1 / 32

The City of Charlotte Update Disparity Study

The City of Charlotte Update Disparity Study. FINAL REPORT PRESENTATION. October 11, 2011. Presented to the Economic Development Committee. Submitted by:. Legal Guidelines and Methodology. Croson Strict Scrutiny Standard of Review

kaloni
Download Presentation

The City of Charlotte Update Disparity Study

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. The City of Charlotte Update Disparity Study FINAL REPORT PRESENTATION October 11, 2011 Presented to the Economic Development Committee Submitted by:

  2. Legal Guidelines and Methodology • Croson • Strict Scrutiny Standard of Review • There must be a compelling interest, such as remedying the present effects of past discrimination • Compelling interest can be found in private sector discrimination if linked to the public sector • Under Narrow Tailoring an Agency • Must employ and evaluate race neutral efforts first • Limit the burden on third parties • Set goals related to availability • Ensure program flexibility

  3. Legal Guidelines – (cont.) In H.B. Rowe Decision (2010) Fourth Circuit accepted MGT’s approach on: (involved NCDOT) • Focused on subcontracting disparity because there was no prime contracting M/WBE program • Anecdotal: The survey in the 2004 study exposed an informal, racially exclusive network that systematically disadvantaged minority subcontractors • Program suspension: the fall in M/WBE subcontractor utilization of 38 percent when SBE program substituted for M/WBE program is evidence of discrimination

  4. MGT Conclusions • To implement a race- and gender-based program, a City must demonstrate: • Statistical data showing disparity • Anecdotal evidence of discrimination • Race and gender neutral program not effective • This study shows: • Statistical disparity in City contracting • Insufficient anecdotal evidence • SBO Program has been effective

  5. 2011 Results – African Americans

  6. Anecdotal Results – African American Total of 168 African American Respondents • 41% of firms stated they were used when SBE goals applied, but seldom or never, solicited for other contracts outside of the SBO Program • 33.4% of firms stated that there is an informal network that excluded their firms • 25% of firms were included for good faith efforts then dropped after contract award • 3.6% of firms experienced discrimination as a subcontractor bidding/proposing Charlotte projects • 7.7% of firms experienced discrimination as a prime contractor bidding/proposing Charlotte projects

  7. 2003 v. 2011 African American Utilization Comparison

  8. 2011 Results – Asian Americans

  9. Anecdotal Results – Asian American Total of 49 Asian American Respondents • 26.5% of firms stated they were used when SBE goals applied, but seldom or never, solicited for other contracts outside of the SBO Program • 14.2% of firms stated that there is an informal network that excluded their firms • 10.2% of firms were included for good faith efforts then dropped after contract award • 4.1% of firms experienced discrimination as a subcontractor bidding/proposing Charlotte projects • 4.1% of firms experienced discrimination as a prime contractor bidding/proposing Charlotte projects

  10. 2003 v. 2011 Asian American Utilization Comparison

  11. 2011 Results – Hispanic Americans

  12. Anecdotal Results – Hispanic American Total of 49 Hispanic American Respondents • 28.6% of firms stated they were used when SBE goals applied, but seldom or never, solicited for other contracts outside of the SBO Program • 20.4% of firms stated that there is an informal network that excluded their firms • 16.3% of firms were included for good faith efforts then dropped after contract award • 0% of firms experienced discrimination as a subcontractor bidding/proposing Charlotte projects • 2.0% of firms experienced discrimination as a prime contractor bidding/proposing Charlotte projects

  13. 2003 v. 2011 Hispanic American Utilization Comparison

  14. 2011 Results – Native Americans *Using custom census measure of availability

  15. Anecdotal Results – Native American Total of 19 Native American Respondents • 31.6% of firms stated they were used when SBE goals applied, but seldom or never, solicited for other contracts outside of the SBO Program • 15.8% of firms stated that there is an informal network that excluded their firms • 15.8% of firms were included for good faith efforts then dropped after contract award • 0% of firms experienced discrimination as a subcontractor bidding/proposing Charlotte projects • 0% of firms experienced discrimination as a prime contractor bidding/proposing Charlotte projects

  16. 2003 v. 2011 Native American Utilization Comparison

  17. 2011 Results – Nonminority Women

  18. Anecdotal Results – Nonminority Women Total of 117 Nonminority Women Respondents • 27.3% of firms stated they were used when SBE goals applied, but seldom or never, solicited for other contracts outside of the SBO Program • 23.1% of firms stated that there is an informal network that excluded their firms • 15.4% of firms were included for good faith efforts then dropped after contract award • 3.4% of firms experienced discrimination as a subcontractor bidding/proposing Charlotte projects • 5.1% of firms experienced discrimination as a prime contractor bidding/proposing Charlotte projects

  19. 2003 v. 2011 Nonminority Women Utilization Comparison

  20. 2003 v. 2011 Disparity Study ComparisonM/WBE Utilization Dollars-Subcontracting • Spending with M/WBE construction subcontractors increased from $23.2 million to $62.1 million, a 166.5 percent increase. • WBE construction subcontractor utilization increased 268.6 percent. • MBE construction subcontractor utilization increased 67.5 percent. • M/WBE construction subcontracting as a percentage of the total prime contracts tripled. • The percentage of construction subcontract dollars received by M/WBEs increased from 7.7 percent to 28.9 percent • The number of M/WBE construction subcontractors increased 27.2 percent. • Spending with WBE A&E subcontractors increased 118.5 percent. • MBE A&E subcontractor utilization increased 148.0 percent. • The number of M/WBE A&E subconsultants utilized increased 82.0 percent.

  21. Disparity Findings at Sub Level – M/WBE Construction Overutilization = > 100.00 Substantial Disparity = < 80.00

  22. Disparity Findings at Sub Level – M/WBE Architecture & Engineering Overutilization = > 100.00 Substantial Disparity = < 80.00

  23. Subcontractor Utilization: 2011 Disparity Study Compared to 2003 Disparity Study WBE • WBE construction subcontractor utilization increased 268.6% • WBE A&E subconsultant utilization increased 118.5% MBE • MBE construction subcontractor utilization increased 67.5% • MBE A&E subconsultant utilization increased 148.0% • M/WBE construction subcontracting as a percentage of the total prime contracts tripled

  24. Private Sector M/WBE Construction Subcontractor Utilization • MBE subcontractors were issued permits for projects totaling $22.2 million (1.20%). • WBE subcontractors received $33.5 million in subcontracting projects (1.82 %). • This lack of use of M/WBE subcontractors in the absence of SBE subcontracting goals was consistent with what M/WBEs stated in the survey.

  25. Disparity Findings at Prime Level – M/WBE Construction

  26. Disparity Findings at Prime Level – M/WBE A&E Overutilization = > 100.00 Substantial Disparity = < 80.00

  27. Disparity Findings at Prime Level – M/WBE Professional Services Overutilization = > 100.00 Substantial Disparity = < 80.00

  28. Disparity Findings at Prime Level – M/WBE Other Services Overutilization = > 100.00 Substantial Disparity = < 80.00

  29. Disparity Findings at Prime Level – M/WBE Goods & Supplies Overutilization = > 100.00 Substantial Disparity = < 80.00

  30. MGT Conclusions This study finds disparity in City contracting. However, evidence does not support the restoration of race- and gender-conscious subcontracting goals because: • SBO Program has been more effective in M/WBE utilization than the previous M/WBE Program • SBO Program as effective as other M/WBE programs in the Charlotte area • The anecdotal evidence of racial exclusion was less in this study than the evidence in the H.B.Rowe case

  31. Key Recommendations Options to Consider: • Raise the informal threshold for construction • Vendor rotation • Mandatory joint ventures on large construction projects • Include SBE subcontracting goals in categories other than construction and A&E • Include RFP provision requiring proposers to report prior M/WBE utilization and future strategy • Raise the personal net worth threshold

  32. Questions

More Related