DEPARTMENT: Economic Development
DEPARTMENT HEAD: Rene Dominguez
COUNCIL DISTRICTS IMPACTED: City-wide
SUBJECT:
Contract Award--New Disparity Causation Analysis Study
SUMMARY:
This Ordinance approves an agreement with National Economic Research Associates, Inc. in an amount not to exceed $750,000 for a one year period, anticipated to begin in May 2014 and end in April 2015, to undertake a Disparity Causation Analysis Study (Disparity Study) for the City of San Antonio. Upon completion, the Disparity Study's findings and recommendations will be presented to the Small Business Advocacy Committee (SBAC), Economic and Community Development Committee (ECDC) and City Council. Following a review and public comment period, City Council will consider any proposed modifications to the Small Business Economic Development Advocacy (SBEDA) Program.
BACKGROUND INFORMATION:
City Council adopted the most recent Disparity Study in March 2010 and in June 2010 adopted the current SBEDA Ordinance, which incorporated numerous consultant recommendations. In accordance with the SBEDA Ordinance, the City must conduct an update to the Disparity Study that will serve as the evidence upon which an updated SBEDA Program may be developed and maintained. Common industry practice is to conduct a Disparity Study every three to five years to determine if disparity still exists in contracting with minority, and women-owned business enterprises (M/WBEs).
The necessity of a Disparity Study emanates from the U.S. Supreme Court case Richmond v. J.A. Croson Co. (1989), which mandates that state and local government programs using race as a consideration in government programs must pass "strict scrutiny" by the courts. This strict scrutiny standard requires that public entities show a compelling governmental interest in establishing race-specific programs, thus requiring that a firm evidentiary basis be established to conclude that the under-representation of minorities (and/or women) is a product of past discrimination. Further, those programs that establish a compelling governmental interest must also be "narrowly tailored" to achieve that interest.
The scope of work associated with this contract requires the consultant to: (1) conduct an analysis of the availability and utilization of Small, Minority, and Women-Owned Business Enterprises (S/M/WBEs) in the relevant market area; (2) compare the procurement and contracting practices of the City and private sector enterprises in relation to the utilization of S/M/WBEs; (3) evaluate the success of the current Small Business Economic Development Advocacy (SBEDA) program; and (4) make recommendations regarding how the City can improve its contracting practices to be more inclusive of S/M/WBEs in alignment with governing laws and best industry practices.
The Disparity Study will also analyze and evaluate evidence of discrimination through quantitative and qualitative evidence. For quantitative evidence, the Disparity Study will use a statistical research methodology and data analysis to determine if there is a gap between availability and utilization of minority and women-owned businesses by the City, as well as by the private sector. Qualitative evidence will include anecdotal evidence of discrimination and other barriers to obtaining bonding, insurance and financing which result in disparities in business formation, business opportunities and earnings.
ISSUE:
As mandated in the SBEDA Ordinance, the City issued a Request for Proposals (RFP) to select a consultant to undertake a comprehensive update of the full Disparity Study. The "Disparity Causation Analysis Study" (RFP 6100002874) was released on October 28, 2013 with a submission deadline of December 6, 2013. The City received five proposal responses for consideration. The evaluation committee conducted interviews of all five firms and finalized the scoring process on February 27, 2014.
The selection team consisted of a representative from the Economic Development Department, City Manager's Office, Parks and Recreation Department, Aviation Department and the Finance Department, Purchasing Division, which assisted by ensuring compliance with City procurement policies and procedures. The proposals were evaluated based upon the published criteria, which included: experience, background and qualifications; proposed plan; and proposed price.
The evaluation of each proposal response was based on a total of 100 points; (1) 20 points allotted for experience, background, and qualifications; (2) 20 points allotted for proposed plan; (3) 30 points allocated for proposed price; (4) 20 points allotted for the SBEDA Program, with 10 preference points for the SBE Prime Contract Program and 10 preference points for the M/WBE Prime Contract Program; and (5) 10 preference points allotted pursuant to the Local Preference Program.
After committee review and discussion, the individual technical scores were finalized and the aggregate scores were then presented to the committee. National Economic Research Associates, Inc., dba NERA Economic Consulting (NERA), received the highest ranking score and was recommended for award by the evaluation committee. NERA is a global firm of economists who work within various marketplaces. Founded in 1961, the firm provides economic analysis and advice to governmental entities, corporations, and law firms among others. NERA's expertise in understanding the legal challenges to Minority and Women Business Enterprise programs and expertise in undertaking statistical analysis will allow the firm to present legally-defensible study findings and policy recommendations to the City for its SBEDA Program.
This contract will be awarded in compliance with the SBEDA Program, which requires contracts to be reviewed by a Goal Setting Committee to establish a requirement and/or incentive unique to the particular contract in an effort to maximize the participation of small, minority, and women-owned business enterprises in performing the contract scope of work. The Goal Setting Committee applied the SBE Prime Contract Program and M/WBE Prime Contract Program tools to the solicitation. NERA did not receive any preference points. The Goal Setting Committee also set a seventeen percent (17%) M/WBE subcontracting goal. NERA has committed to 17.61% M/WBE subcontractor participation. The Local Preference Program was applied in the evaluation of responses received for this contract; however, the highest ranked firm is not a local business.
The Veteran-Owned Small Business Preference Program does not apply to this contract since it was solicited prior to the January 15, 2014 effective date of the program.
This contract was presented to the High Profile Contract Committee for a post-solicitation briefing on March 18, 2014.
ALTERNATIVES:
Delay or failure to approve a contract for the Disparity Study consultant falls short of compliance with the SBEDA Ordinance requirements.
FISCAL IMPACT:
This ordinance authorizes an agreement with National Economic Research Associates in an amount not to exceed $750,000. Funds in the amount of $375,000 are included in the FY 2014 Adopted Budget. Additionally, $375,000 is planned in FY 2015 to support this contract, contingent upon City Council approval of the FY 2015 Budget.
RECOMMENDATION:
Staff recommends approval of this Ordinance authorizing an agreement with the National Economic Research Associates, in an amount not to exceed $750,000, to conduct a Disparity Causation Analysis Study for a one year period.