EXHIBIT ϭϮ
The QPWB Small Business Certification
Initiative is an established business program
of the law firm of Quintairos, Prieto, Wood
& Boyer (QPWB) that provides legal
services and related business consultation
to disadvantaged business enterprises
(DBEs), minority business enterprises
(MBEs), women business enterprises (WBEs),
veteran-owned business enterprises (VBEs),
business enterprises owned by people with
disabilities (BEPD) and LGBT-owned business enterpirses (LGBT) that are seeking to receive and participate on contracts awarded by governmental agencies and major corporations which have small business
programs. These programs are intended to
facilitate the significant growth and development of certified businesses by helping them to compete for and secure major contract
opportunities from government agencies,
their prime contractors and consultants,
and from the top corporations nationwide.
The QPWB Small Business Certification
Initiative can provide your business with a
variety of specialized legal, business and
professional consulting services from experienced attorneys who practice primarily in the Chicago and Atlanta offices of QPWB.
Recognizing that many small businesses
have been severely impacted from the
Coronavirus pandemic, each participating
business will receive a free one-on-one
legal session from QPWB. Additional legal
services may be provided at reduced
hourly rates if needed, upon request by a
participating business.
The services provided by QPWB will
primarily focus on helping your business
to: 1) better understand the certification
eligibility requirements and common pitfalls;
2) determine whether your business qualifies for certification eligibility; 3) complete its certification application, including the
checklist of supporting documentation;
4) properly respond to certification inquiries
and denial decisions by a certifying agency;
and 5) facilitate the expansion of its
designated certification specialty areas, so
that your business can qualify to participate
on more contracts.
In addition, participating businesses may
request and receive related services,
on a case-by-case basis, in the following
areas: government bidding and contracting; contract and subcontract review, negotiations and drafting; small business
subcontracting plans and utilization reports;
Section 3 and other types of certification
eligibility; joint venture, mentor/protégé
and other types of teaming relationships
and agreements; contract monitoring and
compliance; contract disputes; contract
terminations; and certification ineligibility
decisions, governmental investigations and
related debarments or suspensions.
We can also help participating businesses that are seeking governmental opportunities to better understand and
comply with complex, often ambiguous and
ever-changing government rules, regulations and policies. It is critical that you know how to successfully navigate the government
procurement, solicitation and contracting
process, in order to achieve your business
goals and avoid severe contract penalties,
including contract termination, debarment,
suspension, certification denial, decertification,
liquidated damages, fines, as well as, civil
and criminal penalties.
A certified business is generally defined
as a business that is deemed by a certifying
agency to be at least 51% or more owned,
controlled and operated by one or more
individuals who are United States citizens
that are either women or Black, AsianIndian, Asian-Pacific, Hispanic and /or Native American or veterans or persons
with disabilities or persons who are LGBT.
Whether a business is deemed to be
majority controlled by these individuals
depends on its management and daily
operations. Most certifying agencies have
certification requirements that specify
their eligibility criteria and application
process for businesses that are seeking
certification. DBE, MBE, WBE and VBE
certifications are the most common types
The QPWB Small Business Certification Initiative | Page 1
THE QPWB SMALL BUSINESS
CERTIFICATION INITIATIVE
CERTIFIED BUSINESS
SERVICES PROVIDED
Certified Business continues on page 2
For additional information about The QPWB
Small Business Certification Initiative,
email one of the below listed QPWB
attorneys. Please be on the lookout for
our upcoming newsletters which will
include: information about local certifying
agencies in Chicago and Atlanta; listing
of major corporations with DBE/MBE/WBE/
VBE/BEPD/LGBT programs; certification
application questions; standard application
documents; common pitfalls to avoid; and
frequently asked questions.
We appreciate your interest to participate
in The QPWB Small Business Certification
Initiative and hope to have the opportunity
to work with you to provide your business
with legal services and business
consultation that will help you to obtain
the necessary certifications, in order for
your business to participate in governmental and corporate small business programs nationwide and achieve its QUINTAIROS, business goals in 2021/2022.
PRIETO, WOOD
& BOYER, P.A.
CHICAGO OFFICE
CAROL A. CESARETTI,
MANAGING PARTNER
115 SOUTH LASALLE STREET
FLOOR 31
CHICAGO, ILLINOIS 60603
ATLANTA OFFICE
ALPHONSIE NELSON,
MANAGING PARTNER
365 NORTHRIDGE ROAD
SUITE 230
ATLANTA, GEORGIA 30350
WWW.QPWBLAW.COM
ANITA J. PONDER
Partner | Director - Chicago
Government Contracts Group
CHICAGO OFFICE
P: (312) 566-0040
E: [email protected]
DRAGOMIR A.
TSVETENOV
Associate
CHICAGO OFFICE
P: (312) 566-0040
E: dragomir.tsvetenov
@qpwblaw.com
JENNIFER L.
COBB
Associate
ATLANTA OFFICE
P: (770) 650-8737
E: jennifer.cobb
@qpwblaw.com
ABOUT QPWB
CONTACT US
THE QPWB SMALL BUSINESS CERTIFICATION INITIATIVE (CONT.) CERTIFIED BUSINESS (CONT.)
The QPWB Small Business Certification Initiative | Page 2 of certification. Comprehensive certification
requirements are intended to prevent
businesses that are not majority owned,
controlled and operated by women or
minority individuals or veterans or persons
with disabilities or persons who are LGBT
from obtaining certification eligibility and
contract opportunities that are specifically
targeted or set aside for certified businesses. As a result, the certification application process is often extensive, document intensive, time-consuming, complex, as well as, exhausting to applicants. Our experienced
QPWB attorneys will facilitate and expedite
the certification application and evaluation
process for businesses participating in The
QPWB Small Business Certification Initiative,
and significantly increase their likelihood of
obtaining certification eligibility.
QPWB is a national, full service business
law firm with over 40 practice areas. QPWB
is the largest minority and women-owned
law firm in the nation with over 300
attorneys in 27 offices. The Chicago office
of QPWB is located at 115 South LaSalle
Street, Suite 3100 and its managing
partner is Carol Cesaretti. The Atlanta
office of QPWB is located at 365 Northridge
Road, Suite 230 and its managing partner
is Alphonsie Nelson. The firm is certified as
an MBE by the National Minority Supplier
Business Development Council. The QPWB
Small Business Certification Initiative will
be implemented by a highly experienced
and diverse legal team in QPWB’s
Chicago and Atlanta offices, under the
leadership of Anita Ponder, a partner at
QPWB who heads QPWB’s Government
Contracts Practice Group in its Chicago
office. Ms. Ponder has more than 30 years
of experience providing legal services,
consultation, strategic guidance, training
and advocacy to government contractors,
including large, mid-sized, family-owned
and small businesses that are disadvantaged, minority, women and veteran-owned businesses. She has also served as
legal counsel to several State and local
governmental agencies, including public
housing authorities on Section 3 business
matters. Prior to practicing law in some of
the top law firms in Illinois, Ms. Ponder was
a government procurement manager and
attorney who served as the Director
of Certification and Director of Contract
Compliance for a major governmental
agency.
THE QPWB SMALL BUSINESS
CERTIFICATION INITIATIVE
CONTENTS
THE QPWB SMALL
BUSINESS CERTIFICATION
INITIATIVE
Volume 2 | September 2021
BENEFITS TO BECOMING CERTIFIED
Volume 2 | September 2021 | Page 1
Benefits to becoming certified
continues on page 2...
The QPWB Small Business Certification Initiative
is an established business program of the law firm
of Quintairos, Prieto, Wood & Boyer (QPWB) that
provides legal services and related business consultation to disadvantaged business enterprises (DBEs), minority business enterprises (MBEs), women business enterprises (WBEs), veteran-owned business enterprises (VBEs), business enterprises owned by
people with disabilities (BEPD) and LGBT-owned
business enterprises (LGBT) that are seeking to
receive and participate on contracts awarded by
governmental agencies and major corporations
which have supplier diversity and/or small business programs. These programs are intended to facilitate the significant growth and development of
small businesses by helping them to compete
for and secure major contract opportunities from
government agencies, their prime contractors and
consultants, and from some of the top corporations
nationwide.
Certification is a no-brainer for eligible small
businesses! It is your stamp of approval that
allows you to participate in MBE/WBE programs
in the public and private sectors. This is one of the
best marketing tools that a MBE/WBE can have
to grow and sustain its success. Besides securing
major contract opportunities, there are many other
benefits to having your business become certified.
This newsletter provides an overview of some of
the benefits that small businesses can expect to
receive after their business becomes certified as an
MBE/WBE or certified in another preferred group
(ie, disadvantaged, veteran, people with disabilities,
LGBT). Let’s get started!
Although certification offers many benefits to small
businesses, many businesses do not seek certification eligibility because of the time and expense that it takes to complete the application process. It
takes time for applicants to compile all of the required certification documents that must be submitted with
an application and to complete a certification application. Some certifying agencies require applicants to submit an application fee with their application.
Many applicants seek assistance from local Assist
Agencies, business or community organizations and
attorneys in private law firms to help them complete
their certification application. Experienced attorneys
will likely be the most helpful, but they could be costly if they are in private practice. Attorneys are able to readily determine whether the applicant has any
eligibility problems that may prevent it from becoming certified, and they usually know how to properly address the problems with the appropriate legal
documentation to facilitate their eligibility.
So, you may be asking yourself right now - is it really worth it? If you need or want to receive certain benefits to sustain or grow your business, then applying for certification eligibility from the appropriate certifying agencies is well worth it. Some of the benefits may include:
OVERVIEW OF CERTIFICATION
BENEFITS
• Access to develop relationships with
supplier diversity and procurement
administrators with major corporations,
and federal, state, and local agencies
nationwide
• Opportunities to pursue major contracts
and subcontracts with corporations,
prime contractors and government
agencies that have MBE/WBE policies
and programs
• Access to business networking events
and programs, mentor/protege
relationships, executive and business
education and capacity development
programs
• Eligibility for local, regional and national
awards and recognition by business
organizations in your industry and
community
• Promote your business, expand
your company’s visibility, and develop
your business relationships in the
public and private marketplace
• Obtain support from other certified
business owners and small business
professionals who are committed to
promoting diversity, equity and the
inclusion of small businesses
A
Volume 2 | September 2021 | Page 2
RECOGNITION & STATUS
As a certified business, you will have access to
many Fortune 500 corporations and other businesses that have supplier diversity programs which offer a host of benefits. Some of those
benefits may include:
• Access to local and national database
of bidders and contractors/consultants
• Access to formal and informal contract and
subcontract opportunities
• Inclusion in databases of certified businesses
which is accessed by corporations and their
prime contractors/consultants that are seeking
to do business with MBE/WBEs
• Access to supplier diversity administrators
who are responsible for developing
relationships with diverse suppliers, assessing
their goods or services, and assisting them
in learning how to participate in the
company’s bidding and purchasing process
to receive contract opportunities
• Access to corporate executives and buyers
who will provide share information about
contract and subcontract opportunities in
the pipeline and who may facilitate their
introduction to select prime contractors/
consultants
• Opportunities to attend business networking
events that are intended to facilitate
contracting relationships between certified
businesses and major corporations, as
well as between certified businesses and
other small businesses
As a certified business, you will have access to
business programs and resources that are designed to help you and your business to grow and be successful. Certification benefits in this area
may include:
• Access to technical and financial resources
at government agencies and small business
organizations
• Capacity development support from
primes contractors
• Relationships with large businesses and/
or business executives in your industry
who are interested in mentoring small
businesses in a formal Mentor/Protégé
Program
• Access to business and professional
development workshops and programs
EDUCATION & DEVELOPMENT(CONT.) ADVOCACY & SUPPORT(CONT.)
ADVOCACY & SUPPORT
EDUCATION & DEVELOPMENT
ACCESS TO CORPORATIONS
• Access to financial resources
• Opportunities to participate in executive
or leadership educational programs
• Access to business resources from prime
contractors (ie, bonding, lines of credit,
insurance, equipment, supplies, materials
or services)
The certification of minority, women and other
small businesses, which seek to participate in
supplier diversity or small business programs, is
common throughout business communities across
the nation. It typically is a comprehensive application process that determines whether the business is at least 51% owned, controlled and operated
by one or more minority individuals or individuals
in the designated small business group. Many
certified businesses consider their certification
eligibility to be a distinguished achievement that
should be shared with prospective clients and
customers, particularly those who are required
to do business with certified businesses. Another
benefit of certification is that it will increase the
visibility, profile and stature of your business in the public and private marketplaces. Your certification
eligibility can be marketed to promote your business in a number of ways:
• Display your certification letters and/or
certificates in your workplace
• Specify your certification status on the
marketing materials of your business
• Specify your certification status in your
social media profiles
• Promote your business by specifying your
certification status within your small business
networks, including your sponsorship
activities, speaking engagements, business
conferences, workshops, meetings and
other business development activities
• Increase the recognition and stature of your
business by being nominated to receive
local, regional or national awards by business
organizations
• Hold leadership positions in local, regional
and national business, industry, procurement
and/or supplier diversity or small business
organizations
As a certified business, you will benefit from the
strong and effective advocacy by small business
advocates, small business organizations and
BENEFITS TO BECOMING CERTIFIED
Many small businesses do not know
how to successfully compete for contract
opportunities with Fortune 500 companies,
other large businesses and government
agencies. Certification has proven to be
one of the best tools they have to get their
foot in the door of major corporations and
government agencies that have MBE/WBE
or supplier diversity programs. There are
many benefits to getting certified. The most
common benefits include access to corporate and government buyers, business resources, small business advocates and
organizations, marketing opportunities and
of course, contracting and subcontracting
opportunities. You should consider the potential benefits that we have identified in this newsletter when you determine whether
your business should apply for and obtain
certification eligibility from one or more
certifying agencies or whether you should
expand your current certification eligibility
to include additional specialty areas. Typically, your business can only fulfill an MBE/ WBE contract participation goal in its approved specialty areas, as identified in your current certification letter. If you want to
expand your contracting opportunities,
then you should consider expanding your
certification specialty areas. Considering
that these are very challenging times for
most businesses, obtaining certification eligibility can help you to significantly increase your revenues, grow your business and
achieve your business goals.
SUMMARY
groups, as well as, government officials and administrators locally, regionally and nationwide who are committed to the development, growth and
success of small businesses. Certification benefits
in this area may include:
• Connect with small business owners and
advocates from throughout the country,
virtually and in-person, through national,
regional and local meetings
• Become a strong advocate for small businesses
in social media in order to support and promote
small businesses, and increase their contracting
and subcontracting opportunities
• Participate in small business forums, organizations, committees, surveys, and other activities to become more knowledgeable about and
address issues that small business owners are
facing that are preventing them from achieving
their business goals
BENEFITS TO BECOMING CERTIFIED
For additional information about The QPWB
Small Business Certification Initiative, please
email Anita Ponder. In our upcoming newsletters, we will identify major certifying agencies and MBE / WBE programs in
Chicago, Illinois and Atlanta, Georgia; identify some of the top Fortune 500 corporations nationwide that have MBE/WBE programs;
and provide information about the certification eligibility requirements, certification application process and common pitfalls that
certification applicants should avoid. We
initially selected agencies and programs in
Chicago and Atlanta because our firm’s “Small
Business Certification Initiative” is currently
targeted to provide legal assistance to certification applicants in these locations. However, as a national law firm, we have the capability
and resources to provide legal assistance to
applicants nationwide. If you are a prospective
certification applicant and seek certification eligibility from a local, state or federal agency, we are happy to provide you legal assistance.
CHICAGO OFFICE
CAROL A. CESARETTI
MANAGING PARTNER
115 SOUTH LASALLE STREET
FLOOR 31
CHICAGO, ILLINOIS 60603
(312) 566-0040
ATLANTA OFFICE
ALPHONSIE NELSON
MANAGING PARTNER
365 NORTHRIDGE ROAD
SUITE 230
ATLANTA, GEORGIA 30350
(770) 650-8737
WWW.QPWBLAW.COM
QPWB is a national, full service business law
firm with over 40 practice areas. QPWB is the
largest minority and women-owned law firm in
the nation with approximately 400 attorneys
in 27 offices. The Chicago office of QPWB is
located at 115 South LaSalle Street, Suite 3100
and its managing partner is Carol Cesaretti. The
Atlanta office of QPWB is located at 365
Northridge Road, Suite 230 and its managing
partner is Alphonsie Nelson. The firm is certified
as an MBE by the National Minority Supplier
Business Development Council. The QPWB
Small Business Certification Initiative will be implemented by a highly experienced and diverse legal team in QPWB’s Chicago and Atlanta
offices, under the leadership of Anita Ponder,
a partner at QPWB who heads QPWB’s
Government Contracts Practice Group in its
Chicago office. Ms. Ponder has more than 30
years of experience providing legal services,
consultation, strategic guidance, training and
advocacy to government contractors, including
large, mid-sized, family-owned and small businesses that are disadvantaged, minority, women and veteran-owned businesses. She has also
served as legal counsel to several State and local
governmental agencies, including public housing
authorities on Section 3 business matters. Prior
to practicing law in some of the top law firms in
Illinois, Ms. Ponder was a government procurement manager and attorney who served as the Director of Certification and Director of Contract
Compliance for a major governmental agency.
ABOUT QPWB
Volume 2 | September 2021 | Page 3
ANITA J. PONDER
Partner | Director - Chicago
Government Contracts Group
CHICAGO OFFICE
P: (312) 566-0040
E: [email protected]
DRAGOMIR A.
TSVETENOV
Associate
CHICAGO OFFICE
P: (312) 566-0040
E: dragomir.tsvetenov
@qpwblaw.com
JENNIFER L.
COBB
Associate
ATLANTA OFFICE
P: (770) 650-8737
E: jennifer.cobb
@qpwblaw.com
GHANSHYAM
PATEL
Of Counsel
CHICAGO OFFICE
P: (312) 566-0040
E: ghanshyam.patel
@qpwblaw.com
QUINTAIROS,
PRIETO, WOOD
& BOYER, P.A.
The information contained in this newsletter is for general information purposes only. QPWB is not responsible for any errors or omissions, or for the results obtained, or for any benefits not obtained from the use of this information. All information in this newsletter is provided “as is”, with no guarantee of completeness, accuracy, suitability or availability of the results or benefits obtained from the use of this information, and without warranty of any kind, express or implied. Any reliance you place on the information in this newsletter and actions you take to apply for certification eligibility and/or conduct business under any MBE/WBE, supplier diversity and/or small business program is at your own risk.
CONTACT US
THE QPWB SMALL BUSINESS
CERTIFICATION INITIATIVE
CONTENTS
Names and contact information for
select certifying agencies in Illinois
and Georgia
NMSDC corporate members that
promote minority/women businesses
About QPWB
www.qpwblaw.com
THE QPWB
SMALL BUSINESS
CERTIFICATION
INITIATIVE
Volume 3 | November 2021
Volume 3 | November 2021 | Page 1
NATIONAL CERTIFYING AGENCIES
The NMSDC Network includes 23 Regional
Councils across the country and 1,750 corporate Members, including America’s top publiclyowned, privately-owned and foreign-owned companies. The Regional Councils certify and
connect more than 12,000 minority - owned
businesses with member corporations.
1359 Broadway,
Suite 1000
New York, New York 10018
(212) 944-2430
The United States Department of Transportation (USDOT or DOT) is a federal Cabinet department of the U.S. government concerned
with transportation. The Department’s Disadvantaged Business Enterprise (DBE) program is designed to remedy ongoing discrimination
and the continuing effects of past discrimination in federally-assisted highway, transit, airport, and highway safety financial assistance transportation contracting markets nationwide. The primary remedial goal and
objective of the DBE program is to level the
playing field by providing small businesses
owned and controlled by socially and economically disadvantaged individuals a fair opportunity to compete for federally funded
transportation contracts.
U.S. SMALL BUSINESS
ADMINISTRATION (SBA)
The U.S. Small Business Administration is a
United States government agency that provides
support to entrepreneurs and small businesses.
409 3rd Street, SW
Washington, DC 20416
(800) 827-5722
U.S. DEPARTMENT OF
TRANSPORTATION (DOT)
1200 New Jersey Ave, SE
Washington, DC 20590
(800) 832-5660
Certifying agency list continues on page 5
NATIONAL MINORITY SUPPLIER
DEVELOPMENT COUNCIL (NMSDC)
The private sector, as well and the state and federal governments offer a wide variety of opportunities for certified small businesses to compete for contracts. In this newsletter you will find a list of private, non-profit certifying agencies as well as state and federal certifying agencies, and information on who they are and how they can be reached.
Volume 3 | November 2021 | Page 2
CERTIFYING AGENCIES IN ILLINOIS (CONT.)
Certifying agency list continues on page 5
DBE/MBE/WBE CERTIFICATION
CITY OF SAVANNAH
2 East Bay Street
Savannah, Georgia 31401
(912) 651 6565
141 Pryor Street, SW
Atlanta, Georgia 30303
(404) 612-4000
STATE OF ILLINOIS DEPARTMENT
OF CENTRAL MANAGEMENT
SERVICES (ILCMS)
Illinois is a midwestern state bordering
Indiana in the east and the Mississippi River
in the west. Illinois’s Business Enterprise
Program (BEP) assists businesses owned
by minorities, women and people with
disabilities gain access to the State of
Illinois procurement process. BEP certification with the State of Illinois can also open the door to opportunities with other
public and private entities which are looking
for diverse suppliers.
207 State House
Springfield, Illinois 62706
(217) 782-2141
ILLINOIS STATE
TOLL HIGHWAY AUTHORITY
(ILLINOIS TOLLWAY)
The Illinois State Toll Highway Authority is
an administrative agency of the U.S. state
2700 Ogden Avenue
Downers Grove, Illinois 60515
(800) 824-7277
121 North LaSalle Street
Chicago, Illinois 60602
(312) 744-6249
COOK COUNTY
216 West Jackson Blvd, Suite 600
Chicago, Illinois 60606
(312) 755-8880
Cook County is the most populous county
in the U.S. state of Illinois and the secondmost-populous county in the United States after Los Angeles County, California.
Cook County offers MBE and WBE credit
to City of Chicago certified MBEs and
WBEs. Cook County also Cook County
offers a 5% bid preference to Cook County
certified VBEs and SDVBEs and to CMS
certified VOSBs and SDVOSBs.
118 North Clark Street
Chicago, Illinois 60602
(773) 674-1945
CITY OF CHICAGO
Chicago, on Lake Michigan in Illinois, is
among the largest cities in the U.S.
Chicago’s Minority and Women-Owned
Business (MBE/WBE) Certification Program demonstrates the City’s continued commitment to the success of minority-and
women-owned businesses by offering
certification opportunities to MBE and
WBE firms.
FULTON COUNTY
The City of Savannah certifies woman and
minority owned businesses to provide equal
opportunities to all businesses operating in
the area. Qualifying businesses must be
independent, meet SBA size standards,
and be at least 51% owned by a woman or
minority who meets financial requirements
and is an American citizen.
Fulton County offers certifications for
businesses owned by women, minorities,
veterans, and service-disabled veterans
in the area. With these certifications,
businesses within Fulton County can enjoy
increased access to local projects and
contracts.
WOMEN’S BUSINESS
ENTERPRISE NATIONAL
COUNCIL (WBENC)
The Women’s Business Enterprise National
Council (WBENC) is a leading non-profit
organization dedicated to helping womenowned businesses thrive. 1120 Connecticut Avenue, NW,
Suite 1000
Washington, DC 20036
(202) 872-5515
CHICAGO MINORITY
SUPPLIER DEVELOPMENT
COUNCIL (CMSDC)
The Chicago Minority Supplier Development
Council, Inc. (CMSDC) is a premier organization for increasing business opportunities between major buying organizations and
minority-owned businesses. Their mission
is to certify, develop, connect, and advocate
for minority suppliers as the premier supplier
development organization creating sustainable and profitable relationships between minority business enterprises and major
buying organizations.
NATIONAL CERTIFYING
AGENCIES (CONT.)
CERTIFYING AGENCIES
IN ILLINOIS
CITY OF CHICAGO (CONT.)
of Illinois charged with building, operating,
and maintaining toll roads in the state. The
Illinois Tollway’s Disadvantaged Business
Enterprise (DBE) Program includes disadvantaged, minority and women-owned business enterprise (D/M/WBE) firms with
participation goals for both construction and
professional services contracts.
ILLINOIS STATE
TOLL HIGHWAY AUTHORITY
(ILLINOIS TOLLWAY) (CONT.)
CERTIFYING AGENCIES
IN GEORGIA
DBE/MBE/WBE CERTIFICATION
Volume 3 | November 2021 | Page 3
One Georgia Center
600 West Peachtree NW
Atlanta, Georgia 30308
(404) 631-1990
The Georgia Department of Transportation
is the organization in charge of developing
and maintaining all state and federal roadways in the U.S. state of Georgia. In addition to highways, the department also has a limited role in developing public transportation and general aviation programs. The only
certification by the State of Georgia is for a
Disadvantaged Business Enterprise (DBE)
and that certification is performed by the
GA Department of Transportation (GDOT).
GDOT can also process a Minority Business
Enterprise (MBE) certification once the DBE
certification is approved and proper criteria
are met.
The Metropolitan Atlanta Rapid Transit
Authority (MARTA) offers DBE certifications
to businesses located in DeKalb, Clayton,
and Fulton counties. With this certification,
businesses have increased opportunities
to participate in contracts and projects in
the region.
STATE OF GEORGIA DEPARTMENT
OF TRANSPORTATION (GDOT)
170 Piedmont Avenue, SE
Atlanta, Georgia 30308
(404) 848 5000
MARTA DBE PROGRAM
1072 West Peachtree Street,
#78798
Atlanta, Georgia 30357
(404) 846-3314
The information contained in this newsletter is for general information purposes only. We have made every attempt to ensure that the information has been obtained from reliable sources. QPWB is not responsible for any errors or omissions, or for the results obtained, or for any benefits not obtained from the use of this information. all information in this newsletter is provided “as is”, with no guarantee of completeness, accuracy, suitability or availability of the results or benefits obtained from the use of this information, and without warranty of any kind, express or implied. We have no opinion and make no representations or recommendations regarding which of the certifying agencies from which you should pursue or obtain certification eligibility for your business. In no event will QPWB or the partners, agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this newsletter and/or any decision by any certifying agency to deny your business certification eligibility and/or any decision by a NMSDC corporate member or Government agency from which you seek business. Any reliance you place on the information in this newsletter and actions you take to apply for certification eligibility and/or conduct business is therefore strictly at your own risk.
GEORGIA MINORITY
SUPPLIER DEVELOPMENT
COUNCIL (GSMDC)
759 West Peachtree Street, NE, Suite 107
Atlanta, Georgia 30308
(404) 589-4929
Women who own businesses in Georgia
can get Woman Business Enterprise
(WBE) and Woman-Owned Small Business
(WOSB) certifications through the Greater
Women’s Business Council (GWBC).
This organization is an affiliate of the
Women’s Business Enterprise National
Council (WBENC), which allows it to offer
education, events, resources, and national
support for all certified members.
The Georgia Minority Supplier Development Council (GMSDC) is the state of Georgia’s leading advocacy organization for
small business development and supplier
diversity. Their primary focus is simple –
to certify Minority Business Enterprise firms,
help them prepare to engage global supply
chains, and then facilitate partnerships with
corporations and governments in need of
their goods and services. We also advocate
on behalf of our community in the halls of
government and the overall community.
CERTIFYING AGENCIES IN GEORGIA (CONT.)
GREATER WOMEN’S BUSINESS
COUNCIL (GWBC)
DBE/MBE/WBE CERTIFICATION
Volume 3 | November 2021 | Page 4
• AARP
• Abbott Laboratories, Inc.
• AbbVie Inc.
• Abt Associates Inc.
• Accenture LLP
• Accelerate
Learning, Inc.
• Adecco USA, Inc.
• Adient
• ADP, LLC
• AFLAC US
• Agilent Technologies
• Aisin World
Corporation of America
• AJ Gallagher
• Alkermes, Inc.
• Allegion, PLC
• Allstate
• Altria Client Services, Inc.
• Amazon
• American Airlines, Inc.
• American
Express Company
• American Family
Insurance
• American Red Cross
• American Water
• AmerisourceBergen
Corporation
• Amgen Inc.
• AMN Healthcare
• Anschutz Entertainment
Group
• Ansco & Associates, LLC
• Anthem, Inc.
• Aon Service Corporation
• Apple, Inc.
• Applied Materials, Inc.
• APTIV
• ARAMARK Corporation
• Aston Carter
• AstraZeneca
Pharmaceuticals LP
• Assurant, Inc.
• Asurion
• AT&T Inc.
• A.T. Kearney
• Auto Club Group
• Automotive Rentals, Inc.
• Avangrid, Inc.
(former Iberdrola USA)
• Avis Budget Group, Inc.
• Axalta Coating System
• B2GNow (AskReply, Inc.)
• Bain & Company
• Bank of America
Corporation
• Barclays PLC
• Barilla America, Inc.
• Barton Malow
• BASF Corporation
• Bausch Health
Companies, Inc.
• Baxter Healthcare
Corporation
• Bayer Corporation
• BBVA
• Becton, Dickinson
and Company
• Bedford, Freeman
and Worth Publishing
Group, LLC
• Best Buy
• BGIS Global Integrated
Solutions US LLC
• Bimbo Bakeries, Inc.
• BlackRock
• Black & Veatch
Corporation
• Blue Cross Blue Shield
Association
• BMC Software, Inc.
• BMO Harris Bank
• BMW North
American, LLC
• BNSF Railway Company
• BNY Mellon
Corporation
• Boeing Company
• BorgWarner Inc.
• Boston Scientific
Corporation
• BP America, Inc.
• Brasfield & Gorrie, LLC
• Bristol-Myers Squibb
Company
• Burns & McDonnell, Inc.
• C. H. Robinson
Worldwide, Inc.
• Calpine Corporation
• Caesars Entertainment
Corporation
• Cambium Learning, Inc.
• Campbell Soup
Company
• Capgemini USA
• Capital Group
• Capital One
Financial Corp.
• Cardinal Health, Inc.
• Cargill
• CarMax, Inc.
• Caterpillar Inc.
• CBRE Group, Inc.
• CDW Corporation
• Celanese
• Centene Corporation
• CenterPoint Energy, Inc.
• Centuri Group, Inc.
(formerly NPL
Construction Co.)
• Change Healthcare
• Charter
Communications
• CHEP International, Inc.
• Chevron Services
Company
• Chicago Mercantile
Exchange, Inc.
• Church & Dwight Co.,
Inc.
• Chipotle Mexican Grill
• Ciena Corporation
• CIGNA Corporation
• Cintas Corporation
• Citigroup Inc.
• Citizens Bank, N.A.
• CLEAResult Corporations with MBE/
WBE certifications continues
on page 5...
Consulting, Inc.
• Clorox Company
• CNA Financial
Corporation
• Coca-Cola Company
• Colgate-Palmolive
Company
• Columbia Forest
Products
• Comcast NBCUniversal
• Comerica Bank
• Communications Test
Design, Inc.
• Compass Group,
North America Division
• ConocoPhillips
• Construction
Specialties, Inc.
• Continental AG
• Convoy
• Corizon Health, Inc.
• Corning, Inc.
• Corteva Agriscience
• Coupa Software, Inc.
• Covestro LLC
• Covius Holdings, Inc.
(formely LenderLive)
• Cox Enterprises, Inc.
• Cracker Barrel Old
Country Store, Inc.
• Credit Suisse
• CSX Transportation Inc.
• Cummins Inc.
• Cushman & Wakefield
• CVS Health
• Darden Restaurants, Inc.
• Dell Technologies
• Deloitte, LLP
• Delta Air Lines, Inc.
• Delta Dental Insurance
Company
• Denny’s Corporation
• DENSO International
America, Inc.
• DentaQuest, LLC
• DHL Express, Inc.
• Dick’s Sporting Goods
• Discover Financial
Services
• Diversified Maintenance
Systems
• Dominion Energy
• Dow Chemical Company
• DTE Energy Company
• Duke Energy
• Dun & Bradstreet
Corporation
• DuPont
• Eaton Corporation
• Ecolab, Inc.
• Education Networks
of America
• Element Fleet
Management
• Eli Lilly and Company
• Elior North America
• EMCOR Government
Services
• Enbridge
• Engie North America
• Encova Insurance
• Entergy Corporation
• Enterprise Holdings
• E-Procurement
Services (EPS)
• EQT Corporation
• Equipment Controls
Company
• Ericsson Inc.
• Ernst & Young
• Essential Utilities, Inc.
• Essendant Co.
• Essity North America
• The Estee Lauder
Company
• Exide Technologies, Inc.
• Experian
• ExxonMobil
• Facebook, Inc.
• Fannie Mae
There are many Fortune 500 companies
nationwide that have MBE/WBE policies and/or
programs to facilitate the growth and development of certified businesses. These programs typically include contract participation goals,
minority/women business outreach and registration, and contract compliance requirements. The programs may offer a variety of benefits, as previously discussed, to certified businesses including contract and subcontract opportunities. In order
to demonstrate their commitment to do business
with MBE / WBEs, many of these corporations
are members of and/or have relationships with
not-for-profit business organizations that support
and/or certify minority and women businesses,
such as the National Minority Business Council
(NMSDC) and the Women’s Business enterprise
National Council (WBENC). Below is a list of select Fortune 500 that have MBE/WBE programs for participation by certified businesses:
SELECT CORORATIONS WITH MBE/WBE PROGRAMS
• Farmers Insurance
Group, Inc.
• Fastenal Company
• Federal Home Loan
Bank of Chicago
• Federal Home Loan
Bank of Des Moines
• Federal Reserve System
• FedEx Corporation
• Fender Musical
Instruments Corporation
• Fidelity Investments
• Fifth Third Bancorp
• Fiserv
• First Advantage
Corporation
• First Financial Bank
• Flextrack
• Fluor Corporation
• Foot Locker, Inc.
• Ford Motor Company
• Fox Corporation
• Freddie Mac
• Genentech, Inc.
• General Electric
Company
• General Mills, Inc.
• General Motors
Company, LLC
• Genpact
• GlaxoSmithKline
• Global Experience
Specialists, Inc.
• GM Financia
• GMMB Inc.
• GO2 Partners , Inc.
• GoFundMe
• Goldman Sachs (UK)
Svs. Limited
• Goodyear Tire &
Rubber Company
• Google, Inc.
• Government
Employees Health
Association
• Grady Health System
• Groom Construction
Co., Inc.
• Grosvenor USA
• Guardian Life Insurance
Company
• Haartz Corporation
DBE/MBE/WBE CERTIFICATION
Volume 3 | November 2021 | Page 5
• Haier U.S.
Solutions, Inc.
• Harley-Davidson
Motor Company
• Harman International
• The Haskell Company
• Health Care Service
Corporation
• HealthTrust
Purchasing Group
• Hearst Service Center
• Henkel Corporation
North America
• Henkels & McCoy
Group, Inc.
• Herman Miller, Inc.
• Hertz Corporation
• Hess Corporation
• Highmark Health, Inc.
• Hilton Worldwide
• HMSHost
• Home Depot, Inc.
• Honda Of America
MFG.
• Honeywell
• Houghton Mifflin
Harcourt
• HP Inc.
• Hubbell Incorporated
• Humana, Inc.
• Huntington National
Bank
• IBM Corporation
• Idemia Identity &
Security USA LLC
• IDEO
• IDEX Corporation
• Illinois Tool Works
• Impellam NA
• Indiana University
• Infinera Corporation
• Intel Corporation
• International Monetary
Fund
• International Paper
Company
• Interpublic Group of
Companies, Inc.
• Iron Mountain
• ISS Facility Services,
Inc.
• JE Dunn Construction
• JetBlue Airways
• Johnson & Johnson
• Johnson Controls, Inc.
• Jones Lang
LaSalle, Inc.
• JPMorgan Chase & Co.
• JPS Health Network
• The Judge Group
• Kaiser Foundation
Health Plan, Inc
• Kellogg Company
• Kelly Services, Inc.
• KeyBank National
Association (KeyCorp)
• Kiddom Inc.
• Kiewit
• Kilpatrick Townsend
& Stockton LLP
• Kimberly-Clark
Corporation
• Kohl’s Department Stores
• Koppers, Inc.
• KPMG LLP
• Kroger Company
• Lapine
• Lear Corporation
• Legrand, North
& Central America
• Lenovo (United States)
Inc.
• Liberty Mutual Insurance
• LogiTech
• Loram Maintenance of
Way, Inc.
• L’Oreal, Inc.
• Low Income
Investment Fund
• Lowe’s Companies, Inc.
• Lyft, Inc.
• Macy’s, Inc.
• Major League Baseball
• Mallinckrodt
Pharmaceuticals
• ManpowerGroup
• Marathon Petroleum
Corporation, LP
• Marriot International
• Marsh & McLennan
• Mars Incorporated
• Massachusetts Mutual
Life Insurance Co.
• Mastercard
• Materne North America
• McCain Foods USA, Inc.
• McCormick &
Company, Inc.
• McDonald’s Corporation
• McGraw-Hill Education
• McKinsey & Company
• Mears Group, Inc.
• Medtronic, Inc.
• Meijer
• Merakey USA
• Merck & Co., Inc.
• Meridian Medical
Technologies, Inc.
• Messer Construction
Company
• Metabank National
Association
• MetLife, Inc.
• MGM Resorts
International
• Michelin North
America, Inc.
• Micron Technology
• Microsoft Corporation
• Midcontinent
Independent System
Operator (MISO)
• Midwest Steel, Inc.
• Mine Safety Appliances
Company
• Mizuho Americas
Services LLC
• MolsonCoors
• Mondelēz
International, Inc.
• Morgan Stanley
• Moss
• Motion Industries, Inc.
• Motorola Solutions, Inc.
• MUFG Union
Bank, N.A.
• NASCAR
• National Basketball
Association (NBA)
• National Grid USA
• Nelnet
• Nestlé USA, Inc.
• New York Life
Insurance Company
• Newsweek
Publishing, LLC
• Nexant, Inc
• Nielsen Company
• Nike, Inc.
• NiSource Inc.
• Nissan North
America, Inc.
• Northern Trust Company
• Nothing Bundt Cakes
• Novartis
Pharmaceuticals
Corporation
• Nutrien
• O.C. Tanner Company
• Office Depot Inc.
• OFS Fitel, LLC
• OhioHealth
• Omnicom Group
• Ortho-Clinical
Diagnostics
• Oshkosh Corporation
• Otis Elevator Company
• Owens & Minor
• Pacific Gas and
Electric Company
• Papa John’s
• Paymentus Corporation
• PCM, Inc.
• Peapod Digital Labs
• Penn National Gaming
• PepsiCo, Inc.
• Performance Food
Group
• Pfizer Inc
• Phillips 66
• Pitney Bowes Inc.
• PNC Financial
Services Group
• Poettker Construction
Company
• PowerTeam
Services, LLC
• Premier, Inc.
• Pricewaterhouse
Coopers LLP
• Principal Financial Group
• Procter &
Gamble Company
• Pro Unlimited
• Prudential Financial
• Publicis Healthcare
• Quad
• Qdoba Mexican Eats
SELECT CORORATIONS WITH MBE/WBE PROGRAMS (CONT.)
Corporations with MBE/
WBE certifications continues
on page 6...
Most small businesses are unable
to successfully compete to conduct
business with Fortune 500 companies.
Certification has proven to be one of
the best tools they have to get their
foot in the door of major corporations
and government agencies. As we discussed, there are many benefits to getting certified. The most common
benefits include access to procurement buyers, business resources, mentoring relationships and contract
opportunities. We have identified
some of the major certifying agencies in Illinois and Georgia from which businesses should consider obtaining
certification eligibility if they are seeking
to conduct business in these states.
Most of the agencies have diversity
programs for minorities and women to
facilitate their participation on government contracts. In order to help them target prospective buyers in the private
sector, we have identified some of the
top Fortune 500 corporations that also
have MBE/WBE programs. We hope
that the information we have provided
will enable small businesses to
complete their marketing research and
prepare or update their Business Plan
to significantly increase their revenues
during these challenging times.
• Quest Diagnostics Inc.
• Qurate Retail
Group (QVC)
• R&R Partners
• R.J. Reynolds
Tobacco Company
(Reynolds American Inc.)
• R.R. Donnelley &
Sons Company
• Randstad USA
• Raymond James
Financial, Inc
• Raytheon Technologies
• RBC Wealth Management
• Realogy Corporation
(formerly Cartus)
• Regal Beloit Corporation
• Regions Bank
• RELX Group (aka
Lexis Nexis)
• Resource Group,
LLC, An Ascension
Subsidiary
• Rexnord Corporation
• Rightsourcing
• Robert Bosch LLC
• Robert Half
International, Inc
• Rocket Companies
• Ross Stores, Inc.
• Royal Caribbean
Cruises Ltd.
• Ryder System, Inc.
• S&P Global
• Saatchi & Saatchi
• Salesforce
• Samsung Next
• SAP SE
• SAS Institute Inc.
• Savannah River
Nuclear Solutions, LLC
• Savvas Learning
Company LLC
• Schneider Electric
USA, Inc.
• Scholastic Corporation
• Scientific Games
Corporation
• Sedgwick Claims
Management
Services, Inc.
• Sephora
• Shell Oil Company
• Siemens Corporation
• Sinclair Community
College
• Sirius Computer Solutions
• Skanska USA Building
• Smithfield Foods
• Snap-on Incorporated
• Sodexo, Inc.
• Softchoice Corporation
• Sonoco Products
Company
• Sony Pictures
Entertainment
• Southern California
Edison
• Southern Company
• Southern Glazer’s
Wine & Spirits, LLC
• Southwest Airlines
• Spirit Airlines, Inc.
• SPX Flow
• Stanley Black & Decker
• Staples Inc.
• Standard Chartered
Bank
• Starbucks Corporation
• Starkey Hearing
Technologies
• State Farm Insurance
• State Street Corporation
• Steelcase Inc.
• Stellantis (Formerly Fiat
Chrysler Automobiles)
• Strategic Education, Inc.
• Stride Inc
• Stryker Corporation
• Sun Life Financial
• SunTrust Banks, Inc.
• Swinerton
• Synchrony
• Target Corporation
• Tata America
International Corporation
• TC Energy
• TCF Financial
• TD Ameritrade Services
Company, Inc.
• TD Bank Group
• TE Connectivity
• Tenneco Inc.
• Terumo Americas
Holding, Inc.
• The Beck Group
• The Bancorp Bank
• The Hartford
• The New York Times
Company
• Thermo Fisher
Scientific Inc.
• TIAA
• Tishman Speyer
• TJX Companies, Inc.
• T. Marzetti
• T-Mobile USA, Inc.
• Toyota Motor
North America
• Tram, Inc.
• Trane Technologies
• Trans Ash, Inc.
• TriNet USA, Inc.
• T. Rowe Price
• Turner Construction
Company
• Twitter, Inc.
• Tyson Foods, Inc.
• U.S. Bank
• U.S. Cellular
• UAW Retiree Medical
Benefit Trust
• Uber Technologies, Inc.
• UBS
• UGI Corporation
• Under Armour
• UNFI (formerly
SUPERVALU, Inc.)
DBE/MBE/WBE CERTIFICATION
SELECT CORORATIONS WITH MBE/WBE PROGRAMS (CONT.)
• Unilever
• Unispace
• United Airlines, Inc.
• UPS
• United Rentals Inc.
• United Services
Automobile Association
(USAA)
• United States
Postal Service
• United States Tennis
Association
• UnitedHealth Group Inc.
• University of Pittsburgh
Medical Center
• Unum Group
• Upwork Inc.
• USA Today
• US Foods, Inc
• US Silica Company
• Vanguard
• Verizon, Inc.
• ViacomCBS
• Vistra Energy
(formerly Energy
Future Holdings)
• Vizient
• Volkswagen Group
of America, Inc.
• Volvo Cars Charleston
• Volvo Trucks North
America, Inc.
• Voya Financial
• VWR International, LLC
• Walgreens Co.
• Walmart, Inc.
• Walt Disney Company
• Waste Management, Inc.
• Wells Fargo &
Company
• Wesco Anixter
• Westinghouse Electric
Company
• WestRock
• Whirlpool Corporation
• Wieden + Kennedy, Inc.
• Williams-Sonoma, Inc.
• Willis Towers Watson
• Wisconsin Energy
Corporation/We
Energies
• WPP
• Wyndham Destinations
• Wyndham Hotels and
Resorts
• Xylem, Inc.
• Yanfeng Global
Automotive Interiors
• Yazaki North
America, Inc.
• Zebra Technologies
• Zoetis
SUMMARY
Volume 3 | November 2021 | Page 6
DBE/MBE/WBE CERTIFICATION
Volume 3 | November 2021 | Page 7
CHICAGO OFFICE
CAROL A. CESARETTI
MANAGING PARTNER
115 SOUTH LASALLE STREET
FLOOR 31
CHICAGO, ILLINOIS 60603
(312) 566-0040
ATLANTA OFFICE
ALPHONSIE NELSON
MANAGING PARTNER
365 NORTHRIDGE ROAD
SUITE 230
ATLANTA, GEORGIA 30350
(770) 650-8737
WWW.QPWBLAW.COM
QUINTAIROS,
PRIETO, WOOD
& BOYER, P.A.
ANITA J. PONDER
Partner | Director - Chicago
Government Contracts Group
CHICAGO OFFICE
P: (312) 566-0040
E: [email protected]
DRAGOMIR A.
TSVETENOV
Associate
CHICAGO OFFICE
P: (312) 566-0040
E: dragomir.tsvetenov
@qpwblaw.com
JENNIFER L.
COBB
Associate
ATLANTA OFFICE
P: (770) 650-8737
E: jennifer.cobb
@qpwblaw.com
GHANSHYAM
PATEL
Of Counsel
CHICAGO OFFICE
P: (312) 566-0040
E: ghanshyam.patel
@qpwblaw.com
The information contained in this newsletter is for general information purposes only. QPWB is not responsible for any errors or omissions, or for the results obtained, or for any benefits not obtained from the use of this information. All information in this newsletter is provided “as is”, with no guarantee of completeness, accuracy, suitability or availability of the results or benefits obtained from the use of this information, and without warranty of any kind, express or implied. Any reliance you place on the information in this newsletter and actions you take to apply for certification eligibility and/or conduct business under any MBE/WBE, supplier diversity and/or small business program is at your own risk.
For additional information about The QPWB
Small Business Certification Initiative, please
email Anita Ponder. In our upcoming newsletters, we will identify major certifying agencies and MBE / WBE programs in
Chicago, Illinois and Atlanta, Georgia; identify some of the top Fortune 500 corporations nationwide that have MBE/WBE programs;
and provide information about the certification eligibility requirements, certification application process and common pitfalls that
certification applicants should avoid. We
initially selected agencies and programs in
Chicago and Atlanta because our firm’s “Small
Business Certification Initiative” is currently
targeted to provide legal assistance to certification applicants in these locations. However, as a national law firm, we have the capability
and resources to provide legal assistance to
applicants nationwide. If you are a prospective
certification applicant and seek certification eligibility from a local, state or federal agency, we are happy to provide you legal assistance.
QPWB is a national, full service business law
firm with over 40 practice areas. QPWB is the
largest minority and women-owned law firm in
the nation with approximately 400 attorneys
in 27 offices. The Chicago office of QPWB is
located at 115 South LaSalle Street, Suite 3100
and its managing partner is Carol Cesaretti. The
Atlanta office of QPWB is located at 365
Northridge Road, Suite 230 and its managing
partner is Alphonsie Nelson. The firm is certified
as an MBE by the National Minority Supplier
Business Development Council. The QPWB
Small Business Certification Initiative will be implemented by a highly experienced and diverse legal team in QPWB’s Chicago and Atlanta
offices, under the leadership of Anita Ponder,
a partner at QPWB who heads QPWB’s
Government Contracts Practice Group in its
Chicago office. Ms. Ponder has more than 30
years of experience providing legal services,
consultation, strategic guidance, training and
advocacy to government contractors, including
large, mid-sized, family-owned and small businesses that are disadvantaged, minority, women and veteran-owned businesses. She has also
served as legal counsel to several State and local
governmental agencies, including public housing
authorities on Section 3 business matters. Prior
to practicing law in some of the top law firms in
Illinois, Ms. Ponder was a government procurement manager and attorney who served as the Director of Certification and Director of Contract
Compliance for a major governmental agency.
ABOUT QPWB
CONTACT US
EXHIBIT 1ϯ
QUINTAIROS, PRIETO, WOOD & BOYER, P.A.
HARRIS BANK BUILDING
115 S. LASALLE STREET, 31st FLOOR
CHICAGO, IL 60603
P: (312) 566-0040 ● F: (312) 566-0041
www.qpwblaw.com
The QPWB Small Business Certification Initiative
QPWB Attorney Training Session
TALKING POINTS OF TRAINER (Anita Ponder)
Thursday, April 22, 2021
I. MEETING AGENDA
1) Primary criteria for certification eligibility for DBEs (similar rules for MBEs, WBEs, VBEs, BEPDs and LGBTowned businesses; there are many types of certifications and many certifying agencies);
2) DBE application process, form and checklist documents; and
3) Proposed client intake and legal review process
II. LEGAL CRITERIA
Background on US DOT’s DBE Program
o US DOT distributes substantial funds each year
to State and local Transportation Agencies to
finance construction, public transit and airport
projects.
o Department’s most important tool for preventing
unlawful discrimination against minority and
women businesses has been its DBE Program.
o Program originally began in 1980 as a M/WBE
program established under Title VI of the Civil
Rights Act of 1964 and other nondiscrimination
statutes.
o To meet the objectives of the DBE Program
Regulation, recipients (State and local agencies)
of DOT funds must develop and implement a
DBE Program that conforms to DOT standards
set forth in 49 CFR Part 23 and 26.
o Integrity of DOT's DBE program depends upon
systematic certification procedures to ensure that
only bona fide small firms are certified to
participate as DBEs on DOT funded contracts
nationwide.
o DOT DBE regulations place primary
responsibility for the certification process upon
State Transportation Agencies.
Our discussions today will focus on Federal DBE
(DOT) Guidelines/Standards (49 C.F.R. Parts 23
and 26)
DBE must be a for-profit business that is at least
51% owned and controlled by a socially and
economically disadvantaged individual. DBE must
meet the SBA (business size) and DBE (personal
net worth) size standards.
o Rebuttable presumption that certain individuals
are “socially disadvantaged”: Black Americans;
Hispanic Americans; Native Americans; Asian
Pacific Americans; and members of other groups
designated by the SBA.
o An individual who is not a member of one of
these groups must establish individual social
disadvantage by a preponderance of the evidence.
o An “economically disadvantaged” individual
has a personal net worth that generally does not
exceed $1.32 million. This does not include
equity in the owners’ personal residence or
business for which the person is applying for
certification.
A. What rules govern determinations of
ownership?
a. Must consider all the facts in the record
viewed as a whole - including the origin of
all assets and how and when they were used
in obtaining the firm.
b. Must be at least 51 percent owned by
socially and economically disadvantaged
individuals.
c. Contribution of capital or expertise to
acquire ownership interests, must be real,
substantial, and continuing.
i. Example: An individual pays $100 to
acquire a majority interest in a firm
worth $1 million – would not be
viewed as substantial.
ii. Exceptions: interests in a business
obtained in a final property settlement
or court order in a divorce or legal
separation or through inheritance.
iii. Insufficient contributions include
1. Promise to contribute capital
2. Unsecured note payable to the
firm or an owner who is not a
disadvantaged individual
3. Mere participation in a firm's
activities as an employee
4. Capitalization not commensurate
with the value for the firm
5. Disadvantaged owners must enjoy
the customary incidents of
ownership (ie, share in the risks
and be entitled to the profits and
loss commensurate with their
ownership interests)
d. There are additional DBE rules governing
ownership (will NOT be discussed today)
i. Specific ownership requirements for
corporations, partnerships and limited
liability companies
ii. Securities or assets held in trust
iii. Situations in which expertise is relied
upon as part of a disadvantaged
owner’s contribution to acquire
ownership
iv. Situations in which marital assets form
a basis for ownership
v. Gifts and transfers of ownership
interests
B.What rules govern determinations of control?
a. Must consider all the facts in the record,
viewed as a whole (like ownership
determinations)
b. Only an independent business may be
certified as a DBE (ie, its viability does not
depend on its relationship with non-DBE
firm). Following factors will be scrutinized
i. Personnel
ii. Facilities
iii. Equipment
iv. Financial
v. Bonding Support
vi. Current and prior employment
relationships of the disadvantaged
individual
vii. Firm’s relationships with non-DBE
firms (must be consistent with normal
industry practices)
c. DBE firm must not be subject to any
formal or informal restrictions which limit
disadvantaged owners from making any
business decision of the firm without
cooperation or vote of any nondisadvantaged individual. i. Example: can be no restrictions
through corporate charter provisions,
by-law provisions, contracts or voting
trusts
d. Disadvantaged owners must: (i) possess the
power to direct or cause the direction of the
management and policies of the firm and
(ii) make day-to-day and long-term
decisions on matters of management,
policy and operations
i. Disadvantaged owner must hold the
highest officer position in the
company (e.g., chief executive officer
or president)
ii. In a corporation - disadvantaged
owners must control board of directors
iii. In a partnership - one or more
disadvantaged owners must serve as
general partners, with control over all
partnership decisions
e. Individuals who are not disadvantaged may
be involved in a DBE firm as owners,
managers, employees, stockholders, officers
and/or directors
f. Disadvantaged owners of the firm may
delegate areas of the management,
policymaking or daily operations of the firm
to non-disadvantaged participants in the firm
g. Disadvantaged owners must have an overall
understanding of, and managerial and
technical competence and experience
directly related to, the type of business in
which the firm is engaged and the firm's
operations. Examples of insufficient
expertise: i) office management; and
administration; ii) secretarial or
bookkeeping functions
h. If state or local law requires the persons to
have a particular license in order to own
and/or control a certain type of firm, then
the disadvantaged persons who own and
control the firm of that type must possess the
required license
i. Certifying agencies consider differences in
income between disadvantaged and nondisadvantaged owners of the firm j. Disadvantaged owner must work full-time
for firm and cannot engage in outside
employment or other business interests
k. When family members participate in the
firm - disadvantaged owner must control
firm and not their family as a whole
l. Firm must demonstrate with clear and
convincing evidence – firm is controlled by
disadvantaged individual when firm was
formerly owned and/or controlled by nondisadvantaged individual who remains involved with the firm
m. Certifying agencies consider whether
firms owns or leases necessary equipment
to perform its work
n. Certifying agencies only grant certification
for specific types of work (NAICS code)
that disadvantaged owners control
o. Additional DBE rules governing control
(will not be discussed today):
i. Certification of franchises or licensees
ii. Certain rules governing partnerships
iii. Rules governing firms that use an
employee leasing company
iv. Whether a firm performs a
“commercially useful function” or is a
“regular dealer” (pertains solely to
counting the DBE participation towards
the DBE contract goals)
v. Rules governing newly formed firms
vi. DBEs have duty to fully cooperate with
requests for certification information
vii. Rules governing not-for-profit
organizations (not eligible as DBEs)
viii. Rules governing firms that are owned
by another firm (not eligible)
ix. Prequalification of firms (not required)
x. Rules governing an Indian tribe or
Native Hawaiian organization
xi. Rules governing Alaska Native
Corporations (ANCs)
III. DBE APPLICATION PROCESS, FORM AND
CHECKLIST DOCUMENTS
a. Applicants must submit a notarized Uniform
Certification Application and checklist documents,
along with The Affidavit of Certification, to UCP
participating agency in their home state.
b. Sections in Application include:
i. Certification information (contact info;
prior/other certifications)
ii. General information (business profile;
relationships and dealings with other businesses;
iii. Majority owner information (position; gender;
ethnicity; percentage of the total ownership;
initial investment/contribution to acquire
ownership interests; other
employment/businesses owned; personal net
worth; information about immediate family
members)
iv. Control
1. Officers and board of directors
2. Duties of key persons
3. Inventory of equipment/vehicles
4. Office/storage space
5. Management functions
6. Financial/banking info
7. Business loans
8. Contributions or transfers of assets
9. Licenses/permits
10. Largest contracts (last 3 years)
11. Largest active jobs (currently working)
v. Airport Concession (ACDBE) Applicants
c. US DOT’S “One-stop Shopping” Certification
Program” (eliminates need for applicants to obtain
certification from multiple certifying agencies): DOT
recipients or agencies in each state must participate in a Unified Certification Program (UCP) that follows all
certification procedures and standards of the federal
regulations. UCP makes all certification decisions on
behalf of all DOT recipients; decisions are binding;
and each UCP must maintain a DBE directory.
IV. (PROPOSED) CLIENT INTAKE AND LEGAL
REVIEW PROCESS
a. Complete Client Intake Form (to get some
preliminary information about the applicant company)
when you talk with prospective client
b. Forward the Form to me to follow-up with the client to conduct an initial certification eligibility analyses
(need to manage expectations regarding which
certifications (type and certifying agency) are needed
to achieve business goals; obtaining certification
eligibility, legal review process and our fee
arrangement)
c. Want to propose a fixed fee for basic standard legal review; and additional hourly fees to draft corporate
or related business documents
d. If prospective client wants to hire QPWB, I will
conduct a conflicts check and send them an
engagement letter
e. Upon receipt of the executed engagement letter and
fixed fee, we will open the client file
f. Services will commence upon my receipt of the
DRAFT certification application and supporting
documents from client; will assign to associate to
review for completeness
g. Upon receipt of all documents, I will conduct the
certification eligibility analyses, identify certification eligibility issues and propose recommendations to
address each issue
h. Assigned associate and I will have a conference call with the client to jointly develop a legal strategy
with client to facilitate certification eligibility
i. Assigned associate will implement the legal strategy, as agreed by client, under my supervision
V. ADDITIONAL QUESTIONS & ANSWERS
EXHIBIT 14
1 QUINTAIROS, PRIETO, WOOD & BOYER, P.A.
HARRIS BANK BUILDING
115 S. LASALLE STREET, 31stFLOOR
CHICAGO, IL 60603
P: (312) 566-0040 ● F: (312) 566-0041
www.qpwblaw.com
MEMORANDUM
TO: Ellen H. Daley
Chief Procurement Officer, General Services
State of Illinois
John Donato
Chief Procurement Officer, Higher Education
State of Illinois
FROM: Anita Ponder, Partner
Dragomir Tsvetenov, Associate Attorney
Quintairos, Prieto Wood & Boyer, P.A.
DATE: February 2, 2022
RE: WRITTEN REPORT TO STATE OF ILLINOIS EXECUTIVE ETHICS COMMISSION I. INTRODUCTION
The State of Illinois Executive Ethics Commission (“the State”) entered into a contract with the law firm of Quintairos, Prieto, Wood & Boyer, P.A. (“QPWB”) to provide consulting services for procurement diversity. There are four primary goals to be achieved under the contract:
• Draft administrative rules to implement the Request for Proposal (RFP) Commitment to Diversity requirement as outlined in the Illinois Procurement Code (30 ILCS 500/20-15) and (30 ILCS 500/35-30(a);
• Draft a minimum of six (6) new objective elements that can be scored under RFP Commitment to Diversity and prepare a rubric that will guide evaluators on how best to score the recommended elements;
• Provide justification and supporting evidence, including case law where the element was challenged, that the selected Commitment to Diversity elements best represent a firm’s commitment to diversity; and
2 • Draft and format the RFP template instructions for Commitment to Diversity.
A. Contract Term Schedule
The term of the contract between the State and QPWB is for twelve (12) weeks. As specified in the contract, QPWB has agreed to provide its final written report to the State on March 30, 2022, which will include: the scoring elements, administrative rules and RFP Commitment to Diversity section.
During the contract period, there are video conferences that QPWB has agreed to attend and specific deliverables (i.e., written reports, video presentations and related deliverables) that QPWB has agreed to provide to the State. A schedule of the written reports, video presentations and related deliverables are specified below:
• Written Report & Video Presentation #1 (Due Date – February 2, 2022). This memorandum is our written report that is due on February 2, 2022. It includes the following information:
o Any governmental bodies that include an evaluation of a vendor’s commitment to diversity in a solicitation, procurement, grant or similar document o Examples of private firms that have practices promoting diversity in recruiting, hiring, supporting, or promoting employees, volunteers, independent contractors and board members
o Examples of private firms that have practices promoting diversity in their supply chain both up and down stream
• Written Report & Video Presentation #2 (Due Date – February 16, 2022). Our written report will include the following information:
o Guidance on how to use current statutory factors (30 ILCS 500/20-15(e-5)(2)) as scorable elements
o At least six (6) ranked examples of scorable commitment to diversity elements • Written Report & Video Presentation #3 (Due Date – March 9, 2022). In addition to a written report and video presentation, QPWB has agreed to provide proposed administrative rules draft and a RFP Commitment to Diversity section draft. Our written report will include the following information:
o Elements that the State should include in RFPs as a scorable evaluation of a firm’s commitment to diversity
o Justification and evidence explaining why the proposed elements are best at determining a firm’s commitment to diversity
o Citations and summaries to any court case where a government’s use of commitment to diversity elements was challenged
o Proposed administrative rules
• Final Written Report & Video Presentation #4 (Due Date – March 30, 2022). Our written report will include the following information:
o Scoring elements
o Administrative rules
o RFP Commitment to Diversity Section
3 B. Contract Performance (Research)
QPWB promptly commenced its work under the contract upon contract execution and receipt.
Per our prior video conferences with the State, below is a summary of the resources that we have reviewed for information in this Report regarding: vendor’s commitment to diversity in a governmental solicitation, procurement and/or grant; practices by private firms in promoting diversity in recruiting, hiring, supporting, or promoting employees, volunteers, independent contractors and board members; and practices by private firms in promoting diversity in their supply chain. The resources that we have evaluated include, but are not limited to, the following:
• Reviewed the legislative history relating to 30 ILCS 500/20-15(e), in order to better understand the current elements
• Reviewed articles, white papers, and law journals from sources, including:
o Black Employment & Entrepreneur Journal
o Small Business Administration
o The Racial Equity Alliance
o Harvard Kennedy School of Public Policy
o Minority Business News USA
o Institute for Supply Management
o Public Contract Law Journal
o California Employment Law Journal
o California Law and Regulation Reporter
o Texas Bar Journal, Fordham Law Review
o New York City Law Review
o Florida Practice Series
o Virginia Practice Series
• Reviewed notable supplier diversity programs in the private sector, including:
o Abbot Laboratories
o Allstate Insurance Company
o Aramark
o AT&T Inc.
o Bank of America
o Boeing
o Capital one
o CVS Health
o Delta Air Lines Inc.
o FedEx Corporation
o General Mills
o Hilton
o Johnson & Johnson
o Microsoft Corporation
o Verizon
• When our research revealed that a private firm had a notable supplier diversity program, and information on that program was not publicly available, we attempted to contact its supplier diversity representatives in the private sector for information about their supplier diversity programs. Those conclude:
4 o General Motors
o Salesforce
o Citigroup
o Albertsons Companies
o Johnson & Johnson
o UPS
o Chipotle
o Estee Lauder Companies
o Intel
o Liberty Mutual Insurance
o Microsoft
• Reviewed notable supplier diversity programs in the public sector. We have reviewed publicly available information from each state, the largest (by population) fifty cities, and the largest (by population) fifty counties in the USA • Reviewed notable supplier diversity programs in the public sector that were previously identified, evaluated and recommended to prior government clients in prior studies by Anita Ponder and her legal team pursuant to separate legal engagements with other law firms. These programs include:
o City of Atlanta, Georgia
o State of Texas
o City of Austin, Texas
o City of Dallas, Texas
o City of Houston, Texas
o City of Orlando, Florida
o Washington, D.C.
o University of Pennsylvania
o Richard Stockton College, New Jersey
o Baltimore Public Schools, Maryland
o County of Baltimore, Maryland
o State of New York
o City of New York, New York
o Empire State Development Corporation’s Division of Minority and Women’s Business Development, New York
o State of Wisconsin
C. Written Report
As previously indicated, this memorandum is our first written report regarding: 1) vendor’s commitment to diversity in a governmental solicitation, procurement and/or grant; 2) practices by private firms in promoting diversity in recruiting, hiring, supporting, or promoting employees, volunteers, independent contractors and board members; and 3) practices by private firms in promoting diversity in their supply chain. In addition to these practices in the public and private sectors, the report includes information that we obtained during our research that are consistent with and/or related to the elements in the Request for Proposal (RFP) Commitment to Diversity requirement as outlined in the Illinois Procurement Code (30 ILCS 500/20-15) and (30 ILCS 500/35-30(a). Specifically, the report seeks to address the following issues:
5 1. (Public Agencies) Description of Evaluation of Vendor’s “Commitment to Diversity” or Diversity Practices in a Governmental Solicitation • Whether the offeror assisted businesses owned by women, minorities, or persons with disabilities in obtaining lines of credit, insurance, necessary equipment, supplies, materials, or related assistance or services
• Offeror’s Diversity Spend
o Percentage of prior revenues of the offeror that involve businesses owned by women, minorities, or persons with disabilities
o Whether or how well the offeror met the goal of contracting or subcontracting with businesses owned by women, minorities, or persons with disabilities • Whether the offeror has a written supplier diversity program o Whether the supplier diversity program includes a training program o Whether the supplier diversity program includes a mentoring program • Whether the offeror has an Affirmative Action Plan (Recruiting, Hiring, Supporting or Promoting Employees and Board Members)
o Percentage of members of the offeror's governing board who are women, minorities, or persons with disabilities
o Percentage of members of the offeror's senior executives and managers who are women, minorities, or persons with disabilities
2. (Private Firms) Description of Diversity or Affirmative Action Practices of Private Firms (Recruiting, Hiring, Supporting or Promoting Employees and Board Members)
• Percentage of members of the offeror's governing board who are women, minorities, or persons with disabilities
• Percentage of members of the offeror's senior executives and managers who are women, minorities, or persons with disabilities
• Percentage of members of the offeror’s non-management employees who are women, minorities, or persons with disabilities
3. (Private Firms) Description of Supplier Diversity Programs of Private Firm • Offeror’s Diversity Spend
o Whether or how well the offeror met the goal of contracting or subcontracting with businesses owned by women, minorities, or persons with disabilities o Percentage of year revenues of the offeror that involve businesses owned by women, minorities, or persons with disabilities
• Whether the offeror assisted businesses owned by women, minorities, or persons with disabilities in obtaining lines of credit, insurance, necessary equipment, supplies, materials, or related assistance or services
6 • Whether the offeror has a written supplier diversity program o Whether the supplier diversity program includes a training program o Whether the supplier diversity program includes a mentoring program This Report will provide information from our research regarding the public agencies and private firms that have these types of diversity policies, procedures, regulations and/or laws. We will identify those agencies and firms, and discuss their diversity policies, procedures, regulations and/or laws, as they are described in publicly available documents that we have reviewed. Although our research has been quite comprehensive to date, we have found a limited number of agencies and firms that have these type of diversity policies, procedures, regulations and/or laws. In the course of our research, we obtained related information regarding the diversity practices of a couple of private firms that fall outside of these diversity policies, procedures, regulations and/or laws. Because our research has resulted in a limited amount of information to date related to the designated diversity elements, we also discuss this related information.
We believe that the information that we have obtained from agencies and firms has provided us additional insights regarding prospective new objective elements that can be scored under the RFP Commitment to Diversity by the State. Additionally, we have obtained relevant information regarding our preparation of a rubric that could guide evaluators of the State on how best to score the elements.
Please be advised that this Report does not include any information regarding our legal research of court cases. We are currently in the process of conducting legal research for case law where the element was challenged to determine whether there is justification or supporting evidence for the element. Depending on our findings and analyses, the case law should provide us additional guidance on how to use the current statutory factors (30 ILCS 500/20-15(e-5) (2)) and/or possibly other factors as scorable diversity elements.
The Report concludes with a summary of the information from our research regarding the public agencies and private firms that have diversity policies, procedures, regulations and/or laws that are the same or similar to the State. This information may be supplemented in future reports after we receive additional information during our communications with supplier diversity program representatives with select public agencies and private sector firms. Also, we welcome any additional information that the State may be able to provide to us about its current statutory factors and/or those of other public agencies.
II. RESEARCH FINDINGS
A. (Public Agencies) Description of Evaluation of Vendor’s “Commitment to Diversity” or Diversity Practices in a Governmental Solicitation
Of the over 150 programs reviewed, we found that only New York State and the City of Dallas, Texas gave bidders an advantage by measuring and evaluating the types of “commitment to diversity” measures that the State of Illinois evaluates.
1. Whether the offeror assisted businesses owned by women, minorities, or persons with disabilities in obtaining lines of credit, insurance, necessary equipment, supplies, materials, or related assistance or services Although we have reviewed over 150 public supplier diversity programs for features regarding whether an offeror assisted businesses owned by women, minorities, or persons with disabilities in
7 obtaining lines of credit, insurance, necessary equipment, supplies, materials, or related assistance or services, we did not find any information to report.
2. Offeror’s Diversity Spend
a. Percentage of prior revenues of the offeror that involve businesses owned by women, minorities, or persons with disabilities New York State
The State of New York defines diversity practices as "The efforts of contractors to include New York State-certified Minority and Womenowned Business Enterprises (“MWBEs”) in their business practices."1 New York considers diversity practices to include past, present, or future actions and policies, and include activities of contractors on contracts with private entities and governmental units other than the State of New York. Id.
In order to measure and score a bidder's diversity practices, New York State requires bidders to submit a "Diversity Questionnaire" with their bids.2 Each question is scored in an evaluation similar to what is done for the State of Illinois’s “Commitment to Diversity” elements. Among the questions asked, include questions that direct respondents to provide information on the share of expenditures that the respondents made with MWBEs. Id. Only the prior fiscal year of a respondents are taken into account when assigning a score to those questions. Id. Any additional data that respondents provide illustrating expenditures made with MWBEs in other fiscal years is disregarded. Id.
In addition, any data regarding expenditures made to businesses certified as MWBEs by an entity other than the State of New York are also disregarded. Id. Expenditures made to businesses with certifications other than MWBE, such as Disadvantaged Business Enterprises and Service-Disabled Veteran-owned Business Enterprises, are not considered in their analysis." Id.
b. Whether or how well the offeror met the goal of contracting or subcontracting with businesses owned by women, minorities, or persons with disabilities
City of Dallas, Texas
The City of Dallas requires bidders to submit documentation showing their history of M/WBE utilization on previous contracts.3 This documentation required bidders to provide a detailed listing of all projects that a proposer’s firm has performed for the City of Dallas or other entity in the last 3 years as well as a description of the firm’s history of utilizing MWBE firms on all past and current projects. Id. The required information should be submitted on the City’s History of
1 N.Y. Exec. Law § 310 (McKinney)
2 https://doccs.ny.gov/system/files/documents/2019/12/dpp.pdf 3 City of Dallas Business Inclusion and Development Plan Document Number: BDPS-PRO-205.
8 M/WBE Utilization Form which has been attached to this report as Exhibit 1. Id. Although we did not find publicly available data regarding how the City of Dallas scores proposals, we intend to discuss that with them.
3. Whether the offeror has a written supplier diversity program New York State
The State of New York’s Diversity Questionnaire also considers whether a respondent has an immersive, formal program to promote the use of MWBEs as suppliers.4 They require that a formal supplier diversity program be documented via a program policy manual or similar document describing the requirements for participation and elements of the program, as well as documentation of program activities. Id.
a. Whether the supplier diversity program includes a training program New York State
Characteristics of a supplier diversity program that meets their minimum requirements for the respondent to be awarded points could include a supplier diversity program with weak verification procedures focused solely on creating a list of diverse suppliers from which the respondent may procure goods or services. Id. In New York’s program, a robust supplier diversity program may be characterized by rigorous verification of MWBE status, plans for outreach to MWBE suppliers, and training and education programs designed to increase the capacity of MWBE suppliers. Id.
Further, respondents may score points in response to the Diversity Questionnaire by identifying industry-specific technical training of MWBEs. Id. Technical training must be specific to the industry in question, and does not include generic training in skills that are transferable across industries. Id. Examples of trainings that they do not qualify as technical training include trainings in managerial skills and leadership, effective communication, and professional development andnetworking. Id. Examples of technical training topics include the use, installation, or safe handling of particular products, the use of industry- specific IT, and industry-specific sales and customer service strategies. Id.
In assessing the robustness of a respondent’s technical training for scoring, New York takes into account the duration of the technical training program, the number of MWBEs served, and the total number of hours devoted to technical training of MWBEs. Id. New York takes into account that the characteristics of a robust technical training program varies based upon the nature of the industry and the associated opportunities for MWBE training, however, technical training programs fitting the “minimum” scoring criterion typically require that
4 https://doccs.ny.gov/system/files/documents/2019/12/dpp.pdf
9 the respondent has been providing technical training for one year or less, that the respondent has provided fewer than one hundred hours of technical training, or that the respondent has provided technical training to only one MWBE firm in a contracting area for which there is significant MWBE availability. Id.
b. Whether the supplier diversity program includes a mentoring program New York State
In order for a respondent to receive full points for its response to New York’s Diversity Questionnaire, the respondent must provide documentation demonstrating its participation in a mentor-protégé program approved by a governmental entity. Id. Such governmental entity need not be the State of New York. Id. New York allows for appropriate documentation of the existence of a mentor-protégé program to vary based upon the approving governmental entity, however, only documents generated by a governmental entity are accepted to demonstrate the existence of a mentor-protégé program.
Id.
The requirements for a robust mentor-protégé program must include the following elements: i) The mentee must be able to meaningfully participate in the delivery of contract requirements; ii) For services contracts: at least one element of the scope must be performed by the MWBE with the Prime serving as mentor. Id. Multi-year contracts must have a plan in place to expose the MWBE to each element of the scope through the lifetime of the contract; iii) Mentor and mentee must enter into an agreement, approved by a governmental entity, which outlines the expectations of each party; and iv) Specific metrics must be identified which will be used to measure the effectiveness and success of the mentor/protégé relationship. Id.
4. Whether the offeror has an Affirmative Action Plan (Recruiting, Hiring, Supporting or Promoting Employees and Board Members)
City of Dallas, Texas
The City of Dallas requires bidders on City contracts to include the submission of an affirmative action plan and/or policy which includes an Ethnic Workforce Composition Report.5 Elements of the Affirmative Action plan are required to include, but are not limited to: i) A policy statement reflecting the company’s hiring policy; ii) Dissemination techniques including methods of advertisement for open positions to target minority populations; iii) Recruitment activities; iv) Responsibility for administration and implementation of the affirmative action plan; and an v) Ethnic Workforce Composition Report. Id.
The Ethnic Workforce Composition Report includes both the number of a bidder's employees, as well as that number's overall percentage with regards to racial/ethnic categories including: Male; Female; White; Black; Hispanic; and
5 City of Dallas Business Inclusion and Development Plan Document Number: BDPS-PRO-205.
10 Other. Id. The report further requires bidders to disclose what roles the employees play within the company, including: Administrative/ Managerial; Professional; Technical; Office/ Clerical; Skilled; Unskilled; and Seasonal. Id. a. Percentage of members of the offeror's governing board who are women, minorities, or persons with disabilities
Although we conducted extensive research on the supplier diversity program of public agencies, we were not able to find this information. b. Percentage of members of the offeror's senior executives and managers who are women, minorities, or persons with disabilities City of Dallas, Texas
The City of Dallas requires bidders on City contracts to include the submission of an affirmative action plan and/or policy which includes an Ethnic Workforce Composition Report. Id. Elements of the Affirmative Action plan are required to include, but are not limited to: i) A policy statement reflecting the company’s hiring policy; ii) Dissemination techniques including methods of advertisement for open positions to target minority populations; iii) Recruitment activities; iv) Responsibility for administration and implementation of the affirmative action plan; and an v) Ethnic Workforce Composition Report. Id.
The Ethnic Workforce Composition Report includes both the precise number of a bidder's employees, as well as that number's overall percentage with regards to racial/ethnic categories including: Male; Female; White; Black; Hispanic; and Other. Id. The report further requires bidders to disclose what roles the employees play within thecompany, including: Administrative/ Managerial; Professional; Technical; Office/ Clerical; Skilled; Unskilled; and Seasonal. Id.
B. (Private Firms) Description of Diversity or Affirmative Action Practices of Private Firms (Recruiting, Hiring, Supporting or Promoting Employees and Board Members) Despite the comprehensive research that we have been conducting, at this time we have only been able to find useful information from Salesforce, Glassdoor and Chipotle. We intend to supplement this information as we continue our research.
Salesforce
Salesforce is an American cloud-based software company headquartered in San Francisco, California.6It provides customer relationship management (CRM) service and also provides enterprise applications focused on customer service, marketing automation, analytics, and application development. Id. In June 2004, the company had its initial public offering on the New York Stock Exchange under the stock symbol CRM and raised US $110 million. Id.
6 Associated Press, March 29, 2013, cbc.ca, https://www.cbc.ca/news/business/employees-rate-their-employers-ceoson-glassdoor-1.1314 945.
11 Glassdoor
Glassdoor is an American technology company which collects and aggregates employment, pay and other market data on companies around the globe.7In 2018, the company was acquired by the Japanese firm Recruit Holdings for US $1.2 billion.
Chipotle
Chipotle is an American chain of fast casual restaurants in the United States, United Kingdom, Canada, Germany, and France.8 With more than 2,000 locations, Chipotle had a net income of US $475.6 million and a staff of more than 45,000 employees in 2015.
Chipotle has been recognized by Forbes as one of Americas Best Employers for Diversity 2021, in addition to Chairman and CEO Brian Niccol’s inclusion on the list of ‘Best CEOS for Diversity’.
1. Percentage of members of the offeror's governing board who are women, minorities, or persons with disabilities
Although we conducted extensive research on private supplier diversity programs, we were not able to find this information.
2. Percentage of members of the offeror's senior executives and managers who are women, minorities, or persons with disabilities
Although we conducted extensive research on private supplier diversity programs, we were not able to find this information.
3. Percentage of members of the offeror’s non-management employees who are women, minorities, or persons with disabilities
Although we conducted extensive research on private supplier diversity programs, we were not able to find this information.
4. Percentage of the private firm’s: 1) governing board who are women, minorities, or persons with disabilities, 2) senior executives and managers who are women, minorities, or persons with disabilities, and 3) non-management employees who are women, minorities, or persons with disabilities.
Glassdoor
Glassdoor CEO Christian Sutherland-Wong has said, “At Glassdoor, we recognize that diversity within our own employee base is essential to the long term success and vitality of our business.9 To date, we have fallen short.” In an effort to correct that deficiency, Glassdoor has set a goal of women to hold 50% of their leadership roles by the end of 2025. Id. Their inaugural Diversity & Inclusion Transparency Report of 2020 shows that this would be an increase from the current status quo, where women hold 37% of leadership positions (including directors). Id. The only historically disadvantaged
7 Associated Press, March 29, 2013, cbc.ca, https://www.cbc.ca/news/business/employees-rate-their-employers-ceoson-glassdoor-1.1314 945. 8 Chipotle Mexican Grill, Inc. Announces Fourth Quarter and Full Year 2015 Results; CDC Investigation Over; Chipotle Welcomes Customers Back to Restaurants". Denver, CO: Chipotle Mexican Grill. http://webarchive.loc.gov/all/20160204020426/
9 https://www.glassdoor.com/employers/resources/diversity-equity-inclusion/
12 category that was singled out with leadership goals is women, even though the study overall focuses on broad categories of historically disadvantaged categories including:
Black employees; Latinx employees, and Pacific Islander/Native Hawaiian/Indigenous American/Alaska native employees. Id.
The employment goals that they have set for themselves to achieve by 2025 outside of “women in leadership” include: i) Doubling the number of black employees in their workforce from 4% to 8%; 2) Doubling the number of Latinx employees from 5% to 10%; 3) More than double the number of Pacific Islander/Native Hawaiian/Indigenous American/Alaska native employees from 0.4% to 1%; 4) Increase the number of women employees in technology to one-third (33%) from the current 23%.10 In order to achieve these goals, Glassdoor has committed to:
Dedicating more than 50% of their sourcing efforts, including online advertising campaigns, to focus on underrepresented groups; Leveraging technology to help review, write and rewrite all job descriptions, so language and messaging included are inclusive and free of bias;
Using technology and data to ensure that they reach underrepresented groups where they are looking for jobs;
Creating deeper partnerships and a stronger employer brand among universities with large Black and Hispanic or Latino student bodies, as well as those with a majority of women students. In addition, they will be partnering with student diversity clubs and associations at colleges and universities across the nation;
Providing interview and diversity training for executives, recruiters, hiring managers and employee interviewers in an effort to ensure a fair and inclusive interviewing process for all candidates; and Ending their employee referral bonus program where previously they would pay as much as several thousand dollars as a bonus to employees for referral hires which can lead to attracting like-minded candidates from similar backgrounds, as well as ending a policy that actively encouraged employees to refer family members and relatives for the same reason.
Salesforce
Salesforce has stated that it believes that "Business is a powerful platform for change and that it is guided by core values of trust, customer success, innovation, and equality.11 As we continue to navigate both the global health and economic crises that have amplified inequalities, our values become even more important.” Id.
To that end, Salesforce has launched a "Racial Equality and Justice Task Force" with the goal of helping to drive systemic change within the workplace and community. Id. They invited employees from across their business as well as leaders within their Black employees to help them with this endeavor. Id. They have divided the actions they are taking to achieve their vision into four “pillars” – People, Purchasing, Philanthropy, and Policy. Id.
10 https://www.glassdoor.com/employers/resources/diversity-equity-inclusion/ 11 https://www.salesforce.com/news/stories/our-next-actions-on-racial-equality-and-justice/ [salesforce.com]
13 In Pillar 1, related to “people,” Salesforce has set new leadership representation goals.
Id. They have stated that, “Because representation matters at every level - especially in leadership - we are making a new commitment to double the U.S representation of Black employees in leadership (VP+) by the end of 2023.” Id.
Salesforce has also implemented new overall representation goals, stating that in addition to their existing goal, they are making a new commitment to increase their U.S. representation of Black employees by 50% by the end of 2023. Id.
C. (Private Firms) Description of Supplier Diversity Programs of Private Firm Although we conducted extensive research on private supplier diversity programs, we were not able to find specific information on an offeror’s diversity spend, whether the offeror assisted businesses owned by women, minorities, or persons with disabilities in obtaining lines of credit, insurance, necessary equipment, supplies, materials, or related assistance or services, or whether the offeror had a written supplier diversity program.
1. Offeror’s Diversity Spend
a. Whether or how well the offeror met the goal of contracting or subcontracting with businesses owned by women, minorities, or persons with disabilities
b. Percentage of year revenues of the offeror that involve businesses owned by women, minorities, or persons with disabilities
2. Whether the offeror assisted businesses owned by women, minorities, or persons with disabilities in obtaining lines of credit, insurance, necessary equipment, supplies, materials, or related assistance or services
3. Whether the offeror has a written supplier diversity program a. Whether the supplier diversity program includes a training program b. Whether the supplier diversity program includes a mentoring program D. Additional Information
In the course of our research, we obtained related information regarding the diversity practices of a couple of private firms that fall outside of the above specified diversity policies, procedures, regulations and/or laws. Because our research has resulted in a limited amount of information to date related to the designated diversity elements, we discuss this related information below.
Salesforce
In Salesforce’s second pillar, associated with “purchasing,” they have committed to spending $100 million with Black-owned businesses over the next three years and commit to a 25% year-over-year growth in spending with minority-owned businesses.
Salesforce will also review their supplier onboarding process to mitigate any bias and provide better payment terms for Black-owned and minority-owned businesses where
14 appropriate.12 Salesforce has the goal of building a more diverse ecosystem and collectively increasing their overall number of Black and underrepresented minority founders by more than 3 times their current numbers by the end of 2023. Id.
Chipotle
Chipotle has begun to tie executive compensation to its diversity goals, which include maintaining both racial and gender pay equity, as well as implementing a program to accelerate the development of its diverse field organization and support center employees for promotion to above restaurant and next level roles.13 They have also formed Employee Resource Groups (ERGs) as a way for employees to create community and live Chipotle values; most recently, a new Multicultural ERG was formed called UNIFIED – United Network of Influencers Furthering Inclusion and Ethnic Diversity to foster diversity and inclusion across the organization. Id. This effort includes the launching “The Real Scoop with Marissa” in July 2020 a new virtual multicultural education series featuring conversations with black influencers across a variety of industries. Id.
Below is a listing of other actions being taken by Chipotle with the goal of advancing diversity within the company:
Holding ongoing listening sessions across the organization to better understand how it can evolve as a company and provide equal opportunities for all
Enabling employees to identify organizations to spotlight for in-app donations
Reviewing internal diversity data to identify areas requiring more focus and making strategic plans to address those areas through hiring, development and ERGs
Conducting a pay equity study across all levels and roles to ensure compensation equity across all genders and ethnicities
Piloting a mentorship program identifying a diverse group of high potential talent for development and greater advancement within the company
Partnering with the Thurgood Marshall College Fund to build a pipeline of diverse talent
Engaging a third party (Medici Group) to conduct an assessment of the company’s DE&I practices across the business
Expanding the role and title of Chipotle’s Chief People Officer, Marissa Andrada, to now include Chief Diversity, Inclusion and People Officer as she continues to champion a culture of diversity and dignity for all people
Expanding the debt-free degree program for employees to include its first HBCU, Paul Quinn College
12 https://www.salesforce.com/news/stories/our-next-actions-on-racial-equality-and-justice/ [salesforce.com] 13 https://newsroom.chipotle.com/featured-content?item=24
15 III. SUMMARY
This Report provided information from our research regarding the public agencies and private firms that have the same or similar types of diversity policies, procedures, regulations and/or laws as the State. We identified those agencies and firms, and discussed their diversity policies, procedures, regulations and/or laws, as they are described in publicly available documents that we have reviewed.
Although our research has been quite comprehensive to date, we have found a limited number of agencies and firms that have these type of diversity policies, procedures, regulations and/or laws. In the course of our research, we obtained related information regarding the diversity practices of a couple of private firms that fall outside of these diversity policies, procedures, regulations and/or laws. Because our research has resulted in a limited amount of information to date related to the designated diversity elements, we also discussed this related information.
Overall, this assignment really pushed us to dig deep in order to find information. We have conducted an exhaustive review of publicly available information from over 150 government entities,as well as an exhaustive list of secondary sources. Public agencies had many more publicly available primary source documents and direct information, however, there are not many programs with information connected to the type of elements in the State’s Commitment to Diversity evaluation. On the other hand, research on private firms revealed much more information through secondary sources; however the information was very general/ generic and did not provide much useful detail for us to report.
We are currently scheduled to speak with the Executive Director of New York State’s Division of Minority and Women’s Business Development and look forward to asking him detailed questions about their program, including scoring, which we believe will be extremely helpful as we make recommendations to the State regarding the scoring and evaluation of its own diversity elements.
While data uncovered on private firms has shown that many of them are addressing the issues that we were asked to look into, including diversity in employment and information related to their supplier diversity, much of the information was not very detailed, and we uncovered no primary source documents that we found to be useful. It should be noted that we have reached out to many private firms for information, documents, and/or to speak with them directly, but as of yet, have not been able to make contact with many of them. We intend to report on relevant findings that we uncover as we move forward with this matter.
We intend to continue the research that we have commenced. We will continue to look closely at the supplier diversity programs of private firms, including 100 corporate members of the National Minority Supplier Development Council. We will also continue to make every effort to communicate with supplier diversity representatives in both, public agencies and private firms.
Our next report on February 16, 2022 will include information demonstrating how to use current statutory factors (30 ILCS 500/20-15(e-5)(2)) as scorable elements; and providing at least six (6) ranked examples of scorable commitment to diversity elements. We believe that our current research already helped us in this endeavor, including our upcoming connections with both public administrators, and representatives of private firms. We have already begun researching case law with regards to what can and cannot be considered/evaluated in bids for public contracts. We look forward to continuing our comprehensive research, and reporting our findings, analyses and recommendations to the State. Please let us know if you have any questions, suggestions or comments as we proceed forward with completing the goals to be achieved under our contract.
Exhibit 1
INSTRUCTIONS
HISTORY OF M/WBE UTILIZATION FORM
1. Only projects awarded to the firm as a prime consultant are to be listed. Do not list projects for the City of Dallas on which the firm is a subconsultant unless you had a significant role in the project.
2. List all projects awarded within the last three years and list all projects that are currently in progress whether or not they were awarded within the last three years.
3. “Column 1”, list the department or the entity that awarded the project to the prime. Use DWU for Dallas Water Utilities, PW for Public Works, RM for Risk Management, AVI for Aviation, PKR for Parks and Recreation Department, etc.
4. “Column 2”, list the contact name, address, and telephone number of the department or entity that awarded the project to the prime.
5. “Column 3”, list the name of the project.
6. “Column 4”, list the “Total Contract Amount” awarded plus the amount of all Supplemental Agreements, if any.
7. “Column 5”, list the “M/WBE goal” established by the city department or other entity that awarded the project.
8. “Column 6”, list the “M/WBE participation committed”. Indicate the percentage of all M/WBE work committed by the prime (to the sub) at the award of the project plus any additional percentage committed as apart of any Supplemental Agreement.
9. “Column 7”, list the “M/WBE actual-to-date”. Indicate the percentages of all M/WBE actual to date participation of the project plus any additional percentage committed as apart of any Supplemental Agreement.
10. “Column 8”, list the percentage of the contract that has been completed.
11. For projects that have been completed and/or nearing completion and the planned M/WBE participation has not been achieved or will not be achieved, provide an explanation for the difference.
INSTRUCTIONS
FOR THE HISTORY OF M/WBE UTILIZATION FORM
(Cont.)
12. The form may be shortened to eliminate excess rows or lengthened to add rows to present the firm(s) work accurately. The consultant may supply additional information, if desired. Additional information is voluntary.
13. If the prime firm has not performed work for the City of Dallas for the past three years, or has performed two projects for the City of Dallas in the past three years, please use a similar format to provide historical information on your firm’s utilization of M/WBE firms on at least three projects in the past three years with other clients.
14. If you have any questions, please contact the person indicated in the cover letter for the request for Proposals.
CITY OF DALLAS
RFP/RFQ CONTRACTOR'S AFFIDAVIT
HISTORY OF M/WBE UTILIZATION FORM
Project Name: Bid/Contract #:
Instructions:
Column 1: List the department or the name of entity the work is being or has been performed Column 6: List the percentage of all Minority or Women Business Enterprise "M/WBE" work committed to at the award of the project plus any additional percentage committed as part of any Supplemental Agreement.
Column 2: List department or firm(s); contact name; address; telephone number.
Column 3: List the Name of the Project
Column 7: List the percentage of all Minority or Women Business Enterprise "M/WBE" actual to date of the project plus any additional percentage committed as part of any Supplemental Agreement.
Column 8: Indicate the percent of the contract completed.
Column 4: List the amount awarded plus the amount of all Supplemental Agreements Column 5: List the M/WBE goal established by City Department or Other Entity City Depart. Or Other
Entity
[1]
Contact Name Address, City,
State, Zip & Tel. Number
[2]
Project Name
[3]
Total Contract
Amount ($)
[4]
M/WBE Goal
[5]
M/WBE Particpation
Commited
[6]
M/WBE Particpation Actual to Date
[7]
Percent Complete of
Contract
[8]
For Official Use Only
I certify that the information included in this History of M/WBE Utilziation Form is true and complete to the best of my knowledge and belief. I further understand and agree that all information will be reviewed and verified by the Business Inclusion and Development Compliance Staff.
Officer's Signature:
Printed Name:
Title:
Date:
Rev. 1 - 1/29/10
Doc#:BDPS-FRM-205
CITY OF DALLAS
RFP/RFQ CONTRACTOR'S AFFIDAVIT
TYPE OF WORK BY PRIME AND SUBCONSULTANT FORM
Project Name: Bid/Contract #:
Instructions:
Column 1: List name of firm Column 6: Indicate firm's location as L=local (within Dallas county limits); N=Non-local (Outside Dallas county limits).
Column 2: City of Dallas Vendor Number for Prime and Subcontractors/Suppliers (If none, register online: www.bids.dallascityhall.org). ALL Prime and Subcontractors/Suppliers must be registered with the City of Dallas.
Column 7:
List type of work to be performed by Prime and 1st tier subcontractors.
Indicate percentage for the prime and subconsultant for the type of Column 3: M/WBE Certification Number (if applicable).
Column 4: List firm(s); contact name; address; telephone number.
Column 5: List ethnicity of firm(s) owner as B=African American; H=Hispanic; I=Asian Indian; N=Native American; P=Asian Pacific; W=Woman; NON=other than M/WBE.
Column 8: work that will be performed during this contract.
Name of Firm City of Dallas
Vendor Number
M/WBE Certification (If
Applicable)
Contact Name Address, City, State, Zip
& Tel. Number
Type of Firm L
or
N
Types of Work Percent (%) Range
[1] [2] [3] [4] [5] [6] [7] [8]
[Note: Percentages will automatically calculate.] Fo
Statements of Qualifications- % Range is requesting an estimated project percentage.
Total Proposal
Percentage: 0.00%
The undersigned intends to enter into a formal agreement with the subcontractors listged, conditioned upon being awarded the City of Dallas contract. If any changes are made to this list, the Prime contractor must submit to the City for approval a revised schedule with documented explanations for the changes. Failure to comply with this provision could result in termination of the contract, sanctions against the Prime contractor, and/or ineligibility for future City contracts. Intentional misrepresentation could result in criminal prosecution.
Officer's Signature:
Printed Name:
Title:
Date:
Rev. 1- 1/29/10
Doc#BDPS-FRM-206
1 QUINTAIROS, PRIETO, WOOD & BOYER, P.A.
HARRIS BANK BUILDING
115 S. LASALLE STREET, 31stFLOOR
CHICAGO, IL 60603
P: (312) 566-0040 ● F: (312) 566-0041
www.qpwblaw.com
MEMORANDUM
TO: Ellen H. Daley
Chief Procurement Officer, General Services
State of Illinois
John Donato
Chief Procurement Officer, Higher Education
State of Illinois
FROM: Anita Ponder, Partner
Dragomir Tsvetenov, Associate Attorney
Quintairos, Prieto Wood & Boyer, P.A.
DATE: February 16, 2022
RE: WRITTEN REPORT TO STATE OF ILLINOIS EXECUTIVE ETHICS COMMISSION I. INTRODUCTION
The State of Illinois Executive Ethics Commission (“the State”) entered into a contract with the law firm of Quintairos, Prieto, Wood & Boyer, P.A. (“QPWB”) to provide consulting services for procurement diversity. There are four primary goals to be achieved under the contract:
Draft administrative rules to implement the Request for Proposal (RFP) Commitment to Diversity requirement as outlined in the Illinois Procurement Code (30 ILCS 500/20-15) and (30 ILCS 500/35-30(a);
Draft a minimum of six (6) new objective elements that can be scored under RFP Commitment to Diversity and prepare a rubric that will guide evaluators on how best to score the recommended elements;
2 Provide justification and supporting evidence, including case law where the element was challenged, that the selected Commitment to Diversity elements best represent a firm’s commitment to diversity; and
Draft and format the RFP template instructions for Commitment to Diversity.
A. Contract Term Schedule
The term of the contract between the State and QPWB is for twelve (12) weeks. As specified in the contract, QPWB has agreed to provide its final written report to the State on March 30, 2022, which will include: the scoring elements, administrative rules and RFP Commitment to Diversity section.
During the contract period, there are video conferences that QPWB has agreed to attend and specific deliverables (i.e., written reports, video presentations and related deliverables) that QPWB has agreed to provide to the State. A schedule of the written reports, video presentations and related deliverables are specified below:
Written Report & Video Presentation #1 (Due Date – February 2, 2022). This written report was timely submitted by QPWB and our team made a video presentation of the report on February 2, 2022. Our report included the following information:
o Any governmental bodies that include an evaluation of a vendor’s commitment to diversity in a solicitation, procurement, grant or similar document o Examples of private firms that have practices promoting diversity in recruiting, hiring, supporting, or promoting employees, volunteers, independent contractors and board members
o Examples of private firms that have practices promoting diversity in their supply chain both up and down stream
Written Report & Video Presentation #2 (Due Date – February 16, 2022). This memorandum is our written report that is due on February 16, 2022. The report includes the following information:
o Guidance on how to use current statutory factors (30 ILCS 500/20-15(e-5)(2)) as scorable elements
o At least six (6) ranked examples of scorable Commitment to Diversity elements
Written Report & Video Presentation #3 (Due Date – March 9, 2022). In addition to a written report and video presentation, QPWB has agreed to provide proposed administrative rules draft and a RFP Commitment to Diversity section draft. Our written report will include the following information:
o Elements that the State should include in RFPs as a scorable evaluation of a firm’s commitment to diversity
o Justification and evidence explaining why the proposed elements are best at determining a firm’s commitment to diversity
o Citations and summaries to any court case where a government’s use of Commitment to Diversity elements was challenged
o Proposed administrative rules
Final Written Report & Video Presentation #4 (Due Date – March 30, 2022). Our written report will include the following information:
3 o Scoring elements
o Administrative rules
o RFP Commitment to Diversity Section
B. Contract Performance (Research)
Per our prior video conferences with the State, below is a summary of the resources that we have reviewed for information in this Report regarding: 1) a demonstration of how to use current statutory factors (30 ILCS 500/20-15(e-5)(2)) as scorable elements; and 2) providing at least six (6) ranked examples of scorable Commitment to Diversity elements. The resources that we have evaluated include, but are not limited to, the following:
Continued review of publicly available supplier diversity information from 100 National Minority Supplier Development Council member corporations and contacting supplier diversity officials at those companies. Like the research that we reported on in our February 2nd, written report, we are searching for any information about these companies’ supplier diversity programs. There is not much information publicly available regarding the overall structure for how their programs work, so we are also reaching out to the companies in order to request and obtain: 1) any primary source documents from the company that they can share with us; 2) any website or other place that they can point us to which might have information about their program, or 3) any other information that they would like to share with us.
We have begun reviewing case law for justification or pitfalls regarding what a government agency may consider/evaluate in responses from offerors that respond to solicitations, with a focus on the State’s Commitment to Diversity elements. Reviewed supplier diversity programs in the public sector. We have reviewed publicly available information from each state, the largest (by population) fifty cities, and the largest (by population) fifty counties in the United States. Communicated with several high level administrators with the State of New York regarding the diversity practices of offerors of select departments of the State of New York and how those departments score those practices. The State of New York offered to provide us with information and documents regarding its supplier diversity programs and diversity practices, including its most recent State of New York MWBE Disparity Study Final Report, June 2017. We have recently received the following documents from the State of New York: disparity study, rules and regulations governing the State of New York’s MWBE program; related forms; and guidance regarding the use, awarding, monitoring and reporting of procurement contracts. Additional diversity information and documents from the State of New York will be provided to us. Reviewed federal regulations with regards to a bidder’s good faith efforts to meet the contract participation goal on federally funded transportation contracts, in order to find additional scorable elements that the State may want to consider. Good faith efforts are when the bidder shows that it took all necessary and reasonable steps to achieve a DBE goal or other requirement which, by their scope, intensity, and appropriateness to the objective, could reasonably be expected to obtain sufficient DBE participation, even if they were not fully successful.
Reviewed notable supplier diversity programs in the public sector that were previously identified, evaluated and recommended to prior government clients in prior studies by
4 Anita Ponder and her legal team pursuant to separate legal engagements with other law firms.
Reviewed the recommendations of the American Bar Association (ABA) regarding supplier diversity best practices. We also reviewed other publications regarding supplier diversity best practices.
We are currently reviewing the Disparity Study from Illinois, New York, and the City of Chicago. These studies include information of quantitative and qualitative evidence to determine whether there is a disparity between the availability of M/FBEs and the government’s utilization of these firms.
C. Written Report
As previously indicated, this memorandum is our second written report and regards: 1) a demonstration of how to use current statutory factors (30 ILCS 500/20-15(e-5)(2)) as scorable elements; and 2) providing at least six (6) ranked examples of scorable Commitment to Diversity elements. In addition to these practices in the public and private sectors, the report includes information that we obtained during our research that is consistent with and/or related to the elements in the Request for Proposal (RFP) Commitment to Diversity requirement as outlined in the Illinois Procurement Code (30 ILCS 500/20-15) and (30 ILCS 500/35-30(a). Specifically, the report seeks to address the following issues:
1. Guidance on How to Use Current Statutory Factors as Scorable Elements Research Findings & Analyses
Preliminary Checklist on How to Use Current Statutory Factors
2. Ranked Examples of Scorable Commitment to Diversity Elements Research Findings & Analyses
Preliminary Checklist on How to Use Current Statutory Factors This Report will provide information from our research regarding the public agencies and private firms as well as caselaw which gives some guidance during bid evaluation. We will identify those cases, agencies and firms.
The Report concludes with a summary of the information from our research regarding how to use current statutory factors (30 ILCS 500/ 20-15 (e-5)(2)) as scorable elements and provide at least six (6) ranked examples of scorable Commitment to Diversity elements. This information may be supplemented in future reports after we receive additional information during our communications with supplier diversity program representatives with select public agencies and private sector firms. Also, we welcome any additional information that the State may be able to provide to us about its current statutory factors and/or those of other public agencies.
5 II. RESEARCH FINDINGS
A. Guidance on How to Use Current Statutory Factors as Scorable Elements
1. Research Findings & Analyses
Although our research has been exhaustive, we continue to see a lack of information with regards to using current statutory factors as scorable elements. Overall New York State’s information has been very promising since they evaluate some of the same Commitment to Diversity elements that the State of Illinois evaluates in responses to solicitations. Regarding caselaw, it is not surprising that there are limited cases precisely on-point with what the State of Illinois is doing since there are not many other jurisdictions that are also evaluating vendors’ commitment to diversity to the same extent, however, there are several broad rules that may be able to guide the State of Illinois in using current statutory factors as scorable elements. a) Review of Supplier Diversity Programs from Public Agencies We reviewed any and all publicly available supplier diversity program information that we could find from all fifty states, the largest 50 cities and counties, and over 175 private firms, including 100 corporate members of the National Minority Supplier Development Council. As reported in our previous reports, the information that we received from public agencies was limited, however, the information that we received from New York State continues to give insight regarding how to use current statutory factors as scorable elements.
Because New York State evaluates bidders on much of the same criteria that the State of Illinois does, and because we were able to obtain guidance on how the State of New York evaluates its factors, we relied heavily on information we received from the State of New York as we describe how Illinois should use current statutory factors as scorable elements.
b) Review of Supplier Diversity for Private Firms
We reviewed publicly available supplier diversity program information that we could find from over 175 private firms, both large and small. Initially this research consisted of identifying supplier diversity programs from businesses that were touted in the media as notable. When this method was exhausted and resulted in very little useful information, we reviewed the supplier diversity programs of 100 corporate members of the National Minority Supplier Development Council. As a part of this review, we also reached out to these companies and requested any information that they could provide that might guide us. Ultimately, we still have not received much information from many private firms, but we are continuing to reach out to these businesses and request meetings. The private firms that we reviewed and contacted since our last report include the following:
AARP
Abbott Laboratories, Inc.
AbbVie Inc.
Accenture LLP
Accelerate Learning, Inc
6 Adient Altria Client Services, Inc. Barton Malow Baxter Healthcare Corporation BMO Harris Bank BMW North American, LLC BNSF Railway Company Booz Allen Hamilton Boston Consulting Group, Inc. Boston Properties Bowdoin College Centene Corporation CenterPoint Energy, Inc. Change Healthcare Charles Schwab CHEP International, Inc. Cisco Systems Citizens Bank, N.A. Clorox Company Colgate-Palmolive Company Cummins Inc. Denny’s Corporation Dick’s Sporting Goods Domino’s Pizza Dow Chemical Company Fannie Mae Farmers Insurance Group, Inc. Federal Reserve System Ford Motor Company Fox Corporation General Mills, Inc. Guardian Life Insurance Company Haartz Corporation Heidrick & Struggles Henkels & McCoy Hertz Corporation Highmark Health, Inc. Home Depot, Inc. Humana, Inc. Illinois Tool Works JPMorgan Chase & Co. Kilpatrick Townsend & Stockton LLP Kohl’s Kroger Company Lapine M&T Bank McCormick & Company, Inc. Merck & Co., Inc. Meridian Medical Technologies, Inc. MetLife, Inc. Micron Technology
7 Morgan Stanley
Motorola Solutions, Inc.
National Basketball Association (NBA)
Nationwide Insurance
Nestlé USA, Inc.
Nike, Inc.
NiSource Inc.
Nissan North America, Inc.
Northern Trust Company
OhioHealth
Pacific Gas and Electric Company
PepsiCo, Inc.
Pfizer Inc
Phillips 66
Poettker Construction Company
Premier, Inc.
PricewaterhouseCoopers LLP
Principal Financial Group
Procter & Gamble Company
Prologis
Providence
Quest Diagnostics Inc.
Qurate Retail Group (QVC)
R.J. Reynolds Tobacco Company (Reynolds American Inc.) R.R. Donnelley & Sons Company
Raytheon Technologies
RBC Wealth Management
Regions Bank
RELX Group (aka Lexis Nexis)
Resource Group, LLC, An Ascension Subsidiary
Ryan Companies
S&P Global
Schneider
Schneider Electric USA, Inc.
Scientific Games, Inc.
Siemens Corporation
Sinclair Community College
Sodexo, Inc.
Sonoco Products Company
Southern California Edison
Southern Company
c) Review of Select Disparity Studies
We are currently reviewing the Disparity Study from Illinois, New York, and the City of Chicago. These studies include information of quantitative and qualitative evidence to determine whether there is a disparity between the availability of M/FBEs and the government’s utilization of these firms.
8 As it relates to the State of Illinois Department of Central Management Services Disparity Study 2015, we focused our review on: 1) the “Legal Standards for State Contracting Affirmative Action Programs” section; and 2) the “Recommendation for the State of Illinois Business Enterprise Program” with a particular focus on the race and gender-neutral measures. We searched for any information that might give guidance on how to use current statutory factors as scorable elements. This information, similar to the majority of the caselaw that we reviewed, discusses the necessity for the disparity study and its effect on the program. Unfortunately, this information was not very helpful in determining how to use current statutory factors as scorable elements. However, the information was usefull in identifying examples of additional scorable diversity elements that the State may want to consider.
d) Met with Public Agency Procurement and Supplier Diversity Officials We met (via Zoom) with Jerome DuVal, Executive Vice President & Executive Director, Division of Minority and Women’s Business Development, along with several other high level administrators with the State of New York regarding the diversity practices of offerors of select departments of the State of New York and how those departments score those practices. The State of New York offered to provide us with information and documents regarding its supplier diversity programs and diversity practices, including its most recent State of New York MWBE Disparity Study Final Report, June 2017. We have recently received the following documents from the State of New York: disparity study, rules and regulations governing the State of New York’s MWBE program; related forms; and guidance regarding the use, awarding, monitoring and reporting of procurement contracts. Additional diversity information and documents from the State of New York will be provided to us.
e) Review of Caselaw
While we did not find very much caselaw that directly stated how to score bids for public contracts, in general, public procurement caselaw tends to indicate that the State would have great discretion with regards to how it uses current statutory factors as scorable elements. The caselaw also indicates that the State should make its evaluation criteria clear in its solicitations and then not to deviate from that criteria in the evaluation process. We have reviewed the following cases:
Regents of Univ. of California v. Bakke, 438 U.S. 265, 98 S. Ct. 2733, 57 L.
Ed. 2d 750 (1978)
Fullilove v. Klutznick, 448 U.S. 448, 100 S. Ct. 2758, 65 L. Ed. 2d 902 (1980)
City of Richmond v. J.A. Croson Co., 488 U.S. 469, 109 S. Ct. 706, 102 L.
Ed. 2d 854 (1989)
Coral Const. Co. v. King County, 941 F.2d 910 (9th Cir. 1991) Contractors Ass'n of E. Pennsylvania, Inc. v. City of Philadelphia, 6 F.3d 990 (3d Cir. 1993)
Concrete Works of Colorado, Inc. v. City & County of Denver, 36 F.3d 1513 (10th Cir. 1994)
9 Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 115 S. Ct. 2097, 132 L.
Ed. 2d 158 (1995)
Shaw v. Hunt, 517 U.S. 899, 116 S. Ct. 1894, 135 L. Ed. 2d 207 (1996) Eng'g Contractors Ass'n of S. Florida Inc. v. Metro. Dade County, 122 F.3d 895 (11th Cir. 1997)
Grutter v. Bollinger, 539 U.S. 306, 123 S. Ct. 2325, 156 L. Ed. 2d 304 (2003)
Rothe Dev. Corp. v. Dep't of Def., 545 F.3d 1023 (Fed. Cir. 2008) Texas Lottery Comm'n v. Sci. Games Int'l, Inc., 99 S.W.3d 376 (Tex. App. 2003) R.G.V. Vending v. Weslaco Independent School Dist. Associated Gen. Contractors of Texas, Inc. v. City of Corpus Christi, 694 S.W.2d 581 (Tex. App. 1985)
Sterrett v. Bell, 240 S.W.2d 516 (Tex. Civ. App. 1951) L & M Bus Corp. v. New York City Dept. of Educ., 83 A.D.3d 432, 920 N.Y.S.2d 331 (2011)
Quest Diagnostics Inc. v. County of Suffolk, 21 Misc. 3d 944, 865 N.Y.S.2d 504 (Sup. Ct. 2008)
Acme Bus Corp. v. Orange County, 28 N.Y.3d 417, 68 N.E.3d 671 (2016) Linden Airport Mgmt. Corp. v. New York City Econ. Dev. Corp., 71 A.D.3d 501, 896 N.Y.S.2d 344 (2010)
Bd. of Trustees of Cmty. Coll. Dist. No. 502, County of Du Page v. Dep't of Prof'l Regulation, 363 Ill. App. 3d 190, 842 N.E.2d 1255 (2d Dist. 2006) Summit Techs., LLC v. United States, 151 Fed. Cl. 171 (2020) Builders Ass'n of Greater Chicago v. City of Chicago, 298 F. Supp. 2d 725 (N.D. Ill. 2003)
N. Contracting, Inc. v. Illinois, 473 F.3d 715 (7th Cir. 2007) Pub. Util. Comm'n of Texas v. GTE-Sw., Inc., 901 S.W.2d 401 (Tex. 1995) Ahmed v. Morgan's Hotel Group Mgmt., LLC, 160 A.D.3d 555, 74 N.Y.S.3d 546 (2018)
Siegel Consultants, Ltd. v. Nokia, Inc., 32 Misc. 3d 1215(A), 934 N.Y.S.2d 37 (Sup. Ct. 2011)
Auctions Int'l, Inc. v. County of Orange, 196 A.D.3d 688, 148 N.Y.S.3d 693 (2021)
From these cases, we have listed several rules that courts have put forth which provide guidance to the State as it uses current statutory factors as scorable elements. The following is a list of rules which have been gleaned from caselaw and can assist decision making with regards to the process of evaluating bids and using the current statutory factors as scorable elements:
When the legislature expressly confers a power on an agency, it also impliedly intends that the agency have whatever powers are reasonably necessary to fulfill its express functions or duties; an agency may not, however, exercise what is effectively a new power on the theory that such exercise is expedient for the agency's purposes.
In Texas Lottery Comm'n v. Sci. Games Int'l, Inc., 99 S.W.3d 376 (Tex.
App. 2003) R.G.V. Vending v. Weslaco Independent School Dist. Out-ofstate companies that designed and manufactured instant-ticket lottery games for state lotteries sought a declaratory judgment that the State of Texas Lottery Commission lacked authority to adopt a policy of
10 considering a vendor's anticipated economic impact to the State of Texas1. The economic impact being considered gave advantage to instate companies, even though the statute explicitly stated that the agency must have competition to the “greatest extent possible.” Id. The court held that although the State of Texas would usually have the authority to evaluate bids for information such as the location of the bidder, this was prohibited when the legislature explicitly gives rules which an agency action would contradict. Id.
In consideration of the State’s use of statutory factors as scorable elements, we should take from this case that the State has a wide berth in what it evaluates with respect to bids so long as the scoring/evaluation does not contradict a statute.
Where there was no existing law that addresses, let alone precludes, provisions in public bidding contracts, an agency’s arguments and considerations will be taken in good faith by courts if there is a legal challenge.
In L & M Bus Corp. v. New York City Dept. of Educ., 83 A.D.3d 432, 920 N.Y.S.2d 331 (2011), a school bus transportation vendor (“L&M”) commenced a law suit challenging the New York City Education Department's bid specifications for school bus transportation requiring them to obtain various types of insurance (including against sexual molestation, harassment, assault, and other similar acts)2. L&M argued that the types of insurance the City of New York was requiring for vendors to obtain was substantially unrelated to the types of services being solicited, unnecessary, and put an undue burden on vendors responding to the solicitation. Id. The court found in this case, as in Texas Lottery Commission, found that agencies are given great deference with regards to what they require from their bidders on public contracts, and a court will not ordinarily substitute its judgement for that of the agency. Id. If the agency is not contradicting a law, a court will generally respect what an agency decides is necessary with regards to its solicitations. Id.
In consideration of how to use current statutory factors as scorable elements, this case also seems to underpin that the State will be given great deference with regards to what is decides to request from bidders as it evaluates bids, so long as there is not law which would prohibit the evaluation.
An agency may not act arbitrarily by using a method that is inconsistent with the standard set out in its solicitation.
1 Texas Lottery Comm'n v. Sci. Games Int'l, Inc., 99 S.W.3d 376 (Tex. App. 2003). See Also: Pub. Util. Comm'n of Texas v. GTE-Sw., Inc., 901 S.W.2d 401 (Tex. 1995)
2 L & M Bus Corp. v. New York City Dept. of Educ., 83 A.D.3d 432, 920 N.Y.S.2d 331 (2011). See also: Ahmed v.
Morgans Hotel Group Mgmt., LLC, 54 Misc. 3d 1220(A), 55 N.Y.S.3d 691 (N.Y. Sup. Ct. 2017), aff'd sub nom. Ahmed v. Morgan's Hotel Group Mgmt., LLC, 160 A.D.3d 555, 74 N.Y.S.3d 546 (2018); Siegel Consultants, Ltd. v. Nokia, Inc., 32 Misc. 3d 1215(A), 934 N.Y.S.2d 37 (Sup. Ct. 2011).
11 In Acme Bus Corp. v. Orange County, 28 N.Y.3d 417, 68 N.E.3d 671 (2016), a bus company petitioned for review of a county's determination to accept proposals from two of company's competitors to provide school bus transportation services for special needs students and to award contracts to the competitors3. The RFP explained that if there was a difference between the lowest offeror and the next lowest offeror of 10%, then the next lowest offeror would have two points deducted from the maximum cost score of 20. Id. The county used a two-point deduction in scoring proposals for every 4% difference in price, rather than the 10% as stated in the solicitation. Id.
This case tends to show that the State should clearly and explicitly state what it will be evaluating with regards to the statutory elements, how those factors will be evaluated, and then strictly abide by that process. Procuring agencies retain great discretion in determining the scope of a given evaluation factor.
In Summit Techs., LLC v. United States, 151 Fed. Cl. 171 (2020), a vendor who was not awarded a contract for IT services to the VA challenged the decision4. The vendor focused on whether or not the information on which the agency relied was sufficient and reasonably related to the services being requested. Id. The main takeaway from the case was “given the considerable discretion allowed contracting officers, the standard of review for a bid protest challenging a federal procurement is highly deferential,” however, the court also went as far as to state that agencies have great discretion with regards to what they decide to consider/evaluate or “evaluation factors.” Id.
In relation to the State’s statutory factors, this case continues the trend of giving the State a strong indication that it will have great deference as it evaluates the statutory elements. Although this case involved a federal procurement, this case is persuasive with regards to a state procurement.
f) Review of Federal Regulations
We reviewed the federal regulation 49 CFR § 26.53 regarding “What are the good faith efforts procedures (DOT) recipients follow in situation where there are contract goals?” in order to find additional scorable elements that the State may want to consider. Good faith efforts are when the bidder shows that it took all necessary and reasonable steps to achieve a DBE goal or other requirement which, by their scope, intensity, and appropriateness to the objective, could reasonably be expected to obtain sufficient DBE participation, even if they were not fully successful.
g) Review Supplier Diversity Best Practices
3 Acme Bus Corp. v. Orange County, 28 N.Y.3d 417, 68 N.E.3d 671 (2016). See also: Auctions Int'l, Inc. v. County of Orange, 196 A.D.3d 688, 148 N.Y.S.3d 693 (2021)
4 Summit Techs., LLC v. United States, 151 Fed. Cl. 171 (2020)
12 We reviewed the recommendations of the American Bar Association (ABA) regarding supplier diversity best practices. We also reviewed several publications regarding supplier diversity best practices. The information from these sources was general in nature and did not identify specific program initiatives that should be implemented by public agencies and/or private firms to advance supplier diversity.
2. Preliminary Checklist on How to Use Current Statutory Factors Create a comprehensive Commitment to Diversity Form. This form should ask offerors to respond to questions regarding their compliance to each statutory element, and to provide documentation and evidence to support their compliance, where applicable. The form should require a notarized signature from an authorized representative of the offeror. Identify the number of points to be allocated to the offeror’s “Commitment to Diversity” practices. Please note that the number of points must be equivalent to 20% of the points assigned to the third part of the proposal, or “all other items.” 30 ILCS 500/20-15.
Create a weighted matrix which scores points for each “Commitment to Diversity” element.
o The matrix should include a chart listing each element to be scored. In addition, each element should have one or more factors that should be evaluated, in order to determine the number of points that should be allocated for each element.
o Each element may be weighted differently, but the matrix should reflect columns for whether an offeror met the factor for the number of points received. For example, in the element of whether or how well the offeror, on the solicitation being evaluated, met the goal of contracting or subcontracting with businesses owned by women, minorities, or persons with disabilities, a percentage of those points may be distributed based on the percentage of contracts in which the offeror has completely met its goals. In this case, the factors will represent different percentages of contracts in which the goals were met during the designated time period.
Include appropriate language in the solicitation. The solicitation in question should include the following:
o a provision indicating that diversity practices will be scored; o the maximum number of points that may be awarded based upon respondents’ diversity practices; and
13 o provisions in the solicitation requesting that offerors respond with information and documents which evidence the scorable “Commitment to Diversity” elements.
Use the information received in the Commitment to Diversity Form to score the statutory elements on the matrix.
Determine the weighted score. Once you have added the scores for all “Commitment to Diversity” elements questions for a respondent on the matrix, multiply that score based upon the weight that is assigned to diversity practices on the procurement.
The “Commitment to Diversity” information requested in the solicitation constitutes the statutory minimum required to assess the offeror’s commitment to diversity. The State may request additional information in its solicitations to customize them to the procurement activities.
B. Ranked Examples of Scorable Commitment to Diversity Elements
1. Research Findings & Analyses
Our research for this section consisted of our review of: publicly available information from private firms; unpublished information that we received from them directly; information we received from caselaw; information from government agencies (all fifty states and the 50 largest cities and counties); communications with government administrators, and review of the State’s most recent Disparity Study. Additionally, we reviewed the federal regulations with regards to “good faith efforts.” 5 As stated above with regards to the caselaw, while we did not find specific factors to be evaluated, the trend seems to be that agencies are given great discretion with regards to what they can request to be submitted by offerors in their proposals, and how they evaluate the compliance by offerors to the submittal requirements in the solicitation.
Our review of information from the State of New York presented us with additional elements that they score, but that is not considered in the State of Illinois’s “Commitment to Diversity Elements.” We have included those additional elements in our list of ranked examples of scorable Commitment to Diversity Elements.
Our review of the most recent Disparity Study from the State of Illinois also resulted in us identifying additional elements that we have listed under on our list of ranked examples of scorable Commitment to Diversity Elements.
2. Ranked Examples of Scorable Commitment to Diversity Elements These examples have been ranked into three (3) categories: (A) High Priority, (B) Intermediate Priority, and (C) Low Priority. Elements that are ranked into category (A) should be given the greatest priority because of their potential significant impact to advance diversity. Elements in category (B) should have intermediate priority because of their lesser potential impact to advance diversity. Category (C) elements should have
5 49 CFR § 26.53
14 the lowest priority because of their lowest potential impact to advance diversity. The elements in Category (c) may be duplicative of current initiatives by the State of Illinois, select departments and/or small business organizations throughout the state.
A) Examples of High Priority Elements
Whether the offeror has a Chief Diversity Officer who is the point person for diversity, equity and inclusion initiatives at their company Whether the offeror has a written affirmative action program which describes their training programs, outreach efforts and other positive steps to recruit and advance qualified diverse individuals
Whether the offeror has written EEO policies and procedures to protect employees and job applicants against employment discrimination. If yes, submit documentation of compliance to those policies
Whether the offeror has written pay equity policies to eliminate gender and race discrimination when establishing and maintaining wages. If yes, submit documentation of compliance to those policies (ie, certified payroll information for the prior year)
Whether the offeror has engaged in practices during the past year to make a portion of its project work available to diverse suppliers B) Examples of Intermediate Priority Elements
Percentage of the offeror’s non-management employees who are diverse (ie, by ethnicity and gender)
Whether the offeror has written policies governing its advertisement of subcontract opportunities and solicitations of quotes
Whether the offeror has written policies to evaluate the technical capabilities of diverse suppliers to independently perform on contracts Whether the offeror provides regular debriefings to unsuccessful diverse suppliers that seek subcontract or joint venture contracting opportunities from the offeror
Whether the offeror has partnerships, memberships or other types of relationships with the National Minority Supplier Development Council, the Women’s Business Enterprise National Council, including any of their affiliates and/or other organizations that promote supplier diversity in the public and private marketplaces
C) Examples of Low Priority Elements
Whether the offeror has a technical assistance program to assist diverse suppliers obtain technical assistance, such as bid preparation, certification application assistance, estimating, loan application assistance, financial literacy counseling, grant application assistance, technology services, and compliance to
15 governmental policies and regulations
Whether the offeror has a management assistance program to assist diverse suppliers obtain management assistance, such as industry-specific strategies for success, business plan preparation and review, marketing, business incubation, inventory management, bookkeeping and accounting, project management, and mentoring, training and/or coaching
Whether the offeror has documentation of its requests for supplier diversity assistance from State of Illinois administrators and/or representatives of minority business, women business and community organizations during the past year
Whether the offeror has a “business development program” to assist diverse suppliers to successfully compete in the private marketplace Whether the offeror has entered into any joint venture relationships or partnerships with diverse suppliers during the past year to assist them in enhancing their experience, expertise and capabilities to participate as prime contractors on larger projects
Whether the offeror has relationships with Historically Black Colleges and Universities (HBCUs) and/or other diverse institutions to help facilitate the educational, professional and/or future business success of diverse students III. SUMMARY
We have conducted an exhaustive review of publicly available information from over 150 government entities, as well as an exhaustive list of secondary sources. Public agencies had many more publicly available primary source documents and direct information, however, there are not many programs with information connected to the type of elements in the State’s commitment to diversity evaluation. On the other hand, research on private firms revealed much more information through secondary sources; however the information was very general and did not provide much useful detail for us to report as of yet.
We have begun our review of case law, and although there does not seem to be much caselaw directly on point, we have been able to find some cases which tend to show that the State will have a lot of discretion with regards to how it decides to evaluate bids.
We recently spoke with the Executive Director of New York State’s Division of Minority and Women’s Business Development, Jerome DuVal. Mr. DuVal has agreed to share primary source documents with us with regards to the State of New York’s supplier diversity program. We have already begun receiving information and documents, and we expect that this information will give us insight on how their program was developed since it seems to be similar in some ways to what the Illinois Legislature has enacted.
We reviewed federal regulations regarding “good faith efforts” as we sought additional ranked examples of scorable Commitment to Diversity elements. The regulations were helpful in identifying a good number of additional elements, which we have included on our ranked list.
16 We are currently reviewing Disparity Studies from Illinois, New York, and the City of Chicago.
These studies include information of quantitative and qualitative evidence to determine whether there is a disparity between the availability of M/FBEs and the government’s utilization of these firms.
We intend to continue the research that we have been engaged in to date. We will continue review caselaw, and to pursue communications with public agencies and private firms in order to receive additional information.
On March 9th, our next report will cover information containing proposed administrative draft rules, and a RFP Commitment to Diversity section Draft. The report in total will include: all elements that the State should include in RFPs as scorable evaluations of a firm’s commitment to diversity; justification and evidence explaining why the proposed elements are best at demonstrating a firm’s commitment to diversity; citations and summaries to any court case where a government’s use of commitment to diversity elements was challenged; and proposed administrative rules.
1 QUINTAIROS, PRIETO, WOOD & BOYER, P.A.
HARRIS BANK BUILDING
115 S. LASALLE STREET, 31stFLOOR
CHICAGO, IL 60603
P: (312) 566-0040 ● F: (312) 566-0041
www.qpwblaw.com
MEMORANDUM
TO: Ellen H. Daley
Chief Procurement Officer, General Services
State of Illinois
John Donato
Chief Procurement Officer, Higher Education
State of Illinois
FROM: Anita Ponder, Partner
Dragomir Tsvetenov, Associate Attorney
Quintairos, Prieto, Wood & Boyer, P.A.
DATE: March 21, 2022
RE: WRITTEN REPORT TO STATE OF ILLINOIS EXECUTIVE ETHICS COMMISSION I. INTRODUCTION
The State of Illinois Executive Ethics Commission (“the State”) entered into a contract with the law firm of Quintairos, Prieto, Wood & Boyer, P.A. (“QPWB”) to provide consulting services for procurement diversity. There are four primary goals to be achieved under the contract:
• Draft administrative rules to implement the Request for Proposal (RFP) Commitment to Diversity requirement as outlined in the Illinois Procurement Code (30 ILCS 500/20-15) and (30 ILCS 500/35-30(a);
• Draft a minimum of six (6) new objective elements that can be scored under RFP Commitment to Diversity and prepare a rubric that will guide evaluators on how best to score the recommended elements;
• Provide justification and supporting evidence, including caselaw where the element was challenged, that the selected Commitment to Diversity elements best represent a firm’s commitment to diversity; and
2 • Draft and format the RFP template instructions for Commitment to Diversity.
A. Contract Term Schedule
The term of the contract between the State and QPWB is for twelve (12) weeks. As specified in the contract, QPWB has agreed to provide its final written report to the State on March 30, 2022, which will include: the scoring elements, administrative rules and RFP Commitment to Diversity section. During the contract period, there are video conferences that QPWB has agreed to attend and specific deliverables (i.e., written reports, video presentations and related deliverables) that QPWB has agreed to provide to the State. A schedule of the written reports, video presentations and related deliverables are specified below:
• Written Report & Video Presentation #1 (Due Date – February 2, 2022). This written report was timely submitted by QPWB and our team made a video presentation of the report on February 2, 2022. Our report included the following information:
o Any governmental bodies that include an evaluation of a vendor’s commitment to diversity in a solicitation, procurement, grant or similar document o Examples of private firms that have practices promoting diversity in recruiting, hiring, supporting, or promoting employees, volunteers, independent contractors and board members
o Examples of private firms that have practices promoting diversity in their supply chain, both up and down stream
• Written Report & Video Presentation #2 (Due Date – February 16, 2022). This written report was timely submitted by QPWB and our team made a video presentation of the report on February 16, 2022. Our report included the following information:
o Guidance on how to use current statutory factors (30 ILCS 500/20-15(e-5)(2)) as scorable elements
o At least six (6) ranked examples of scorable Commitment to Diversity elements • Written Report & Video Presentation #3 (Due Date – March 21, 2022). This memorandum is our written report that is due on March 21, 2022. The report includes the following information:
o Elements that the State should include in RFPs as a scorable evaluation of a firm’s commitment to diversity
o Justification and evidence explaining why the proposed elements are best at determining a firm’s commitment to diversity
o Citations and summaries to any court case where a government’s use of Commitment to Diversity elements was challenged
o Proposed administrative rules
• Final Written Report & Video Presentation #4 (Due Date – March 30, 2022). Our written report will include the following information:
o Scoring elements
o Administrative rules
o RFP Commitment to Diversity Section
3 B. Contract Performance (Research)
Below is a summary of the resources that we have reviewed for information in this Report regarding: all elements that the State should include in RFPs as a scorable evaluation of a firm’s commitment to diversity; justification and evidence explaining why the proposed elements are best at demonstrating a firm’s commitment to diversity; citations and summaries to any court cases where a government’s use of commitment to diversity elements was challenged; and proposed administrative rules The resources that we have evaluated include, but are not limited to, the following:
• We reviewed publicly available supplier diversity information from more than 100 National Minority Supplier Development Council member corporations1. After several weeks of comprehensive research, we have learned that there is not a lot of publicly available information regarding their supplier diversity programs and/or their initiatives to advance diversity. As a result, we reached out to supplier diversity officials at each of these companies, on a weekly basis, to request and obtain: any primary source documents about their supplier diversity programs and initiatives; any website or other resources which might have information about their supplier diversity program and initiatives; and to obtain any related diversity information that they may be willing to provide us.
• We reviewed secondary sources, including news media, journals and studies for information related to each proposed element and factor to help explain why the proposed elements are best at determining a firm’s commitment to diversity. We have included this information as part of the justification and evidence to support the elements and factors.
• We researched and analyzed caselaw related to the proposed elements and factors. We specified the relevant caselaw, including the applicable citations. We also summarized certain court cases where the government’s use of commitment to diversity elements was challenged.
• We reviewed supplier diversity or minority/women business enterprise (MBE/WBE) programs in the public sector. We reviewed publicly available information from each state, the largest (by population) fifty cities, and the largest (by population) fifty counties in the United States.
• We reviewed the MBE/WBE Disparity Studies from the State of Illinois2, State of New York3, Cook County4 and the City of Chicago5(“disparity studies”). Based on established caselaw, these disparity studies include statistical evidence to determine whether there is a disparity between the availability of MBE/WBEs and the government’s utilization of these firms as prime contractors and/or subcontractors. A disparity between the utilization and availability of MBE/WBEs may raise an inference of discriminatory exclusion6. Where gross statistical disparities can be shown, they alone in a proper case may constitute prima facie proof of a pattern or practice of discrimination. Id.
1 https://nmsdc.org/corporate-membership/corporate-members 2 The State of Illinois, Department of Central Management Services Disparity Study (2015) 3 The State of New York, MWBE Disparity Study (2017)
4 Cook County, Illinois, Disparity Study (2015)
5 The City of Chicago, Disparity Study for Construction Contracts (2021) 6 City of Richmond v. J.A. Croson Co., 488 U.S. 469, 109 S. Ct. 706, 102 L. Ed. 2d 854 (1989)
4 • We prioritized the recommendations in the study for the State of Illinois, although the disparity studies have similar information. Our review of these disparity studies focused on two parts: the various caselaw challenging the constitutionality of MBE/WBE Programs nationwide; and the caselaw promoting the use of race-neutral measures (i.e., initiatives or programs) that are, or can be, used to assist all small businesses, without making distinctions or classifications on the basis of race, ethnicity or gender. Many of the elements and factors that we recommend to the State are consistent with established caselaw, as cited and proposed in one or more of the disparity studies.
Race-neutral measures are a necessary component of a defensible and effective race and gender conscious program7 and the failure to seriously consider such remedies has been fatal to several programs8. The requirement that an agency must meet the maximum feasible portion of the goal through race-neutral measures, as well as estimate that portion of the goal it predicts will be met through such measures has been central to the holdings that the DBE regulations meet narrow tailoring9. However, strict scrutiny does not require that every race-neutral approach must be implemented and then proven ineffective before race-conscious remedies may be utilized10.
C. Written Report
This memorandum is our third written report and it includes the following information:
i. Elements that the State should include in RFPs as a scorable evaluation of a firm’s commitment to diversity
ii. Justification and evidence explaining why the proposed elements are best at determining a firm’s commitment to diversity
iii. Citations and summaries to any court case where a government’s use of Commitment to Diversity elements was challenged
iv. Proposed administrative rules
This report begins by introducing the background information for this assignment. In the introduction we outline the written report, including the contract term schedule, research, written report, and the summary.
The extensive research conducted by our firm in connection with this third written report is the culmination of all of our outreach efforts to public agencies and private companies, review of journals, new articles, white papers, statistical data, disparity studies and a number of cases. With this information, we developed a list of elements and related factors that the State can use to evaluate an offerors’ commitment to diversity.
The elements that we recommend to the State include the current legislative statutory elements/factors11 with additional elements that we propose to the State to evaluate an offeror’s commitment to diversity. Each element has evaluation factors that can be used by the State to evaluate and score the element.
7 City of Richmond v. J.A. Croson Co., 488 U.S. 469, 109 S. Ct. 706, 102 L. Ed. 2d 854 (1989); See also: Associated Gen.
Contractors of Ohio, Inc. v. Drabik, 214 F.3d 730 (6th Cir. 2000) 8 See, e.g., Florida A.G.C. Council, Inc. v. State of Florida, Case No.: 4:03-CV-59-SPM at 10 (N. Dist. Fla. 2004) (“There is absolutely no evidence in the record to suggest that the Defendants contemplated race-neutral means to accomplish the objectives” of the statute.); Eng'g Contractors Ass'n of S. Florida Inc. v. Metro. Dade County, 122 F.3d 895 (11th Cir. 1997) 9 Sherbrooke Turf, Inc. v. Minnesota Dept. of Transp., 345 F.3d 964 (8th Cir. 2003) 10 Grutter v. Bollinger, 539 U.S. 306, 123 S. Ct. 2325, 156 L. Ed. 2d 304 (2003) 11 30 ILCS 500/20-15
5 The section of this written report that discusses the justification and evidence states the reasoning for why we recommend each element and factor. This justification may include data that we have found in our research, including caselaw which promotes race-neutral measures recommended in disparity studies12, caselaw as reflected in the federal regulations13 (governing the Disadvantaged Business Enterprise or DBE Program) or other applicable federal laws, primary and secondary sources, and the current diversity programs and initiatives.
It should be noted that the Federal DBE program is a legislatively mandated U.S. Department of Transportation (USDOT) program that applies to Federal-aid highway dollars expended on federallyassisted contracts issued by USDOT recipients, such as State Transportation Agencies (STAs). Every three years, STAs are required to set an overall DBE goal that they must meet, or show that they used good faith efforts to meet, annually. Congress established the DBE program in 1982 to: ensure nondiscrimination in the award and administration of DOT-assisted contracts; help remove barriers to the participation of DBEs in DOT-assisted contracts; and assist the development of firms that can compete successfully in the marketplace outside of the DBE program.
Regarding the citations and summaries to any court cases in which an element was challenged, we reviewed court cases related to each element and factor. Many of the elements and factors that we recommend come from: 1) established federal regulations, laws or policies where there have not been any successful challenges; 2) primary and secondary sources; and 3) caselaw that promotes the use of race-neutral measures, as cited and proposed in one or more of the disparity studies. We have summarized relevant caselaw that we believe provides the State legal support to implement the elements and factors that we have proposed.
This report ends with a brief summary and the status of our final written report which will include the scoring elements, administrative rules and the RFP Commitment to Diversity Section, as well as possibly two additional elements with factors.
Regarding the citations and summaries to any court cases in which an element was challenged, we reviewed court cases related to each element and factor. Many of the elements and factors that we recommend come from: 1) established federal regulations, laws or policies where there have not been any successful challenges; 2) primary and secondary sources; and 3) caselaw that promotes the use of race-neutral measures, as cited and proposed in one or more of the disparity studies. We have summarized relevant caselaw that we believe provides the State legal support to implement the elements and factors that we have proposed.
This report ends with a brief summary and the status of our final written report which will include the scoring elements, administrative rules and the RFP Commitment to Diversity Section, as well as possibly two additional elements with factors.
II. ELEMENTS AND FACTORS THAT THE STATE SHOULD INCLUDE IN RFPS AS A SCORABLE EVALUATION OF A FIRM’S COMMITMENT TO DIVERSITY
We recommend eight (8) elements and twenty-nine (29) factors to the State to include in RFPs as a scorable evaluation of a firm’s commitment to diversity. The State’s current statutory elements that are listed under 30 ILCS 500/20-15
14 have been included in the list as either elements or factors. One current element was divided into two elements to minimize the administrative burden to the State to fully
12 The State of Illinois, Department of Central Management Services Disparity Study (2015); The State of New York, MWBE Disparity Study (2017); Cook County, Illinois, Disparity Study (2015); The City of Chicago, Disparity Study for Construction Contracts (2021)
13 49 C.F.R. § Pt. 26, App. A
14 30 ILCS 500/20-15
6 evaluate and score the related initiatives of the offerors. Additionally, another current element is included as a factor to a proposed element. Because we expect to receive and evaluate additional information from some of the public agencies and private companies that we have contacted, it is possible that additional elements and/or factors may be recommended in our final written report.
The elements and factors in this report resulted from our comprehensive research and analyses of data from a variety of sources, including but not limited to, caselaw including race-neutral measures recommended in disparity studies15, caselaw as reflected in the federal regulations16 (regarding Disadvantaged Business Enterprise or DBE programs) or other applicable federal laws, as well as primary and secondary source information from public agencies and private companies.
The elements and factors that we recommend to the State to include in RFPs as a scorable evaluation of a firm’s commitment to diversity are specified below:
1) Whether or how well the offeror on the solicitation being evaluated, met the goal of contracting or subcontracting with businesses owned by women, minorities, or persons with disabilities. This is a current statutory element of the State. We propose the below factors to evaluate and score an offeror’s compliance to this element. a. Whether the offeror completed and submitted all required solicitation forms demonstrating its proposed utilization of businesses owned by women, minorities, or persons with disabilities, pursuant to the specified instructions b. Whether the offeror met the contract participation goal for businesses owned by women or demonstrated good faith efforts to meet the goal c. Whether the offeror met the contract participation goal for businesses owned by minorities or demonstrated good faith efforts to meet the goal d. Whether the offeror met the contract participation goal for businesses owned by persons with disabilities or demonstrated good faith efforts to meet the goal 2) The percentage of prior year spend by the offeror with businesses owned by women, minorities, or persons with disabilities. This is a current statutory element of the State that we have modified. We propose the below factors to evaluate and score an offeror’s compliance to this element.
a. Whether the percentage of prior year spend of the offeror exceeds 5% to businesses owned by women, minorities, or persons with disabilities b. Whether the percentage of prior year spend of the offeror exceeds 10% to businesses owned by women, minorities, or persons with disabilities c. Whether the percentage of prior year spend of the offeror exceeds 20% to businesses owned by women, minorities, or persons with disabilities d. Whether the percentage of prior year spend of the offeror exceeds 30% to businesses owned by women, minorities, or persons with disabilities 3) Whether the offeror has a written supplier diversity program, including, but not limited to, use of diverse vendors in the supply chain. This is part of a current statutory element of the State. We recommend that the other part of the current statutory element
15 The State of Illinois Department of Central Management Services Disparity Study (2015); The State of New York, MWBE Disparity Study (2017); Cook County, Illinois Disparity Study (2015); The City of Chicago, Disparity Study for Construction Contracts (2021)
16 49 C.F.R. § Pt. 26, App. A
7 becomes a separate element, as specified. We propose the below factors to evaluate and score an offeror’s compliance to this element.
a. Whether the offeror has written policies governing its advertisement of subcontract opportunities and solicitations of quotes
b. Whether the offeror has written policies to evaluate the technical capabilities of diverse suppliers to ensure they are not unfairly disadvantaged in the bidding process and there is adequate competition
c. Whether the offeror has partnerships, memberships or other types of relationships with the National Minority Supplier Development Council, the Women’s Business Enterprise National Council, including any of their affiliates, Assist Agencies and/or other organizations that promote supplier diversity in the public and private marketplaces
d. Whether the offeror has regular meetings and/or networking events with businesses owned by women, minorities, or persons with disabilities that includes their receipt of information on “How to do Business” with the offeror, persons who small businesses can contact regarding contracting opportunities, and information relating to the offeror’s annual or semi-annual contracting forecasts e. Whether the offeror has written procurement policies on how it will promote, develop and/or increase its utilization of businesses owned by women, minorities, or persons with disabilities which include, but is not limited to, prompt payment requirements, contract unbundling procedures and target market opportunities for small, diverse businesses
4) Whether the offeror has a program to assist, develop, train and/or mentor businesses owned by women, minorities, or persons with disabilities. This is the other part of the above current statutory element of the State. We propose the below factors to evaluate and score an offeror’s compliance to this element.
a. Whether the offeror provides debriefings to unsuccessful diverse suppliers that seek subcontract or joint venture contracting opportunities with the offeror b. Whether the offeror has a technical assistance program to assist businesses owned by women, minorities, or persons with disabilities obtain technical assistance, such as bid preparation, certification application assistance, estimating, loan application assistance, financial literacy counseling, grant application assistance, technology services, and compliance to governmental policies and regulations
c. Whether the offeror has a management assistance program to assist businesses owned by women, minorities, or persons with disabilities obtain management assistance, such as industry-specific strategies for success, business plan preparation and review, marketing, business incubation, inventory management, bookkeeping and accounting, project management, and mentoring, training and/or coaching
d. Whether offeror has a Mentor-Protégé program that includes, at a minimum, formal program guidelines, written development plan requirements, as well as a long-term and specific commitment between the parties (of at least one year). 5) Whether the offeror has an affirmative action program which describes their efforts to recruit, screen, select, pay equitably, and promote diverse individuals who are employed or affiliated with the offeror. This is a new statutory element that we propose
8 to the State. We propose the below factors to evaluate and score an offeror’s compliance to this element.
a. Whether the offeror has a written affirmative action program that includes, at a minimum, a workforce analysis, job group analysis, utilization analysis and placement goals
b. Whether the offeror has a high-level executive (i.e., Chief Diversity Officer, Chief Equity Officer, Vice President Diversity) who has been the point person for diversity, equity and inclusion initiatives at the company for at least six (6) months c. Whether the offeror has a written Equal Employment Opportunity (EEO) policy, which includes affirmative obligations and pay equity policies d. Percentage of members of the offeror’s governing board, senior executives, and managers who are women, minorities, or persons with disabilities e. Percentage of the offeror’s non-management employees who are women, minorities, or persons with disabilities
6) Whether the offeror has a business development program to assist businesses owned by women, minorities, or persons with disabilities to develop and successfully compete.
This is a new statutory element that we propose to the State. We propose the below factors to evaluate and score an offeror’s compliance to this element. a. Whether the offeror has entered into any joint venture relationships or partnerships during the past year to assist businesses owned by women, minorities, or persons with disabilities in enhancing their experience, expertise and capabilities to facilitate their participation on larger projects as prime contractors/consultants
b. Whether the offeror on the solicitation being evaluated, assisted businesses owned by women, minorities, or persons with disabilities within the past year in obtaining lines of credit, insurance, equipment, supplies, materials, or related assistance or services
7) Whether the offeror has relationships with Historically Black Colleges and Universities (HBCUs), other diverse institutions and/or their diverse students to help them achieve their educational, future employment and/or business goals. This is a new statutory element that we propose to the State. We propose the below factors to evaluate and score an offeror’s compliance to this element.
a. Whether the offeror has a program that offers grants, scholarships, loans or other types of financial assistance to HBCU or diverse students b. Whether the offeror has a program that provides paid internships and/or employment to HBCU or diverse students
8) Whether the offeror has engaged in activities during the past year that promote and/or support diverse communities and families. This is a new statutory element that we propose to the State. We propose the below factors to evaluate and score an offeror’s compliance to this element.
a. Whether offeror supports building rental or for-sale affordable housing for diverse individuals
b. Whether the offeror has a mentoring or sponsorship program for diverse employees or individuals from diverse communities
9 c. Whether the offeror has other significant programs or initiatives that promote and/or support diverse communities and families
We are considering two (2) additional elements and administrative rules that we may recommend to the State in our final written report after the completion of our research relating to these possible elements/administrative rules. These additional elements and administrative rules are:
• Whether the offeror has written policies to conduct business with veteran-owned businesses and LGBTQ business enterprises
• Whether the offeror has written policies to conduct business with local businesses and employ local persons from the communities where they conduct business or perform work
III. JUSTIFICATION AND EVIDENCE EXPLAINING WHY THE PROPOSED ELEMENTS ARE BEST AT DETERMINING A FIRM’S COMMITMENT TO DIVERSITY
The justification and/or evidence, where applicable, explaining why each element and factor are recommended is specified below.
1) Whether or how well the offeror on the solicitation being evaluated, met the goal of contracting or subcontracting with businesses owned by women, minorities, or persons with disabilities.
The justification for this element is supported by caselaw and discussed in the State of Illinois Disparity Study 17 which provides evidence to support contract participation goals for minority and women businesses on certain State contracts. The Disparity Study, which includes statistical data and anecdotal testimony, provides sufficient basis for remedial race and gender-based measures (i.e., contract participation goals) to ensure full and fair access by all firms, including businesses owned by women, minorities, or persons with disabilities, to State prime contracting and related subcontracting opportunities.
Offerors that meet the goal of contracting or subcontracting with diverse businesses demonstrate a commitment to diversity.
a. Whether the offeror completed and submitted all required solicitation forms demonstrating its proposed utilization of businesses owned by women, minorities, or persons with disabilities, pursuant to the specified instructions.
The justification for this factor is that minority and women business utilization forms should be required to be submitted from offerors with their bid documents, so that the State can fully evaluate their compliance to the applicable contract participation goals.
Offerors that have completed and submitted all required solicitation forms regarding their proposed utilization of diverse businesses demonstrate a commitment to diversity.
17 The State of Illinois Department of Central Management Services Disparity Study (2015)
10 b. Whether the offeror met the contract participation goal for businesses owned by women or demonstrated good faith efforts to meet the goal.
The justification for this factor is in various caselaw challenging the constitutionality of State and local MBE/WBE programs nationwide. Because there is sufficient evidence in the State of Illinois Disparity Study18 to support contract participation goals, the State may set contract participation goals which require offerors to make a “good faith effort” to achieve the goals. If offerors demonstrate, with the appropriate documentation, that they have made a good faith effort to achieve the applicable goals and fail to do so, the State cannot reject the offeror’s bid based on its noncompliance19. Good faith efforts mean that the offeror took all necessary and reasonable steps to achieve the goal which, by their scope, intensity, and appropriateness, could reasonably be expected to obtain sufficient MBE/WBE participation. Adequate good faith efforts also mean that the bidder actively and aggressively sought MBE/WBE participation. Mere pro forma efforts by offerors are not considered good faith efforts.
Offerors that meet the contract participation goal for women businesses or demonstrated good faith efforts to meet the goal demonstrate a commitment to diversity.
c. Whether the offeror met the contract participation goal for businesses owned by minorities or demonstrated good faith efforts to meet the goal.
The justification for this factor is in various caselaw challenging the constitutionality of State and local MBE/WBE programs nationwide. Because there is sufficient evidence in the State of Illinois Disparity Study20 to support contract participation goals, the State may set contract participation goals which require offerors to make a “good faith effort” to achieve the goals. If offerors demonstrate, with the appropriate documentation, that they have made a good faith effort to achieve the applicable goals and fail to do so, the State cannot reject the offeror’s bid based on its noncompliance21. Good faith efforts mean that the offeror took all necessary and reasonable steps to achieve the goal which, by their scope, intensity, and appropriateness, could reasonably be expected to obtain sufficient MBE/WBE participation. Adequate good faith efforts also mean that the bidder actively and aggressively sought MBE/WBE participation. Mere pro forma efforts by offerors are not considered good faith efforts.
Offerors that meet the contract participation goal for minority businesses or demonstrated good faith efforts to meet the goal demonstrate a commitment to diversity
18 The State of Illinois, Department of Central Management Services Disparity Study (2015) 19 See, e.g., BAGC v. Chicago, 298 F. Supp.2d at 740 (Programs that lack waivers for firms that fail to meet the subcontracting goals but make good faith efforts to do so have been struck down.) 20 The State of Illinois, Department of Central Management Services Disparity Study (2015) 21 See, e.g., BAGC v. Chicago, 298 F. Supp.2d at 740 (Programs that lack waivers for firms that fail to meet the subcontracting goals but make good faith efforts to do so have been struck down.)
11 d. Whether the offeror met the contract participation goal for businesses owned by persons with disabilities or demonstrated good faith efforts to meet the goal.
The justification for this factor is in various caselaw challenging the constitutionality of State and local MBE/WBE programs nationwide. Because there is sufficient evidence in the State of Illinois Disparity Study22 to support contract participation goals, the State may set contract participation goals which require offerors to make a “good faith effort” to achieve the goals. If offerors demonstrate, with the appropriate documentation, that they have made a good faith effort to achieve the applicable goals and fail to do so, the State cannot reject the offeror’s bid based on its noncompliance23. Good faith efforts mean that the offeror took all necessary and reasonable steps to achieve the goal which, by their scope, intensity, and appropriateness, could reasonably be expected to obtain sufficient MBE/WBE participation. Adequate good faith efforts also mean that the bidder actively and aggressively sought MBE/WBE participation. Mere pro forma efforts by offerors are not considered good faith efforts.
Offerors that meet the contract participation goal for businesses owned by persons with disabilities or demonstrated good faith efforts to meet the goal demonstrate a commitment to diversity.
2) The percentage of prior year spend by the offeror with businesses owned by women, minorities, or persons with disabilities. (It should be noted that this proposed element focuses on the “procurement spend” of offerors, instead of their revenues. We understand that the State has some concerns regarding the evaluation of the offeror’s revenues as they relate to their commitment to diversity. Because of this, our Report does not discuss the justification, if any, for the percentage of prior year revenues of the offeror to diverse businesses.)
The justification for this element is in various primary and secondary sources which reflect that private companies that monitor and track their spending with businesses owned by women, minorities and persons with disabilities tend to procure more goods and services from these businesses than companies that do not24. The more goods and services that a company procures, the greater should be deemed their commitment to diversity. We recommend that the State use a graduated scale to fully evaluate and score an offeror’s commitment to diversity, as indicated in the below factors.
The percentage of total spend by the offeror with diverse businesses demonstrates its commitment to diversity.
a. Whether the percentage of prior year spend of the offeror exceed 5% to businesses owned by women, minorities, or persons with disabilities.
The justification for this element is in various primary and secondary sources which reflect that private companies that monitor and track their spending with businesses owned by women, minorities and persons with disabilities tend to
22 The State of Illinois, Department of Central Management Services Disparity Study (2015) 23 See, e.g., BAGC v. Chicago, 298 F. Supp.2d at 740 (Programs that lack waivers for firms that fail to meet the subcontracting goals but make good faith efforts to do so have been struck down.) 24 See https://www.supplier.io/blog/supplier-diversity-best-practice2, et al, If you change which metrics you’re tracking or don’t…track your growth…[you cannot] gain the insight you need to grow and improve.
12 procure more services and products from these businesses than companies that do not. The more goods and services that a company procures, the greater should be deemed their commitment to diversity. We recommend that the State use a graduated scale to fully evaluate and score an offeror’s commitment to diversity.
The percentage of total spend by the offeror with diverse businesses demonstrates its commitment to diversity.
b. Whether the percentage of prior year spend of the offeror exceed 10% to businesses owned by women, minorities, or persons with disabilities.
The justification for this element is in various primary and secondary sources which reflect that private companies that monitor and track their spending with businesses owned by women, minorities and persons with disabilities tend to procure more services and products from these businesses than companies that do not. The more goods and services that a company procures, the greater should be deemed their commitment to diversity. We recommend that the State use a graduated scale to fully evaluate and score an offeror’s commitment to diversity.
The percentage of total spend by the offeror with diverse businesses demonstrates its commitment to diversity.
c. Whether the percentage of prior year spend of the offeror exceed 20% to businesses owned by women, minorities, or persons with disabilities.
The justification for this element is in various primary and secondary sources which reflect that private companies that monitor and track their spending with businesses owned by women, minorities and persons with disabilities tend to procure more services and products from these businesses than companies that do not. The more goods and services that a company procures, the greater should be deemed their commitment to diversity. We recommend that the State use a graduated scale to fully evaluate and score an offeror’s commitment to diversity.
The percentage of total spend by the offeror with diverse businesses demonstrates its commitment to diversity.
d. Whether the percentage of prior year spend of the offeror exceed 30% to businesses owned by women, minorities, or persons with disabilities.
The justification for this element is in various primary and secondary sources which reflect that private companies that monitor and track their spending with businesses owned by women, minorities and persons with disabilities tend to procure more services and products from these businesses than companies that do not. The more goods and services that a company procures, the greater should be deemed their commitment to diversity. We recommend that the State use a graduated scale to fully evaluate and score an offeror’s commitment to diversity.
The percentage of total spend by the offeror with diverse businesses demonstrates its commitment to diversity.
13 3) Whether the offeror has a written supplier diversity program, including, but not limited to, use of diverse vendors in the supply chain.
The justification for this element is in various primary and secondary sources which reflect that private companies with a supplier diversity program tend to procure more goods and services from businesses owned by women, minorities, and persons with disabilities than companies that do not.
Offerors that have a formal supplier diversity program with written policies and specific initiatives, should be deemed to have a greater commitment to diversity. a. Whether the offeror has written policies governing its advertisement of subcontract opportunities and solicitations of quotes.
The justification for this factor isin caselaw, as reflected in the federal regulations governing DBE programs in connection with Guidance Concerning Good Faith Efforts25. According to the Guidance from the federal government, advertisement of subcontract opportunities and solicitations of quotes by offerors demonstrate their good faith efforts to meet their contract participation goal on a government contract. Id. We recommend that offerors develop written policies to standardize and perform these actions for all of their subcontract opportunities, in order to increase their procurement of goods and services from diverse businesses.
Offerors that have written policies governing their advertisement of their subcontract opportunities and solicitations of quotes demonstrate a commitment to diversity.
b. Whether the offeror has written policies to evaluate the technical capabilities of diverse suppliers to ensure they are not unfairly disadvantaged in the bidding process and there is adequate competition.
The justification for this factor is in: 1) caselaw, as reflected in the federal regulations governing DBE programs in connection with Guidance Concerning Good Faith Efforts; Id. and 2) caselaw that promotes the use of race-neutral measures, as cited and proposed in the State of Illinois Disparity Study26.
According to the Guidance from the federal government, offerors demonstrate their good faith efforts to meet their contract participation goal on a government contract by not rejecting diverse businesses as being unqualified without sound reasons based on a thorough investigation of their capabilities27. One of the raceneutral recommendations in the State’s Disparity Study indicates that the State should review experience requirements to ensure that diverse businesses and small firms are not unfairly disadvantaged and that there is adequate competition for projects. Id. We recommend that offerors develop written policies to evaluate the technical capabilities of diverse suppliers to ensure they are not unfairly disadvantaged in the bidding process and there is adequate competition. Written policies will increase their procurement of goods and services from diverse businesses.
25 49 C.F.R. § Pt. 26, App. A
26 The State of Illinois, Department of Central Management Services Disparity Study (2015) 27 49 C.F.R. § Pt. 26, App. A
14 Offerors that have written policies to evaluate the technical capabilities of diverse suppliers demonstrate a commitment to diversity.
c. Whether the offeror has partnerships, memberships or other types of relationships with the National Minority Supplier Development Council, the Women’s Business Enterprise National Council, including any of their affiliates, Assist Agencies and/or other organizations that promote supplier diversity in the public and private marketplaces.
The justification for this factor is in: 1) caselaw, as reflected in the federal regulations governing DBE programs in connection with Guidance Concerning Good Faith Efforts28; and 2) primary and secondary sources. According to the Guidance from the federal government, offerors demonstrate their good faith efforts to meet their contract participation goal on a government contract by effectively using the services of available minority/women community organizations, minority/women contractor’s groups, governmental assist offices and other organizations that provide recruitment and placement of diverse businesses. Id. We recommend that offerors have partnerships, memberships or other types of relationships with well-established minority/women organizations, the State and other governmental agencies that promote supplier diversity and diverse businesses. These relationships will increase their procurement of goods and services from diverse businesses.
An example of this type of relationship is Sysco, the leading global foodservice distribution company, which recently announced five (5) new partnerships that will enhance its supplier diversity initiatives29. Sysco will partner with Disability:IN, National LGBT Chamber of Commerce (NGLCC), National VeteranOwned Business (NaVOBA), The National Minority Supplier Development Council (NMSDC), and the Women’s Business Enterprise National Council (WBENC). Id.
These partnerships will facilitate relationships with qualified diverse suppliers. Id.
Key benefits these partnerships will provide to diverse suppliers include:
education, training and development opportunities; mentorships; opportunity to identify and establish long-term supplier relationships with corporations; invitations to participate in qualified corporate member projects; and advance the success of diverse suppliers. Id.
Offerors that have partnerships, memberships or other types of relationships with the National Minority Supplier Development Council, the Women’s Business Enterprise National Council, including any of their affiliates, Assist Agencies and/or other organizations that promote supplier diversity in the public and private marketplaces demonstrate a commitment to diversity. d. Whether the offeror has regular meetings and/or networking events with businesses owned by women, minorities, or persons with disabilities that includes their receipt of information on “How to do Business” with the offeror, persons who small businesses can contact regarding contracting opportunities,
28 49 C.F.R. § Pt. 26, App. A
29 https://investors.sysco.com/annual-reports-and-sec-filings/news-releases/2022/01-05-2022
15 and information relating to the offeror’s annual or semi-annual contracting forecasts.
The justification for this factor is in: 1) caselaw as reflected in the federal regulations governing DBE programs in connection with Guidance Concerning Good Faith Efforts; Id. and 2) caselaw that promotes the use of race-neutral measures, as cited and proposed in the State of Illinois Disparity Study30.
According to the Guidance from the federal government, offerors demonstrate their good faith efforts to meet their contract participation goal on a government contract by soliciting through all reasonable and available means the interest of all certified businesses that have the capability to perform work of the contract31.
This may include attendance at pre-bid and business matchmaking meetings and events.
One of the race-neutral recommendations in the State’s Disparity Study indicate that the State should increase its outreach to diverse businesses through networking events with personnel responsible for contracting decisions and prime contractors32. The State could significantly increase its outreach to diverse businesses if it requires offerors to also increase their outreach to diverse businesses. We recommend that offerors have regular meetings and/or networking events with diverse businesses that include their receipt of information on “How to do Business” with the offeror, persons who small businesses can contact regarding contracting opportunities, and information relating to the offeror’s annual or semi-annual contracting forecasts. Additionally, another race-neutral recommendation in the State’s Disparity Study indicates that the State should provide annual or semi-annual contracting forecasts, whereby it projects what it will spend at the general industry level or on specific projects. Id.
We know that the State and other local agencies attend networking events of local minority and women business organizations to inform their members on “How to do Business”. For example, the City of Chicago is hosting its 10th Annual Virtual Construction Summit in March 2022, at which the Chicago Department of Procurement Services will have a full day of five workshops focused on construction-related contracting opportunities33. Participating businesses will have an opportunity to meet with City administrators and subject matter experts from the City’s user departments and learn about doing business with the City.
Id. We recommend that the State’s offerors host similar kinds of networking meetings with diverse businesses, on a regular basis, to increase their procurement spending with these companies.
Recently, Cushman & Wakefield held its Supplier Diversity Day for diverse businesses34. It was the company’s first event of this kind, at which it discussed the impact of diverse dollars on the growth of its business, its commitment to the diverse communities that it serves, its new Supplier Registration Portal, and the value of diverse suppliers in its supply chain. Id. The speakers at the event included the company’s Chief Financial Officer, Chief Diversity, Equity & Inclusion
30 The State of Illinois, Department of Central Management Services Disparity Study (2015) 31 49 C.F.R. § Pt. 26, App. A
32 The State of Illinois, Department of Central Management Services Disparity Study (2015) 33 https://www.chicago.gov/city/en/depts/dps/provdrs/events/svcs/ConstructionSummit2022.html 34 https://nmsdc.org/join-cushman-wakefield-for-supplier-diversity-day/
16 Officer and the Chief Procurement Officer. Id. Networking meetings of this kind with diverse businesses tend to increase spending with these companies.
Offerors that have regular meetings and/or networking events with diverse businesses that include their receipt of information on “How to do Business” with the offeror, persons who small businesses can contact regarding contracting opportunities, and information relating to the offeror’s annual or semi-annual contracting forecasts demonstrate a commitment to diversity. e. Whether the offeror has written procurement policies on how it will promote, develop and/or increase its utilization of businesses owned by women, minorities, or persons with disabilities which include, but is not limited to, prompt payment requirements, contract unbundling procedures and target market opportunities for small, diverse businesses.
The justification for this factor is in: 1) caselaw, as reflected in the federal regulations governing DBE programs in connection with Guidance Concerning Good Faith Efforts35; and 2) caselaw that promotes the use of race-neutral measures, as cited and proposed in the City of Chicago Disparity Study36 and Cook County Disparity Study37. According to the Guidance from the federal government, offerors demonstrate their good faith efforts to meet their contract participation goal on a government contract by selecting portions of the work to be performed by diverse businesses to increase the likelihood that the DBE goals will be achieved38. This includes, where appropriate, breaking contract work items into economically feasible units (i.e., smaller tasks or quantities).
The City of Chicago’s Disparity Study indicates that slow payment by the City was the number one criticism of the City’s construction activities39. One of the raceneutral recommendations to the City is to pay promptly and ensure prime vendors promptly pay subcontractors. Id. Because slow payment is a common problem for most diverse businesses that participate on government contracts, the State should encourage offerors to promptly pay their diverse subcontractors.
Additional race-neutral recommendations to the City are to increase contract unbundling, as well as opportunities for small firms by limiting the pool of eligible bidders to like-sized firms. Id.
Offerors that have written procurement policies on how they will promote, develop and/or increase their utilization of diverse businesses which include, but are not limited to, prompt payment requirements, contract unbundling procedures and target market opportunities for small, diverse businesses, demonstrate a commitment to diversity.
4) Whether the offeror has a program to assist, develop, train and/or mentor businesses owned by women, minorities, or persons with disabilities. This current statutory
35 49 C.F.R. § Pt. 26, App. A
36 The State of Illinois, Department of Central Management Services Disparity Study (2015) 37 Cook County, Illinois, Disparity Study (2015)
38 49 C.F.R. § Pt. 26, App. A
39 The City of Chicago, Disparity Study for Construction Contracts (2021)
17 element was divided into two elements to minimize the administrative burden to the State to fully evaluate and score the related initiatives of the offerors.
The justification for this factor is in: 1) caselaw, as reflected in the federal regulations governing the DBE Program40 and the Mentor-Protégé Program Guidelines41; 2) caselaw that promotes the use of race-neutral measures, as cited and proposed in the State of Illinois Disparity Study; and 3) caselaw that promotes the use of race-neutral measures, as cited and proposed in the City of Chicago Disparity Study42. According to the federal Mentor-Protégé Program Guidelines, the purpose of the program is to further the development of DBEs, including but not limited to assisting them to move into nontraditional areas of work and/or compete in the marketplace outside the DBE program, via the provision of training and assistance from other firms43. Any mentorprotégé relationship must be based on a written development plan which clearly sets forth the objectives of the parties and their respective roles, the duration of the arrangement and the services and resources to be provided by the mentor to the protégé.
The formal mentor-protégé agreement may set a fee schedule to cover cost for services rendered by the mentor.
One of the race-neutral recommendations in the State’s Disparity Study indicate that the State should adopt a Mentor-Protégé Program similar to the program of the Illinois Department of Transportation (IDOT). The Disparity Study indicates that the program should include: formal program guidelines; written development plan; long term and specific commitment between the parties; extra credit for the mentor’s utilization of the protégé to meet a contract participation goal; fee schedule to cover the cost for services provided by the mentor; and the regular review of the plan. Id. One of the race-neutral recommendations in the City of Chicago’s Disparity Study indicate that the City should revise its Mentor-Protégé Program to reflect best practices, and to focus on building longterm relationships to expand the capabilities of diverse businesses44. The City’s Disparity Study cites the federal Mentor-Protégé Program for being an excellent national model.
Id.
Offerors that have a Mentor-Protégé Program or other type of program to assist, develop and/or train diverse businesses demonstrate a commitment to diversity. a. Whether the offeror provides debriefings to unsuccessful diverse businesses that seek subcontract or joint venture contracting opportunities with the offeror.
The justification for this factor is in: 1) the federal regulations under FAR Part 1545; and 2) caselaw that promotes the use of race-neutral measures, as cited and proposed in the City of Chicago Disparity Study46. A debriefing is required for federal procurements under FAR Part 1547 – Contracting by Negotiation and for task or delivery orders exceeding $5.5M if a written debriefing request is timely received by the agency. A debriefing is an opportunity for an offeror to better
40 49 C.F.R. § Pt. 26
41 13 CFR § 125.9
42 The State of Illinois, Department of Central Management Services Disparity Study (2015) 43 13 CFR § 125.9
44 The City of Chicago, Disparity Study for Construction Contracts (2021) 45 15 C.F.R. § 296.5
46 The City of Chicago, Disparity Study for Construction Contracts (2021) 47 FAR 16.505(b)(6)
18 understand the basis for an agency’s selection decision. Debriefings provide an opportunity to offerors to communicate with the agency regarding: the evaluation process; how their proposal was evaluated and scored; what was successful in their proposal; what was deficient in their proposal; and the applicable source selection procedures.
One of the race-neutral recommendations in the City of Chicago’s Disparity Study indicate that the City should implement a technical assistance program that includes educational opportunities for contractors48. Debriefings are educational opportunities for diverse businesses that are unsuccessful in the bidding process to better understand the basis for a contract award decision.
Offerors that provide debriefings to unsuccessful diverse businesses that seek subcontract or joint venture contracting opportunities with the offeror demonstrate a commitment to diversity.
b. Whether the offeror has a technical assistance program to assist businesses owned by women, minorities, or persons with disabilities obtain technical assistance, such as bid preparation, certification application assistance, estimating, loan application assistance, financial literacy counseling, grant application assistance, technology services, and compliance to governmental policies and regulations.
The justification for this factor is in: 1) caselaw, as reflected in the federal regulations governing the DBE Program in the Mentor-Protégé Program Guidelines49; 2) caselaw that promotions the use of race-neutral measures, as cited and proposed in the State of Illinois Disparity Study; 3) caselaw that promotes the use of race-neutral measures, as cited and proposed in the City of Chicago Disparity Study50 and Cook County Disparity Study51; and 4) primary and secondary sources. According to the Guidance from the federal government, offerors demonstrate their good faith efforts to meet their contract participation goal on a government contract by: making efforts to assist interested diverse businesses in obtaining bonding, lines of credit or insurance; and making efforts to assist diverse businesses in obtaining necessary equipment, supplies, materials or related assistance or services52.
One of the race-neutral recommendations in the State’s Disparity Study indicate that the State should expand its contractor bonding and financing programs, so that diverse and small businesses can have greater access to bonding and working capital, and obtain larger loans and bonds to increase their capacity53.
One of the race-neutral recommendations in the City of Chicago’s Disparity Study indicate that the City should implement a technical assistance, capital access and guaranteed bonding program for diverse businesses which might include:
consultations and coaching; contractor assessments; referrals to partner resources, including surety brokers, insurance brokers, lenders, certified public
48 The City of Chicago, Disparity Study for Construction Contracts (2021) 49 13 CFR § 125.9
50 The City of Chicago, Disparity Study for Construction Contracts (2021) 51 Cook County, Illinois, Disparity Study (2015)
52 49 C.F.R. § Pt. 26, App. A
53 The State of Illinois, Department of Central Management Services Disparity Study (2015)
19 accountants and construction attorneys; educational opportunities (including bonding, systems training, estimating and marketing); surety partner commitments; and pre-claims resolution54.
Our research led us to Sage and The BOSS Network which are partnering to offer twenty-five (25) $10,000 grants to Black women entrepreneurs to grow their businesses55. The Sage Invest in Progress grant will award the funding to help support Black women during their first five years of business. Id. The drive aims to help erase barriers that many entrepreneurs, particularly Black women business owners, deal with when starting a business. The effort will include a 12- month program of entrepreneurial mentorship and education. Id. Grant awardees will receive quarterly business training courses through BOSS University. Id. They will gain access to The BOSS Network’s online community, as well as complimentary Sage Business Cloud Accounting software. Id. The Sage Invest in Progress grant is a three-year commitment to support the newly announced BOSS Impact Fund. It is focused on getting entrepreneurs prepared to build scalable, growth aggressive companies. Id. The fund’s goal is to raise investment funding for more than 500 Black women entrepreneurs over the next three years. Id.
Offerors that have a technical assistance program to assist diverse businesses demonstrate a commitment to diversity.
c. Whether the offeror has a management assistance program to assist businesses owned by women, minorities, or persons with disabilities obtain management assistance, such as industry-specific strategies for success, business plan preparation and review, marketing, business incubation, inventory management, bookkeeping and accounting, project management, and mentoring, training and/or coach.
The justification for this factor is in: 1) caselaw, as reflected in the federal regulations governing the DBE Program in the Mentor-Protégé Program Guidelines56; 2) caselaw that promotes the use of race-neutral measures, as cited and proposed in the State of Illinois Disparity Study57; and 3) caselaw that promotes the use of race-neutral measures, as cited and proposed in the City of Chicago Disparity Study58. Please see the justification for technical assistance programs which also applies to management assistance programs. Although these programs are different, they provide some of the same type of services to diverse businesses.
Offerors that have a management assistance program and/or a technical assistance program to assist diverse businesses demonstrate a commitment to diversity.
54 The City of Chicago, Disparity Study for Construction Contracts (2021) 55 https://www.blackenterprise.com/black-women-entrepreneurs-can-apply-for-10000-grants-to-help-grow-theirbusiness/#:~:text=Sage%20and%20The%20BOSS%20Network,business%2C%20per%20a%20news%20release 56 13 CFR § 125.9
57 The State of Illinois, Department of Central Management Services Disparity Study (2015) 58 The City of Chicago, Disparity Study for Construction Contracts (2021)
20 d. Whether offeror has a Mentor-Protégé program that includes, at a minimum, formal program guidelines, written development plan requirements, as well as a long-term and specific commitment between the parties (of at least one year).
The justification for this factor is in: 1) caselaw, as reflected in the federal regulations governing the DBE Program in the Mentor-Protégé Program Guidelines59; 2) caselaw that promotes the use of race-neutral measures, as cited and proposed in the State of Illinois Disparity Study60; and 3) caselaw that promotes the use of race-neutral measures, as cited and proposed in the City of Chicago Disparity Study61. As previously indicated, according to the federal Mentor-Protégé Program Guidelines, the purpose of the program is to further the development of DBEs, including but not limited to assisting them to move into nontraditional areas of work and/or compete in the marketplace outside the DBE program, via the provision of training and assistance from other firms62. Please see the justification for programs to assist, develop, train and/or mentor businesses. The same justification applies specifically to Mentor-Protégé Programs.
Our research led us to Aramark which currently sponsors a series of mentorship programs to support its supplier diversity goals63. The programs are geared toward viable suppliers and vendors that are small, diverse-owned (i.e., predominantly Black and Latino), and locally based. Many of the programs’ mentors, speakers, and coaches are employees of the company. Aramark’s mentorship programs offer skills-based training, resources, and access to subject matter experts.
Aramark has partner organizations that participate that are leaders in supplier diversity, advocacy, and community empowerment in Chicago, Philadelphia, and Southern California. The company’s mentorship programs are open to suppliers that are currently in Aramark’s supply chain, as well as those seeking to work with the company in the future. The programs are designed to help diverse businesses to build capacity and thrive. In 2022, Aramark continued the mentorship programs in existing markets, combining virtual and in-person opportunities where possible.
Offerors that have a Mentor-Protégé program to assist diverse businesses demonstrate a commitment to diversity.
5) Whether the offeror has an affirmative action program which describes their efforts to recruit, screen, select, pay equitably, and promote diverse individuals who are employed or affiliated with the offeror.
The justification for this element is in: 1) various federal regulations and laws; and 2) primary and secondary sources. Each non-construction contractor and subcontractor with 50 or more employees is required to develop a written Affirmative Action Program for each of its establishments within 120 days from the start of the federal contract, if it:
59 13 CFR § 125.9
60 The State of Illinois, Department of Central Management Services Disparity Study (2015) 61 The City of Chicago, Disparity Study for Construction Contracts (2021) 62 13 CFR § 125.9
63 https://www.aramark.com/about-us/blog/building-a-diverse-supply-chain-throughmentorship#:~:text=To%20support%20our%20supplier%20diversity,small%2C%20diverse%2Downed%20suppliers
21 has a federal contract or subcontract of $50,000 or more; has government bills of lading which in any 12-month period total, or can reasonably be expected to total, $50,000 or more; serves as a depository of federal funds; or is a financial institution that is an issuing and paying agent for U.S. savings bonds and saving notes64.
Affirmative action plans are a well-established method in federal procurement for advancing diversity. Studies have documented important gains in racial and gender equality as a direct result of affirmative action.65 For example, according to the Labor Department, affirmative action plans have helped 5 million minority members and 6 million White and minority women move up in the workforce. Id. Likewise, a study sponsored by the Office of Federal Contract Compliance Programs showed that between 1974 and 1980 federal contractors who were required to adopt affirmative action goals added Black and female officials and managers at twice the rate of non-contractors. Id.
Various primary and secondary sources have reported that many large companies have Affirmative Action Programs which have policies that have resulted in a significant increase of their employment of minorities and women. Some of these companies include AT&T, IBM, and Sears Roebuck. Id.
Offerors that have an Affirmative Action Program to advance diversity within their company demonstrate a commitment to diversity.
a. Whether the offeror has a written Affirmative Action Program that includes, at a minimum, an organizational profile/chart, a workforce analysis, job group analysis, utilization analysis, placement goals, and designation of responsibility for implementation.
The justification for this factor is in various federal regulations and laws. An Affirmative Action Program (“AAP”) can have different styles and formats that meet federal regulatory requirements. An AAP should be customized to reflect an employer’s organizational structure, policies, practices, programs and data. A separate AAP is typically required for each establishment which may include several facilities located at two or more sites if the facilities are in the same labor market or recruiting area. An employer is required to compile and maintain records to support its AAP, as well as materials supporting its affirmative action efforts. This may include items such as: copies of collective bargaining agreements and other documents that indicate employment policies and practices; copies of letters to suppliers and vendors stating the EEO/affirmative action policy; copies of letters sent to recruitment sources and community organizations; and copies of contract language incorporating the regulatory EEO clause66.
In order for a federal contractor to comply with the AAP requirements, the AAP should include the following: organizational profile; job group analysis; utilization analysis; placement goals; additional required elements; support data. The additional required elements should include: designation of responsibility for
64 Executive Order 11246
65 https://www.usf.edu/compliance-ethics/equal-opportunity/ten-myths-about-affirmative-action.aspx. See also:
https://www.brookings.edu/articles/affirmative-action-dont-mend-it-or-end-it-bend-it/; https://hr.uoregon.edu/employeelabor-relations/affirmative-action/affirmative-action-myths-and-realities; https://www.washingtonpost.com/business/2018/08/09/why-there-are-still-so-few-minority-women-ceos/ 66 41 CFR 60-1.4
22 implementation; identification of problem areas, action-oriented programs; and internal audit and reporting system67.
Offerors that have an Affirmative Action Program to advance diversity within their establishment demonstrate a commitment to diversity. b. Whether the offeror has a high-level executive (i.e., Chief Diversity Officer, Chief Equity Officer, Vice President Diversity) who has been the point person for diversity, equity and inclusion initiatives at the company for at least six (6) months.
The justification for this factor is in various primary and secondary sources. The Chief Diversity Officer is an executive leader who is responsible for designing and implementing an organization’s diversity and inclusion strategy.68 Their goal is to ensure equal opportunity for employees and candidates across dimensions such as age, gender, race, ethnicity, and disability. Id. In some organizations, the leader of the diversity function may use a different title — per a LinkedIn study, there was also significant growth in the number of people with the title head of diversity (107%) and director of diversity (75%).
The current status quo has demonstrated that racial, gender, income level, and other diverse inequalities still exist. Id. These inequalities are embedded in our work, community, and personal lives. Id. According to statistics, 21 out of 500 or 4% of companies have a female Chair. Id. Blacks earn 62 cents and Latinas 54 cents for every dollar a White male earns. Id. A University of North Carolina Kenan-Flagler Business School study revealed job applicants with "typically White" names received 50% more callbacks than those with "typically Black" names. Id. 2020 Census Statistics show that the U.S. population, and workforce, are becoming increasingly diverse. Id. The fastest-growing ethnic group over the next several decades will be people who are two or more races. Id. People that are two or more races are projected to grow some 200 percent by 2060. In addition, the foreign-born population is anticipated to grow from 44 million people in 2016 to 69 million in 2060. Id.
A recent study showed that 234 of the Fortune 500 companies currently have some form of a Chief Diversity Officer.69 Some of these companies include Microsoft, Centene, Target; Gap, Biogen, Intel, Verizon Communications, Allstate; PVH, Bank of America, Amazon.com, Nike, Wells Fargo, Visa, Bank of New York Mellon, Progressive, Citigroup, Anthem, Walgreens Boots Alliance, and Walmart.
Offerors that have a high-level executive who is responsible for their company’s diversity, equity and inclusion initiatives demonstrate a commitment to diversity.
67 Executive Order 11246
68 https://kindredmembers.com/insights/chief-diversityofficer/#:~:text=DE%26I%20Strategy%3A%20The%20CDO%20helps,hire%2C%20and%20train%20diverse%20employees 69 https://www.chezie.co/bluepages/why-a-chief-diversity-officer-might-not-solve-diversityproblems#:~:text=A%20recent%20study%20showed%20that,of%20a%20Chief%20Diversity%20Officer.
23 c. Whether the offeror has a written Equal Employment Opportunity (EEO) policy, which include affirmative obligations and pay equity policies.
The justification for this factor is in federal laws that the United States Equal Opportunity Commission (EEOC) is responsible for enforcing. These laws make it illegal to discriminate against a job applicant or an employee because of the person’s race, color, religion, sex (including pregnancy, transgender status, and sexual orientation), national origin, age (40 or older), disability or genetic information. Most employers with at least 15 employees are covered by EEOC laws (20 employees in age discrimination cases). Most labor unions and employment agencies are also covered. The laws apply to all types of work situations, including hiring, firing, promotions, harassment, training, wages and benefits.
The EEOC provides leadership and guidance to federal agencies on all aspects of the federal government’s EEO program. EEOC assures federal agency and department compliance with EEOC regulations, provides technical assistance to federal agencies concerning EEO complaint adjudication, monitors and evaluates federal agencies’ affirmative employment programs, develops and distributes federal sector educational materials and conducts training for stakeholders, provides guidance and assistance to Administrative Judges who conduct hearings on EEO complaints, and adjudicates appeals from administrative decisions made by federal agencies on EEO complaints.
The EEOC has stated that developing and distributing clear employee policies, updating the policies as needed, and consistently enforcing the policies may: help employees understand and comply with a company’srules and expectations; help prevent problems that may result in discrimination complaints; and 3) limit liability should a complaint arise.70
Despite the progress that has been made nationwide in the workplace, the playing field is far from level.71 Women continue to earn 70 cents for every male dollar. Id. Black people continue to have twice the unemployment rate of White people, half the median family income, and half the proportion who attend four years or more of college. Id.
Offerors that have a written Equal Employment Opportunity (EEO) policy demonstrate a commitment to diversity.
d. Percentage of members of the offeror’s governing board, senior executives, and managers who are women, minorities, or persons with disabilities.
The justification for this factor is in primary and secondary sources which have reported significant disparities between persons in different ethnic groups, who have executive or senior leadership positions.
Our research indicates that Black professionals in 2018 held 3.3% of all executive or senior leadership roles, which are defined as within two reporting levels of the CEO, according to the EEOC.
72 Among Fortune 500 companies, less than 1% of
70 https://www.eeoc.gov/employers/small-business/creating-employee-policies. 71 https://www.usf.edu/compliance-ethics/equal-opportunity/ten-myths-about-affirmative-action.aspx 72 https://www.cnn.com/2020/06/02/success/diversity-and-black-leadership-in-corporate-america/index.html.
24 CEOs are Black. Id. In 2020 there were only 4, (down from a high of 6 in 2012), according to Fortune Magazine, and over the past two decades, there have only been 17 Black CEOs in total. Id. Of those, only one has been a woman, Ursula Burns, who ran Xerox from 2009 to 2016. Id. Those most often promoted to CEO or named to corporate boards usually have held one or more specific titles, such as CEO, chief financial officer and regional or division president in charge of business units that deliver significant profits to the company overall. Id. Black Enterprise's 2019 Power in the Boardroom Report found that among S&P 500 companies, there were 322 Black corporate directors at 307 companies. Id. Of those, 21 were chairmen and lead directors. But the report also found that more than a third of S&P 500 companies did not have any Black board members. Id.
Offerors that have a significant percentage of their governing board, senior executives, and managers who are women, minorities, or persons with disabilities demonstrate a commitment to diversity.
e. Percentage of the offeror’s non-management employees who are women, minorities, or persons with disabilities.
The justification for this factor is in primary and secondary sources which have reported significant disparities between persons in different ethnic groups who have non-managerial positions.
Our research indicates that Black graduates are almost twice as likely to be unemployed as their White peers a year after leaving college.73 Figures recently released show that around 5.5% of Black graduates are unemployed a little over a year after graduation, compared with 2.8% of White graduates. Id. Additionally, Black graduates are also less likely to be in full-time work. Id.
Offerors that have a significant percentage of their non-management employees who are women, minorities, or persons with disabilities demonstrate a commitment to diversity.
6) Whether the offeror has a business development program to assist businesses owned by women, minorities, or persons with disabilities to develop and successfully compete.
The justification for this element is in: 1) caselaw, as reflected in the federal regulations governing the DBE Program in the Mentor-Protégé Program Guidelines74; 2) caselaw that promotes the use of race-neutral measures, as cited and proposed in the State of Illinois Disparity Study75; and 3) caselaw that promotes the use of race-neutral measures, as cited and proposed in the City of Chicago Disparity Study76. Please see the justification for technical assistance programs and management assistance programs. Although these programs are different from a business development program, they provide some of the same type of services to diverse businesses.
73 https://www.forbes.com/sites/nickmorrison/2020/06/18/black-graduates-twice-as-likely-to-beunemployed/?sh=111d398577eb 74 13 CFR § 125.9
75 The State of Illinois, Department of Central Management Services Disparity Study (2015) 76 The City of Chicago, Disparity Study for Construction Contracts (2021)
25 Offerors that have a management assistance program, technical assistance program and/or business development program to assist diverse businesses demonstrate a commitment to diversity.
a. Whether the offeror has entered into any joint venture relationships or partnerships during the past year to assist businesses owned by women, minorities, or persons with disabilities in enhancing their experience, expertise and capabilities to facilitate their participation on larger projects as prime contractors/consultants.
The justification for this element is in: 1) the federal regulations governing joint ventures; and 2) caselaw that promotes the use of race-neutral measures, as cited and proposed in the City of Chicago Disparity Study77. The federal government encourages joint venture relationships with diverse businesses, subject to certain requirements. The benefits to joint venture participants include: collective representation of past performance; shared costs and resources; and leveraging the other partner’s experience and market share. These benefits help diverse businesses to develop their experience, expertise and capabilities to perform on larger projects as prime contractors and consultants.
One of the race-neutral measures in the City of Chicago Disparity Study indicate that the City should focus on supporting opportunities for diverse businesses as prime contractors by: increasing contract unbundling; providing mobilization payments and quick pay schedules; and improving procurement methods to increase opportunities for small firms by limiting the pool of eligible bidders to like-sized firms. Id.
Offerors that have entered into joint venture relationships or partnerships to assist diverse businesses to enhance their experience, expertise and capabilities to facilitate their participation on larger projects as prime contractors and consultants demonstrate a commitment to diversity.
b. Whether the offeror on the solicitation being evaluated, assisted businesses owned by women, minorities, or persons with disabilities within the past year in obtaining lines of credit, insurance, equipment, supplies, materials, or related assistance or services.
The justification for this factor is in: 1) caselaw, as reflected in the federal regulations governing the DBE Program in the Mentor-Protégé Program Guidelines78; 2) caselaw the promotes the use of race-neutral measures, as cited and proposed in the State of Illinois Disparity Study79; and 3) caselaw that promotes the use of race-neutral measures, as cited and proposed in the City of Chicago Disparity Study80. According to the Guidance from the federal government, offerors demonstrate their good faith efforts to meet their contract participation goal on a government contract by: making efforts to assist interested diverse businesses in obtaining bonding, lines of credit or insurance;
77 15 C.F.R. § 296.5
78 13 CFR § 125.9
79 The State of Illinois, Department of Central Management Services Disparity Study (2015) 80 The City of Chicago, Disparity Study for Construction Contracts (2021)
26 and making efforts to assist diverse businesses in obtaining necessary equipment, supplies, materials or related assistance or services.
One of the race-neutral recommendations in the State’s Disparity Study indicate that the State should expand its contractor bonding and financing programs, so that diverse and small businesses can have greater access to bonding and working capital, and obtain larger loans and bonds to increase their capacity81.
One of the race-neutral recommendations in the City of Chicago’s Disparity Study indicate that the City should implement a technical assistance, capital access and guaranteed bonding program for diverse businesses which might include:
consultations and coaching; contractor assessments; referrals to partner resources, including surety brokers, insurance brokers, lenders, certified public accountants and construction attorneys; educational opportunities (including bonding, systems training, estimating and marketing); surety partner commitments; and pre-claims resolution82.
Offerors that have assisted diverse businesses in obtaining lines of credit, insurance, equipment, supplies, materials, or related assistance or services demonstrate a commitment to diversity.
7) Whether the offeror has relationships with Historically Black Colleges and Universities (HBCUs), other diverse institutions and/or their diverse students to help them achieve their educational, future employment and/or business goals.
The justification for this element is in: 1) the Executive Order dated September 1, 2021 on White House Initiative on Advancing Educational, Equity, Excellence, and Economic Opportunity through Historically Black Colleges and Universities (“HBCU Executive Order”)83; and 2) primary and secondary sources. The HBCU Executive Order advances the policy of the federal government to promote educational equity, excellence, and economic opportunity in partnership with HBCUs, and to ensure that these vital institutions of higher learning have resources and support. Id.
According to the HBCU Executive Order, the White House Initiative will perform the following functions: supporting implementation of the HBCU Propelling Agency Relationships Towards a New Era for Students Act; working closely with the Executive Office of the President on key Administration priorities; working to break down barriers and expand pathways for HBCUs to access Federal funding and programs; strengthening the capacity of HBCUs to participate in Federal programs, access Federal resources and partner with Federal agencies; advancing and coordinating efforts to ensure that HBCUs can respond to and recover from the COVID-19 pandemic and thoroughly support student’s holistic recovery; developing new and expanding pre-existing national networks of individuals, organizations, and communities; fostering sustainable public-private and philanthropic partnerships and private-sector initiatives; strengthening capacity to improve the availability, dissemination, and quality of information about HBCUs and HBCU students; partnering with private entities, elementary and secondary education providers, and other stakeholders to build a pipeline for students that may be interested in attending HBCUs, facilitate HBCU modernization, address college affordability, and
81 The State of Illinois, Department of Central Management Services Disparity Study (2015) 82 The City of Chicago, Disparity Study for Construction Contracts (2021) 83 Executive Order 14050
27 promote degree attainment; addressing efforts to promote student success and retention; encouraging the development of highly qualified, diverse, culturally responsive educators and administrators; establishing clear plans to strengthen Federal recruitment activities at HBCUs; meeting regularly with HBCU students, leaders, and representatives; and hosting the National HBCU Week Conference. Id.
According to our primary and secondary sources, private companies have developed relationships with HBCUs to support these institutions and their students. These companies have programs that offer grants, scholarships, loans and other types of financial assistance to HBCUs and/or their students, as well as programs that provide students paid internships and/or employment.
Offerors that have relationships with HBCUs, other diverse institutions and/or their diverse students to help them achieve their educational, future employment and/or business goals demonstrate a commitment to diversity.
a. Whether the offeror has a program that offers grants, scholarships, loans or other types of financial assistance to HBCU or diverse students.
The justification for this factor is in: 1) the Executive Order dated September 1, 2021 on White House Initiative on Advancing Educational, Equity, Excellence, and Economic Opportunity through Historically Black Colleges and Universities (“HBCU Executive Order84”); and 2) primary and secondary sources.
There is a general trend of state cuts in higher education funding nationally, modest increases in federal grant aid and rising tuition. According to a new Report from the think tank Demos, African American, Latino and low-income student are borrowing money to get a degree. The cost of college has outpaced inflation and wages in the last few decades. States have reversed their course on investing in higher education, and public colleges have raised tuition to offset the loss of funding.85 Federal grant aid for low-income students, which minority students often rely on, barely covers a third of the cost of college, according to the Institute for College Access and Success. Id.
Eighty-four (84) percent of college students with Pell grants graduate from fouryear public schools with debt, compared with less than half of students without the need-based grants, according to the Report. Id. While less than two-thirds of White graduates from public schools borrow, four out of five Black graduates take out loans for college. 86 Additionally Black students who do borrow come out with more debt than their peers, while higher-income, predominately White, households can hope to minimize borrowing by using tax-advantaged savings and investment accounts, home equity and other mechanisms. Id. Data from the Education Department and the Federal Reserve’s Survey of Consumer Finances, shows that graduates with Pell grants borrow at far higher rates and higher amounts than their middle- and upper-income counterparts at two- and fouryear institutions, regardless of whether they attend public or private colleges.
84 Executive Order 14050
85 https://www.washingtonpost.com/news/wonk/wp/2015/05/19/minorities-and-poor-college-students-are-shouldering-themost-student-debt/ 86 https://www.demos.org/research/debt-divide-racial-and-class-bias-behind-new-normal-student-borrowing
28 Public agencies and private companies are partnering with HBCUs to offer grants, scholarships, loans or other types of financial assistance to HBCU or diverse students87. For example, the U.S. General Services Administration recently hosted a roundtable discussion with HBCUs to increase the number of HBCU’s with Multiple Award Schedule (MAS) contracts and provide training and education to help these HBCUs achieve success in the federal marketplace88. This virtual event included HBCUc that have active MAS contracts and also included those that are interested in the MAS program. GSA plays a key role in advancing the goals of the White House Initiative on Advancing Educational Equity, Excellence, and Economic Opportunity through HBCUs. During FY22, GSA has committed to increase the number of HBCUs with MAS contracts along with providing training and education to help these HBCUs achieve success in support of the initiative.
The MAS program has the potential to widen HBCU exposure to federal business opportunities and offers these educational institutions a new market that could potentially lead to increased revenue. The agency is committed to supporting strategic initiatives that bolster HBCU competitiveness by promoting HBCU industry events, increasing GSA MAS vendor training opportunities for HBCUs, and providing continued mentorship on federal procurement.
Another example, Suffolk University Law School (“Suffolk Law”) recently launched the Thaddeus Alexander Kitchener Scholarship to make law school more affordable for students who demonstrate the ability to succeed in law school, but who may not otherwise receive merit-based scholarships.
Suffolk Law recently released a public statement stating, “We recognize that standardized testing and traditional merit-based scholarship models can be barriers to entry to law school and the legal profession for students from nontraditional backgrounds, and this scholarship is designed to address those barriers.” This award will guarantee full tuition scholarships at Suffolk Law for all students who are admitted to and enroll in a JD program at Suffolk Law via the Binding Early Decision HBCU Program, and have received their undergraduate degree by the time of enrollment at Suffolk Law from one of the identified HBCUs.
HBCU graduates who are not ready to commit to Suffolk Law through the Binding Early Decision HBCU Program will still be awarded the Thaddeus Alexander Kitchener Scholarship.
Walgreens, one of the largest employers in Illinois and a leading provider of local healthcare and wellbeing, is another example. Walgreens has recently announced its support of Hope Chicago, an innovative college scholarship program committed to awarding $1 billion in debt-free scholarships over the next decade to Chicago Public Schools students and their parents89. In a published statement, Roz Brewer, CEO, Walgreens Boots Alliance stated, “Walgreens is committed to caring for our communities today and investing in them for the future. Because education is fundamental to good health, removing financial barriers for students and their families in need so they can pursue higher education is critical.”
87 https://www.suffolk.edu/law/about/diversity-inclusion/hbcu-merit-scholarship 88 https://www.gsa.gov/about-us/newsroom/news-releases/gsa-expands-support-for-historically-black-colleges-anduniversities-02162022 89 https://news.walgreens.com/our-stories/walgreens-hopechicago-college-freetuition-rozbrewer.htm
29 CDW recently announced its Legacy Excellence Program, a new partnership with the Thurgood Marshall College Fund (TMCF) and four HBCUs, including Alabama A&M University, Florida A&M University, North Carolina A&T State University and Southern University and A&M College90. The Program is designed to deliver support in four key areas, including technology investments in the form of infrastructure and programmatic solutions for the four participating HBCUs, a fellowship opportunity for students attending the institutions, a scholarship program for full-time students attending any publicly funded HBCU and the formation of an HBCU-dedicated vertical team at CDW to support the unique needs of all HBCUs. The CDW Legacy Excellence Program is also intended to help create sustainable IT infrastructures, support HBCU student educational expenses and technology needs and create a pathway towards leadership for diverse students.
Lastly, we highlight Robert F. Smith’s Student Freedom Initiative which has partnered with Prudential Financial to provide $1.8 million in microgrants to HBCU students through the Handling Everyday Life Problems for Students(HELPS) Program91. The goal of the program is to address financial need for students that may not be academic related, providing one-time funds for expenses disproportionately faced by Black students. In addition to the microgrants, Prudential will also offer paid internships and pro bono services for HBCU students and families that help promote improved financial literacy. All of it is part of Prudential and the Student Freedom Initiative’s commitment to closing the racial wealth gap.
Additionally, Fortune 500 companies, including Adobe, Goldman Sachs, Boeing and Southern Company, are partnering with HBCUs to offer grants, scholarships, loans or other types of financial assistance to HBCU or diverse students.
Offerors that have a program that offers grants, scholarships, loans or other types of financial assistance to HBCU or diverse students demonstrate a commitment to diversity.
b. Whether the offeror has a program that provides paid internships and/or employment to HBCU or diverse students.
The justification for this factor is in primary and secondary sources.
The National Association of Colleges and Employers (NACE) has reported that minority students are at a disadvantage when it comes to internships. 92 The
problem particularly impacts Black students. Id.
NACE research of the graduating class of 2019 shows Black students accounted for 6.6% of graduating seniors, but just 6% of paid internships. Id. Additionally, Black students accounted for 7.3% of unpaid internships which indicates that they
90 https://www.cdw.com/content/cdw/en/newsroom/articles/corporatenews/2022/02/14/cdw-announces-legacy-excellenceprogram.html#:~:text=%E2%80%93%20February%2014%2C%202022%20%E2%80%93%20CDW,new%20partnership%20with%2 0the%20Thurgood
91 https://news.prudential.com/student-freedom-initiative-announces-catalytic-support-from-prudential.htm 92 https://louisville.edu/career/news/minorities-overrepresented-unpaid-interns. See also:
https://www.insidehighered.com/quicktakes/2020/09/10/analysis-students-color-less-likely-have-paid-internships; https://www.naceweb.org/diversity-equity-and-inclusion/trends-and-predictions/open-the-door-disparities-in-paidinternships/
30 are underrepresented as paid interns and overrepresented as unpaid interns. Id.
NACE further reports the opposite for White students who are overrepresented in paid internships and underrepresented in unpaid positions.
Disparities in internships extend to other groups. Id. NACE research shows that Hispanic students are overrepresented in the group who has never had an internship; and multi-racial students and those who have never had an internship are overrepresented as unpaid interns. Id. First-generation students made up 22% of the research sample, but accounted for only 19% of paid internships and this group also was overrepresented with more than 25% having no internship at all. Id.
Regarding employment after college, Black graduates are almost twice as likely to be unemployed as their White peers, a year after leaving college.93 Figures recently released show that approximately 5.5% of Black graduates are unemployed over a year after graduation, compared with 2.8% of White graduates. Id. Additionally, Black graduates are also less likely to be in full-time positions. Id.
Public agencies and private companies are partnering with HBCUsto recruit HBCU students for training, internship and employment opportunities. For example, the Los Angeles Department of Water and Power (LADWP) recently approved an agreement with HBCU schools to boost engineering diversity94. LADWP reached an agreement with Advancing Minorities’ Interest in Engineering (AMIE), a nonprofit that develops industry, government, and university partnerships, will coordinate technical and scientific research on behalf of the LADWP with 15 HBCU schools of engineering. The HBCU schools involved in the partnership include Alabama A&M University, Florida A&M University, Hampton University, Howard University, Jackson State University, Morgan State University, Norfolk State University, North Carolina AT&T State University, Prairie View A&M University, Southern University, Tennessee State University, Tuskegee University, University of Maryland Eastern Shore, University of the District of Columbia and Virginia State University. In addition to research, the LADWP will work with HBCUs on training in the field required to manage the city’s water and power systems.
Other examples include Delta Airlines which has partnered with Hampton University to participate in its Propel Collegiate Pilot Career Path Program to help develop the next generation of pilots95. It is deemed to be a critical program considering the aviation industry is on the brink of a pilot shortage. Hampton University students who join the program and meet Delta’s standards will receive a job offer upon graduation.
Additionally, there are Fortune 500 companies that are providing paid internships and recruiting from HBCUs for employment after graduation96. Those companies include BMW and Boeing. There are also Tech companies, namely, Amazon,
93 https://www.forbes.com/sites/nickmorrison/2020/06/18/black-graduates-twice-as-likely-to-beunemployed/?sh=111d398577eb 94 https://www.blackenterprise.com/los-angeles-department-of-water-and-power-commissioners-approve-5-million-hbcupartnership/ 95 https://news.delta.com/hampton-university-becomes-deltas-first-hbcu-propel-college 96 https://www.blackenterprise.com/wells-fargo-report-shows-black-women-owned-businesses-have-made-real-economicprogress/
31 Microsoft, Google, and Apple, which have created partnerships with HBCUs to train students and create diverse college-to-career tech pipelines. Offerors that have a program that provides paid internships and/or employment to diverse students demonstrate a commitment to diversity.
8) Whether the offeror has engaged in activities during the past year that promote and/or support diverse communities and families.
The justification for this element is in: 1) the federal regulations and laws; and 2) primary and secondary sources.
There are various initiatives that promote and/or support diverse communities and families that live in diverse communities. Many of them may significantly advance diversity and demonstrate an offeror’s commitment to diversity. However, we could not possibly include all of these initiatives as an element or factor, and it would be unreasonable to expect for all offerors to promote them. This element will allow the State to evaluate and promote the implementation of other initiatives by offerors, as presented on a case-by-case basis, including, but not limited to, those relating to affordable housing and employee mentorships or sponsorships.
Offerors that have engaged in activities during the past year that promote and/or support diverse communities and families demonstrate a commitment to diversity. a. Whether offeror supports building rental or for-sale affordable housing for diverse individuals.
The justification for this element is in: 1) the federal regulations and laws; and 2) primary and secondary sources97.
The United States Congress enacted the Fair Housing Act as Title VIII of the Civil Rights Act (P.L. 90-284) in 196898. The law prohibits discrimination in the sale, rental or financing of housing based on race, color, religion, national origin, sex, familial status, and handicap. In addition to prohibiting discrimination, the Fair Housing Act requires HUD and other federal agencies to administer their housing and urban development programs in ways that affirmatively further fair housing.
In other words, as determined by the courts, HUD is to prevent segregation and ensure that housing is open to everyone.
Leading up to the passage of the Fair Housing Act, there has been years of governmental and private discrimination in the provision of housing. For example, the Federal Housing Administration’s policies and underwriting requirements often discouraged or prohibited FHA insurance for mortgages in certain areas, including non-white or racially mixed areas, and encouraged occupancy restrictions based on race for the mortgages it insured. Such policies limited minority households’ opportunities to achieve homeownership and contributed to patterns of racial segregation.
Systematic racial discrimination was not limited to private market housing transactions, but was also prevalent in public housing. Together, a presidential order, Supreme Court cases, and civil rights legislation, including the Fair Housing
97 Congressional Research Service; Overview of Federal Housing Assistance Programs and Policy (2019) 98 42 U.S.C.A. § Ch. 45, Subch. I, Refs & Annos
32 Act, worked to make it illegal to deny public housing assistance to families based on their race and to segregate public housing residents systematically by race, both of which had been common practice since the inception of the program.
Minorities are more likely than White households to be extremely low-income renters and minorities disproportionately struggle to pay rent compared to White households.99 In fact, 20% of Black households are extremely low-income renters as compared to just 6% of White households. Id. A large part of this is due to discrimination in the job market where, even as minorities climb the corporate ladder, they still make less than equally qualified Whites. Id. Lower wages, along with historical discrimination that prevented them from owning homes and building wealth, means that minorities are more likely to rent and are also more likely to struggle affording that rent. Id. When people struggle to afford rent, they face greater risks of instability, eviction, and even homelessness, which research links to an array of negative life outcomes such as food insecurity, poor health, lower academic achievement, and lower economic mobility. Id.
Minorities are far more likely to experience housing instability and homelessness.
Id. They are dramatically overrepresented among those experiencing homelessness. Id. Blacks represent 13% of the general population, but are 40% of people experiencing homelessness and more than 50% of homeless families with children. Id. Similarly, American Indians/Alaska Natives, Native Hawaiians and Pacific Islanders, and people who identify as two or more races make up a disproportionate share of the homeless population. Id. Hispanics make up a share of the homeless population approximately equal to their share of the general population, while Whites and Asians are significantly underrepresented. Id.
Atlanta Mayor Andre Dickens recently announced an initiative that could produce affordable homes on land owned by churches, mosques, and synagogues over the next five years100. This new endeavor is part of nonprofit developer Enterprise Community Partners’ Faith-Based Development Initiative. It is projected to deliver 1,000 rental and for-sale units across 52 acres of land owned by 15 houses of worship in Atlanta. The rentals would be priced for households earning 60% of the area median income (AMI) or less, while the home ownership units would be affordable to those making 120% of the AMI or less. An $8.5 million Wells Fargo Foundation grant was also announced that will support pre-development efforts at these sites. The initiative will also tee up these organizations to seek help from the City of Atlanta, by way of the housing opportunity bond program or other funding mechanisms.
The need for affordable housing in the minority communitiesis well documented.
Fortune 500 companies that support building rental or for-sale affordable housing for diverse individuals include Amazon, Apple, New York Life and Fannie Mae.
99 https://www.opportunityhome.org/resources/racial-equity-housing. See also:
https://www.americanprogress.org/article/racial-disparities-home-appreciation/; https://www.pewresearch.org/facttank/2022/01/18/a-growing-share-of-americans-say-affordable-housing-is-a-major-problem-where-they-live/; https://www.urban.org/features/exposing-housing-discrimination 100 https://www.washingtonpost.com/religion/2022/02/25/houses-faith-are-building-affordable-housing-their-properties/
33 Offerors that support building rental or for-sale affordable housing for diverse individuals demonstrate a commitment to diversity.
b. Whether the offeror has a mentoring or sponsorship program for diverse employees or individuals from diverse communities.
The justification for this factor is in: 1) caselaw, as reflected in the federal regulations governing the DBE Program in the Mentor-Protégé Program Guidelines; 2) caselaw the promotes the use of race-neutral measures, as cited and proposed in the State of Illinois Disparity Study; 3) caselaw the promotes the use of race-neutral measures, as cited and proposed in the City of Chicago Disparity Study; and 4) primary and secondary sources. As previously indicated, according to the federal Mentor-Protégé Program Guidelines, the purpose of the program is to further the development of DBEs, including but not limited to assisting them to move into nontraditional areas of work and/or compete in the marketplace outside the DBE program, via the provision of training and assistance from other firms. Please see the justification for programs to assist, develop, train and/or mentor businesses. The same justification applies specifically to MentorProtégé Programs that focus on mentoring women and minority employees, instead of business owners and executives.
Women and minorities are more likely to say that mentoring is extremely important to their careers. In recent data compiled by Heidrick & Struggles (NASDAQ: HSII), 30% of women said their mentoring relationship was extremely important compared to 23% of men, and 32% of minorities found it extremely important, compared with 27% of the overall sample.101 Further, minorities were more likely to say they found a mentor on their own at 25% compared to 18% of the overall sample, suggesting their organizations could benefit from establishing tools and forums to help them succeed in finding a mentor. Id.
It was also found that of the 27% of respondents who said their organizations offer formal mentoring programs, nearly three-fourths (74%) of minority respondents participated – compared with 65% of respondents overall – indicating that formalizing the mentoring experience can be a key tool in helping this important employee base accelerate their careers and achieve professional growth. Id. These results confirm similar findings from other social science and professional think-tanks, such as McKenzie and Company, The Society of Critical Care Medicine, and Taylor and Frances102.
Similarly, having a “sponsor” can also lead to promotions, higher wages and career advancement. The Harvard Business Review (HBR) reports both finding and being a sponsor can lead an employee from middle management to the top
101 https://heidrick.mediaroom.com/2017-12-27-Study-Women-and-Minorities-Value-Mentoring-Programs-But-FindingsReveal-Opportunities-for-Improved-Effectiveness 102 https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.1023.1075&rep=rep1&type=pdf; https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.625.6180&rep=rep1&type=pdf; https://www.tandfonline.com/doi/abs/10.1207/s15327930pje7402_2?journalCode=hpje20; https://www.sccm.org/Communications/Critical-Connections/Archives/2019/Enhancing-Diversity-and-ProfessionalDevelopment-T; https://imdiversity.com/diversity-news/mentoring-matters-especially-for-women-and-minorities/; https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/delivering-throughdiversity; https://heidrick.mediaroom.com/2017-12-27-Study-Women-and-Minorities-Value-Mentoring-Programs-But-FindingsReveal-Opportunities-for-Improved-Effectiveness
34 of any company103. According to the book Forget a Mentor, Find a Sponsor: The New Way to Fast Track Your Career, male managers who win sponsorships within an organization are 23% more likely to be promoted than peers who don’t have a sponsor. Women are 19% more likely to get promoted104. Black employees who are sponsored by a manager are not more likely to progress in their careers, but are less likely to leave the company they’re with. Additionally, recent research shows employee sponsorships are by far the most effective method to retain and advance Black talent.
Among the private companies that have sponsorship initiatives include: Aramark; JP Morgan Chase; Splunk; DraftKings; Norton Rose Fulbright; and Cisco. Those initiatives include positioning the retention and progression of Black talent as a strategic imperative, encouraging senior executives and CEOs to sponsor someone at their company, and providing customized executive coaching for both employees and proteges.
Offerors that have a mentoring or sponsorship program for diverse employees or individuals from diverse communities demonstrate a commitment to diversity. c. Whether the offeror has other significant programs or initiatives that promote and/or support diverse communities and families.
The justification for this factor is in: 1) the federal regulations and laws; and 2) primary and secondary sources.
As previously indicated, there are various initiatives and/or policies that promote and/or support diverse communities and families that live in diverse communities. Many of them may significantly advance diversity and demonstrate an offeror’s commitment to diversity. This factor will allow the State to evaluate and promote the implementation of other initiatives by offerors, as presented by offerors on a case-by-case basis.
For example, there are five diversity, equity and inclusion (DEI) policies that are gaining increasing traction for today’s workforce, according to Baker McKenzie 105
.
These policies are: 1) neurodiversity policies to increase the awareness of autism, and better engage with applicants and employees; 2) adoption policies that offer parental leave to parents who adopt; 3) domestic abuse policies that support employees (i.e., giving them leave to address health or legal concerns) as they seek restraining orders, as well as non-discrimination and non-retaliation policies that protect victims of domestic violence; 4) menopause policies which give employees leave and flexible work hours to deal with symptoms of menopause; and 5) miscarriage policies which give employees paid leave and flexible work hours to help them handle their medical appointments and physical recovery.
These policies have been adopted by several companies, including Etsy, Deloitte and Netflix, which offers their employees substantial PTO for parents who adopt.
Etsy offers up to 26 weeks, and Netflix gives unlimited leave in the first year after a child is adopted. The Mom Project, a digital talent marketplace for women,
103 https://hbr.org/2022/02/20-of-white-employees-have-sponsors-only-5-of-black-employees-do 104 https://www.blackenterprise.com/study-20-percent-of-white-employees-have-a-sponsor-only-5-percent-of-blackemployees-have-one/#:~:text=According%20to%20the%20book%20Forget,more%20likely%20to%20get%20promoted 105 https://www.benefitnews.com/list/baker-mckenzie-lists-5-dei-policies-essential-to-companies
35 offers one week of paid leave for miscarriages that occur in the first trimester, three weeks in the second trimester and six weeks in the third trimester.
Offerors that have significant programs or initiatives that promote and/or support diverse communities and families demonstrate a commitment to diversity106
IV. CITATIONS AND SUMMARIES TO ANY COURT CASES WHERE A GOVERNMENT’S USE OF
COMMITMENT TO DIVERSITY ELEMENTS WAS CHALLENGED
It is well-established that a race-based program for public contracts must meet the judicial test of constitutional strict scrutiny to be enforceable and legally defensible.107 Courts have subjected preferences for WBEs to intermediate scrutiny.108 Gender-based classifications must be supported by an exceedingly persuasive justification and be substantially related to the objective. However, appellate courts, including the Seventh Circuit Court of Appeals, have applied strict scrutiny to the gender-based presumption of social disadvantage in reviewing the constitutionality of the Federal DBE program.109 Classifications that are not based on race, ethnicity, religion, national origin or gender are subject to the lesser standard of review of rational basis scrutiny because the courts have held there are no equal protection implications under the Fourteenth Amendment for groups that are not subject to systemic discrimination.110 In contrast to strict scrutiny of government actions directed towards persons of suspect classifications such as racial and ethnic minorities, rational basis means the governmental action must only be rationally related to a legitimate government interest. Preferences for persons with disabilities, veterans, and other groups may be enacted with vastly less evidence than race or gender-based measures to combat historic discrimination.
The State seeks to determine an offerors’ commitment to diversity by evaluating additional elements and/or factors in their proposals, in addition to their utilization of diverse businesses on State contracts which may have contract participation goals. The cases that we have highlighted below discuss specific factors that the State should evaluate when it awards public contracts. We believe that the cases provide guidance on how the State should proceed forward with this process. The guidance goes beyond the level of scrutiny applied by the courts when they review the constitutionally of race and gender-based procurement programs. It provides guidance about the powers of State agencies to determine whether an offeror has met its commitment to diversity.
A. Elements and Factors to be Evaluated by the State
We have reviewed a number of court cases, including those that were mentioned in the three disparity studies that we reviewed. We searched for challenges to diversity programs or initiatives nationwide that include each of the State’s current elements, as well as each of the additional elements and factors that we recommend. None of the current or additional elements and factors have been challenged in a court of law. To the contrary, many opinions that have challenged the constitutionality of governmental supplier diversity programs have encouraged state and local agencies to implement race and gender-neutral initiatives to advance supplier diversity. In addition, the opinions have indicated that agencies must consider the good faith efforts of offerors to fulfill contract participation goals on state and
106 https://work.themomproject.com/resources/miscarriageleave 107 City of Richmond v. J.A. Croson Co., 488 U.S. 469, 109 S. Ct. 706, 102 L. Ed. 2d 854 (1989) 108 Craig v. Boren, 429 U.S. 190 (1976); U.S. v. Virginia, 518 U.S. 515 (1996); Frontiero v. Richardson, 411 U.S. 677 (1973); Gonzales v. Carhart, 550 U.S. 124 (2007); County of Washington v. Gunther, 452 U.S. 161 (1981); Michael M. v. Superior Court, 450 U.S. 464 (1981); Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011); Pittsburgh Press Co. v. Pittsburgh Commission on Human Relations, 413 U.S. 376 (1973)
109 Eldredge v. Carpenters 46 N. California Ctys. Joint Apprenticeship & Training Comm., 94 F.3d 1366 (9th Cir. 1996) 110 Mayo v. Wisconsin Injured Patients & Families Compensation Fund, 2018 WI 78, 383 Wis.2d 1, 914 N.W.2d 678 (2018)
36 local contracts. We believe that each element and factor that we recommend to the State is justified by current federal regulations and laws and/or established caselaw.
B. Caselaw Summaries and Guidance
Although none of the current or additional elements and factors have been challenged in a court of law, the below cases provide the State with guidance about the powers of State agencies to determine whether an offeror has met its commitment to diversity. We have included cases that have previously been discussed in our prior written reports to the State. • When the legislature expressly confers a power on an agency, it also impliedly intends that the agency have whatever powers are reasonably necessary to fulfill its express functions or duties; an agency may not, however, exercise what is effectively a new power on the theory that such exercise is expedient for the agency's purposes.
In Texas Lottery Comm'n v. Sci. Games Int'l, Inc., 99 S.W.3d 376 (Tex. App. 2003) R.G.V. Vending v. Weslaco Independent School Dist. Out-of-state companies that designed and manufactured instantticket lottery games for state lotteries sought a declaratory judgment that the State of Texas Lottery Commission lacked authority to adopt a policy of considering a vendor's anticipated economic impact to the State of Texas111. The economic impact being considered gave advantage to in-state companies, even though the statute explicitly stated that the agency must have competition to the “greatest extent possible.” Id. The court held that although the State of Texas would usually have the authority to evaluate bids for information such as the location of the bidder, this was prohibited when the legislature explicitly gives rules which an agency action would contradict. Id.
In consideration of the State’s use of statutory diversity elements and factors as scorable elements in its RFPs, this case gives the State a wide berth in what it evaluates with respect to bids, so long as the evaluation and scoring does not contradict a statute.
• Where there was no existing law that addresses, let alone precludes, provisions in public bidding contracts, an agency’s arguments and considerations will be taken in good faith by courts if there is a legal challenge.
In L & M Bus Corp. v. New York City Dept. of Educ., 83 A.D.3d 432, 920 N.Y.S.2d 331 (2011), a school bus transportation vendor (“L&M”) commenced a lawsuit challenging the New York City Education Department's bid specifications for school bus transportation requiring them to obtain various types of insurance (including against sexual molestation, harassment, assault, and other similar acts)112. L&M argued that the types of insurance the City of New York was requiring for vendors to obtain was substantially unrelated to the types of services being solicited, unnecessary, and put an undue burden on vendors responding to the solicitation. Id. The court found in this case, as in Texas Lottery Commission, found that agencies are given great deference with regards to what they require from their bidders on public contracts, and a court will not ordinarily substitute its judgement for that of the agency. Id. If the agency is not contradicting a law, a court will generally respect what an agency decides is necessary with regards to its solicitations. Id.
111 Texas Lottery Comm'n v. Sci. Games Int'l, Inc., 99 S.W.3d 376 (Tex. App. 2003). See Also: Pub. Util. Comm'n of Texas v. GTESw., Inc., 901 S.W.2d 401 (Tex. 1995) 112 L & M Bus Corp. v. New York City Dept. of Educ., 83 A.D.3d 432, 920 N.Y.S.2d 331 (2011). See also: Ahmed v. Morgans Hotel Group Mgmt., LLC, 54 Misc. 3d 1220(A), 55 N.Y.S.3d 691 (N.Y. Sup. Ct. 2017), aff'd sub nom. Ahmed v. Morgan's Hotel Group Mgmt., LLC, 160 A.D.3d 555, 74 N.Y.S.3d 546 (2018); Siegel Consultants, Ltd. v. Nokia, Inc., 32 Misc. 3d 1215(A), 934 N.Y.S.2d 37 (Sup. Ct. 2011).
37 In consideration of the State’s use of statutory diversity elements and factors as scorable elements in its RFPs, this case gives the State great deference with regards to what is decides to request from bidders as it evaluates bids, so long as there is not law which would prohibit the evaluation. • An agency may not act arbitrarily by using a method that is inconsistent with the standard set out in its solicitation.
In Acme Bus Corp. v. Orange County, 28 N.Y.3d 417, 68 N.E.3d 671 (2016), a bus company petitioned for review of a county's determination to accept proposals from two of company's competitors to provide school bus transportation services for special needs students and to award contracts to the competitors113. The RFP explained that if there was a difference between the lowest offeror and the next lowest offeror of 10%, then the next lowest offeror would have two points deducted from the maximum cost score of 20. Id. The county used a two-point deduction in scoring proposals for every 4% difference in price, rather than the 10% as stated in the solicitation. Id.
This case requires the State to clearly and explicitly indicate what it will be evaluating with regards to the statutory elements, how those factors will be evaluated, and then strictly abide by that process. • Procuring agencies retain great discretion in determining the scope of a given evaluation factor.
In Summit Techs., LLC v. United States, 151 Fed. Cl. 171 (2020), a vendor who was not awarded a contract for IT services to the VA challenged the decision114. The vendor focused on whether the information on which the agency relied was sufficient and reasonably related to the services being requested. Id. The main takeaway from the case was “given the considerable discretion allowed contracting officers, the standard of review for a bid protest challenging a federal procurement is highly deferential”. However, the court also indicated that agencies have great discretion with regards to what they decide to consider/evaluate or “evaluation factors.” Id.
In relation to the State’s statutory diversity elements and factors, this case appears to continue the trend of giving the State great deference as it evaluates the statutory diversity elements and factors.
Although this case involved a federal procurement, this case is persuasive with regards to state procurements.
• Racial discrimination claims of White persons are treated as race discrimination claims, not as reverse discrimination claims, and are analyzed exactly as court would analyze any racial discrimination claim. They will receive the strict scrutiny standard of review and selecting a less qualified non-minority person can support an inference of discriminatory motivation for Title VII purposes.
In Bass v. Bd. of County Com'rs, Orange County, Fla., 256 F.3d 1095 (11th Cir. 2001)115, a NonHispanic White County employee claimed race discrimination in violation of Title VII and the Equal Protection Clause, as well as retaliation in violation of Title VII. Bass, the Non-Hispanic White county employee met all qualifications for a job that he applied for and was not hired over the far less qualified minority and woman applicants who were hired for the job. Id. The court held that 1) racial discrimination claims of White persons are treated as race discrimination claims, not as reverse discrimination claims, and are analyzed exactly as court would analyze any racial discrimination claim. They will receive the strict
113 Acme Bus Corp. v. Orange County, 28 N.Y.3d 417, 68 N.E.3d 671 (2016). See also: Auctions Int'l, Inc. v. County of Orange, 196 A.D.3d 688, 148 N.Y.S.3d 693 (2021)
114 Summit Techs., LLC v. United States, 151 Fed. Cl. 171 (2020) 115 Bass v. Bd. of County Com'rs, Orange County, Fla., 256 F.3d 1095 (11th Cir. 2001)
38 scrutiny standard of review; and 2) hiring a less qualified person can support an inference of discriminatory motivation for Title VII purposes. Id.
What this means for the State is that in a non-minority company’s challenge to the evaluation of the commitment to diversity elements as reverse discrimination would be analyzed in the same way that a minority’s race discrimination challenge would be and would receive a strict scrutiny review by the courts.
Additionally, if the State were to grant a contract to a less qualified company, solely on the basis of their commitment to diversity score, it would create an inference in the court that race discrimination has occurred. We have noted that the scoring is currently defined in RFPs by the State as “20% of the points assigned to the third part of the proposal, all other items.” Because State contracts are not awarded based solely on the diversity commitment of the offerors, there would be no inference created in court that race discrimination has occurred. 30 ILCS 500/20-15. A court has also indicated that the disparity in qualifications in Bass was extreme. Martin v. Dean, 1:06-CV-0497-MHS, 2008 WL 11324082 (N.D. Ga. Oct. 21, 2008).
• An agency's failure to adopt bid evaluation policies by rule can aid a protester.
In Baxter's Asphalt & Concrete, Inc. v. Dept. of Transp., 475 So. 2d 1284 (Fla. Dist. Ct. App. 1985)116, The Department of Transportation rejected the lowest bid on a highway project. On appeal, the court held that an agency's failure to adopt bid evaluation policies by rule can aid a protester.
While the majority of the court’s ruling in this case underpins the general rule that public agencies have a high degree of deference and discretion in evaluating responses to solicitations, the finding that an agency’s failure to adopt bid evaluation policies by rule can aid a protester shows how important it is for the State to have an organized process to evaluate bids. In this case, the contractor claimed that it should have been permitted to establish its responsibility to perform the work as of the date of the protest hearing, whereas the department contended that this responsibility had to have been established at the time of award. Although the timing issue was not dispositive, the controversy may have been eliminated had the department determined by rule when responsibility would be fixed. • The State should be careful that the evaluation criteria do not steer contracts towards individual offerors.
In Robinson's, Inc. v. Short, 146 So. 2d 108 (Fla. Dist. Ct. App. 1962) 117, a taxpayer brought action against a state comptroller and contractor for declaratory judgment that the specifications and bids on which a printing contract was awarded to a contractor were illegal. The bid requirements required printing in such a way that only one printer in the county would be able to qualify. The court held that specifications may not be drawn in a manner that would permit only one bidder to qualify. Id.
As it relates to the State, this case means that the diversity elements and factors that are evaluated should not be tailored in a way that would steer the solicitation to a specific offeror. This should not present any legal issues for the State with regards to our recommended elements and factors.
However, any modifications, additions, or changes to those elements and factors by the State should be reviewed to ensure that they do not limit the selection of an offeror for contract award, so that only one offeror would qualify.
116 Baxter's Asphalt & Concrete, Inc. v. Dept. of Transp., 475 So. 2d 1284 (Fla. Dist. Ct. App. 1985) 117 Robinson's, Inc. v. Short, 146 So. 2d 108 (Fla. Dist. Ct. App. 1962)
39 • Race-Neutral approaches are a necessary component of a defensible and effective raceand gender-conscious program.
In City of Richmond v. J.A. Croson Co., 488 U.S. 469, 109 S. Ct. 706, 102 L. Ed. 2d 854 (1989), A bidder brought a suit challenging the City of Richmond’s plan requiring prime contractors awarded city construction contracts to subcontract at least 30% of the dollar amount of each contract to one or more “Minority Business Enterprises.”118 The Court struck down the set-aside program for several reasons regarding the sufficiency of the evidence used to underpin its supplier diversity program, including it’s lack of consideration of race-neutral measures.
What this means for the State is that race-neutral measures must be considered in its supplier diversity program.
• The failure to seriously consider Race and Gender-Neutral remedies can invite successful legal challenges.
In Florida A.G.C. Council, Inc. v. State of Florida, Case No.: 4:03-CV-59-SPM at 10 (N. Dist. Fla. 2004), a contractors' associations brought an action against the State of Florida, challenging the constitutionality of a state law that granted preferences to minority business enterprises (MBEs) in certain industries by encouraging state agencies to meet spending goals which were based on racial classifications of business owners.119 Id. The court found that the statute was not narrowly tailored to remedy systemic pattern of past and present racial discrimination against minority business enterprises, so as to satisfy strict scrutiny, stating “There is absolutely no evidence in the record to suggest that the Defendants contemplated race-neutral means to accomplish the objectives” of the statute. Id.
For the State, this reinforces the necessity for consideration of race-neutral measures.
V. PROPOSED ADMINISTRATIVE RULES
As previously stated, we recommend eight (8) elements to the State to include in RFPs as a scorable evaluation of a firm’s commitment to diversity. The State’s current statutory elements that are listed under 30 ILCS 500/20-15120 have been included in the list as either elements or factors. One current element was divided into two elements to minimize the administrative burden to the State to fully evaluate and score the related initiatives of the offerors. Additionally, another current element is included as a factor to a proposed element. Based on our recommended elements, the administrative rules that we propose to the State are specified below:
• Whether or how well the offeror on the solicitation being evaluated, met the goal of contracting or subcontracting with businesses owned by women, minorities, or persons with disabilities
• The percentage of prior year revenues of the offeror that involve businesses owned by women, minorities, or persons with disabilities
• Whether the offeror has a written supplier diversity program, including, but not limited to, use of diverse vendors in the supply chain
118 City of Richmond v. J.A. Croson Co., 488 U.S. 469, 109 S. Ct. 706, 102 L. Ed. 2d 854 (1989 119 Florida A.G.C. Council, Inc. v. State of Florida, Case No.: 4:03-CV-59-SPM at 10 (N. Dist. Fla. 2004) 120 30 ILCS 500/20-15
40 • Whether the offeror has a program to assist, develop, train and/or mentor businesses owned by women, minorities, or persons with disabilities • Whether the offeror has an affirmative action program which describes their efforts to recruit, screen, select, pay equitably, and promote diverse individuals who are employed or affiliated with the offeror
• Whether the offeror has a business development program to assist businesses owned by women, minorities, or persons with disabilities to develop and successfully compete • Whether the offeror has relationships with Historically Black Colleges and Universities (HBCUs), other diverse institutions or schools and/or their diverse students to help them achieve their educational, future employment and/or business goals • Whether the offeror has engaged in activities during the past year that promote and/or support diverse communities and families
We are considering two additional elements and administrative rules that we may recommend to the State in our final written report after the completion of our research relating to these possible elements/administrative rules. These additional elements and administrative rules are: whether the offeror has policies to conduct business with veteran-owned businesses and LGBTQ business enterprises; and whether the offeror has policies to conduct business with local businesses from the communities where they conduct business or perform work.
VI. SUMMARY
This concludes our third written report to the State which includes the following information:
elements that the State should include in RFPs as a scorable evaluation of a firm’s commitment to diversity; justification and evidence explaining why the proposed elements are best at determining a firm’s commitment to diversity; citations and summaries to any court case where a government’s use of Commitment to Diversity elements was challenged; and proposed administrative rules.
We propose eight (8) elements to be used by the State to evaluate an offeror’s commitment to diversity on State contracts. The elements and administrative rules that we propose to the State are as follows:
• Whether or how well the offeror on the solicitation being evaluated, met the goal of contracting or subcontracting with businesses owned by women, minorities, or persons with disabilities
• The percentage of prior year revenues of the offeror that involve businesses owned by women, minorities, or persons with disabilities
• Whether the offeror has a written supplier diversity program, including, but not limited to, use of diverse vendors in the supply chain
• Whether the offeror has a program to assist, develop, train and/or mentor businesses owned by women, minorities, or persons with disabilities • Whether the offeror has an affirmative action program which describes their efforts to recruit, screen, select, pay equitably, and promote diverse individuals who are employed or affiliated with the offeror
41 • Whether the offeror has a business development program to assist businesses owned by women, minorities, or persons with disabilities to develop and successfully compete • Whether the offeror has relationships with Historically Black Colleges and Universities (HBCUs), other diverse institutions or schools and/or their diverse students to help them achieve their educational, future employment and/or business goals • Whether the offeror has engaged in activities during the past year that promote and/or support diverse communities and families
We have provided justification and/or evidence to support each element and factor. The justification and/or evidence includes: data that we have found in primary and secondary sources from public agencies and private companies; caselaw that promotes the use of race-neutral measures, as cited and proposed in select disparity studies; caselaw, as reflected in the federal regulations (governing the Disadvantaged Business Enterprise or DBE Program) or other applicable federal laws; and other publicly available information about diversity programs and initiatives.
We are considering two additional elements and administrative rules that we may recommend to the State in our final written report after the completion of our research relating to these possible elements/administrative rules. These additional elements and administrative rules are: whether the offeror has policies to conduct business with veteran-owned businesses and LGBTQ business enterprises; and whether the offeror has policies to conduct business with local businesses from the communities where they conduct business or perform work.
This report reiterates caselaw relating to the State’s evaluation of an offeror’s commitment to diversity. While there was no caselaw which challenged any of the elements and factors that we recommend to the State, there is caselaw which provides guidance to the State that should be considered.
The caselaw provides the following guidance to the State:
When the legislature expressly confers a power on an agency, it also impliedly intends that the agency have whatever powers are reasonably necessary to fulfill its express functions or duties. An agency may not, however, exercise what is effectively a new power on the theory that such exercise is expedient for the agency's purposes. Where there was no existing law that addresses, let alone precludes, provisions in public bidding contracts, an agency's arguments and considerations will be taken in good faith by courts if there is a legal challenge.
An agency may not act arbitrarily by using a method that is inconsistent with the standard set out in its solicitation.
Procuring agencies retain great discretion in determining the scope of a given evaluation factor.
Racial discrimination claims of White persons are treated as race discrimination claims, not as reverse discrimination claims. They are analyzed exactly as a court would analyze any racial discrimination claim pursuant to a strict scrutiny standard of review. Selecting a less qualified non-minority person can support an inference of discriminatory motivation for Title VII purposes.
An agency's failure to adopt bid evaluation policies by rule can aid a protester.
42 The State should be careful that the evaluation criteria do not steer contracts towards individual offerors.
Race-Neutral approaches are a necessary component of a defensible and effective raceand gender-conscious program. The failure to seriously consider Race and Gender-Neutral remedies can invite successful legal challenges.
Our final written report and video presentation are due on March 30, 2022. Our written report will include the following information: scoring elements; administrative rules; and a draft of the RFP Commitment to Diversity Section. We have commenced the preparation of each of these deliverables.
We are currently completing our research on two additional elements and related factors. We are reviewing the Administrative Rules of the State and its current Commitment to Diversity RFP language.
We are also creating a sample scoring matrix which the State can use to score each of the commitment to diversity elements and factors that we recommend.
We have appreciated the opportunity to work with the State on this matter and we look forward to completing it. Please let us know if you have any questions or feedback regarding any of the issues that we have discussed in this report.