SAVANNAH-CHATHAM COUNTY PUBLIC SCHOOL SYSTEM DISPARITY STUDY FINAL PRESENTATION
Miller3 Consulting, Inc., Atlanta, GA November 7,
2012
Acknowledgements
Miller3 Consulting, Inc.
November 7, 2012
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Miller3 Consulting, Inc. wishes to acknowledge the
leadership and commitment of
SCCPSS
Purchasing Department
who have accepted the challenge of participating in the
Disparity Study process in the best interest of those
whom they serve.
Disparity Study Project Team
Miller3 Consulting, Inc.
November 7, 2012
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Miller3 Consulting, Inc.
Custom Research Associates
MJNH Consulting
Miller3 Consulting, Inc.
November 7, 2012
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Miller3 Consulting, Inc.
The Leader in MWBE Analysis and Design
Disparity study in Hillsborough County in 1988 foreshadowed Croson decision in
1989
Conducted disparity studies for more than 121 public sector entities
Conducted MBE Analysis in 75 Cities for MBDA
Headquarters
M3 Consulting
Research Studies
M3 Consulting
Disparity Studies
DEFINITION AND LEGAL FRAMEWORK OF A DISPARITY STUDY
Purpose of the Disparity Study
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Address recent court standards
Provide guidance on utilization of race-conscious and race-neutral techniques in procurement activity design to increase MWBE participation
Legal Framework
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Richmond v. Croson requires:
• Building a factual predicate
• Considering race-neutral alternatives
• Designing a narrowly tailored program
Adarand v. Pẽna set standard for federal programs
MILLER3’S METHODOLOGY MEETS THE STANDARDS OF CROSON AND ITS PROGENY
DISPARITY STUDY STATISTICAL FINDINGS
SCCPSS Disparity Study Methodology
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Industry Analysis
Legal Analysis Procurement and M/WBE Program
Operational Analysis
Statistical Analysis
Relevant Market
Availability Analysis
Utilization Analysis
Disparity Ratios
Regression and Capacity Analysis
Market Analysis
Anecdotal and Survey Analysis
Race-Gender Neutral Analysis
Private Sector Analysis
Conclusions Finding of discrimination, passive or active, if
any Identification of barriers to M/WBE
participation
Recommendations Race conscious and race neutral
recommendations Post study support and
implementation
What is the Relevant Market
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Relevant Market Definition
Geographical area encompassing most of a public entity’s commercial activity
Miller3 focuses on where 70-75% of the commercial activity occurs
Relevant Market Determination
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Procurement Type Relevant Market
Architecture & Engineering 12-Counties
Construction 12-Counties
Material Equipment & Supplies Nationwide
General Services Nationwide
Professional Services Nationwide
Source: M³ Consulting
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Bidders & Subbidders
Prime & Sub Awardees
Vendors
Certified DBEs
SCCPSS RWASM Availability
SCCPSS RWASM
Other Public Entities’
Vendors, Prime Bidders
and Subbidders,
Prime & Sub Awardees
DBEs
Public Sector Availability
Census
Dun & Bradstreet
Reed Construction Data
Marketplace Availability
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M³ Consulting’s RWASM Model
Premise: Those firms who are Ready, Willing and Able to do business with the SCCPSS
• Ready—firms that exist
• Willing—firms understand the requirements of the work being requested and want to perform the work
• Able—firms with the capacity to do the job
Difference Between Actual and Potential Availability
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Actual
Potential
R W A
R
W
A
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M3 Consulting
Availability
Model
SCCPSS-Specific RWASM Availability
1. Prime and subbidders by contract category for each year of study period
2. Prime and subbidders by contract category for fewer years
3. Prime bidders, subawardees, prime awardees (informal purchases) for each year of study period
4. Prime bidders, subawardees, prime awardees (informal purchases) for fewer years period
5. Prime bidders, subawardees, prime awardees (informal purchases) + Vendors + certified DBEs
for fewer years period
RWA Availability
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Summary Table - RWASM Availability Level 3 vs Census by Relevant Market
Savannah-Chatham County Public School System
Ethnicity
A&E Construction Professional
Services
Non-professional
Services Goods & Supplies
LEVEL 3 Census LEVEL 3 Census LEVEL 3 Census LEVEL 3 Census LEVEL 3 Census
% % % % % % % % % %
Non-minority 54.55 - 68.33 89.01 88.49 72.94 79.62 66.73 91.26 74.34
American Indian 0.00 - 0.00 0.26 0.00 0.22 0.32 0.00 0.22 0.10
Native Hawaiian and
Other PacificIslander - - 0.07 - 0.00 - 0.00 - 0.00
Asian American 0.00 - 0.83 0.00 2.20 2.98 2.87 10.60 1.08 8.39
Black American 13.64 - 15.00 2.96 3.21 4.81 6.69 3.37 1.29 2.03
Hispanic American 4.55 - 0.00 1.95 0.00 1.08 0.96 3.22 0.38 1.15
Non-designated MBE 0.00 - 0.00 - 0.00 - 0.00 - 0.11
MBE 18.18 - 15.83 5.25 5.41 9.09 10.83 17.19 3.07 11.66
WBE 18.18 - 14.17 5.74 5.58 17.97 9.55 16.07 5.29 13.99
Non-designated M/WBE 4.55 - 0.83 - 0.34 - 0.00 - 0.11 -
M/WBE 40.91 - 30.83 10.99 11.34 27.06 20.38 33.27 8.47 25.66
DBE 4.55 - 0.00 - 0.17 - 0.00 - 0.22 -
SBE 0.00 - 0.83 - 0.00 - 0.00 - 0.05 -
Total 100.00 - 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Source: SCCPSS Bid and Award data; AP/PO Vendors; M3 Consulting.
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Definition:
The actual procurement award or purchasing activity
of the SCCPSS.
Data Sources:
Contracts Data
Payments Data
Accounts Payable and Purchase Orders
Utilization Analysis
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Federal and non-Federal activity
Procurement categories
Competitive and non-competitive thresholds
Race gender and ethnicity
Prime and subcontractor utilization (separately)
Regional relevant market activity
Specialties
Utilization Activity Measured by…
Utilization by Industry
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Summary Table - Utilization by Relevant Market
SCCPSS
Relevant Market; FY 2004 – 2008
Ethnicity
A&E Construction Professional
Services
Non-professional
Services Goods & Supplies
%
%
%
%
%
Non-minority 29.55 21.68 97.98 98.76 97.48
American Indian 0.00 0.00 0.00 0.00 0.01
Asian American 0.00 0.34 0.07 0.02 0.26
Black American 31.72 6.67 0.08 0.72 0.07
Hispanic American 0.00 0.00 0.01 0.00 0.00
Non-designated MBE 0.00 0.00 0.00 0.00 0.00
MBE 31.72 7.01 0.16 0.74 0.34
WBE 38.73 63.12 0.14 0.32 2.13
Non-designated
M/WBE 0.00 0.00 0.06 0.00 0.03
M/WBE 70.45 70.13 0.36 1.06 2.56
DBE 0.00 8.19 1.65 0.17 0.02
Total 100.00 100.00 100.00 100.00 100.00
Source: Source: SCCPSS Purchase Order Data, Accounts Payable Data and Contract Award data;;M3 Consulting
Miller3 Consulting Disparity Ratio© Calculation
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The ratio of the percentage of M/WBEs in the market
(availability) compared to the proportion of dollars spent with
those businesses (utilization)
D =
A
U
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Miller3 Disparity Ratio Concept©…
A
U Non Significant
Underutilization
Non Significant Overutilization
Significant
Overutilization
Significant
Underutilization
1.00
RWA Statistical Disparity
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D = U
A
* = Statistical significance
SCCPSS Disparity Ratios
A&E Construction Professional
Services
Non-professional
Services Goods & Supplies
Asian American ND Under Under** Under** Under**
Black American Over* Under Under** Under** Under**
Hispanic American Under ND ND Under** Under**
American Indian ND ND ND Under Under**
WBE Over* Over* Under** Under** Under**
DISPARITY STUDY QUALITATIVE FINDINGS
Procurement Analysis
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SCCPSS Self-certification impacts accurate M/WBE reporting
No Comprehensive
outreach, matchmaking or
technical assistance
Does not use race neutral
methods or race conscious goals
to achieve MWBE participation No buyer
evaluations on efforts to include
M/WBEs
No forecasting of opportunities
Consortium-wide Anecdotal Analysis
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White male firms viewed goals as set-asides and feel they are forced to use MWBEs for work they could do themselves.
Local firms being locked out
List MWBEs, but do not use
Creating and utilizing WBE fronts to meet goal requirements
Prime contractors utilize firms with whom they are familiar
Private Sector Analysis Based on City of Savannah Building Permits
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Based on Dollars
Based on Counts
$ % # %
Non-minority 1,000,754,741 95.74 8,112 88.70
American Indian 37,075 0.00 31 0.34
Asian American 2,958,502 0.28 55 0.60
Black American 4,035,516 0.39 543 5.94
Hispanic American 101,398 0.01 6 0.07
MBE 7,132,491 0.68 635 6.94
WBE 37,346,740 3.57 382 4.18
Non-designated
M/WBE 82,400 0.01 9 0.10
M/WBE 44,561,631 4.26 1,026 11.22
DBE 3,200 0.00 7 0.08
Total 1,045,319,572 100.00 9,145 100.00
Additionally, 27 public sector permits issued to white males; one permit valued at $33,000, 26 without values
SCCPSS OPPORTUNITIES TO BE CONSIDERED
Croson Requirements
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Race-conscious Programs
In conjunction with or following race neutral efforts
Sunset program
Graduation provisions
Flexible goals
Tied to MWBE Availability
Limit impact on third parties
Limited to groups which have suffered discrimination or have shown significant disparity
Race Neutral Program Options
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Race-neutral
Programs
(with or without race conscious programs)
Small business goals
Procurement adjustments
Non-discrimination policies
Flexible goals
Matchmaking
Outreach (not focused on MWBEs only)
Management, Technical and Financial Assistance
Race-conscious Goal-Setting Program Recommendations
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D = U
A
* = Statistical significance
A&E1 Construction1 Professional
Services2
Non-professional
Services2 Goods & Supplies2
Asian American No No Yes Yes Yes
Black American No Yes Yes Yes Yes
Hispanic American No No No Yes Yes
American Indian No No No No Yes
WBE No No Yes Yes Yes
Procurement Practice Suggestions
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Conduct annual budgeting and forecasting to facilitate matchmaking
Revamp vendor registry
Maximize discretion at informal level
Monitor contracts for concentration
Operational adjustments to increase accountability for MWBE participation
Utilize goal setting
Promoting MWBE at both the prime and subcontractor level
M/WBE Program Adjustments
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Develop an MWBE based on 6 essential elements
Outreach and Matchmaking
Certification
Technical Assistance
MWBE Inclusion in Bid Opportunities
Contract Award Review
Organizational Performance Review
MWBE Program for Large Construction and Development Projects
Maximize Race Neutral Programs
Sunset Clause
Nondiscrimination Policy
Post Study Support Services
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Program Design • Certification, Goal-Setting and ATM Formula, Technical Assistance,
Matchmaking, Enhancing MWBE & Business Development Initiatives, Bulk Purchasing, Non-Discrimination Policy
Communications Plan • Stakeholders, Community
Legal Defense • Litigation Support, Expert testimony
Monitoring & Tracking • Procurement Audits, Evaluation, Contract Compliance
On Behalf of the Team, Thank You!
Miller3 Consulting, Inc.
November 7, 2012
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Miller3 Consulting, Inc.
Custom Research Associates
MJNH Consulting
SAVANNAH-CHATHAM COUNTY PUBLIC SCHOOL SYSTEM DISPARITY STUDY FINAL PRESENTATION
Miller3 Consulting, Inc., Atlanta, GA November 7,
2012