Agenda Item 9
December 1,2015
Public Hearing-Action
MEMORANDUM
November 25,2015
TO:
County Council
FROM:
Robert
H.
Drummer, Senior Legislative Attorney
~
SUBJECT:
Public Hearing-Action:
Expedited Bill 48-15, Contracts and Procurement ­
Minority-Owned Businesses - Sunset Date - Amendments
Expedited Bill 48-15, Contracts and Procurement - Minority-Owned Businesses - Sunset
Date - Amendments, sponsored by Lead Sponsor Government Operations and Fiscal Policy
Committee, was introduced on November 17, 2015. Action is scheduled following this hearing.
Background
The Supreme Court in
City ofRichmond
v.
J. A. Croson Company,
488 U.S. 469 (1989),
established a framework for a local government to implement a program that provides a preference
for minority owned businesses. The Court held that there must be substantial evidence of past or
ongoing discrimination in order to show a compelling government interest
to
justify the program.
The Program must be narrowly tailored to remedy the past or ongoing discrimination. For this
reason, local governments that have this type of program must evaluate the continuing need for it
every few years. The County Executive submitted a Disparity Study to the Council on July 1,
2014 prepared by Griffin and Strong that supports the continuation of the program.
2014 Disparity Study
In May 2013, the County retained Griffin
&
Strong, P.C. (GSPC) to conduct a
comprehensive disparity study. GSPC examined and analyzed the procurement policies and
practices of the County and its prime contractors regarding the use of Minority, Female, and
Disabled owned businesses (MFD) on County contracts for goods and services. The objective was
to detennine if there was a statistically significant disparity between the number of MFD finns in
the relevant market and the dollars awarded to MFD finns through County contracts. GSPC
divided County contracts into 4 categories - Construction, Professional Services, Services, and
Goods.
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GSPC conducted a quantitative analysis of the County's contracting history between July
1,2007
and June
30,2012.
This analysis started with a determination of the relevant geographic
market area for each of the 4 categories of procurement contracts. GSPC concluded that the
relevant market was the geographic area where
75-85%
of the firms contracting with the County
are located. Within each relevant market, GSPC compared the percentage of firms in each race,
ethnicity, gender, and disability group that are qualified, willing and able to perform services used
by the County with the percentage of dollars spent by the County on finns in each MFD group.
GSPC used this analysis to determine if each MFD group was underutilized or overutilized in each
relevant market. GSPC looked at both prime contractor utilization and subcontractor utilization.
GSPC further analyzed the results to determine if the underutilization observed was
statistically significant and ifthe underutilization could be attributed to the MFD status ofthe firms
through both a regression analysis that controlled for other possible explanations, such as business
size or experience, and anecdotal evidence.
The complete report can be found at:
http://www.montgomerycountymd.gov/catlservices/disparitystudy.htm!.
Expedited Bill 42-14
Based upon the
2014
Disparity Study, the Council extended the sunset date for the MFD
Program until December
31, 2015
by enacting Expedited Bill
42-14
on October
21,2014.
The
Council subsequently created 2 task forces to study the MFD Program and the overall Procurement
System. Each of these task forces presented their recommendations to the Council last month.
The
2014
Disparity Study supports an extension ofthe MFD Program while the Council considers
the recommendations of the 2 task forces. Expedited Bill
48-15
would extend the sunset date for
the MFD Program until December
31,
2016 to give the Council time to analyze the
recommendations of the 2 task forces and decide if any changes to the legislation authorizing the
MFD Program should be made.
This packet contains:
Expedited Bill
48-15
Legislati ve Request Report
F:\LA W\BILLS\1548 MFD Program - Sunset - Amendrnents\Public Hearing-Action Merno.Docx
Circle
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Expedited
Bill
No.
48-15
Concerning: Contracts and Procurement
- Minoritv-Owned Businesses ­
Sunset Date - Amendments
Revised: November
10,2015
Draft No.1
Introduced:
November
17,2015
Expires:
May
17,2017
Enacted: _ _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ _ __
EffedNe: _ _ _ _ _ _ _ ___
Sunset Date: December
31. 2016
Ch, _ _,
Laws
of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsor: Government Operations and Fiscal Policy Committee
AN EXPEDITED ACT
to:
1) extend the sunset
date
for the County's minority owned business purchasing program;
and
2) generally amend the County's minority owned business purchasing program.
By amending
Montgomery County Code
Chapter 11 B, Contracts and Procurement
Sections I1B-64
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface bracketsD
* * *
Heading or defined term.
Addedto existing law by original bill.
Deletedfrom existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves thefollowing Act.'
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exPEDITED BILL
No. 48-15
1
Sec. 1. Section 11B-64 is amended as follows:
11B-64. Sunset date.
2
3
4
This Article is not effective after December 31, [2015] 2016.
Sec. 2. Expedited Effective Date.
5
6
The Council declares that this legislation is necessary for the immediate
protection of the public interest. This Act takes effect on the date on which it
becomes law.
7
8
9
Approved:
10
George Leventhal, President, County Council
11
Date
Approved:
12
Isiah Leggett, County Executive
13
This is a correct copy ofCouncil action.
Date
14
Linda M. Lauer, Clerk ofthe Council
Date
1:2;:\
t.::.:.4:\LA
W\BILLS\1548 MFD
Program·
Sunset· Amendments\Billl.Doc
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LEGISLATIVE REQUEST REPORT
Expedited Bill 48-15
Contracts and Procurement
-
Minority-Owned Businesses
-
Sunset Date
-
Amendments
DESCRIPTION:
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Expedited Bill 48-15 would extend the sunset date for the MFD
Program until December 31, 2016.
The MFD Program would sunset on December 31, 2015 absent Council
action.
Continue the MFD Program to remedy the effects of past
discrimination against women and minority-owned businesses
in
County procurement.
Office of Procurement, County Attorney
To
be
requested.
To be requested.
To be requested.
To be researched.
Robert H. Drummer, Senior Legislative Attorney
Not applicable.
Contractual remedies.
F:\LAW\BILLS\1548 MFD Program - Sunset - Amendments\LRR.Docx