. And none of them have exploded recently. So, I don't think it was an emergency. Is this a regular -- 253 040048, 040145, 040414 - 6/2/04

Ms. Hitchcock

If it was an emergency, it will say so on there.

Councilman Nutter

It's not an emergency, no. 6

Ms. Hitchcock

Okay. Do you have a bid number?

Councilman Nutter

I don't think you'd have an emergency at three separate locations. There's a purchase order number, there's a bid number, there's a work -- I mean, this is what I sent over. I'd be glad to give you a copy of it. I'd like not to read it into the record.

Ms. Hitchcock

You sent it over.

Councilman Nutter

But I guess my question is, you can do all the investigatory work. How is something like that possible? Wouldn't this contract --

Councilman Goode

You have to approach the witness table.

Councilman Nutter

Wouldn't this contract go through MBEC?

Ms. Hitchcock

Most of the time. 254 040048, 040145, 040414 - 6/2/04

Councilman Nutter

Not professional services.

Ms. Hitchcock

No. Most of the time that would.

Councilman Nutter

I don't understand. What do you mean most of the time?

Ms. Hitchcock

Most of the time. There are occasions when some of those bids get through, and we don't see them.

Councilman Nutter

Why?

Ms. Hitchcock

They didn't come. Somebody did not send it to us.

Councilman Nutter

How could somebody not send it to you?

Ms. Hitchcock

It has happened, Councilman.

Councilman Goode

Excuse me a second. Miss Dunn, could you identify yourself for the record.

Ms. Hitchcock

Madalyn Dunn, community advocate from West Philadelphia. When you say an executive -- I was thinking an executive order. Something the 255 040048, 040145, 040414 - 6/2/04 Mayor sent down saying this don't have to be done; is that right?