Background

• New data shows participation in City contracting opportunities by women and minority-owned businesses (WMBE) has plummeted in recent years.
• African-American firms, in particular, have nearly disappeared from public-works projects.
• Some of this is fall out from I-200 and some of it is because it is difficult for small developing companies to submit the "low bid" that state law requires be the basis for awarding contracts.
• Prior to I-200, subcontracting set-asides of 9 percent WBE and 18 percent MBE were generally established on City projects to remedy the effects of past discrimination.
• Actual usage of WMBE exceeded the goals and, in aggregate, totaled about 30 percent.


• As a result of I-200, WMBE utilization to-date has declined by about a third and Seattle expects it to continue to decline based on the participation information it's receiving.
• Even when a relatively successful WMBE set-aside program existed, African American firms only received about 2 percent of total construction expenditures. Since I-200, African American firms have only received about 1 percent of the work.

Mayor Greg Nickels' Initiatives for Increasing Small Business & WMBE Participation
In City Contracting Projects

On July 2, 2002, Mayor Greg Nickels announced a series of initiatives to increase small disadvantaged business participation, including WMBEs, in City contracting opportunities. These include both new programs and a redoubling of existing efforts.

New Programs

Mayor's Executive Order
The Executive Order sends a clear message to City departments that the Mayor wants to increase the use of WMBE firms in all areas of City contracting, not just construction contracts. The law prohibits the use of preferences to accomplish this, but increased outreach efforts and other inclusiveness strategies should result in greater opportunities for WMBEs to compete for City contracts. Ordinance 119603, passed after Initiative 200, requires these outreach efforts. When work can be subcontracted, (construction and some consulting contracts), the Order directs that "aspirational goals" be set to establish the City's clear intent that prime contractors try to equitably distribute subcontracts throughout the community.

"Unbundling" Contracts/Subcontracts
The Mayor decided to break contracts/subcontracts for construction and some consulting projects into smaller pieces so that small firms/WMBEs can compete more effectively on them. This should help create small contract opportunities and may allow Seattle to waive performance bonds which are difficult for small contractors to secure.

Contracting Development & Competitiveness Center
The Mayor proposed a new Competitiveness Center that will provide assistance and training to small disadvantaged businesses, including WMBE firms, and advocate on their behalf with large prime contractors. The Seattle Urban League will sponsor the center and operate it on behalf of the City. Other agencies who will partner with the Urban League on this effort are: Associated General Contractors of Washington; Associated Builders and Contractors of Western Washington; Community Capital Development; and Turner Construction.

Outreach
The Mayor directed City of Seattle Purchasing and Contracting staff to aggressively enforce statutory requirements that our prime contractors reach out to minority-owned businesses for subcontracting.

Purchasing Contracts
The Mayor ordered certain changes in purchase contracts. Seattle will on some occasions seek to award multiple contracts, rather than a single one, to provide more opportunities for WMBEs to compete. In some cases, multiple contracts lessen the City's dependence on a particular supplier and/or it may provide for better set of choices for the City, particularly when there could be work load or scheduling concerns with an individual contractor at certain times.

Strengthening Existing Efforts

Boost
The Mayor decided to simplify Boost Program entry requirements. The Boost Program is a pilot program designed to assist small businesses competing for construction project subcontracting opportunities. The City is encouraging its primary contractors on large construction projects to subcontract to/support these small and predominantly local businesses. Currently the City has Boost provisions in projects valued at about one half billion dollars, including contracts for the construction of the Seattle Public Library, Justice Center, City Hall, Seattle Opera House renovation, Cedar River Treatment Facility, Park 90/5, and Landsburg Fish Passage. http://www.cityofseattle.net/contract/boost.htm

WMBE Aspirational Goals
The Mayor decided to expand the use of aspirational goals. On large construction and consulting projects, the City has begun setting specific "aspirational goals" for participation of WMBE businesses as subcontractors. Although there are no benefits or penalties associated with these goals, they communicate to the City's prime contractors its serious interest in ensuring that WMBEs participate in its projects and that they are included in any subcontractor bidding opportunities.

Small Construction Projects Roster
Under the Nickels Administration, the City has begun awarding contracts from the Small Construction Projects Roster. That program allows City Departments to competitively solicit contractors for construction projects valued at up to $200,000 from a pre-qualified roster. About one-third of the firms on the roster are "self-identified" or state-certified WMBEs. Two of 12 contracts executed since the program began late last year have been awarded to WMBEs ($118,000 of $581,000 awarded). The City may solicit bids directly from contractors listed in particular Roster categories, rather than advertise these projects in the Seattle Daily Journal of Commerce newspaper as otherwise required. One of the benefits of the Roster includes a faster process for bidding small projects. Earlier this year, as allowed by State law, Seattle eliminated bonding and "retainage" requirements on projects of less than $35,000. This allows very small companies that cannot afford to be strapped with retainage or cannot obtain a performance bond to compete for these projects. http://www.cityofseattle.net/contract/smlpubwks.htm

Consultant Roster Program
The Mayor decided to establish Boost and aspirational goals for the Consultant Roster Program. That program prioritizes small business participation and gives small businesses a chance to work as prime contractors. The roster includes many WMBE businesses and simplifies the selection process for City departments, creating opportunities for small businesses to work on City projects. http://www2.ci.seattle.wa.us/consultantroster/

Prompt Payment
At the Mayor's direction, the City is negotiating provisions within contracts to assure that subcontractors will secure prompt payments from prime contractors. The City's construction contracts include requirements that provide an additional mechanism for subcontractors and suppliers to be paid promptly by the contractor, for work satisfactorily completed, after the contractor has received payment from the City. Prompt payments help small businesses to maintain the cash flow necessary for operations.

Fair Contracting Ordinance
The Mayor has called for additional monitoring and more rigorous enforcement of Ordinance 119601, which prohibits discrimination in all contracting activities, regardless of whether it involves a public or private entity. http://www.cityofseattle.net/civilrights/factsheet.htm