City of -v-irginia Beach

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1 City of -v-irginia Beach VBgov.com OFFICE OF THE CITY MANAGER [757) FAX (757) MUNICIPAL CENTER BUILDING 1, ROOM COURTHOUSE DRIVE VIRGINIA BEACH, VIRGINIA February 17, 2012 The Honorable William D. Sessoms, Jr., Mayor Members of City Council Subject: Report of City Expenditures and Purchase Order Awards to Minority Vendors Dear Mayor and Council Members: Attached is the semi-annual Report on Expenditures and Purchase Order Awards to Minority Vendors by the City of Virginia Beach, as required by the City Council Resolution Setting a 10% Goal for Minority Participation in City Contracts, adopted on May 6, As indicated in the Report, City expenditures to minority vendors amounted to $5.7 million for the period beginning July 1, 2011 and ending December 31, 2011, representing 5.64% of total expenditures. It is interesting that while Non-CIP expenditures increased to 9.32%, CIP expenditures decreased to 2.11 %, reflecting the continued difficulty of minority firms to participate in construction projects. It is important to view these numbers in the context of two important actions of the City Council. On June 28, 2011 the Council provided a program to allow the waiver of bonds for non-transportation projects between $100,000 and $500,000. On September 27, 2011 the Council provided a DMBE-certified small business, including minority-owned, woman-owned, and disabled veteran-owned business, enhancement program. It will take some time to see the impact of these programs on subsequent expenditure reports, but these tools show the commitment of the City to reach its 10% goal for minority participation in City contracts.

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4 Mr. James K. Spore, City Manager Report on City Expenditures and Purchase Order Awards to Minority Vendors February 17, 2012 Page 2 Section 1 - Summary of Expenditures and Purchase Order Awards: Expenditures: City expenditures to minority vendors, adjusted for items not subject to competition (such as utilities, debt service, etc.) amounted to $5.7 million for the period, a decrease of 18.44% over the same period in FY2011. As a percentage of total expenditures it decreased from 6.89% to 5.64%. As noted below, Non-CIP expenditures actually increased, but CIP expenditures decreased as percentages of totals. Table 1 Non-CIP Expenditures FY08 FY09 FY10 FY11 FY12 (6 Months) Total Expenditures $114.1 M $107.5 M $105.0 M $106.5 M $49.7 M Minority Expenditures $9.2 M $10.30 M $9.7 M $8.9 M $4.6 M % Minority Expenditures 8.09% 9.57% 9.19% 8.40% 9.32% CIP Expenditures FY08 FY09 FY10 FY11 FY12 (6 Months) Total Expenditures $110.5M $85.8 M $120.0 M $121.1 M $51.6 M Minority Expenditures $3.0 M $3.8 M $5.1 M $4.5 M $1.1M % Minority Expenditures 2.68% 4.48% 4.25% 3.74% 2.11% Total Expenditures FY08 FY09 FY10 FY11 FY12 (6 Months) Total Overall Expenditures $224.7 M $193.3 M $225.0 M $227.6 M $101.4 M Total Minority Expenditures $12.2 M $14.1 M $14.8 M $13.5 M $5.7 M Total Overall Percentage 5.40% 7.30% 6.60% 5.92% 5.64%

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11 Attachment C Requested by Councilmembers Villanueva and Dyer 1 A RESOLUTION SETTING A 10% GOAL FOR MINORITY 2 PARTICIPATION IN CITY CONTRACTS 3 4 WHEREAS, City Code defines a "minority-owned business" as: 5 6 A business or other entity that is at least fifty-one (51) 7 percent owned and controlled by one (1) or more socially 8 and economically disadvantaged person(s}. For purposes of 9 this definition, the term "control" shall mean exercising the 1 0 power to make policy decisions and being actively involved 11 in day-to-day management. Such disadvantage may arise 12 from cultural, racial, chronic economic circumstance or 13 background, or other similar cause. Such persons include, 14 but are not limited to, Black Americans. Hispanic Americans, 15 Asian Americans, Eskimos, and Aleuts WHEREAS, City Council is committed to the City's established policy of equal 18 opportunity and nondiscrimination in procurement, and supports economic 19 advancement for all of its citizens; WHEREAS, City Council reaffirms the City's policy of encouraging the 22 participation of minority-owned businesses in City procurement activities; WHEREAS, City Council also supports the City's efforts to continue to ensure 25 that procurement opportunities are available to all persons, regardless of race, religion, 26 color, sex, national origin or handicap; and WHEREAS, the establishment of a goal for minority-owned business participation 29 in City contracts will convey the importance that City Council places on ensuring equal 30 opportunities in City expenditures and procurement activities; NOW THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF 33 VIRGINIA BEACH, VIRGINIA: That City Council desires to increase minority-owned business 36 participation in City contracts and therefore resolves that the City shall aim for the 37 following goal: that ten percent of all of the City's competitive expenditures be made to 38 minority-owned businesses within one year from the date of adoption of this resolution, 39 and that the ten percent goal shall apply to each of the following three categories 40 individually: goods and services; construction; and architectural and engineering 41 services That in attempting to meet this goal, the City shall fully comply with state 44 and federal law, including both the equal protection component of the due process

12 45 clause of the Fifth Amendment to the United States Constitution and the provisions of 46 Virginia Public Procurement Act, which means that although the City may and should 47 take all steps necessary to facilitate and help ensure the participation of minority-owned 48 businesses in the City's procurement processes, no preference or set-aside of any kind 49 may be given to a minority-owned business when determining which bidder or potential 50 contractor shall receive a City contract That this goal shal l apply to all expenditures of City funds for which there 53 is competition by businesses, but shall not include expenditures for (1) debt services; 54 (2) utilities or other goods or services for which a single business or corporation has a 55 legal monopoly; (3) salaries and fringe benefits; (4) documented sole-sourced 56 procurements; and (5) real estate purchases, leases, or rentals That special emphasis shall be placed on increasing minority-owned 59 business expenditures in the areas of construction and architectural and engineering 60 services, which are two areas in which City expenditures to minority-owned businesses 61 have been especially low That any business that has been certified by the Virginia Department of 64 Minority Business Enterprise as a minority-owned business pursuant to the 65 Commonwealth of Virginia's Small, Women and Minority Owned Business {"SWaM"} 66 Procurement Initiative is a "minority -owned business" for purposes of this resolution, but 67 a business that has not chosen to obtain state certification may nevertheless be a 68 "minority-owned business" for purposes of this resolution, so long as the business 69 meets the City Code's criteria for a "minority-owned business (as reproduced above 70 and as set forth at City Code ) That the City Manager or designee shall report the City's progress with 73 respect to this goal to the Minority Business Council on at least a quarterly basis, and 74 that the City Manager or designee shall make progress reports to City Council on a 75 semiannual basis. Such reports shall include a break-down of awards and expenditures 76 for both Capital Improvement Programs and non-capital expenditures. These reports 77 shall form the basis for an annual evaluation, to be presented to City Council, of the 78 City's progress toward meeting the goal That the City Ma nager shall ensure that all department directors and all 81 other officers and employees with delegated procurement authority are made aware of 82 this resolution and the expectations of City Council that are expressed herein Adopted by the City Council of the City of Virginia Beach, Virginia, this 6th 85 day of May,

13 APPROVED AS TO LEGAL SUFFICIENCY: CA R-1 0 April 8, 2008 CERTIFIED TO BE A TRUE COPY OF A RESOLUTION ADOPTED BY THE COUNCIL OF THE CITY OF VIRGINIA. BEACH ON 6 May 2008.

14 Attachment D Administrative Directive Title: Woman and Minority-Owned Business Participation in City Procurements Index Number: AD Dale of Adoption: 08/3110_7.L- D _ a _ te _ o _f _ R_ e _ v _ is _ io _ n _: -l.._ P a g e o _..::: 1 f_ Purpose and Need The City of Virginia Beach is committed to increasing the participation of woman and minority-owned businesses in its procurement activities. All departments are responsible and accountable for projecting the City's image to fairly reflect Virginia Beach as a City of ethnic and racial diversity when conducting the City's business, particularly when recommending and awarding contracts and purchase orders. 2.0 Administrative Directive It is the City's poiicy to enhance awareness of the need, and thereby the accountability for, increasing the participation of woman and minority-owned businesses in City procurements and contracts and lo provide maximum practicable opportunities to such businesses. 3.0 Procedure to Accomplish Administrative Directive A. The Finance Department, Purchasing Division shall be responsible for policies and procedures that will support increased participation in City procurement and contracts, as well as recommend related legislatrve changes. B. Department Directors, in conjunction with the Purchasing Agent, shall be responsible for developing and implementing plans to increase the use of woman and minority-owned businesses, wherever practicable. and in accordance with policies and procedures, for procurements within their delega ted authority. Performance reviews for City Department Directors shall include the results of their minority participation efforts of the prior year, as well as their plans for the coming year. 4.0 Responsibility and Authority A. The Finance Department, Purchasing Division shall be responsible for: 1. Centralized monitoring, analysis and reporting on the progress regarding the participation of worn an and minority-owned businesses in City contracts and subcontracts. 2. Creating an awareness of the benefits of working with woman and minority-owned businesses through outreach, marketing, education and training. 3. Giving special recognition and awards to individuals and departments that make outstanding contributions to the success of the City's increased contract awards to woman and minority-owned businesses. 4. Focusing on continued identification of potential woman and minority-owned businesses. 5. Maintaining a woman and minority-owned business database accessible to all City agencies and to the public. 6. Promulgating procedures for inclusion of woman and minority-owned businesses in the City's purchasing activities that are consistent with competitive practices and departmental delegated authority. 7. Auditing and reviewing purchases made under delegated authority for compliance with the woman and minority-owned business participation procedures. 8. Providing reports to the Minority Business Council on the woman and minority business participation on a regular basis

15 "--] Title: Woman and Minority-Owned Business Participation in City Index Number: AD 6.09 Procurements Date of Adoption: 08/31/07 j Date of Revision: Page 2 of 3 4. Responsibility and Authority (continued) B. City Department Directors with delegated procurement authority are responsible for: 1. Providing forecasts of contract opportunities on a quarterly basis for publication on the Minonty Business Council webpage, BEACHr.et and related communication mediums. Each City department will also post this information on their individual webpage. 2. Promoting and adhering to the woman and minority-owned business participation procedures by those departmental members exercising delegated purchasing responsibilities. 3. Developing departmental strategies to assist those members with delegated purchasing authority to publicize small purchase opportunities at the department level. 4. Participating in outreach efforts in City hos!ed workshops, seminars, conferences and expos, networking events and for referring prime contractors to the Purchasing Division for a potential list of woman and minority-owned businesses. 5. Debundling contracts to facilitate woman and minority business participation whenever practical. 6. Identifying and recruiting woman and minority-owned businesses to be included in the City's database. 7. Processing invoices promptly, forwarding to Finance/Accounts Payable within fourteen (14) days. 8. Reporting to the Purchasing Agent all subcontracting results of each construction contract. 5.0 Definitions Mast definitions relating to this subject matter can be found in City Code Section through , and should be referred to in implementing this directive. For purposes of this section, the following words shall have the meanings: A. Woman and Minority-owned Business Database - A list of vendors and contractors maintained by the Purchasing Agent of woman-owned or minority-owned businesses, organized by category or business. B. Minority -owned or Woman -owned Business- A business or other entity that is at leastfifty-<me (51) percent owned and controlled by one or more socially and economically disadvantaged person(s). For C. purposes of this definition, the term "control" shall mean exercising the power to make policy decisions and being actively involved in day-to-day management. Such disadvantage may arise from cultural, racial, chronic economic circumstance or background, or other similar cause. Such persons include, but are not limited to, Black Americans, Hispanic Americans, Asian Americans. Native Americans, Eskimos and Aleuts. Small Purc hase Proced ures: The Purchasing Agent has delegated to all Using Agencies the authority to purchase goods or services under $1,000 in accordance with the provisions of the Delegation of Procurement Aut/Jorily section of the Purchasing Manual. Among the vendors considered, agencies shall consider woman or minority-owned businesses, if available. All Using Agencies that have direct access to the ViBES system have a granted procurement authority of $5,000, except for the items noted in the Purchasing Manual. A Using Agency may be granted procurement authority in excess of $5,000 upon written approval of the Purchasing Agent. All orders of $1,000 must have a purchase order issued; Using Agency to enter a requisition and create a purchase order in the ViBES system. When practicable, buyer solicits a minimum of three (3) written quotations, depending on dollar volume and amount of competition. Of the quotations solicited, the buyer shall solicit at least one (1) quotation from a woman or minority-owned business, If available. Upon approval by the Purchasing Agent, departments may be authorized to obtain informal price quotations for small purchases greater than $30,000 but not exceeding $50,000. When practicable. the buyer solicits written informal quotations from a minimum of four (4) bidders. Of the qu otations solicited, the buyer s hall solicit at least two (2) quotations from woman or minority-owned bus inesses, If available

16 ,-- -- Title: Woman and Minority-Owned Business Participation in City Procurements Index Number: AD 6.09 Date of Adoption: 08/31107 j Date of Revision: Page 3 of Specific Requirements On an annual basis, a consolidated annual report will be prepared by the Purchasing Division for presentation to the Minority Business Council and to City Council. The annual report shail also detail past and plann ed activities and contain recommendations for improvement in increasing awards to woman and minority-owned businesses. as appropriate. Approved as to Content: Patricia A. Phillips Director. Department of Finance Date Approved as to Legal Sufficiency: Roderick Ingram City Attorney's Office 08124/07 Date Approved: David L. Hansen Chief of Finance and Technology 08124/07 Date Approved: James K. Spore City Manager 08/31/07 Date