Item No. 9d supp Meeting Date: June 12, 2018 Diversity in Contracting Diversity In Contracting Division Goal Setting Contracting Organizational Structure Outreach and Inclusion Monitoring, Reporting & Evaluation Promoting Equity in Contracting 2 Purpose and Goal Advance equity and address contracting disparities by increasing the utilization of Women Minority Business Enterprises and other disadvantaged firms Goals: 1. 2. Triple the number of WMBE firms doing business with the Port Increase to 15% the amount of spend on WMBE contracts within 5 years Policy Requirements: - Set Division level goals and establish Annual Plans - Develop Contracting Methods & Tools - Provide Outreach and Technical Assistance - Address Organizational Structure/Roles and Responsibilities - Establish Compliance Elements - Conduct Monitoring, Reporting and Evaluation 3 Key Milestones Time Frame May 2018 Activity Define elements of Diversity in Contracting (DIC) Program:  Establish executive level accountability  Establish organizational and governance structure  Divisional goals approach  Contracting Mechanisms June 2018 Application to contracting and procurement Kick-off community meetings and messaging July 2018 July - November 2018 September- October 2018 October 2018 January 2019 January-February 2019 January February 2019 End 2019 Tools developed for setting division/department goals available Pilot WMBE contracting and procurement/apply lessons learned Divisions/Departments establish goals Executive/key leadership training (performance goals identified) Management/staff performance goals established All divisions submit Annual Plan Annual program evaluation (including lessons learned) Prior year reporting to Commission (annually) Internal audit program review 4 Organization & Accountability Completed to date:  Discussed alignment with broader Port equity work  Evaluated organization models at City of Seattle and other jurisdictions  Completed evaluation of short term staffing needs Next Steps: • Organization Ownership and Accountability October 2018 Accountability Management responsibilities established Q4 2018 • Resources Identify staff and tools needed for success Q3 2018 • Establish team to finalize organizational charts and management responsibilities for overall program Develop training materials to orient ELT and Port leadership about program goals and requirements Synch with ePerformance for 2019. 5 Port of Seattle Priorities Aviation Maritime Economic Development Equity COMMUNITY Sustainability ENVIRONMENT Safety/ Resiliency SAFETY / PREPAREDNESS / RESILIENCY Fiscal Responsibility FINANCIAL MANAGEMENT Lines of Business / Operations / Asset Management Corporate Department/Division Goal Setting Completed to date:  Spending tables and tracking tools by Department/Division have been initiated  Initiated piloting process to link aspirational goal setting to budget process  Identified "departments" for goal setting purposes Identified Departments and ownership Division Assessment Define "Divisions" Process Alignment Align Goal Setting and Tracking with Established Divisions Q2 2018 Establish SOP's Standardized methods for goal setting Internal training Q3-Q4 2018 Annual Plans Goal setting and division plans for inclusion In line with budget season Q3-Q4 2018 May 2018 Next Steps • Pilot goal setting process • Provide orientation to staff regarding WMBE goal setting • Establish WMBE goals during budget development 7 Annual Plan Cycle Aligned with annual budget process Departments identify future procurement needs Liaisons support goals and strategies Departments define aspirational goals for said procurements, and identify engagement strategies Recorded by Division for accountability and tracking Goals and strategies are consolidated into Annual Division Plans Annual Plan provided to Commission with prior year report Division goals and strategies are rolled up into the Port's Annual DIC (WMBE) Plan 8 Outreach and Inclusion Completed to date:  Development of Supplier/Vendor database in progress  Engagement with external agencies to expand suppliers  Doubled potential suppliers in contact database Outreach & Education Expand messaging and outreach Q3 2018 Public and Community Partners Establish WMBE Stakeholder Group Q3 2018 Expanded Assistance Develop Collaborative Offerings Q3 2018 Database Development Develop Publicly Searchable & Accessible DB Go live Q1 2019 Strong Results So Far 2016 2017 Percent 5.3% 8.8% Firms 118 200 % Change 66% 69% Next Steps • Continued database development • Continued PortGen offerings • Organize WMBE stakeholder group 9 Outreach Examples • • • • LinkedIn promotions During Small Business week we promoted small businesses that are part of the Port family and our PortGen workshops. Web traffic to our Port small business page increased 10% during "Small Business Week." Social media posts reached more than 11,227 people. Quarterly success stories are being developed. 10 Monitoring, Reporting & Evaluation Completed to date:  Spending tables and tracking tools by Department/Division have been initiated  Process defined for ePerformance alignment to support accountability  Diversity in Contracting policy elements have been tied to the Long Range Plan Compliance Mechanisms and Roles defined Q2-Q3 2018 Data & Dashboards Data tools developed to support reporting Q2-Q3 2018 Visibility Progress available internally and externally Q3 2018 Program Review Internal Audit conduct assessment Q4 2019 Next Steps: • Refine roles and complete responsibility matrix • Develop dashboard structure • Establish tools for current and accurate reporting visible to all audiences 11 Contracting Completed to date:  Inclusion plans for Construction and Service Agreements have been drafted  Initial outreach to contractor and consultant associations  Identified procurement to pilot in 2018 Application Define roll-out plan Training & Pilot Inclusion Plan Internal process education Outreach to Community Meet with ACEC, AGC, & WMBE Community May 2018 Training - July 2018 Pilot - Q3 & Q4 Q3 2018 Next Steps • Train staff for implementation • Hire WMBE specialist • Define & document lessons learned from initial procurements 12 Small Dollar Contracts Dollar Value P-Card Direct Buy 3- Quote < $5K < $50K < $150K (Purchasing) < $200K (Consulting) Ability to Purchase Direct with Firm CPO Manages Procurement • • • • Greatest ability to directly influence utilization of WMBE firms Port-wide P-Card training begins July 2018 Encourage direct purchasing from MWBE firms Reminder: Port cannot provide an award preference based on WMBE status 13 Inclusion Plan - Consulting Services Port of Seattle Inclusion Plan (IP) Elements • Establishes aspirational goal per procurement • Evaluates Inclusion Plan during selection • Inclusion Plan is part of award decision 1. Commitment to MWBE Proposer • Defines Inclusion Plan for the contract • Outreach WMBE early during procurement • Active engagement: • Include WMBE in the work • Manage subconsultants & prompt pay 2. Evaluation of past performance 3. Key person to manage IP 4. Proactive management plan 14 Inclusion Plan - Low Bid Construction Port of Seattle • • Establishes aspirational goal per contract Evaluates Inclusion Plan as a matter of responsibility Bidder • • • • • Defines bidder's Inclusion Plan (IP) Bidder can supplement IP prior to responsibility decision MWBE commitment by firm or by percentage Affirmative Efforts = necessary and reasonable action to achieve the aspirational goal. Active engagement: • Include WMBE in the work • Manage subconsultants & prompt pay Inclusion Plan Elements 1. Commitment to MWBE; or 2. Demonstrated affirmative efforts; & 3. Key person to manage IP; & 4. Proactive management plan 15 Challenges and Recommendations 1. Historic data insufficient to use a "historic plus" approach for construction - Recommendation: For first 2-3 years (2018-2020) identify aspirational goals on a contract by contract basis. Move to historical plus approach after utilization and data has improved 2. Concerns about increased costs for purchases and time associated with getting quotes for P-Card & Direct Buys - Recommendation: CPO and Legal will provide training. Port encourages utilization of MWBE firms, cost reasonableness and fiscal accountability. 16 Challenges and Recommendations 3. Responsibility for overall effort & alignment with Port-wide equity work - Recommendation: Assign small team to address alignment to ensure Diversity In Contracting does not lose momentum 4. Concerns about increased project costs/capital costs associated with implementation - Recommendation: Establish team led by CDD to determine how to incorporate cost adjustments 17 Challenges and Recommendations 5. Concerns about increased procurement time to address inclusion plan and protests - Recommendation: Develop process with clearly defined roles. Train dedicated MWBE Compliance Officers to address Inclusion Plan review. Include additional 30+ days for major construction for review, revisions, and potential challenges/protests. 18 Looking Forward 1. Continue to gear up to implement Diversity in Contracting across the Port 2. Increase outreach and assistance - work with public affairs to drive interest in program 3. Pilot procurements and contracting to establish basic practices • Apply "lessons learned" from key projects 4. Establish One Port accountability, governance and evaluation 5. Assess, Adjust & Improve Committed to Diversity and Inclusion 19