TRANSCRIPT: Small Business Chittlin Circuit in Houston, Tx. | DOUBLE-HEADER: CoH MWBE Committee + Strategic Purchasing Division

Part One: M/WBE AND SMALL CONTRACTOR DEVELOPMENT COMMITTEE

You can listen to the show @: Houston LIVE! M/WBE Committee

Hot Link: HTV: http://houstontx.city.swagit.com/City_Council/

~ beginning of transcript

I would like to earnestly thank Mr. Jose Soto, in City Council member Rodriguez’s office for providing the location of source information for me while I was researching for this episode.

The committee is comprised of the following members:

Chair: James G. Rodriguez, District I

Vice-Chair: C.O. “Brad” Bradford, At Large Position 4

Members:

  1. Jarvis Johnson, District B
  2. Sue Lovell, At Large Position 2
  3. Wanda Adams, District D
  4. Jolanda “Jo” Jones, At Large Position 5
  5. Al Hoang, District F
  6. Ed Gonzalez, District H

According the City of Houston website, “The M/WBE Committee will consider small contractor development and contract compliance; the City’s Minority and Women-Owned Business Enterprise (M/WBE) and Persons With Disabilities Enterprise (PWDBE) programs; and compliance with labor standards, including prevailing wage standards.”

The key word here is consider. You see, contrary to popular thought; this committee does not form policy or make formal decisions. More importantly, there are no formal records, notes or minutes taken – nor is there a formal taping for the held sessions on HTV – where City Council meetings are taped and archived. The only take-away collateral for these committee meetings are the copious notes taken by committee members and their staff.

Essentially, the committee provides what I call an FYI oversight function of the Affirmative Action department – in other words, it is a discussion forum for the committee members. My recommendation is that if you have an issue, you hire a lobbyist to present to the City rather than spending the time and resources to address the committee directly. The reason for this recommendation is that there is no guarantee that notes taken by the committee members are contextually or empirically in the form you would desire; or that your issue will see the light of day. Also, it has been my experience that most of the committee members send their office aides to these meetings rather than attend them themselves.

Now, let’s look at what is being considered at these committee meetings. As stated earlier, this committee considers (1) small contractor development, (2) contract compliance, and (3) compliance with labor standards, including prevailing wage standards. I am not sure what, if anything, this committee does to consider small contractor development because that consideration would in some form or fashion require measurement, which would require the aggregation of data, which would require reporting. So, let’s just assume for the time being that this consideration is present as eye-candy.

Contract compliance is an issue that it appears the committee discusses quite a bit, but in action does little to eliminate the consistent practice of corruption. Corruption occurs when a contractor has an established goal for MWBE participation on a contract, agrees to it; the, turns around and doesn’t give the subcontract work to the MWBE. Then, in many cases; these same (White-male owned) firms are able to continue receiving contracts with the city by giving explanations of the arduous task of finding MWBEs qualified to perform the work. Call me stupid but, why would you agree to a goal that you were not sure you could meet? Well duhhh, because I know if I don’t meet it; nothing is going to happen. But again, I digress – that is a topic for another day.

Regarding compliance with labor standards, including prevailing wage standards – that is an issue that most small businesses are good about staying on top of; not one that be brought before this body.

So, if you have an issue or concern regarding the more mainstream concerns of fairness in the procurement process, not getting any business, etc. I recommend to you hire a lobbyist to deal with that and continue focusing on growing your business. My business practice, ALJUCAR & Co., has relationships with several SME lobbyist in the City of Houston – for more information email me @ info@aljucar.com .

Now, all of that said, I now want to shift gears to discuss a little known tool that, if appropriately engaged; might serve as a legitimate counterbalance and alternative to engaging the M/WBE and small contractor development committee.

This tool is the…

Advisory Committee on MWBE Program and Contractor-City Relations

Hot Link: Committee Board Powers & Duties: http://cbtcws.cityofhouston.gov/BoardsCommApplicationForm/BoardDesc.aspx?boardid=64

This committee was initially incepted June 14, 1995 and re-effected March 30, 2004 by Executive Order No. 1-3.

Because of the relative importance of this tool, the Executive order follows in detail:

1. PURPOSE

The purpose of this Executive Order is to facilitate the goals of the City’s Minority and Women Business Enterprise (“MWBE”) program by seeking input and advice from the private sector to foster better understanding and relations among MWBE contractors, non- MWBE contractors and the City. To that end there is hereby created a Committee to be known as the “Affirmative Action Advisory Committee” (hereinafter, the “Committee”)-

2. OBJECTIVES

The objectives of this Executive Order are to seek private sector assistance in easing difficulties that may be encountered by MWBEs and small businesses in accessing City contracts and to improve communication among MWBEs, non-MWBEs and the City.

3. ORGANIZATION OF COMMITTEE

a. APPOINTMENT

The Mayor’s Office shall develop a list of qualified candidates for membership on the Committee, and the Mayor shall appoint members to 11 positions, which shall be filled as follows:

  • Positions 1 & 2 Two members representing local contractors’ (presumably White-male owned) organizations.
  • Positions 3 & 4 Two members representing minority business enterprises.
  • Position 5 A member representing women-owned business enterprises.
  • Position 6 A respected citizen of Houston.
  • Position 7 A representative of the local banking industry.
  • Position 8 A representative of the surety industry.
  • Position 9 The Director of Aviation of the City of Houston, who shall serve ex-officio.
  • Position 10 The Director of the Affirmative Action and Contract Compliance Division of the Mayor’s Office, who shall serve ex-officio, and who shall also serve as Secretary of the Committee.
  • Position 11 The Director of Public Works and Engineering of the City of Houston, who shall serve ex-officio.

Each of the Directors of the Aviation, Public Works and Engineering Departments and of the Affirmative Action and Contract Compliance Division may, from time to time, designate in writing a person under his or her supervision to act in his or her place as his or her duly authorized representative, said representative to enjoy all rights and privileges of the position. A copy of the written designation, specifying the dates the person shall act as representative of the Director, shall be filed with the minutes of the Committee.

b. CHAIR

The Mayor shall designate the Chair of the Committee.

c. TERMS OF MEMBERS

The terms of office for the appointees to Positions 1, 3, 5 and 7 shall expire on the second day of January of odd-numbered years, and the terms of appointees to Positions 2, 4, 6 and 8 shall expire on the second day of January of even-numbered years; however, each member shall continue in office until his or her respective successor shall have been appointed.

d. VACANCIES

Whenever any position on the Committee becomes vacant by reason of death, resignation or removal the Mayor shall appoint another qualified person to serve the unexpired term of the member being replaced.

e. REMOVAL OF MEMBER

Any member of the Committee may be removed at any time by the Mayor without consent of City Council.

f. NO COMPENSATION

Each member of the Committee shall serve without compensation.

g. QUORUM

Five members of the Committee shall constitute a quorum for the conduct of Committee business.

h. VOTING

A majority vote of the members of the Committee present and lawfully meeting shall determine the wishes of the Committee. A City employee member of the Committee shall not vote on any motion, resolution or recommendation by the Committee concerning proposed amendments to Chapter 15 of the Code of Ordinances.

i. RULES

The Committee shall adopt reasonable rules and regulations for the conduct of its duties.

j . REPORTS

All Committee reports or recommendations delivered to the Mayor and City Council shall be rendered in writing with copies to the Affirmative Action and Contract Compliance Division of the Mayors Office.

4. DUTIES OF COMMITTEE

The duties of the Committee are:

a. To consider and make recommendations to the Mayor and City Council regarding the MWBE program;

b. To consider methods and means of making City contracts more accessible to MWBEs and non-MWBEs by reducing the size and increasing the number of City contracts;

c. To facilitate better relations between the banking industry and smaller contractors, both MWBEs and non-MWBEs, with respect to lending opportunities;

d. To assist and facilitate mentoring and outreach functions, training and other programs requiring cooperation between the City and the private sector to achieve the purposes and goals of the MWBE program; and

e. To assist in facilitating MWBE opportunities in private sector contracting,

5. RESPONSIBILITY OF DEPARTMENTS AND EMPLOYEES

All City departments and employees shall cooperate with the Committee to the best of their abilities. The Affirmative Action and Contract Compliance Division of the Mayors Office shall provide clerical support to the Committee, as needed.

Now, this is a tool with tremendous potential. However, it does not appear that this committee has been formed yet under the current Mayor. So, if you are interested in being a member or concerned about the committee not being in place; drop me a line and I will run some traps and see what I can find out.

~

Part Two: City of Houston STRATEGIC PURCHASING DIVISION (SPD)

You can listen to the show @: Houston LIVE! CoH SPD

Hot Links:

Register your Firmhttp://purchasing.houstontx.gov/bid_regform.aspx

Download Bidshttp://purchasing.houstontx.gov/bid_download.aspx

Pre-bid Schedule: http://purchasing.houstontx.gov/PreBidSchedule.aspx

Frequently Asked Questions:   http://purchasing.houstontx.gov/faqs.htm

OK – Now I want to shift gears to what I believe is the heart and soul of, the intersection if you will, of the small-business Supply and City of Houston Demand curves for products and services – the City of Houston Strategic  Purchasing Division (SPD) led by Mr. Calvin Wells – and under the umbrella of Mr. Alfred Moran’s shop, Administration & Regulatory Affairs.

In short, this division is where the rubber meets the road. I want to thank Mr. Wells for the source information he provided when I contacted his office about this show.

I will now read a summary of what this department does and how it should be strategically used for the purpose of doing business with the city of Houston.

The Strategic Purchasing Division (SPD) is committed to meeting the Mayor’s challenge of continuous improvement by establishing a customer-driven, procurement process utilizing “best practices.” Remember, these guys are only the execution arm of transactions with the city of Houston; you have to close the DEAL with the departments themselves.

Nevertheless, it is important that you know where to get information and the “process” by which that information should be enacted.

1st, Strategic Purchasing “Notice to Bidders” are available from the following sources:

  • Each Friday, bid advertisements appear in the “Notice to Bidder” section of the Houston Business Journal. Some bid advertisements may be found in the Sunday edition of the Houston Chronicle.
  • Bids for supplies and nonprofessional services are posted in the basement reception area of City Hall, 901 Bagby, Room B120.
  • Bid advertisements appear weekly on the Municipal Access Channel (TCI and Warner Cable TV).
  • Bids and Requests for Proposals are available on the Internet – (I will provide a link on 8-PAC after this show)

The Strategic Purchasing Division makes available online and at no charge to the public a complete listing of all formal bid documents and proposals. SPD updates the Online Bid/RFP Downloads page daily. However, you will not be able to download any bid/RFP documents until you register.

To find more information about a specific bid document or RFP, you need to attend the Pre-Bid or Pre-Proposal Conference and ask questions about specifications and general terms and conditions. These conferences also you to get guidance and find out who is interested in bidding or proposing on a particular contract, or you can contact the assigned buyer. Again, all of these links will be posted on 8-PAC.

Now, let’s discuss the types of solicitations:

There are six types of solicitations used for procuring goods and services for the City of Houston Municipal operations. They are the following:

  • Purchase Orders (POs)
  • Emergency Purchase Orders (EPOs)
  • Formal Bids
  • Informal Bids
  • Request for Proposals (RFPs)
  • Construction Contracts under $500,000
  • Purchasing Cards (PCards)

POs – Purchase Orders: Bids are solicited by telephone, facsimile or in writing by department purchasing personnel within their level of authority. When bids are received they are analyzed, evaluated and a PO is issued to the low bid meeting specifications. In most cases, all these purchases will be under $20,000 although some departments have lower thresholds.

EPOs – Emergency Purchase Orders: Bids may be solicited if the nature of the emergency permits and would be handled the same as POs. However in severe emergencies, requirements are not competitively bid. Departments issue emergency purchase orders if within their level of authority, otherwise, emergency purchase orders are issued by Strategic Purchasing.

Formal BidsWritten solicitations exceeding $25,000 for goods and nonprofessional services: These bids are taken in accordance with State law. Bids are advertised for two consecutive weeks in the Houston Business Journal and minority papers, then received by the City Secretary’s Office on the advertised bid due date, opened and publicly read in the City Council Chambers (unless place of opening has been transferred in accordance with Section 15-3 B(5) of the City of Houston Code of Ordinances.) The City Purchasing Agent recommends awards for formal bids to City Council. Most formal bids are awarded on the basis of lowest responsible bid. Variations on formal bids include reverse auction and best value procurement. Reverse auctions are conducted real time on the internet. These solicitations are handled by the Texas Procurement Center (TPC). Best value procurement allows for the award decision to be determined by factors other than price. Both of these approaches will follow the standard notifications process but vary in the manner for deciding on award. Prior to issuing a bid invitation estimated to be in excess of $100,000, Strategic Purchasing reviews and researches each for the purpose of determining subcontracting possibilities. When it is evident there is MWDBE subcontracting potential, a goal is assigned to give certified MWDBE suppliers additional opportunity to participate in City business.

Informal BidsSolicitations valued at $25,000 or less for goods and nonprofessional services: Strategic Purchasing makes informal solicitations for requirements exceeding department authority by mail, telephone, or facsimile. After bids are received, they are analyzed, evaluated and purchase orders are issued by Strategic Purchasing. Informal Bids are classified as regulated contracts to attract MWDBE participation. When there is a capable MWDBE firm certified by the City’s Affirmative Action Division, the user department is required to solicit bids from that company. Also, the user department is required to solicit participation from no less than three (3) certified MWBE’s if there are three or more capable firms.

Request for Proposals (RFPs) – Request for Proposals are used to solicit equipment, goods, and services of a highly technical nature: RFPs are taken in accordance with State law provision under Vernon’s Annotated Civil Statutes (V.A.C.S. § 252), which is a unit of the Texas Legislative Council’s statutory revision program authorized by the Texas Local Government Code. As an example, the City will solicit requests for proposals for information processing equipment, software and hardware used in conjunction with information processing equipment, telecommunications, radio and microwave systems, electronic distributed control systems and technical services related to this equipment. RFPs are also reviewed for MWBE opportunities.

ConstructionProjects involving improvement to City facilities amounting to $500,000 or less: Sealed bids are taken in accordance with State law for various construction projects amounting to $500,000 or less. Bid Bonds are required on all construction projects. Projects exceeding $25,000 require bidders to submit a payment bond and those exceeding $100,000 require a payment and performance bond. The City Purchasing Director recommends award of contracts to City Council. Certified MWBE’s are encouraged to bid as prime contractors.

Purchasing Card (PCard): Some city employees carry a MasterCard for making immediate need and small dollar purchases for official city business. The PCard is used in lieu of petty cash or purchase orders.

FAIR CAMPAIGN ORDINANCE

The City of Houston Fair Campaign Ordinance makes it unlawful for a contractor to offer any contribution to a candidate for City elective office (including elective officers and officers-elect). All respondents to any Request for Proposals must comply with Houston Code of Ordinance Chapter 18-36 as amended relating to the contribution and solicitation of funds for election campaigns. Provisions of this ordinance may be obtained from the office of the City Secretary. Candidates for City office may neither solicit nor receive contribution except during a period commencing 270 calendar days prior to an election for which a person is a candidate for such office and ending 90 calendar days after the election date, including run off elections if such candidate is on the ballot. Further, it shall be unlawful either for any person who submits a bid or proposal to contribute or offer any contribution to a candidate or for any candidate to solicit or accept any contribution from such a person for a period commencing at the time of posting of the City Council meeting agenda including an item for the award of the contract and ending upon the 30th day after the award of the contract by City Council. For the purpose of this ordinance quote, a CONTRACT is defined as each contract having a value in excess of $30,000.00 that is let by the City for professional services, personal services, or other goods or services of any other nature whether the contract is awarded on a negotiated basis, request for proposal basis, competitive proposal basis or formal sealed competitive bids.

The term CONTRACT includes proprietors of proprietorship, all partners of partnership, all officers and directors of corporations, and all holders of 10% or more of the outstanding shares of corporations. A STATEMENT DISCLOSING THE NAMES AND BUSINESS ADDRESSES OF EACH OF THOSE PERSONS WILL BE REQUIRED TO BE SUBMITTED WITH EACH BID OR PROPOSAL FOR A CITY CONTRACT. Completion of the form entitled CONTRACTOR SUBMISSION LIST” will satisfy this requirement. Failure to provide this information may be cause for rejection of a bid or proposal.

~ end of transcript

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