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Goals Program Background & Timeline

November 2014: BoE adopts Equitable and Inclusive Contracting Policy (ACE) after Disparity Study found justification to implement a narrowly tailored program targeted at increasing participation of Minority and Women owned business (MWBE) suppliers for construction and construction-related professional services.

February 2015: MGT releases final report; Board of Education adopts aspirational goal of 24% participation for bond funded construction related projects; DPS hires staff and launches goals program.

Certified MWBE firms are defined as business:

• Owned or controlled by Native Americans, Asian Americans, African Americans, Hispanics, or women• Located in the Denver Aurora Combined Statistical Area (as defined by the U.S. Office of Management

and Budget)*; Holding a certification from the City and County of Denver, the Mountain Plains Supplier Development Council, the Women’s Business Enterprise Council, or another governmental or industry agency acceptable to Owner. A business is deemed owned by whoever holds at least 51% of the equity interest in the enterprise. A business is deemed controlled by its chief executive officer (if the business is a corporation), its managing partner (if business is a partnership), the proprietor (if the business is a sole proprietorship), and in all cases by the person or persons with ultimate decision-making authority in the ongoing, day-to-day operation of the business. A business is deemed located in the Denver Aurora Combined Statistical Area if its headquarters or a local office is located within the area.

*The Denver Aurora CSA consists of the following counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, Park and Weld.

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**Disparity index is the ratio of actual spend with MWBE firms divided by the available MWBE firms multiplied by 100. A disparity index score of 100 indicates no disparity. A disparity index score below 80 indicates a substantial level of disparity.

Contract Category MWBE Disparity Index**

Construction Prime Contractors 56.74

Construction Subcontractors 54.28

Architect & Engineer Prime Contractors 80.86

Architect & Engineer Subcontractors 84.63

• Because contract categories have different expertise, disparity differs by prime, sub, architects, and general contractors based on availability of MWBE firms in the respective market

• Index under 80 indicated significant disparity. Index over 100 indicates overutilization

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2014 Disparity Study Results

Activities since Policy ACE passed in November 2014

Pursuant to Board policy, DPS staff has taken the following steps:

• Established DPS goals committee and program• Set district aspirational goals at 24% participation of MWBE firms- BoE

approved in February 2015• $11.6 million paid to MWBE firms since goals program, accounting for

34.4%• As of April 2016, exceeding aspirational goals• Updated bid documentation to include MWBE commitment.

Contractors who did not meet utilization commitment are subject to sanctions

• Hired staff to manage compliance and data system (B2G) • Goals set on 126 projects

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Project Goals To Date

126 goals set as of 4/27/16• 30 Construction Related Professional Services

(Architects & Engineers- A&E)• 96 Construction General Contractors (GC)

As of 4/18/16• 33.4%* of 2012 Bond-funded construction dollars from

projects with goals established and dollars spent (starting in February 2015) went to MWBE firms

• 54 of 126 projects have payments made• Accounts for $11.6 million in payments

*Note: We expect this percentage to vary over time based upon the type of work being performed, and will continue to target and track against the aspirational goal of 24%

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9.70% 9.50%

8.90% 7.00% 24%

33.40%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

MGT RecommendedAspirational Goal- Construction

MGT RecommendedAspirational Goal- CRPS

DPS Aspirational Goal 2015-2016 Utilization to Date

Goals & Actual Spend

MBE WBE MWBE

Progress to Aspirational Goal

$11.6 million to M/WBE firms* for Bond financed goals projects

Utilization: Payments to MWBE contractors divided by total payments. Anticipate exceeding aspirational goal

after projects close out. *From 2/2/15- 04/18/16 6

2012 Bond Payments Distribution(Jan 1, 2013 – Apr 18, 2016)

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13% 3%

12%

72%

2012 Bond Utilization

MWBE Sub-Contractors

MWBE Prime Contractors

Non-MWBEs Sub-Contractors

Non-MWBE Prime Contractors

$52,483,625 to MWBE Firms

2012 Bond Post-Goals Program Payment Distribution (Feb 1, 2015 – Apr 18, 2016)

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30%

4%

24%

42%

Post Goals Utilization

MWBE Sub-Contractors

MWBE Prime Contractors

Non MWBE Sub-Contractors

Non MWBE Prime Contractor

$11,646,133 to MWBE Firms

2012 Bond MWBE Supplier Utilization

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14.1%

33.4%

16.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Pre Goals Program Post Goals program Pre & Post Goals

2012 Bond MWBE Utilization

Goals Committee(Established February 2015)

Goals Committee Members Nine (9) member goals committee of external stakeholders in construction or architectural/engineering services. Committee members serve staggered 2 and 3 year terms.

Goal Setting Process • Goals Committee receives project scope breakdown and data showing market

availability • Senior Construction Services staff member presents project scope breakdown and any

special requirements during Goals Committee meeting • Goals Committee member motions for project goal, majority vote to recommend goal • Recommended project goals and disclosure of Committee member interest in projects

are documented • Committee Chair (Trena Deane) records and approves recommended goal • The Project Manager has opportunity to request/justify amendment of goal to Chair

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Next Steps

• Continue to evaluate processes and gather feedback from stakeholders

• Standardize reporting – BOE, BDOP, community• Continued communication with supplier community on

upcoming events• Continued improvement on operating processes• Annual report out planned for September 2016• Draft a program manual• Continue looking for best practices being used by other

government entities• Develop SBE sheltered market program• Evaluate other program improvement opportunities (e.g.,

workforce development)

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Section A - Foundations and Basic Commitments Title- Equitable and Inclusive Contracting PolicyNumber- ACE Status- Active Legal Adopted- November 20, 2014

Pursuant to the Board of Education’s Resolution 3457, school district administrators and officials are to develop a policy to increase in the school district’s bond construction program and other construction related services the utilization and participation by minority and women owned businesses (“MWBEs”).

Accordingly, school district administrators and officials subsequently hired MGT of America to examine the school district’s procurement practices and determine whether any current school district policies and procedures have been, or are barriers to meaningful participation by MWBEs. The MGT disparity study presented to the School Board of Education identified that current practices contributed to the underutilization of ready, able and willing MWBEs in the construction industry operating in the Denver Metropolitan area.

The Board of Education, upon the receipt and acceptance of the MGT disparity study, authorizes the Superintendent or designated representative(s) to take all necessary and reasonable action required to ensure that all businesses, principally those identified as underutilized MWBEs, are afforded a fair and equitable opportunity to provide their construction and construction-related services and goods to the school district.The Board of Education directs the Superintendent or designated representative to modify, change or amend any existing policy, practice, and/or procedure that has been a barrier to participation by MWBEs, or that can increase the utilization of MWBEs.

The Board of Education hereby delegates to the Superintendent or designated representative(s) the authority to take all necessary and reasonable steps the law permits to ensure the full, equitable participation of any and all qualified MWBEs, and small, and local businesses.

This Policy shall apply only to the solicitation of construction and construction-related supplies, services, and contracts procured in accordance with the School Board purchasing and procurement policies and the applicable laws of Colorado. To the extent permitted by applicable state and federal laws, this policy is intended to address the implementation of construction and construction-related programs to remediate the disparity and underutilization of MWBEs by developing a race and gender goals program, as well as a race and gender neutral program.

Appendix AEquitable and Inclusive Contracting Policy

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Appendix B: 2012 Bond Pre-goals Program MWBE Utilization (Jan 2013 - Jan 2015)

Pre-Goals program Implementation Construction & AE ServicesPayments to prime-

contractors: Total $290,238,387* 86.4% verified*

Payments to sub-contractors (A): MWBEs Subtotal $31,633,823* 76.8% verified*

Not MWBEs Subtotal $28,716,771

Total All Subs $60,350,594

Primes Self Performing (B): MWBEs Subtotal $9,203,669* 69.7% verified*

Not MWBEs Verified $220,684,123

Total All Primes Self $229,887,792

MWBE Utilization/ ALL Payments (A+B)

14.1% $40,837,492

*Payments from DPS to primes were verified though our accounting system (Lawson). Verified percentages for payments to MWBEs (as sub-contractors or self-performing primes) based on written verification via e-mail from responsive MWBE sub-contractors and MWBE self-performing primes contractors.

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Appendix B: 2012 Bond Post-Goals Program MWBE Utilization (Feb 1, 2015 – Apr 18, 2016)

Post Goals Program Implementation Construction & AE Services

Payments to Prime Contractors: Total $34,865,561

Payments to Subcontractors (A): MWBE Subtotal $10,409,624

Non MWBE Subtotal $8,455,562

All Total Subcontractors $18,865,186

Self Performing Primes (B): MWBE Subtotal $1,236,509

Non-MWBE Subtotal 14,763,867

Awards & Utilization All Total $16,000,376

MWBE Utilization/ ALL Payments (A+B) 33.4% $11,646,133

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Appendix B: 2012 Bond Total MWBE Utilization / Payments (Jan 2013 – Apr 18, 2016) Summary

Pre & Post Goals Program Construction & AE ServicesPayments to PrimeContractors:

Total $325,103,948

Payments to Subcontractors (A):

MWBE Subtotal $42,043,447

Non MWBEs Subtotal $37,172,333

Total All Subs $79,215,780

Primes Self Performing (B):

MWBE Subtotal $10,440,178

Non MWBE Subtotal $235,447,990

Total All Primes Self $245,888,168

MWBE Utilization/ ALL Payments (A+B) 16.1% $52,483,625

Since the beginning of the 2012 Bond Program, nearly $52.5 million (16.1% of all payments) has been paid to MWBE Prime & Sub Contractors