Regional leaders launch post I-200 initiative "Equity In Contracting"

Since November 17, 1998, shortly after the passage of Initiative 200, a team of operational and legal staff from local government agencies has been meeting to develop a new approach to create contracting opportunities for disadvantaged businesses. The team was asked by King County Executive Ron Sims, Seattle Mayor Paul Schell, Port of Seattle Executive Director Mic Dinsmore, University Washington President Richard McCormick, and Seattle Public Schools Superintendent Joseph Olchefske to come up with new ways to promote contracting equity in the new legal context of I-200.

Initiative 200 has limited the tools available to governments to address the effects of historical discrimination. The regional effort has focused on the desire to take meaningful action while complying with the letter and spirit of the law.

The Contracting Equity Framework combines the strategies of broadening existing anti-discrimination laws to cover contracting, establishing new criteria for priority utilization in contracting, facilitating new opportunities for small businesses, and supporting business development.

Mayor Schell originally called for a meeting of the regional heads in November of 1998 because, "The County, City, Port, School District, and the University have common values and a mutual resolve to eradicate discrimination and help small and disadvantaged businesses to prosper and excel in the economic mainstream of our region."

In March 1999, the regional jurisdictions, along with the State of Washington's Women- and Minority-Owned Business Administration, sponsored a symposium at the University of Washington Business School which began the process of involving businesses, business development programs, agency staff from all jurisdictions, and advocates to help shape the Contracting Equity Framework. Additional meetings were held in June with groups and individuals, including many who attended the March symposium, to continue discussions of the program as it evolved.

According to Dr. William Bradford, Dean of the University of Washington's Business school, "The programs and strategies described in this document have consistently received wide support, and President McCormick affirms the new approach. In particular, input from the broad and representative group of stakeholders enabled us to refine The Boost Program eligibility criteria to meet the real economic and educational needs of small businesses."

Contracting Equity Framework

"The result of the regional planning effort," according to Executive Ron Sims, "is the creation of a four-part 'Contracting Equity Framework' that pursues the important goals of combating discrimination and positioning businesses to thrive over the long-term."

"The Port of Seattle is excited about this program for several reasons. We believe it will provide a route to economic empowerment for small businesses in our region, and strengthen networking between prime and subcontractors," said Mic Dinsmore, Executive Director of the Port of Seattle.

Within the next thirty days, the regional executives will be forwarding legislation or resolutions to their governing and legislative bodies in support of the Contracting Equity Framework.

The Contracting Equity Framework combines the following strategies:

1. Anti-discrimination

   This effort extends traditional anti-discrimination laws from housing and employment to public and private contracting practices by adding new nondiscrimination ordinances for King County and the City of Seattle. These "Fair Contracting Practices" ordinances will prohibit discrimination in contracting by business entities doing business within un-incorporated King County and within the City of Seattle. The ordinances will apply to private and public contracting and will establish monetary penalties for violations.

2. Priority and Incentives in Contracting: The Boost Program

   In order to create incentives for the use and development of businesses most in need, the regional work group has developed a new contracting program, The Boost Program. The Boost Program would be designed to further the economic justice and economic development goals by identifying contractors that should be given a degree of short-term competitive advantage in seeking public projects. The regional team has looked at a range of eligibility criteria for participation and is proposing the program apply to:

   • Small businesses, defined based on annual sales compared with the Small Business Administration standards, and by considering the financial resources of the owner (i.e., businesses with very wealthy owners or numerous affiliate businesses would be ineligible). The program may also require that local businesses be defined as those within the geographic boundaries of the participating jurisdictions.

   • Participant in business development program, defined based on completion or enrollment in programs geared to developing competitive and technical business skills.

   • Businesses within economically distressed areas, defined as those areas of concentrated poverty such as indicated by boundaries set for empowerment zones, enterprise communities or HUBZones.

   The Boost Program would offer both prime contractors and Boost-designated businesses an incentive to work together in public works projects, and thereby encourage successful and sustaining business relationships. Under the proposed program, work done by Boost businesses could receive a competitive discount of up to 10% whether performed as a prime contractor or when used as a subcontractor or supplier.

3. Contracting Practices

   Along with launching a new contracting discount program, the regional work group sees benefits in adjusting traditional contracting practices to create and facilitate opportunities for small businesses. For example, we are looking at ways for small businesses to serve and succeed as prime contractors. Also being explored are methods to increase the prime contractor and agency outreach to small businesses and minimize bureaucratic obstacles that such businesses may experience.

4. Business Development

   The contracting incentives to be provided to Boost participants would give those businesses the opportunity to generate income, build business connections within their respective specialties, and otherwise move toward sustainability. Strategies under consideration include a program for providing bonding assistance for public works contracts at both the King County and City of Seattle levels. Another focus will be to develop supportive options such as technical assistance and mentoring programs and other business development concepts.

In addition to relying heavily on the hands-on experience and knowledge of the local businesses and stakeholders who participated in the UW symposium discussions, the regional work group studied examples of contracting strategies implemented elsewhere in the country for their potential applicability in the Puget Sound region. According to Seattle Public Schools Superintendent Joseph Olchefske, "We did our homework for the Equity In Contracting Framework by assessing programs as far away as Texas and Milwaukee, and as close to home as San Jose and San Francisco, that attempt to deal with economic disparity and broaden contracting opportunities. Seattle Public Schools is proud to support a proposal that combines education and business development with strategies for addressing discrimination and inequities in our region."

Seattle City Councilmember Martha Choe, a strong proponent of affirmative action measures and an outspoken leader in the fight against racial discrimination,. added, "It is critical that we continue to promote diversity and ensure equal access to public contracts. Discrimination still exists in our society, and we need to find ways to address it. I appreciate the hard work that has gone into shaping a contracting framework that meets the needs of our diverse and growing region. I am especially pleased that these efforts have proactively included the participation of the businesses most affected.."