City Hall Hustle: Trying to Share the Work

Council tweaks MBE/WBE rules to broaden contract participation

One of the most inscrutable aspects of city contracting – and there are a lot – has to be Austin's Minority-Owned and Women-Owned Business Enterprise Procurement Program. Otherwise known as MBE/WBE, the program is an alphabet soup of participants (minority- and women-owned business enterprises MBE and WBE) and agencies (the city's Small & Minority Business Resources Depart­ment) striving to meet participation goals that, by law, can't be explicitly spelled out. (That would be the Reagan-era bugaboo of "quotas," remember?)

The idea, to give a leg-up to women and minority businesses – groups that didn't get a 180-year head start locally – is that city contracts and subcontracts should have participation goals, or failing that, the winning bidder should be able to show that a demonstrable "good faith effort" has been made to ensure MBE/WBE participation, even if that goal wasn't met.

However, the Hustle recalls many a City Council meeting in which a major contract was pulled from the consent agenda for want of participation. "I've been doing that quite a bit, you could say," laments Sheryl Cole, who sits on the council committee for MBE/WBE. "We simply received complaints from a number of citizens about low participation rates and items that were not lawful under the code. We simply needed to make that more explicit."

That's what a suite of items on the council agenda would do this week. Covering each of the four areas for which the city contracts – professional services, construction, nonprofessional services, and commodities – the items perform four separate tasks. First, they require contract bidders to step up their solicitation efforts for MBE/WBE participation by using at least two means (options include newspaper ads, faxes, phone calls, social media, and more). They also look to increase participation by having contractors break subcontracting work into "economically feasible portions" that potentially smaller firms could handle, as well as utilize resources from MBE/WBE community organizations and the SMBR office. "For the past several months, we've noticed glitches in the system," Cole says of low minority participation contracts, "glitches that these changes are meant to clear up."

The second issue addressed by the changes, Cole says, is a prohibition on bid shopping, a situation in which "a general contractor goes out and makes his overall proposal and contacts a list of subcontractors, then he runs into another subcontractor" who will undercut the previous bid. "A deal is a deal," she says. "We eliminated that – the idea is that you cut it off at a point in time. You can be sanctioned now."

The third change addresses an issue that Cole says "comes up quite a bit in the [MBE/WBE] subcommittee": unapproved contract changes. "Some of the citizens that testify about this say a general contractor will prepare a bid proposal that says it's going to use good faith efforts ... then they will actually change that proposal, and reduce or eliminate those goals, and not notify the city or the subcontractors about that change. So you'll have representation that you're going to have 1.8 percent African-American participation, but when it's over with, you'll have none at all. This will require a request for changes" to be vetted by the SMBR office. While Cole emphasizes that "some contract changes are legitimate and some are not," the often glacial pace of the contracting process ("Sometimes it takes a year or nine months to execute," she notes) means not every change can be caught or addressed. Overall, she says, the reforms are needed. "If we're gonna have these goals and require good faith, then we need to do all that we can."

The changes were vetted by both the council MBE/WBE committee and a citizen's MBE/WBE small business advisory commission. One of the participants in that process was Carol Hadnot, program consultant for the Austin Black Contractors Association. She first caught the Hustle's attention back in April, when she spoke in opposition to a $67 million contract to build Austin Ener­gy's System Control Center with no minority participation goals. (The contract was postponed, then pulled from the agenda.) Hadnot sees the changes as "really just cleanup – more of a housekeeping item." She applauds the measures, saying they should succeed in "making things much clearer to the business community." However, she notes, "It's one thing to get things on paper; another thing is implementation," suggesting the ABCA, not to mention Austin's Hispanic and female contractors, will be watching closely.

Spend just a few minutes around a council agenda, and you realize it primarily consists of spending money – lots of money. Hopefully with this week's actions, we'll begin to see Austin's bounty of construction contracts spread a little more equitably across the city, thanks to spelling out the rules a little more clearly.

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MBE / WBE, MBE/WBE, Sheryl Cole, Austin Black Contractors Association

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