Agenda Item 3A
November 1, 2016
Introduction
MEMORANDUM
October 27,2016
TO:
County Council
FROM:
Robert H. Drummer, Senior Legislative Attorney
If:)
,
SUBJECT:
Introduction:
Expedited Bill 45-16, Contracts and Procurement - Minority-Owned
Businesses - Sunset Date - Amendments
Expedited Bill 45-16, 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 1, 2016. A public hearing is tentatively scheduled for November
8 at 1:30 p.m.
Expedited Bill 45-16 would extend the sunset date for the County's minority owned business
purchasing program until December 31,2019.
Background
The Supreme Court in
City of Richmond
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 ofprogram 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 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 fIrms 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 ifthe underutilization observed was statistically
signifIcant and if the underutilization could be attributed to the MFD status of the 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.montgomerycountvmd.gov/catlservices/disparitystudy.html.
Expedited Bill 42-14 and Expedited Bill 48-15
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 in November 2015. The 2014
Disparity Study supports an extension of the MFD Program. Expedited Bill 48-15 extended 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.
Government Operations and Fiscal Policy Committee Worksession
The Government Operations and Fiscal Policy (GO) Committee held a worksession on March 10,
2016 to review the recommendations of the task forces. The Committee made several recommendations
to the OffIce and Procurement. The GO Committee also agreed to extend the sunset date for the MFD
program to December 31, 2019 with the understanding that the Executive should have completed a new
disparity study before that date.
This packet contains:
Expedited Bill 45-16
Legislative Request Report
Circle #
1
3
F:\LAW\BILLS\1645 MFD - Sunset Date - Arnendment\Intro Memo.Docx
2
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Expedited Bill No.
45-16
Concerning: Contracts and Procurement
- Minority-Owned Businesses ­
Sunset Date - Amendments
Revised: 10-24-2015
Draft No. _1_
Introduced:
November 1. 2016
May 1. 2018
Expires:
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: December 31.2019
Ch. _ _ Laws of Mont. Co. _ __
I
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 lIB, Contracts and Procurement
Sections 11 B-64
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to 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. 45-16
1
Sec.
1.
Section IlB-64 is amended as follows:
IlB-64. Sunset date.
This Article is not effective after December 31, [2016] 2019.
2
3
4
5
Sec. 2. Expedited Effective Date.
The Council declares that this legislation is necessary for the immediate
protection ofthe public interest. This Act takes effect on the date on which it becomes
law.
6
7
8
9
Approved:
10
Nancy Floreen, President, County Council
11
Date
Approved:
12
Isiah Leggett, County Executive
Date
13
This is a correct copy ofCouncil action.
14
Linda M. Lauer, Clerk ofthe Council
Date
F:\LAW\BILLS\1645 MFD - Sunset Date - Amendment\BilI 1.Docx
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LEGISLATIVE REQUEST REPORT
Expedited Bill 45-16
Contracts and Procurement
-
Minority-Owned Businesses
-
Sunset Date
-
Amendments
DESCRIPTION:
. Expedited Bill 45-16 would extend the sunset date for the County's
minority owned business purchasing program until December 31,
2019.
The County's minority owned business purchasing program is
currently scheduled to sunset on December 31, 2016.
Remedy the effects ofpast discrimination on certain businesses
owned by minorities, women, and disabled people.
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.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
None.
F:\LAW\BILLS\1645 MFD - Sunset Date - Amendment\LRR.Docx