Agenda Item 6C
November 17, 2015
Introduction
MEMORANDUM
November 13,2015
TO:
County Council
FROM:
Robert H. Drwnmer, Senior Legislative Attorney
~'0r
SUBJECT:
Introduction:
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, is scheduled to be introduced on November 17,2015. A public hearing followed by
action is tentatively scheduled for December 1, 2015 at 1:30 p.m.
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 determine if there was a statistically significant disparity between the number of MFD firms in
the relevant market and the dollars awarded to MFD firms 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
fmns
contracting with the County
are located. Within each relevant market, GSPC compared the percentage of flrms in each race,
ethnicity, gender, and disability group that are qualifled, willing and able to perform services used
by the County with the percentage of dollars spent by the County on flrms 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 signiflcant and ifthe underutilization could be attributed to the MFD status ofthe flrms
through both a regression analysis that controlled for other possible explanations, such as business
The complete report can be found at:
size or experience, and anecdotal evidence.
http://www.montgomerycountymd.gov/cat/services/disparitystudy.html.
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 Bil142-14 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 of the 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.
This packet contains:
Expedited Bill 48-15
Legislative Request Report
F:\LAW\BILLS\1548 MFD Program - Sunset ­ Amendments\Intro Memo.Docx
Circle #
1
3
2
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Expedited Bill No.
48-15
Concerning: Contracts and Procurement
- Minority...Qwned Businesses ­
Sunset Date - Amendments
Revised: November 10,2015 Draft No.1
Introduced:
November 17, 2015
Expires:
May 17, 2017
Enacted: _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
E~ctive:
_ _ _ _ _ _ _ ___
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 11B, Contracts and Procurement
Sections 11B-64
Boldface
Underlining
[Single boldface brackets)
Double undedjnina
[[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 the following Act:
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ExPEDITED BILL
No. 48-15
1
2
Sec.
1.
Section IlB-64 is amended as follows:
11B-64. Sunset date.
This Article is not effective after December 31, [2015] 2016.
Sec. 2. Expedited Effective Date.
The Council declares that this legislation
IS
3
4
5
6
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
Approved:
Date
12
Isiah Leggett, County Executive
13
This is a correct copy ofCouncil action.
Date
14
Linda M. Lauer, Clerk ofthe Council
Date
{2:\
~:\LA
W\BILLS\1548 MFD
Program •
SIlIISet • Amendments\BiIll.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