Template revised September 22, 2016; formatting update October 19, 2016.
COMMISSION
AGENDA MEMORANDUM
Item No.
9d
BRIEFING ITEM
Date of Meeting
June 12, 2018
DATE: May 4, 2018
TO: Stephen P. Metruck, Executive Director
FROM: Teresa Delicino, Director, Small Business Development Department
Nora Huey, Director, Central Procurement Office
Dave McFadden, Managing Director, Economic Development
SUBJECT: Diversity In Contracting Program
EXECUTIVE SUMMARY
On January 9, 2018, Port Commissioners adopted a new Diversity in Contracting policy,
Resolution 3737 that drives equity in Port contracting. The new policy addresses historical
disparities in women and minority business enterprise (WMBE) participation in Port
contracting.
The Resolution required that the Executive Director shall “within 120 days of passage of this
policy directive, develop a Diversity in Contracting Program that identifies affirmative efforts to
afford women and minority businesses the maximum practicable opportunity to meaningfully
participate on Port contracts and to achieve the Port-wide goals.” This briefing updates the
Commission on work done to develop the program and implement Resolution 3737, the Port’s
new Diversity in Contracting (DIC) policy.
Staff has taken significant steps to develop the DIC program. At the same time, there are still
some challenges and issues needing resolution as we implement the new program over the
next 6-12 months.
The Port Commission established utilization goals for both the amount of contracting dollars
paid to WMBE firms as well as the number of WMBE firms under contract to the Port:
5 year goals:
1) Triple the number of WMBE firms that contract with the Port
2) Increase to 15% the percentage of dollars spent on WMBE contracts
This new policy also directs the establishment of:
Executive level accountability that drives performance across the Port
Port-wide goal setting and reporting processes, requiring Divisions/Departments to
establish Annual WMBE Plans that set aspirational goals and performance targets
Clear lines of responsibility and accountability for implementation with designated
WMBE liaisons for each division
COMMISSION AGENDA Briefing Item No. __9d__ Page 2 of 6
Meeting Date: June 12, 2018
Template revised September 22, 2016.
Template revised September 22, 2016.
Enhanced compliance and tracking of key performance objectives and incorporation of
WMBE goals into the Port’s Long Range Plan
Categories of contracts where inclusion plans and other tools will be used
Implementation and monitoring procedures to ensure prompt payment and change
order processes
Expanded technical assistance for WMBE firms, coordination with external partners, and
support for internal training to Port staff
Organization and Accountability:
Clear lines of responsibility are necessary to ensure smooth and consistent implementation of
the Diversity in Contracting policy. Structural alignment and articulation of job functions that
support tasks and roles is necessary for the success of this effort. As these roles and
responsibilities become further detailed, recommendations to organizational structure and
staff resources will follow, working with executive leadership to finalize roles and
responsibilities, ownership and accountability, and address budgetary needs for new resources.
Completed Actions Remaining
Timeline
Discussed alignment with
broader Port equity work
Evaluated organization models
at City of Seattle and other
jurisdictions
Completed evaluation of short
term staffing needs
Organizational charts and ownership
structure defined
Identify staff and resources needed for
success
Internal training for Port leadership on
program, goals and requirements
Management responsibilities and
accountability defined
Q3 2018
Q3 2018
Q4 2018
Q4 2018
Division Goal Setting and Annual Plans:
To establish aspirational goals by Division, “divisions” needed to be clarified and a strategy
developed to ensure goal setting and reporting would align systematically. By utilizing existing
processes, divisions can develop their Annual Plan (spend projections and engagement
strategies) during the annual budget forecasting process. Division liaisons will provide critical
support in establishing aspirational goals and developing engagement strategies. Development
of data tracking and dashboard tools, aggregated and disaggregated by division and for the Port
overall, has been initiated (see Monitoring, Reporting and Evaluation below)
COMMISSION AGENDA Briefing Item No. __9d__ Page 3 of 6
Meeting Date: June 12, 2018
Template revised September 22, 2016.
Template revised September 22, 2016.
Completed Actions Remaining
Timeline
Divisions” have been defined
Spending tables and tracking
tools are aligned with Divisions
Initiated process to link
aspirational goal setting to
budget process
Establish standardized goal setting
methods and initiate internal
education
Identify division liaisons and
resources to support goal setting and
inclusion efforts
Divisions/Departments establish DIC
goals as part of budget process
Annual Plans and Port-Wide goals
submitted
July 2018
Aug. - Oct. 2018
Q3 2018
Q4 2018
Jan. Feb. 2019
Outreach, Supplier Diversity and Technical Assistance:
Development of an improved Supplier Database and Procurement System was approved by
Commission in 2017 and is currently under development. This system will enable collection of
demographic data (gender, race, etc.) and business data of vendors. Searchable and accessible
to internal and external audiences the system will become a vehicle for identification of
available firms, providing us the means to understand and manage our suppliers. To reach
diverse communities, the Small Business Development department (SBD) coordinates
educational opportunities, outreach events and communications while looking to expand
offerings in cooperation with public partners and community agencies. Division liaisons shall
also serve to support outreach, training, technical assistance and engagement between the Port
and the business community. The development of procurement forecasting tools has enabled
us to make opportunities visible to the business community.
Completed Actions Remaining
Timeline
Contact database and
communications platform
established
Expanded engagement with
external agencies to support
supplier diversity and
outreach
Continued development of
PortGen offerings
Current and future
procurement opportunities
have been made visible
Supplier/Vendor database in
progress
Expand messaging and outreach
Develop collaborative offerings with
resource partners
Establish quarterly community
engagement (small business group)
Searchable database accessible
internally and externally
Q3 2018
Q3 - Q4 2018
Q4 2018
Q1 2019
COMMISSION AGENDA Briefing Item No. __9d__ Page 4 of 6
Meeting Date: June 12, 2018
Template revised September 22, 2016.
Template revised September 22, 2016.
Monitoring, Reporting and Evaluation:
Staff has made significant strides to improve data integrity. Dashboard development for
measuring utilization by division is underway which will enable quick assessment of progress
toward goals, both aggregated and disaggregated by division and for the Port overall. Aspects
of the Diversity in Contracting policy have been fully tied to the Long Range Plan as a reporting
instrument. Human Resources has identified methods to support performance and
accountability through existing tools such as EPerformance. Internal Audit is prepared to assess
program efforts in their 2019 work plan.
Completed Actions Remaining
Timeline
Spending tables and tracking
tools by Department/Division
have been initiated
Process defined for
ePerformance alignment to
support accountability
Diversity in Contracting
elements have been tied to
the Long Range Plan
Data dashboard and monitoring tools to
be further developed
Compliance mechanisms, prompt pay
and change order processes and roles to
be further defined
Internal and external visibility
mechanisms to be developed to show
progress
Internal Audit to conduct programmatic
assessment
Q2-Q3 2018
Q2 – Q3 2018
Q3 2018
Q4 2019
Contracting and Inclusion Plans:
The Central Procurement Office (CPO), working with Small Business, Legal, Capital Development
and others, has developed a program that will implement Diversity in Contracting into
construction, consulting, and purchasing procurements. The Port has good faith belief that the
program described below is legal but recognizes there is risk that it may be challenged. This is a
completely new approach for the Port that requires development of new systems and
processes for implementation and compliance monitoring.
1. Major Construction Low Bid Procurements: As part of Contractor responsibility, Contractors
must submit an acceptable inclusion plan or they will be rejected as not responsible. For each
construction procurement, the Port will establish aspirational goals for MWBE utilization. The
Contractor’s inclusion plan may either commit to meeting the aspirational goal or provide
evidence of its affirmative efforts to use MWBE firms. Affirmative efforts mean that the bidder
has taken necessary and reasonable steps to achieve the aspirational goal; mere pro forma
efforts are not affirmative efforts. Commitment to the aspirational goal may be evidenced by
commitment to utilize certain MWBE firms for specified work and/or commitment to a
percentage of MWBE engagement in the performance of the contract. The inclusion plan will
COMMISSION AGENDA Briefing Item No. __9d__ Page 5 of 6
Meeting Date: June 12, 2018
Template revised September 22, 2016.
Template revised September 22, 2016.
also identify a company representative who will address affirmative efforts during contract
performance and issues such as prompt payment to all subcontractors.
2. Consulting & Other Service Type Procurements: The Port will establish aspirational goals for
MWBE utilization on contracts where there is a reasonable expectation of subconsulting.
Consultant will submit an inclusion plan with its proposal demonstrating commitment to
meeting the aspirational goal. Commitment to the aspirational goal may be evidenced by
commitment to utilize certain MWBE firms for specified work and/or commitment to a
percentage of MWBE engagement in the performance of the contract. The inclusion plan will
also identify a company representative who will address affirmative efforts during contract
performance and issues such as prompt payment to all subcontractors. During the evaluation
process, the Port will have the ability to discuss the inclusion plan and consultant may be given
opportunity to provide revised inclusion plan.
3. Purchasing Card (P-Card) Procurements & Direct Buys: The port has a P-Card program for
purchasing items less than $5,000. P-Card purchases are decentralized and made by individuals
throughout the Port. Direct Buys are procurements for less than $50,000. CPO is responsible
for all direct buys.
The Port will encourage P-Card Holders and CPO Buyers to purchase items from MWBE vendors
directly. P-Card purchases and direct buy purchases are meant to be quick efficient means to
buy low dollar value items. The Port does not mandate multiple quotes; however, the port may
seek multiple quotes as a means to validate price reasonableness and maintain fiscal
responsibility. In those circumstances, the Port must buy from the lowest priced vendor,
provided items are similar quality and delivery. The Port cannot give an MWBE vendor priority
over a lower prices non-MWBE firm.
4. Purchases Less Than $150,000. Port policy directs CPO to seek three quotes for goods and
services with a cost less than $150,000. This type of purchase is often referred to as Three
Quotes process. CPO will include MWBE vendors in the three quote process when we are
aware of qualified MWBE vendors.
Completed Actions Remaining
Timeline
Inclusion plans for
Construction and Service
Agreements have been
drafted
A roll-out plan for inclusion
plans has been defined
Payments for Category 1
procurements (under $50,000)
have been set to automatically
pay upon receipt
Internal training on Procurement
processes
Internal process education on
inclusion plans
Community outreach and education
Small and large procurements
identified for pilot projects
Q3 2018
Q3 2018
Q3 2018
Q3 2018
COMMISSION AGENDA Briefing Item No. __9d__ Page 6 of 6
Meeting Date: June 12, 2018
Template revised September 22, 2016.
Template revised September 22, 2016.
ATTACHMENTS TO THIS BRIEFING
(1) Presentation slides
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
January 9, 2018 Diversity in Contracting 2
nd
reading policy & passage of resolution 3737
December 19, 2017 Diversity in Contracting Policy Review
December 12, 2017 - Women and Minority Business Enterprise Policy Review
December 5, 2017 - Women and Minority Business Enterprise Policy Review
November 28, 2017 Women and Minority Business Enterprise Policy Review
October 24, 2017 - Women and Minority Business Enterprise Policy Review
July 12, 2017 Commission Budget Priorities, Building Economic Opportunity in
Underserved Communities
March 28, 2017 Small Business Development Update
March 22, 2016 Small Business Utilization briefing
December 14, 2014 Disparity Study briefing
August 19, 2014 Small Business Utilization briefing
January 26, 2010 Adoption of Resolution No. 3618 concerning small business utilization