May 19, 2008
Minority Contracting at City Hall-The Taxpayers Pay the Bills
Since 1997, the city has had a minority purchasing ordinance and while there is a misconception by many at city hall that this entitles minority firms a piece of the pie with or without bids, it does not.
To put it bluntly, the problem is not the process of awarding contracts it is the process of finding minority firms. Only CERTIFIED minority contractors are consider minority firms by city hall. And who certifies minority firms? It isn’t the city, it’s the Mid-South Minority Business Council (MMBC) and it involves a minority firm handing over everything related to its business in order to prove its minority ownership is genuine – enough to discourage some. The certification may also take months, which means that by the time a bid comes around it is too late to register as a minority firm that is unless someone tips you off in the City that a contract is coming in time to certify.
There is also another problem. What might take months to get minority status for some can be expedited for others, as we saw with Reginald French’s firm Integrate Technologies. This is the true disparity in the city’s minority purchasing ordinance. Some minority firms appear to be favored over others. See the attached email expediting Integrate Technologies application.
Has there been any audit of whether firms are certified fairly? Imagine the power the MMBC holds as the gatekeeper of minority contracts at city hall. Who is monitoring what they are doing? I have tried, which resulted in a lawsuit and a nice letter that basically said they were not obligated to give me anything.
Elbert Jefferson is quoted in a recent article as saying, “And if you find that there was inequity, you have to determine whether those inequities are the result of whether those businesses may have been inexperienced, whether there were market factors that affected their inability to contract with the city, or whether there were intentional acts on the part of the municipality or municipal employees that triggered those contracts not going to a particular segment of the community.”
What would trigger a contract not to go to a minority firm based solely on the company’s minority status? The City Charter for one! The City Charter plainly states:
Sec. 6-92-8 M/WBE goals.
A.iii. Twenty-four (24) percent - total goal.
The annual goals provided above shall be reviewed annually by the M/WBE advisory committee. These overall M/WBE participation goals are only intended to be benchmarks for evaluating the overall performance of the M/WBE program on an annual basis. These participation goals are not and, shall not be quotas. For purposes of determining or satisfying annual participation goals, only the participation of minority- or woman-owned business enterprises located within the Memphis MSA and certified by the city’s contracted central certification agency will be considered.
Sec. 6-92-11 Miscellaneous.
B. Bid Preferences. If upon review of the results of the annual program goals, the city determines that it has not achieved the individual M/WBE program goals based on contracts let or bids made during the preceding fiscal year for women or minority business enterprises, then the city may consider amend the ordinance codified in this chapter to include bid preferences as may be permitted by law.
What does this mean? The city cannot use this ordinance as a preference towards vendors based on race and if they intended to, a disparity study must be conducted and the charter changed. Odd that this is being done on the cusp of charter committee recommendations, don’t you think?
I have attached a previous disparity study done in 1994. Look at recommendations #6, #10 and #15. #6 calls for the elimination of the ability of Division Directors to override the decisions of procurement agents by implementing a penalty system against those who do so. #10 reduces insurance and bonding requirements to State law requirements to induce greater MWBE participation. #15 calls for cutting up the bid packages so that they are just under $50,000 so that they are not bound by the open bid law.
Also I have attached a December 2004 email from Carlee McCullough, the Contract Compliance Officer, to the Mayor telling about her success in the minority contracting area but complaining about Mel Scheuerman, the BDC Administrator. Also look at page 2 and look at who has feasted on this work, Allan Wade, Ricky Wilkins, Lesure Computer Services, Mitchell Technology, Thomas Technologies and Integrate Technologies. Enough said. The pie is big, but the slices are few and favored.
Is Mr. Jefferson so mistaken that the city can award contracts based on set aside goals? I believe so. The City’s purchasing ordinance is clear. No contract under $50,000 is to be awarded to any vendor unless deemed through an open bid process to be “lowest and best.” The minority ordinance is only meant to monitor and is not meant to govern the act of purchasing, that is unless a disparity study shows a disproportionate gap between minority and non-minority firms. Then and only then, if it will hold up to a legal challenge, can the city force award contracts to minorities.
Another thing that troubles me about the meeting is that no where is it mentioned that the study will look at those who have been turned down for minority status, those who have lost contracts, and those who choose not to participate in the minority program because of the level of disclosure. Or, how many minority firms have had their fill of contracts and are now operating at an equitable level and need to step aside for other firms or the actual statistical data of minority/non-minority businesses in Memphis.
A recent newspaper article stated the following.
“The city is working with a team of consultants to complete what’s being called a ‘disparity study.’ Memphis city government, which functions with the help of a half-billion-dollar operating budget, also depends on the contributions of contractors and vendors it hires for a variety of tasks.
The city wants to hear directly from those people.”
I don’t think asking the fox in the hen house if he has had his fill of chickens is necessarily the best thing to do when determining how many more chickens to buy. The interest of the taxpayers, who pay all the bills, need to be considered and every contract should clearly show the premium paid over and above market price for the goods or services purchased. My experience and research with the City of Memphis ACS contract and previously with the County shows that we paid up to 30% or more over market price for millions of dollars in computers. The County has corrected this situation but the City still continues its past practices.
Click here to read the fax from Carlee McCullough to expedite Reginald French's application with the Uniform Certification Agency
Click here to read the 1994 disparity study and items #6, #10 and #15
Click here to read the 2004 report from Carlee McCullough to the Mayor about minority contracting and on page 2 see who gets the bacon
Minority Contracting at City Hall-The Taxpayers Pay the Bills
Since 1997, the city has had a minority purchasing ordinance and while there is a misconception by many at city hall that this entitles minority firms a piece of the pie with or without bids, it does not.
To put it bluntly, the problem is not the process of awarding contracts it is the process of finding minority firms. Only CERTIFIED minority contractors are consider minority firms by city hall. And who certifies minority firms? It isn’t the city, it’s the Mid-South Minority Business Council (MMBC) and it involves a minority firm handing over everything related to its business in order to prove its minority ownership is genuine – enough to discourage some. The certification may also take months, which means that by the time a bid comes around it is too late to register as a minority firm that is unless someone tips you off in the City that a contract is coming in time to certify.
There is also another problem. What might take months to get minority status for some can be expedited for others, as we saw with Reginald French’s firm Integrate Technologies. This is the true disparity in the city’s minority purchasing ordinance. Some minority firms appear to be favored over others. See the attached email expediting Integrate Technologies application.
Has there been any audit of whether firms are certified fairly? Imagine the power the MMBC holds as the gatekeeper of minority contracts at city hall. Who is monitoring what they are doing? I have tried, which resulted in a lawsuit and a nice letter that basically said they were not obligated to give me anything.
Elbert Jefferson is quoted in a recent article as saying, “And if you find that there was inequity, you have to determine whether those inequities are the result of whether those businesses may have been inexperienced, whether there were market factors that affected their inability to contract with the city, or whether there were intentional acts on the part of the municipality or municipal employees that triggered those contracts not going to a particular segment of the community.”
What would trigger a contract not to go to a minority firm based solely on the company’s minority status? The City Charter for one! The City Charter plainly states:
Sec. 6-92-8 M/WBE goals.
A.iii. Twenty-four (24) percent - total goal.
The annual goals provided above shall be reviewed annually by the M/WBE advisory committee. These overall M/WBE participation goals are only intended to be benchmarks for evaluating the overall performance of the M/WBE program on an annual basis. These participation goals are not and, shall not be quotas. For purposes of determining or satisfying annual participation goals, only the participation of minority- or woman-owned business enterprises located within the Memphis MSA and certified by the city’s contracted central certification agency will be considered.
Sec. 6-92-11 Miscellaneous.
B. Bid Preferences. If upon review of the results of the annual program goals, the city determines that it has not achieved the individual M/WBE program goals based on contracts let or bids made during the preceding fiscal year for women or minority business enterprises, then the city may consider amend the ordinance codified in this chapter to include bid preferences as may be permitted by law.
What does this mean? The city cannot use this ordinance as a preference towards vendors based on race and if they intended to, a disparity study must be conducted and the charter changed. Odd that this is being done on the cusp of charter committee recommendations, don’t you think?
I have attached a previous disparity study done in 1994. Look at recommendations #6, #10 and #15. #6 calls for the elimination of the ability of Division Directors to override the decisions of procurement agents by implementing a penalty system against those who do so. #10 reduces insurance and bonding requirements to State law requirements to induce greater MWBE participation. #15 calls for cutting up the bid packages so that they are just under $50,000 so that they are not bound by the open bid law.
Also I have attached a December 2004 email from Carlee McCullough, the Contract Compliance Officer, to the Mayor telling about her success in the minority contracting area but complaining about Mel Scheuerman, the BDC Administrator. Also look at page 2 and look at who has feasted on this work, Allan Wade, Ricky Wilkins, Lesure Computer Services, Mitchell Technology, Thomas Technologies and Integrate Technologies. Enough said. The pie is big, but the slices are few and favored.
Is Mr. Jefferson so mistaken that the city can award contracts based on set aside goals? I believe so. The City’s purchasing ordinance is clear. No contract under $50,000 is to be awarded to any vendor unless deemed through an open bid process to be “lowest and best.” The minority ordinance is only meant to monitor and is not meant to govern the act of purchasing, that is unless a disparity study shows a disproportionate gap between minority and non-minority firms. Then and only then, if it will hold up to a legal challenge, can the city force award contracts to minorities.
Another thing that troubles me about the meeting is that no where is it mentioned that the study will look at those who have been turned down for minority status, those who have lost contracts, and those who choose not to participate in the minority program because of the level of disclosure. Or, how many minority firms have had their fill of contracts and are now operating at an equitable level and need to step aside for other firms or the actual statistical data of minority/non-minority businesses in Memphis.
A recent newspaper article stated the following.
“The city is working with a team of consultants to complete what’s being called a ‘disparity study.’ Memphis city government, which functions with the help of a half-billion-dollar operating budget, also depends on the contributions of contractors and vendors it hires for a variety of tasks.
The city wants to hear directly from those people.”
I don’t think asking the fox in the hen house if he has had his fill of chickens is necessarily the best thing to do when determining how many more chickens to buy. The interest of the taxpayers, who pay all the bills, need to be considered and every contract should clearly show the premium paid over and above market price for the goods or services purchased. My experience and research with the City of Memphis ACS contract and previously with the County shows that we paid up to 30% or more over market price for millions of dollars in computers. The County has corrected this situation but the City still continues its past practices.
Click here to read the fax from Carlee McCullough to expedite Reginald French's application with the Uniform Certification Agency
Click here to read the 1994 disparity study and items #6, #10 and #15
Click here to read the 2004 report from Carlee McCullough to the Mayor about minority contracting and on page 2 see who gets the bacon
posted by watchdog at
2:38 PM
0 Comments:
Post a Comment
<< Home