DISPARITY STUDY
FINAL REPORT
MAY 2024
Attachment A
1999 Harrison Street
Suite
2000
Oakland, CA 94612
Tel ● 510.835.9012
Fax ● 510.835.2647
www.masontillman.com
May 31, 2024
Mr. Jestin D. Johnson
City Administrator
C
ity of Oakland
1 Frank H. Ogawa Plaza
Oakland, CA 94612
Dear Mr. Johnson,
I am pleased to submit the 2024 City of Oakland Disparity Study Final Report. This report provides a detailed statistical and anecdotal a nalysis of the ethnic and gender disparities in the City's contracting and procurement policies and practices.
The draft report was submitted on February 22, 2024. Comments on the report were received on April 3, 2024, with the City’s instructions to remove the recommendations and legal chapters. Resolution No. 89058, which awarded the disparity study contract, states that M ason T illman shall “recommend actions, programs, policies, procedures and practices to address race and gender-based disparities that are documented.” Schedule T: Contract Summary Tr ansmittal also states that Mason Tillman shall “identify disparities in City procurement and off er recommendations for mitigation.” Nonetheless, Mason Tillman has removed the recommendations chapter in accordance with the City’s instructions.
Mason Tillman has not elected to remove the legal chapter from the final report because it is the fund amenta l framework for a sou nd legally defensible study. Because the methodology is intertwined with the case law, which provides the standard for the disparity study methodology, Mason Tillman has inserted the legal chapter in the a
ppendix.
We appreciate the opportunity to assist the City of Oakland with this important project. Should you have any further questions or require additional information, please do not hes itate to contact me directly.
Our contract provides for a presentation of the Study findings. Please let me know if you would like to proceed with a presentation.
Sincerely,
Eleanor Mason Ramsey, Ph.D.
President
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Preface
Preface
On March 1, 2022, the City of Oakland retained Mason Tillman Associates, Ltd. to study the construction, architectural and engineering, professional services, and goods and services contracts awarded from July 1, 2016, to June 30, 2021. A disparity study, as required by Section 808(b) of the City Charter, 1 must be performed every five years. The purpose of the disparity study as set forth in Resolution No. 89058 is to determine if:
…
the City has been an active or passive participant in actual, identifiable discrimination within its relevant contacting marketplace, and to establish a narrowly tailored race and/or gender business participation program, if discrimination is demonstrated and substantiated by the disparity. 2 The 2024 City of Oakland Disparity Study documented with statistical and qualitative evidence that the City was both an active and passive participant in the disparity of both prime contracts and subcontracts awarded to minority and woman-owned business enterprises (M/WBEs). While the California Constitution prohibits preferential treatment in the award of public contracts, there is a paucity of California case law discussing preferential treatment. However, the disproportionate share of contracts awarded to non-minority firms may be characterized, considering the case law, as preferential treatment. The disparity study also highlights significant statistical disparities in the award of federally assisted contracts and raises concerns regarding the City’s compliance with Title VI and the United States Department of Transportation’s Disadvantaged Business Enterprise regulations. The disparity study provides a detailed examination of the City’s procurement and contracting processes and practices.
Th
e statistical findings constitute the legal predicate for the City to address the deficiencies in its contracting policies and practices . The findings also meet the Supreme Court’s strict scrutiny standard required for race-based remedies and arguably satisf y the requirements for race -based remedies under Section 31 of the California Constitution .3 Section 31 exempts race and gender- conscious remedies that are required under the Federal Equal Protection Clause to remedy intentional discrimination.
4 To address the discrimination findings and authorize a race and gender- based contracting policy , the City Council must a dopt the Disparity Study report and take appropriate legislative actions.
T
his comprehensive Disparity Study report is organized into two parts. Part I includes the standard statistical chapters as required by the strict scrutiny constitutional analysis applicable to race-based remedies for public contracting programs , as set forth in City of Richmond v. J.A. Croson Co. (Croson).5 T hese chapters analyze the utilization, availability, and disparity of minority and 1 T he Charter of the City of Oakland, Section 808(b), Oakland, 2022. 2 R esolution No. 89058 C.M.S., page 1, passed on March 1, 2022. 3 C alifornia Constitution, Art 1, Section 31.
4 Hi - Voltage Wire Works Inc. v. City of San Jose, 24 Cal. 4th 537, 569 (2000) (Hi-Voltage). 5 C ity of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989).
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Preface
woman-owned businesses as both prime contractors and subcontractors. Part II provides t he chapters that analyze components of the City’s local equity program and compliance with the affirmative action provisions on the federally assisted contracts. The recommendations chapter, required by the Council Resolution No. 890586 which authorized this study, has been prepared but is not included in this Final Report.
Part I
The eight chapters in Part I constitute the core of the disparity study report. Seven chapters present the statistical evidence of the City and its prime contractors’ award of subcontracts, and the eighth chapter consists of anecdotal accounts of businesses’ perceptions of the City’s contracting process.
The Regression Analysis chapter presents evidence of disparity from federal census data.
1. Prime Contractor Utilization Analysis—This chapter documents the City of Oakland’s utilization of minority and wome n-owned business enterprises (M/WBE s) and non- minority, male-owned business enterprises (non -M/WBEs) as prime contractors by ethnicity, gender, and industry during the study period.
2. Subcontractor Utilization Analysis —This chapter presents the utilization of subcontractors by ethnicity, gender, and industry. The subcontracts examined were awarded by the City of Oakland’s prime contractors during the study period.
3. Geographic Market Area Analysis—This chapter offers the legal criteria for defining the geographic market area. The geographic distribution of all prime contracts awarded by the City of Oakland was analyzed to determine the market area for the study.
4. Prime Contractor and Subcontractor Availability Analysis —This chapter enumerates willing and able market area businesses by ethnicity, gender, and industry. In compliance with the Croson standard, the capacity of the enumerated businesses was assessed.
5. Prime Contract Disparity Analysis —This chapter determines if M/WBEs available to perform the City of Oakland’s prime contracts were underutilized during the study period.
The statistical significance of documented underutilization was assessed.
6. Subcontract Disparity Analysis —This chapter determines if available M/WBEs were underutilized in awarding the City of Oakland’s subcontracts during the study period. The statistical significance of documented underutilization was assessed.
7. Regression Analysis —The regression analysi s examined two outcome variables — business ownership rates and earnings—to determine if the City of Oakland passively participated in ethnic or gender discrimination.
6 Resolution No. 89058 C.M.S., page 1, passed on March 1, 2022.
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8. Anecdotal Analysis—This chapter presents anecdotal evidence from in-depth, one-on-one business interviews to highlight actions that may have prevented M/WBEs from accessing the City’s contracts.
Part II
Part II consists of three chapters. The first chapter assesses the implementation of the Local and Small Local Business Enterprise (L/SLBE) Program. The second chapter reviews compliance with the affirmative action requirements of federal financial assistance grant s. The t hird chapter examines the impact of the COVID-19 pandemic on M/WBEs with consideration to the local and federal policies intended to mitigate the pandemic’s effect on local businesses.
1. Local and Small Local Business Enterprise Program Analysis—This chapter analyzes the City’s current L/SLBE Program to determine its utilization of M /WBEs. It includes a review of program policies and procedures, interviews with City staff and business owners, and recommendations for improvements.
2. Federally Funded Contracts Analysis —This chapter analyzes the awarded contracts funded in whole or part by a federal grant directly from the United States government or from a California state department or local agency. The City’s compliance with Title VI affirmative action requirements associated with federal financial assistance was also assessed.
3. COVID-19 Impact on M/WBEs —This chapter examines the immediate and enduring effects of C OVID-19 on M/WBEs in the City. This analysis examines the direct and nuanced relationship between the pandemic’s impact and the resilience of M/WBEs.
Appendix
The Legal Review summarizes the constitutional standards the federal and state courts have applied in reviewing local governments’ affirmative action contracting programs. It also summarizes the state constitutional standard and relevant case law for applying race and gender - conscious measures in California.
City of Oakland
Disparity Study
Final Report
Part I
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Table of Contents
Table of Contents
CHAPTER 1: PRIME CONTRACTOR UTILIZATION ANALYSIS ................................................. 1-1
I. INTRODUCTION ........................................................................................................... 1-1
II. PRIME CONTRACT DATA SOURCES ............................................................................ 1-3
III. THRESHOLDS FOR ANALYSIS ...................................................................................... 1-5
A. ALL FORMAL PRIME CONTRACT THRESHOLDS .......................................................... 1-5 B. INFORMAL PRIME CONTRACT THRESHOLDS .............................................................. 1-5 C. FORMAL PRIME CONTRACT THRESHOLDS WITHOUT OUTLIERS ................................. 1-6
IV. PRIME CONTRACTOR UTILIZATION ........................................................................... 1-7
A. ALL PRIME CONTRACTORS ........................................................................................ 1-7 B. HIGHLY USED PRIME CONTRACTORS ........................................................................ 1-7 C. ALL PRIME CONTRACTS BY INDUSTRY .................................................................... 1-12 D. INFORMAL PRIME CONTRACTS BY INDUSTRY .......................................................... 1-20 E. FORMAL PRIME CONTRACTS BY INDUSTRY ............................................................. 1-28
V. CONCLUSION ............................................................................................................. 1-36
A. DISCRETIONARY PROCUREMENT PROCESSES .......................................................... 1-36 B. SUMMARY OF POLICIES AND PRACTICES TO MAXIMIZE THE UTILIZATION OF LOCAL BUSINESSES ................................................................................................. 1-38
CHAPTER
2: SUBCONTRACTOR UTILIZATION ANALYSIS ....................................................... 2-1
I. INTRODUCTION ........................................................................................................... 2-1
II. DATA SOURCES ........................................................................................................... 2-1
III. DATA COLLECTION PROCESS ..................................................................................... 2-1
A. SUBCONTRACT RECORDS FROM THE CITY ................................................................. 2-1 B. PRIME CONTRACTOR EXPENDITURE SURVEY ............................................................ 2-2 C. SUBCONTRACT DATA ANALYSIS ............................................................................... 2-2
IV. SUBCONTRACTOR UTILIZATION ................................................................................. 2-3
A. ALL SUBCONTRACTS ................................................................................................. 2-3 B. SUBCONTRACTS BY INDUSTRY .................................................................................. 2-4
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V. CONCLUSION ............................................................................................................. 2-10
CHAPTER 3: GEOGRAPHIC MARKET AREA ANALYSIS ........................................................... 3-1
I. MARKET AREA DEFINITION ....................................................................................... 3-1
A. LEGAL CRITERIA FOR GEOGRAPHIC MARKET AREA ................................................. 3-1 B. APPLICATION OF THE CROSON STANDARD ................................................................ 3-1
II. GEOGRAPHIC MARKET AREA ANALYSIS ................................................................... 3-3
A. SUMMARY OF THE DISTRIBUTION OF ALL PRIME CONTRACTS AWARDED ................. 3-4
III. SUMMARY .................................................................................................................... 3-6
CHAPTER 4: PRIME CONTRACTOR AND SUBCONTRACTOR AVAILABILITY ANALYSIS ......... 4-1
I. INTRODUCTION ........................................................................................................... 4-1
II. PRIME CONTRACTOR AVAILABILITY DATA SOURCES .............................................. 4-1
A. IDENTIFICATION OF WILLING MARKET AREA BUSINESSES........................................ 4-1 B. PRIME CONTRACTOR SOURCES.................................................................................. 4-2 C. DETERMINATION OF WILLINGNESS ........................................................................... 4-4 D. DISTRIBUTION OF AVAILABLE PRIME CONTRACTORS BY SOURCE, ETHNICITY, AND GENDER ............................................................................................................. 4-4
III. CAPACITY .................................................................................................................... 4-6
A. PRIME CONTRACT SIZE DISTRIBUTION ...................................................................... 4-7 B. LARGEST M/WBE PRIME CONTRACTS AWARDED BY INDUSTRY .............................. 4-8 C. FREQUENCY DISTRIBUTION ....................................................................................... 4-9 D. FORMAL CONTRACT THRESHOLD ANALYSIS ........................................................... 4-10 E. BUSINESS CAPACITY ASSESSMENT .......................................................................... 4-10
IV. PRIME CONTRACTOR AVAILABILITY ANALYSIS ..................................................... 4-11
A. CONSTRUCTION PRIME CONTRACTOR AVAILABILITY ............................................. 4-11 B. ARCHITECTURAL AND ENGINEERING PRIME CONTRACTOR AVAILABILITY ............. 4-13 C. PROFESSIONAL SERVICES PRIME CONTRACTOR AVAILABILITY .............................. 4-15 D. GOODS AND SERVICES PRIME CONTRACTOR AVAILABILITY ................................... 4-17
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V. SUBCONTRACTOR AVAILABILITY ANALYSIS ........................................................... 4-19
A. SOURCE OF WILLING AND ABLE SUBCONTRACTORS ............................................... 4-19 B. DETERMINATION OF WILLINGNESS AND CAPACITY ................................................. 4-19 C. CONSTRUCTION SUBCONTRACTOR AVAILABILITY .................................................. 4-20 D. ARCHITECTURAL AND ENGINEERING SUBCONTRACTOR AVAILABILITY .................. 4-22 E. PROFESSIONAL SERVICES SUBCONTRACTOR AVAILABILITY ................................... 4-24
VI. SUMMARY .................................................................................................................. 4-26
CHAPTER 5: PRIME CONTRACT DISPARITY ANALYSIS .......................................................... 5-1
I. INTRODUCTION ........................................................................................................... 5-1
II. DISPARITY ANALYSIS .................................................................................................. 5-2
A. DISPARITY ANALYSIS: INFORMAL PRIME CONTRACTS BY INDUSTRY ........................ 5-4 B. DISPARITY ANALYSIS: FORMAL PRIME CONTRACTS BY INDUSTRY ......................... 5-16
III. CONCLUSION ............................................................................................................. 5-28
A. DISPARITY FINDINGS ............................................................................................... 5-28 B. BEST PRACTICES IN PUBLIC CONTRACTING ............................................................. 5-34
CHAPTER 6: SUBCONTRACT DISPARITY ANALYSIS ................................................................ 6-1
I. INTRODUCTION ........................................................................................................... 6-1
II. DISPARITY ANALYSIS .................................................................................................. 6-2
III. DISPARITY ANALYSIS: ALL SUBCONTRACTS BY INDUSTRY ...................................... 6-3
A. CONSTRUCTION SUBCONTRACTS ............................................................................... 6-3 B. ARCHITECTURAL AND ENGINEERING SUBCONTRACTS .............................................. 6-6 C. PROFESSIONAL SERVICES SUBCONTRACTS ................................................................ 6-9
IV. CONCLUSION ............................................................................................................. 6-12
A. DISPARITY FINDINGS ............................................................................................... 6-12 B. SUMMARY OF POLICIES AND PRACTICES TO REMEDY STATISTICAL DISPARITIES ON SUBCONTRACTS ................................................................................................. 6-13
CHAPTER 7: REGRESSION ANALYSIS ...................................................................................... 7-1
I. INTRODUCTION ........................................................................................................... 7-1
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II. LEGAL ANALYSIS ........................................................................................................ 7-2
A. PASSIVE DISCRIMINATION ......................................................................................... 7-2 B. NARROW TAILORING ................................................................................................. 7-2 C. CONCLUSION ............................................................................................................. 7-4
III. REGRESSION ANALYSIS METHODOLOGY .................................................................. 7-4
IV. DATASETS ANALYZED................................................................................................. 7-4
V. REGRESSION MODELS DEFINED ................................................................................. 7-5
A. BUSINESS OWNERSHIP ANALYSIS .............................................................................. 7-5 B. THE EARNINGS DISPARITY ANALYSIS ....................................................................... 7-6
VI. FINDINGS ..................................................................................................................... 7-7
A. BUSINESS OWNERSHIP ANALYSIS .............................................................................. 7-7 B. BUSINESS OWNERSHIP ANALYSIS CONCLUSION ...................................................... 7-13 C. BUSINESS EARNINGS ANALYSIS .............................................................................. 7-13 D. BUSINESS EARNINGS ANALYSIS CONCLUSION ........................................................ 7-22
VII. CONCLUSION ............................................................................................................. 7-23
CHAPTER 8: ANECDOTAL ANALYSIS ....................................................................................... 8-1
I. INTRODUCTION ........................................................................................................... 8-1
A. ANECDOTAL EVIDENCE OF ACTIVE AND PASSIVE DISCRIMINATION.......................... 8-1 B. ANECDOTAL METHODOLOGY .................................................................................... 8-2
II. ANECDOTAL FINDINGS ............................................................................................... 8-4
A. FOCUS GROUP RESPONSES ........................................................................................ 8-5 B. PRINT AND SOCIAL MEDIA NEWS ARTICLES ........................................................... 8-11 C. JUDICIAL COMPLAINTS ............................................................................................ 8-14 D. ONE-ON-ONE INTERVIEWS ...................................................................................... 8-16
III. SUMMARY .................................................................................................................. 8-32
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List of Tables
TABLE 1.1: SIX DIGIT NAICS CODES AND TITLES FOR FLOORING ............................................... 1-1
TABLE 1.2: BUSINESS ETHNIC AND GENDER GROUPS ................................................................... 1-3
TABLE 1.3: FORMAL CONTRACT THRESHOLDS BY INDUSTRY ....................................................... 1-5
TABLE 1.4: INFORMAL CONTRACT THRESHOLDS BY INDUSTRY .................................................... 1-6
T
ABLE 1.5: FORMAL CONTRACT THRESHOLDS BY INDUSTRY EXCLUDING OUTLIERS .................. 1-6
T
ABLE 1.6: TOTAL PRIME CONTRACTS AND DOLLARS EXPENDED, ALL INDUSTRIES ................... 1-7
T
ABLE 1.7: CONSTRUCTION PRIME CONTRACTS ........................................................................... 1-8
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ABLE 1.8: CONSTRUCTION PRIME CONTRACTS DISTRIBUTED BY NUMBER OF BUSINESSES ........ 1-8
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ABLE 1.9: MOST HIGHLY USED CONSTRUCTION PRIME CONTRACTORS ..................................... 1-8
TABLE 1.10: ARCHITECTURAL AND ENGINEERING PRIME CONTRACTS ......................................... 1-8
TABLE 1.11: ARCHITECTURAL AND ENGINEERING PRIME CONTRACTS DISTRIBUTED BY NUMBER OF BUSINESSES .......................................................................................... 1-9
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ABLE 1.12: MOST HIGHLY USED ARCHITECTURAL AND ENGINEERING PRIME CONTRACTORS ......................................................................................................... 1-9
T
ABLE 1.13: PROFESSIONAL SERVICES PRIME CONTRACTS .......................................................... 1-9
TABLE 1.14: PROFESSIONAL SERVICES PRIME CONTRACTS DISTRIBUTED BY NUMBER OF BUSINESSES ............................................................................................................ 1-10
TABLE 1.15: MOST HIGHLY USED PROFESSIONAL SERVICES PRIME CONTRACTORS .................. 1-10
TABLE 1.16: GOODS AND SERVICES PRIME CONTRACTS ............................................................. 1-10
TABLE 1.17: GOODS AND SERVICES PRIME CONTRACTS DISTRIBUTED BY NUMBER OF BUSINESSES ............................................................................................................ 1-11
TABLE 1.18: MOST HIGHLY USED GOODS AND SERVICES PRIME CONTRACTORS ....................... 1-11
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TABLE 1.19: CONSTRUCTION PRIME CONTRACT UTILIZATION, ALL CONTRACTS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 1-13
TABLE 1.20: ARCHITECTURAL AND ENGINEERING PRIME CONTRACT UTILIZATION, ALL CONTRACTS JULY 1, 2016 TO JUNE 30, 2021 ......................................................... 1-15
TABLE 1.21: PROFESSIONAL SERVICES PRIME CONTRACT UTILIZATION, ALL CONTRACTS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 1-17
TABLE 1.22: GOODS AND SERVICES PRIME CONTRACT UTILIZATION, ALL CONTRACTS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 1-19
TABLE 1.23: CONSTRUCTION PRIME CONTRACT UTILIZATION, CONTRACTS VALUED AT $50,000 AND UNDER, JULY 1, 2016 TO JUNE 30, 2021 ............................................ 1-21
TABLE 1.24: ARCHITECTURAL AND ENGINEERING PRIME CONTRACT UTILIZATION, CONTRACTS VALUED AT $50,000 AND UNDER, JULY 1, 2016 TO JUNE 30, 2021 .... 1-23
TABLE 1.25: PROFESSIONAL SERVICES PRIME CONTRACT UTILIZATION, CONTRACTS VALUED AT $50,000 AND UNDER, JULY 1, 2016 TO JUNE 30, 2021 ........................ 1-25
TABLE 1.26: GOODS AND SERVICES PRIME CONTRACT UTILIZATION, CONTRACTS VALUED AT $50,000 AND UNDER, JULY 1, 2016 TO JUNE 30, 2021 ....................................... 1-27
T
ABLE 1.27: CONSTRUCTION PRIME CONTRACT UTILIZATION, CONTRACTS VALUED BETWEEN $50,000 AND $3,730,000, JULY 1, 2016 TO JUNE 30, 2021 ..................... 1-29
T
ABLE 1.28: ARCHITECTURAL AND ENGINEERING PRIME CONTRACT UTILIZATION, CONTRACTS VALUED BETWEEN $50,000 AND $790,000,
JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 1-31
T
ABLE 1.29: PROFESSIONAL SERVICES PRIME CONTRACT UTILIZATION, CONTRACTS VALUED BETWEEN $50,000 AND $700,000, JULY 1, 2016 TO JUNE 30, 2021 ......... 1-33
T
ABLE 1.30: GOODS AND SERVICES PRIME CONTRACT UTILIZATION, CONTRACTS VALUED BETWEEN $50,000 AND $590,000, JULY 1, 2016 TO JUNE 30, 2021 ......... 1-35
TABLE 2.1: SUBCONTRACTS AWARDED AND DOLLARS EXPENDED BY INDUSTRY JULY 1, 2016 TO JUNE 30, 2021 .................................................................................. 2-3
TABLE 2.2: CONSTRUCTION SUBCONTRACTOR UTILIZATION JULY 1, 2016 TO JUNE 30, 2021 ...... 2-5
TABLE 2.3: ARCHITECTURAL AND ENGINEERING SUBCONTRACTOR UTILIZATION JULY 1, 2016 TO JUNE 30, 2021 .................................................................................. 2-7
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TABLE 2.4: PROFESSIONAL SERVICES SUBCONTRACTOR UTILIZATION JULY 1, 2016 TO JUNE 30, 2021 .................................................................................. 2-9
TABLE 3.1: DISTRIBUTION OF ALL CONTRACTS AWARDED .......................................................... 3-4
TABLE 3.2: CITY OF OAKLAND CONTRACT DISTRIBUTION ........................................................... 3-6
TABLE 4.1: PRIME CONTRACTOR AVAILABILITY DATA SOURCES ................................................. 4-2
T
ABLE 4.2: DISTRIBUTION OF PRIME CONTRACTOR AVAILABILITY DATA SOURCES:
CONSTRUCTION .......................................................................................................... 4-4
TABLE 4.3: DISTRIBUTION OF PRIME CONTRACTOR AVAILABILITY DATA SOURCES:
ARCHITECTURAL & ENGINEERING .............................................................................. 4-5
TABLE 4.4: DISTRIBUTION OF PRIME CONTRACTOR AVAILABILITY DATA SOURCES:
PROFESSIONAL SERVICES ........................................................................................... 4-5
T
ABLE 4.5: DISTRIBUTION OF PRIME CONTRACTOR AVAILABILITY DATA SOURCES: GOODS AND SERVICES ............................................................................................................ 4-6
T
ABLE 4.6: ALL INDUSTRY CONTRACTS BY SIZE JULY 1, 2016 TO JUNE 30, 2021 ........................ 4-8
TABLE 4.7: LARGEST PRIME CONTRACTS AWARDED BY CITY OF OAKLAND TO M/WBES ........... 4-9
TABLE 4.8: AVAILABLE CONSTRUCTION PRIME CONTRACTORS
JULY 1, 2016 TO JUNE 30, 2021 ................................................................................ 4-12
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ABLE 4.9: AVAILABLE ARCHITECTURAL AND ENGINEERING PRIME CONTRACTORS JULY 1, 2016 TO JUNE 30, 2021 ................................................................................ 4-14
T
ABLE 4.10: AVAILABLE PROFESSIONAL SERVICES PRIME CONTRACTORS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 4-16
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ABLE 4.11: AVAILABLE GOODS AND SERVICES PRIME CONTRACTORS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 4-18
TABLE 4.12: SUBCONTRACTOR AVAILABILITY DATA SOURCES ................................................. 4-19
TABLE 4.13: AVAILABLE CONSTRUCTION SUBCONTRACTORS
JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 4-21
TABLE 4.14: AVAILABLE ARCHITECTURAL AND ENGINEERING SUBCONTRACTORS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 4-23
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TABLE 4.15: AVAILABLE PROFESSIONAL SERVICES SUBCONTRACTORS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 4-25
TABLE 5.1: INFORMAL THRESHOLDS BY INDUSTRY ...................................................................... 5-2
TABLE 5.2: FORMAL CONTRACT THRESHOLDS BY INDUSTRY WITHOUT OUTLIERS ....................... 5-3
TABLE 5.3: STATISTICAL OUTCOME DESCRIPTIONS ...................................................................... 5-3
T
ABLE 5.4: DISPARITY ANALYSIS: CONSTRUCTION PRIME CONTRACTS VALUED AT $50,000 AND UNDER JULY 1, 2016 TO JUNE 30, 2021 ................................................. 5-5
TABLE 5.5: DISPARITY ANALYSIS: ARCHITECTURAL AND ENGINEERING PRIME CONTRACTS VALUED AT $50,000 AND UNDER JULY 1, 2016 TO JUNE 30, 2021 .............................. 5-8
T
ABLE 5.6: DISPARITY ANALYSIS: PROFESSIONAL SERVICES PRIME CONTRACTS VALUED AT $50,000 AND UNDER JULY 1, 2016 TO JUNE 30, 2021 ............................................... 5-11
TABLE 5.7: DISPARITY ANALYSIS: GOODS AND SERVICES PRIME CONTRACTS VALUED AT $50,000 AND UNDER JULY 1, 2016 TO JUNE 30, 2021 ............................................... 5-14
TABLE 5.8: DISPARITY ANALYSIS: CONSTRUCTION PRIME CONTRACTS VALUED BETWEEN $50,000 AND $3,730,000 JULY 1, 2016 TO JUNE 30, 2021 ........................................ 5-17
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ABLE 5.9: DISPARITY ANALYSIS: ARCHITECTURAL AND ENGINEERING PRIME CONTRACTS VALUED BETWEEN $50,000 AND $790,000 JULY 1, 2016 TO JULY 30, 2021 ............. 5-20
T
ABLE 5.10: DISPARITY ANALYSIS: PROFESSIONAL SERVICES CONTRACTS VALUED BETWEEN $50,000 AND $700,000 JULY 1, 2016 TO JUNE 30, 2021 ......................... 5-23
TABLE 5.11: DISPARITY ANALYSIS: GOODS AND SERVICES PRIME CONTRACTS VALUED BETWEEN $50,000 AND $590,000 JULY 1, 2016 TO JUNE 30, 2021 ......................... 5-26
TABLE 5.12: DISPARITY SUMMARY: CONSTRUCTION PRIME CONTRACT DOLLARS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 5-29
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ABLE 5.13: DISPARITY SUMMARY: ARCHITECTURAL AND ENGINEERING PRIME CONTRACT DOLLARS JULY 1, 2016 TO JUNE 30, 2021 ............................................................. 5-29
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ABLE 5.14: DISPARITY SUMMARY: PROFESSIONAL SERVICES PRIME CONTRACT DOLLARS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 5-30
TABLE 5.15: DISPARITY SUMMARY: GOODS AND SERVICES PRIME CONTRACT DOLLARS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 5-31
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TABLE 5.16: DISPARITY SUMMARY: FEDERALLY ASSISTED PRIME CONTRACT DOLLARS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 5-32
TABLE 5.17: CALTRANS FEDERALLY ASSISTED PRIME CONTRACTS BY DBE STATUS ................ 5-32
TABLE 5.18: DISPARITY ANALYSIS: ON-CALL, EMERGENCY, AND COOPERATIVE AGREEMENTS JULY 1, 2016 TO JUNE 30, 2021 ....................................................... 5-33
TABLE 6.1: STATISTICAL OUTCOME DESCRIPTIONS ...................................................................... 6-2
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ABLE 6.2: DISPARITY ANALYSIS: CONSTRUCTION SUBCONTRACTS JULY 1, 2016 TO JUNE 30, 2021 .................................................................................. 6-4
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ABLE 6.3: DISPARITY ANALYSIS: ARCHITECTURAL AND ENGINEERING SUBCONTRACTS JULY 1, 2016 TO JUNE 30, 2021 .................................................................................. 6-7
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ABLE 6.4: DISPARITY ANALYSIS: PROFESSIONAL SERVICES SUBCONTRACTS JULY 1, 2016 TO JUNE 30, 2021 ................................................................................ 6-10
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ABLE 6.5: SUBCONTRACT DISPARITY SUMMARY, JULY 1, 2016 TO JUNE 30, 2021 ................... 6-12
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ABLE 7.1: UNEMPLOYMENT RATE BY ETHNICITY ....................................................................... 7-5
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ABLE 7.2: INDEPENDENT VARIABLES USED IN THE BUSINESS OWNERSHIP ANALYSIS ................ 7-6
TABLE 7.3: INDEPENDENT VARIABLES USED FOR THE EARNINGS DISPARITY ANALYSIS .............. 7-7
T
ABLE 7.4: CONSTRUCTION INDUSTRY LOGISTIC MODEL............................................................. 7-8
TABLE 7.5: ARCHITECTURAL AND ENGINEERING INDUSTRY LOGISTIC MODEL ............................ 7-9
TABLE 7.6: PROFESSIONAL SERVICES INDUSTRY LOGISTIC MODEL ............................................ 7-10
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ABLE 7.7: GOODS AND SERVICES INDUSTRY LOGISTIC MODEL ................................................ 7-12
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ABLE 7.8: STATISTICALLY SIGNIFICANT BUSINESS OWNERSHIP DISPARITIES ........................... 7-13
TABLE 7.9: CONSTRUCTION INDUSTRY OLS REGRESSION .......................................................... 7-14
TABLE 7.10: ARCHITECTURAL AND ENGINEERING INDUSTRY OLS REGRESSION ....................... 7-16
T
ABLE 7.11: PROFESSIONAL SERVICES INDUSTRY OLS REGRESSION ......................................... 7-18
T
ABLE 7.12: GOODS AND SERVICES INDUSTRY OLS REGRESSION ............................................. 7-20
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List of Tables
TABLE 7.13: STATISTICALLY SIGNIFICANT BUSINESS EARNINGS DISPARITIES ........................... 7-22
TABLE 8.1: KEY RECOMMENDATIONS FROM THE DSI REPORT TO ADDRESS BARRIERS IN THE CONSTRUCTION INDUSTRY ......................................................................................... 8-9
TABLE 8.2: KEY SUGGESTIONS FOR COMPLIANCE AND MONITORING FROM THE DSI REPORT ... 8-10
TABLE 8.3: BARRIERS REPORTED BY THE INTERVIEWEES ........................................................... 8-32
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List of Charts
List of Charts
CHART 4.1: ALL INDUSTRY CONTRACTS BY SIZE JULY 1, 2016 TO JUNE 30, 2021 ....................... 4-8
C
HART 4.2: MEDIAN CONTRACT VALUE ..................................................................................... 4-10
C
HART 5.1: DISPARITY ANALYSIS: CONSTRUCTION PRIME CONTRACTS VALUED AT $50,000 AND UNDER JULY 1, 2016 TO JUNE 30, 2021 .............................................................. 5-6
C
HART 5.2: DISPARITY ANALYSIS: ARCHITECTURAL AND ENGINEERING PRIME CONTRACTS VALUED AT $50,000 AND UNDER JULY 1, 2016 TO JUNE 30, 2021 ............................. 5-9
C
HART 5.3: DISPARITY ANALYSIS: PROFESSIONAL SERVICES PRIME CONTRACTS VALUED AT $50,000 AND UNDER JULY 1, 2016 TO JUNE 30, 2021 .............................................. 5-12
C
HART 5.4: DISPARITY ANALYSIS: GOODS AND SERVICES PRIME CONTRACTS VALUED AT $50,000 AND UNDER JULY 1, 2016 TO JUNE 30, 2021 .............................................. 5-15
CHART 5.5: DISPARITY ANALYSIS: CONSTRUCTION PRIME CONTRACTS VALUED BETWEEN $50,000 AND $3,730,000 JULY 1, 2016 TO JUNE 30, 2021 ....................................... 5-18
C
HART 5.6: DISPARITY ANALYSIS: ARCHITECTURAL AND ENGINEERING PRIME CONTRACTS VALUED BETWEEN $50,000 AND $790,000 JULY 1, 2016 TO JUNE 30, 2021 ............ 5-21
C
HART 5.7: DISPARITY ANALYSIS: PROFESSIONAL SERVICES CONTRACTS VALUED BETWEEN $50,000 AND $700,000 JULY 1, 2016 TO JULY 1, 2021 ............................................ 5-24
CHART 5.8: DISPARITY ANALYSIS: GOODS AND SERVICES PRIME CONTRACTS VALUED BETWEEN $50,000 AND $590,000 JULY 1, 2016 TO JUNE 30, 2021 .......................... 5-27
C
HART 6.1: DISPARITY ANALYSIS: CONSTRUCTION SUBCONTRACTS JULY 1, 2016 TO JUNE 30, 2021 ................................................................................. 6-5
C
HART 6.2: DISPARITY ANALYSIS: ARCHITECTURAL AND ENGINEERING SUBCONTRACTS JULY 1, 2016 TO JUNE 30, 2021 ................................................................................. 6-8
C
HART 6.3: DISPARITY ANALYSIS: PROFESSIONAL SERVICES SUBCONTRACTS JULY 1, 2016 TO JUNE 30, 2021 ............................................................................... 6-11
C
HART 8.1: 2019 ANECDOTAL BARRIERS ..................................................................................... 8-5
C
HART 8.2: THE L/SLBE PROGRAM’S KEY COMPONENTS ......................................................... 8-24
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Chapter 1: Prime Contractor Utilization Analysis
CHAPTER 1: Prime Contractor Utilization
Analysis
I. Introduction
This chapter documents the City of Oakland’s utilization of minority and woman-owned business enterprises (M/WBEs)
and non- minority male -owned business enterprises (non- M/WBEs) as prime contractors by ethnicity, gender, and industry during the study period of July 1, 2016 to June 30, 2021. The City requested that the industry analysis be disaggregated by six- digit North American Industry Classification System (NAICS) codes. The NAICS system is the standard used by federal statistical agencies in classifying business establishments into their primary industry. It was developed under the direction and guidance of the Office of Management and Budget for the collection, tabulation, presentation, and analysis of statistical data.
1 Establishments are assigned industries/codes according to similarities in the processes used to produce their goods or services. For example, a business listed in a source document as a flooring company would require an additional description of its output to assign the six- digit code. Flooring has nine, six-digit NAICS codes describing an output. As noted in Table 1.1, flooring’s six-digit codes describe the various services of a flooring company.
Table 1.1: Six Digit NAICS Codes and Titles for Flooring
NAICS Codes NAICS Titles
238330 Flooring Contractors
321918 Other Millwork (including Flooring)
423310 Lumber, Plywood, Millwork, and Wood Panel Merchant Wholesalers 332323 Ornamental and Architectural Metal Work Manufacturing 238310 Drywall and Insulation Contractors
332322 Sheet Metal Work Manufacturing
444190 Other Building Material Dealers
321114 Wood Preservation
238340 Tile and Terrazzo Contractors
The classification of a business by a six- digit NAICS code requires relevant descriptive information about the business’s primary good or service. In the performance of the disparity study, the utilization data define the goods and services the agency proc ures and dictate the types of goods and services available market area businesses must provide. The City’s data did not meet the minimum requirements to classify the utilized businesses by their primary good or service.
In the utilization data extracted from the City’s Oracle financial system, there were 914 unique businesses which received 2,289 prime contracts. Since there was no NAICS code information in Oracle, an extensive effort was undertaken to determine if the contracts could be classified
1 North American Industry Classification System, United States Census Bureau, North American Industry Classification System (NAICS) U.S. Census Bureau.
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by a primary good or service. Businesses from Oracle were cross referenced with the City’s vendor registration lists —iSupplier and B2Gnow —to identify their NAICS codes. These sources did not contain NAICS codes for the primary good or service provided by the utilized businesses. Some vendor profiles contained six- digit NAICS codes, some three -digit codes, and others no codes. Only 24% of the 914 unique businesses had a single six- digit NAICS code, and 42% of the unique businesses had no NAICS codes. A meeti ng was held with the City’s Finance Director and key staff to determine if the NAICS codes could be extracted from their systems. The department did not have additional resources to assist in identifying the NAICS codes.
Given the NAICS code limitations, the prime contracts were classified into four industries, as defined by the City of Oakland Municipal Code
2 and the Bureau of Design and Construction,
Capital Contracts Division Standard Operations Procedures.3
• Construction: Construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any publicly owned, leased, or operated facility.
• Architectural and Engineering: Professional services of architectural or engineering nature associated with research, planning, development, design, construction, alteration, or repair of real property.
• Professional Services: Advisory services that recommend a course of action or personal expertise that will result in the provision of information to the City.
Information related to the administration, program management, and innovation services performed by licensed consultants or persons possessing unique or special training, education, or skills.
• Goods and Services: Supplies, materials, commodities, and equipment; services such as labor, professional services, consulting services, or a combination of services and supplies that include public works projects.
The businesses are disaggregated into eight ethnic and gender groups, which are listed and defined in Table 1.2.
2 Oakland Municipal Code, ch..2.04 Purchasing System §2.04.010.
3 Bureau of Design & Construction, Capital Contracts Division, Standard Operation Procedure, January 2023.
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Table 1.2: Business Ethnic and Gender Groups
Ethnic and Gender Group Definition4
African Americans Businesses owned by males and females having origins in any of the Black racial groups of Africa.
Asian Americans
Businesses owned by males and females having
origins in any of the original peoples of the Far
East, Southeast Asia, the Indian subcontinent, or
the Pacific Islands. This area includes, for
example, China, India, Japan, Korea, the
Philippine Islands, and Samoa.
Hispanic Americans
Businesses owned by males and females of
Mexican, Puerto Rican, Cuban, Central or South
American, or other Spanish culture or origin,
regardless of race.
Native Americans
Businesses owned by males and females having
origins in any of the original peoples of North
America and who maintains cultural identification
through tribal affiliation or community recognition.
Caucasian Females Businesses owned by non-minority women.
Minority Females
Businesses owned by African American, Asian
American, Hispanic American, and Native
American females.
Non-minority Male-owned Businesses
Businesses owned by Caucasian males and
businesses that could not be identified as minority
or female-owned.
5 Minority-owned Businesses
Businesses owned by male and female African
Americans, Asian Americans, Hispanic
Americans, and Native Americans.
Woman-owned Businesses Businesses owned by females.
II. Prime Contract Data Sources
The analyzed construction, architectural and engineering, professional services, and goods and services prime contracts were extracted from the City of Oakland Oracle 11i and Oracle 12 financial systems and provided in October 2022.
During the study period, the City migrated its contract management system from Oracle 11i to Oracle 12. Oracle 11i housed data for 2016, and was migrated to Oracle 12, which housed data from 2017 to 2021. Award and payment data were recorded for each purchase order, although a unique identifier was not available in each record. Even though there was a field in both Oracle 11i and Oracle 12 that tied the purchase order to the authorizing contract , it was not populated for 74% of Oracle 11i and 18.59% of Oracle 12 datasets. For some records, a contract number, resolution number, or cooperative agreement number was embedded in the comment
4 Statistical Policy Directive No. 15, The U.S. Office of Management and Budget, 1977. 5 See Section II: Prime Contract Data Sources for the methodology employed to identify the ethnicity and gender of utilized prime contractors.
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field instead. Mason Tillman applied the City’s decision rules in an attempt to assign a unique identifier to each record . Identifying the unique contract and number authorizing each order was difficult and, for some records, impossible.
The decision rules the City provided to link the purchase order numbers to the authorizing contract could only be applied when the contract number field was populated, or if the contract number, resolution number, or cooperative agreement number was embedded in a text field.
Some of the relevant information in the text field could be extracted by code, although most of the extractions were done manually. Given the limitations of the data captured in Oracle, only the unique purchase orders could be linked to the payment. It was not possible to link the purchase orders’ missing contract numbers to the contract that authorized the purchase order.
Therefore, standard purchase orders missing contract numbers were grouped and totaled by purchase order year (i.e., the first 4 figures of the purchase order number) and prime vendor.
The purchase orders missing contract numbers were grouped and totaled into 629 prime records and were analyzed as separate contracts. The 629 contracts represented $22,555,597 or 4.63% of all dollars.
The data verification report (DVR) outlined these issues and was provided to the City in December 2022. The City responded to the issues and data questions detailed in the DVR in January 2023. However, the responses were insufficient to determine each record's unique contract number.
Once the City reviewed the DVR and responded to the data questions, the dataset was scrubbed to remove payments made on contracts awarded outside the study period. Exclusions —which included payments to entities such as not -for-profit organizations, procurement card vendors, manufacturers, big box stores and utility companies—were coded for removal from the dataset.
Purchases of proprietary commodities, as well as maintenance and service of the commodities, were also excluded.
Each contract included in the dataset was assigned one of four industries: construction, architectural and engineering, professional services, or goods and services. An i ndustry was assigned by reviewing the project name, contractor name, contract type, and category description. The industry classifications were reviewed and approved by the City.
Prime co ntractors’ ethnicity and gender designations were determined from either Mason Tillman’s proprietary database of regional businesses or research. The initial step in the ethnicity and gender research was to determine if the contractor was certified by a government agency. When available, the ethnicity and gender of certified firms were derived from certification record s. Additional sources used to determine ethnicity and gender included internet research and a contractor survey. Internet research ex amined the company’s website, social media, digital media, and business listings to determine the business owner’s ethnicity and gender. The contractor survey solicited ethnicity and gender information directly from the business when it was not available from another source. Prime contractors whose ethnicity and gender could not be verified as minority or Caucasian female -owned were classified as non - M/WBE. The non- M/WBE category also included publicly traded corporations, employee - owned businesses, and 50/ 50 partnerships, in which the partners were neither minority nor female.
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III. Thresholds for Analysis
The City’s prime contracts awarded in each industry were analyzed at three size thresholds: (1) all prime contracts, (2) informal prime contracts, as defined by the City’s Municipal Code, and (3) formal prime contracts, with the outliers removed. While formal prime contracts are defined by the City’s Municipal Code, an upper limit for each industry was calculated using a statistical calculation. The methodology for defining the upper limits of the formal contract threshold for each industry is detailed below.
A. All Formal Prime Contract Thresholds
The formal threshold for each industry is defined by the Ci ty’s Municipal Code . Formal contracts require public notice of the solicitation and a specified advertisement period. The formal thresholds for each industry are listed in Table 1.3.
Table 1.3: Formal Contract Thresholds by Industry
Industry Formal Contract Threshold
Construction Over $50,000
Architectural and Engineering Over $50,000
Professional Services Over $50,000
Goods and Services Over $50,000
The description of all formal contracts, including the outliers, is presented in Section IV: Prime Contractor Utilization. The data, including the outliers, represent the City’s total spending during the study period.
B. Informal Prime Contract Thresholds
The City of Oakland’s Municipal Code defines an informal contract threshold for each of the four industries. Public notice is not required to solicit informal bids. 6 The informal threshold
for each industry is listed in Table 1.4.
6 Oakland Municipal Code, Chapter 2.04 – Purchasing System, §2.04.010.
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Table 1.4: Informal Contract Thresholds by Industry
Industry Informal Contract Threshold
Construction $50,000 and under
Architectural and Engineering $50,000 and under
Professional Services $50,000 and under
Goods and Services $50,000 and under
C. Formal Prime Contract Thresholds without Outliers
Given the wide range of contract values in the formal prime contract data, upper limits, or maximum amounts, were defined to avoid skewing the analysis of disparity. The outliers, or otherwise atypical contract amounts, were removed from each industry’s formal threshold. To define the upper limits, a distribution cluster analysis was performed to determine the characteristics of the prime contract data. A distribution analysis reveals the presence of outliers in the prime contract data. The atypical contract amounts, which are notably different from the rest of the contract values, can either be contract amounts that are too high or too low.
To determine outliers, both the upper and lower limits of the accepted contract values in the prime data were defined, and the 1.5 x interquartile range (IQR) rule was applied. Calculating the IQR required identifying the value of the contracts at the first and third quartiles. The distance, or the difference in value, between the first and third quartile defined the IQR. The IQR multiplied by 1.5 was subtracted from the first quartile to identify the lower limit of the accepted contract amount. Anything below that amount was considered an outlier and was not counted in the formal threshold. The value of 1.5 multiplied by the IQR was then added to the third quartile to identify the upper limit of the accepted contract amount. Contracts that had an amount above the upper range were considered outliers and excluded from the formal contracts analyzed. Table 1.5 lists the contract thresholds by industry for the formal contracts with outliers removed.
Table 1.5: Formal Contract Thresholds by Industry Excluding Outliers
Industry Formal Contract Threshold
Construction Between $50,000 and $3,730,000
Architectural and Engineering Between $50,000 and $790,000 Professional Services Between $50,000 and $700,000
Goods and Services Between $50,000 and $590,000
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In this chapter, the analysis of M/WBE and non- M/WBE prime contractor utilization is presented with and without outliers. However, outliers were removed from the statistical analysis of disparity presented in Chapter 5: Prime Contract Disparity Analysis.
IV. Prime Contractor Utilization
A. All Prime Contractors
As shown in Table 1.6, the City issued 2,264 prime contracts from July 1, 2016 to June 30, 2021. The 2,264 prime contracts awarded included 191 for construction, 112 for architectural and engineering, 457 for professional services, and 1,504 for goods and services. The payments made by the City during the study period totaled $486,705,907 for all 2,264 prime contracts.
Payments included $214,636,848 for construction, $28,586,595 for architectural and engineering, $78,883,345 for professional services, and $164,599,118 for goods and services.
Table 1.6: Total Prime Contracts and Dollars Expended, All Industries July 1, 2016 to June 30, 2021
Industry Total Number
of Contracts
Total
Dollars Expended
Construction 191 $214,636,848
Architectural and Engineering 112 $28,586,595
Professional Services 457 $78,883,345
Goods and Services 1,504 $164,599,118
Total 2,264 $486,705,907*
* The total dollars expended may not add up to $486,705,907 due to rounding.
B. Highly Used Prime Contractors
The City awarded a significant number of its prime contract dollars to a few contractors referred to as “highly used.” All prime contracts, including the outliers, are included in the analysis of highly used contractors. The “highly used” analysis shows the businesses that received approximately 70% of the total contract dollars awarded in each industry. The “most highly used” analysis shows a subset of the “highly used” businesses that received approximately 50% of the total contract dollars in each industry. The most highly used businesses received the largest percentage of the contract dollars in their industry. The percentage of the prime contract dollars awarded to the highly used contractors illustrates that most of the C ity’s subcontracts were controlled by a few businesses.
1. Highly Used Construction Prime Contractors
The City awarded a total of 191 construction prime contracts during the study period. As listed in Table 1.7, the 191 construction prime contracts were awarded to 62 unique businesses, for a total of $214,636,848.
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Table 1.7: Construction Prime Contracts
Total Contracts 191
Total Utilized Vendors 62
Total Expenditures $214,636,848
Table 1.8 lists the distribution of construction prime contracts by the number of businesses.
Seven of the 6 2 businesses received $152,425,256, or 71% , of the total construction prime contract dollars. The findings show that a small group of prime contractors received the majority of the construction prime contract dollars spent by the City.
Table 1.8: Construction Prime Contracts Distributed by Number of Businesses
Businesses Total
Dollars
Percent
of Dollars
Number of
Contracts
Percent of
Contracts
7 Highly Used Businesses $152,425,256 71% 73 38%
55 Businesses $62,211,592 29% 118 62%
62 Total Businesses $214,636,848 100% 191 100%
Table 1.9 lists the ethnicity and gender of the most highly used construction prime contractors, who received the most construction prime contract dollars. The four most highly used prime contractors were one Hispanic American business and three non- minority male -owned businesses. The four contractors received $107,997,979, or 50% of the total construction prime contract dollars. T he distribution of $107,997,979 between these two groups was 18% and 82%, respectively. The contracts received by these four businesses ranged in value from $17,039 to $25,220,897.
Table 1.9: Most Highly Used Construction Prime Contractors
Ethnicity/
Gender
Total
Dollars
Number of
Contracts
1 Hispanic American $19,270,238 14
3 Non-Minority Males $88,727,741 30
2. Highly Used Architectural and Engineering Prime Contractors
The City awarded 112 architectural and engineering prime contracts during the study period.
As listed in Table 1.10, the 112 architectural and engineering prime contracts were received by 69 unique businesses, for a total of $28,586,595.
Table 1.10: Architectural and Engineering Prime Contracts
Total Contracts 112
Total Utilized Vendors 69
Total Expenditures $28,586,595
Table 1.11 lists the distribution of architectural and engineering prime contracts by the number of businesses. Twelve of the 69 businesses received $20,314,803, or 71%, of the total architectural and engineering prime contract dollars. The findings show that a small group of
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prime contractors received a majority of the architectural and engineering prime contract dollars spent by the City.
Table 1.11: Architectural and Engineering Prime Contracts Distributed by Number of Businesses
Businesses Total
Dollars
Percent
of Dollars
Number of
Contracts
Percent of
Contracts
12 Highly Used Businesses $20,314,803 71% 28 25%
57 Businesses $8,271,792 29% 84 75%
69 Total Businesses $28,586,595 100% 112 100%
Table 1.12 shows the ethnicity and gender of the most highly used architectural and engineering prime contractors, who received the most architectural and engineering prime contract dollars.
The seven most highly used prime contractors were one Asian American business, one Caucasian female busine ss, and five non -minority male -owned businesses. The seven contractors received $14,306,457, or 50% of the total architectural and engineering prime contract dollars. The distribution of $14,306,457 between these three groups was 12%, 18%, and 70%, respectively. The contracts received by these seven businesses ranged in value from $22,505 to $2,540,000.
Table 1.12: Most Highly Used Architectural and Engineering Prime Contractors
Ethnicity/
Gender
Total
Dollars
Number of
Contracts
1 Asian American $1,800,000 1
1 Caucasian Female $2,554,996 2
5 Non-Minority Males $9,951,461 11
3. Highly Used Professional Services Prime Contractors
The City awarded 457 professional services prime contracts during the study period. As listed in Table 1.13, the 457 professional services prime contracts were received by 234 unique businesses, for a total of $78,883,345.
Table 1.13: Professional Services Prime Contracts
Total Contracts 457
Total Utilized Vendors 234
Total Expenditures $78,883,345
Table 1.14 lists the distribution of the C ity’s professional services prime contracts by the number of businesses. Thirty-two of the 234 businesses received $55,510,309, or 70%, of the total professional services prime contract dollars. The findings show that a small group of prime contractors received most of the professional services prime contract dollars spent by the City.
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Table 1.14: Professional Services Prime Contracts Distributed by Number of Businesses
Businesses Total
Dollars
Percent
of Dollars
Number of
Contracts
Percent of
Contracts
32 Highly Used Businesses $55,510,309 70% 120 26%
202 Businesses $23,373,036 30% 337 74%
234 Total Businesses $78,883,345 100% 457 100%
Table 1.15 shows the ethnicity and gender of the most highly used professional services prime contractors, who received the most professional services prime contract dollars. The 14 most highly used prime contractors were one Caucasian female busine ss, one African American business, one Asian American business, and 11 non-minority male-owned businesses. The 14 contractors received $39,450,573, or 50% of the total professional services prime contract dollars. The distribution of $39,450,573 between these four groups was 3%, 4%, 10%, and 83%, respectively. The contracts received by these 14 businesses ranged in value from $283,070 to $6,846,808.
Table 1.15: Most Highly Used Professional Services Prime Contractors
Ethnicity/
Gender
Total
Dollars
Number of
Contracts
1 Caucasian Female $1,241,772 5
1 African American $1,499,203 2
1 Asian American $4,019,243 5
11 Non-Minority Males $32,690,355 40
4. Highly Used Goods and Services Prime Contractors
The City awarded a total of 1,504 goods and services prime contracts during the study period.
As listed in Table 1.16, the 1,504 goods and services prime contracts were received by 5 63 unique businesses, for a total of $164,599,118.
Table 1.16: Goods and Services Prime Contracts
Total Contracts 1,504
Total Utilized Vendors 563
Total Expenditures $164,599,118
Table 1.17 lists the distribution of the City’s goods and services prime contracts by the number of businesses. Seventy-six of the 563 businesses received $115,002,520, or 70% , of the total goods and services prime contract dollars. The findings show that a small group of prime contractors received most of the City’s goods and services prime contract dollars.
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Table 1.17: Goods and Services Prime Contracts Distributed by Number of Businesses
Businesses Total
Dollars
Percent
of Dollars
Number of
Contracts
Percent of
Contracts
76 Highly Used Businesses $115,002,520 70% 350 23%
487 Businesses $49,596,598 30% 1,154 77%
563 Total Businesses $164,599,118 100% 1,504 100%
Table 1.18 shows the ethnicity and gender of the 34 most highly used goods and services prime contractors, who received the most goods and services prime contract dollars. The 34 most highly used prime contractors were one Asian American business, one Hispanic American business, one Caucasian female business, and 31 non-minority male-owned businesses. The 34 contractors received $82,319,613, or 50% of the total goods and services prime contract dollars.
The distribution of $82,319,613 between the four groups was about 1%, 2%, 2%, and 95% , respectively. The contracts received by these 34 businesses ranged in value from $125 to $4,218,795.
Table 1.18: Most Highly Used Goods and Services Prime Contractors
Ethnicity/Gender Total
Dollars
Number of
Contracts
1 Asian American $1,319,692 7
1 Hispanic American $1,674,357 1
1 Caucasian Female $1,298,414 10
31 Non-Minority Males $78,027,150 170
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C. All Prime Contracts by Industry
1. Construction Prime Contract Utilization: All Contracts
Table 1.19 lists all prime contract dollars expended by the City on construction prime contracts.
MBEs received 15.71% , WBEs received 0.97% , and non-M/WBEs received 84.24% of the construction prime contract dollars.
African Americans received 8, or 4.19% of the construction prime contracts awarded during the study period, representing $651,985, or 0.30% of the construction prime contract dollars.
Asian Americans received 13, or 6.81% of the construction prime contracts awarded during the study period, representing $4,615,008, or 2.15% of the construction prime contract dollars.
Hispanic Americans received 36, or 18.85% of the construction prime contracts awarded during the study period, representing $28,449,052, or 13.25% of the construction prime contract dollars.
Native Americans received none of the construction prime contracts awarded during the study period.
Caucasian Females received 2, or 1.05% of the construction prime contracts awarded during the study period, representing $101,122, or 0.05% of the construction prime contract dollars.
Minority Females received 3, or 1.57% of the construction prime contracts awarded during the study period, representing $1,980,836, or 0.92% of the construction prime contract dollars.
Non-minority Males received 132, or 69.11% of all construction prime contracts for all contracts awarded during the study period, representing $180,819,682, or 84.24% of the construction prime contract dollars.
Minority Business Enterprises received 57, or 29.84% of the construction prime contracts awarded during the study period, representing $33,716,044, or 15.71% of the construction prime contract dollars.
Woman Business Enterprises received 5, or 2.62% of the construction prime contracts awarded during the study period, representing $2,081,958, or 0.97% of the construction prime contract dollars.
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Table 1.19: Construction Prime Contract Utilization, All Contracts July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f Contracts of Dollars of Dollars
African Americans 8 4.19% $651,985 0.30%
Asian Americans 13 6.81% $4,615,008 2.15%
Hispanic Americans 36 18.85% $28,449,052 13.25%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 2 1.05% $101,122 0.05%
Non-minority Males 132 69.11% $180,819,682 84.24%
TOTAL 191 100.00% $214,636,848 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 1 0.52% $338,000 0.16%
African American Males 7 3.66% $313,985 0.15%
Asian American Females 2 1.05% $1,642,836 0.77%
Asian American Males 11 5.76% $2,972,172 1.38%
Hispanic American Females 0 0.00% $0 0.00%
Hispanic American Males 36 18.85% $28,449,052 13.25%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 2 1.05% $101,122 0.05%
Non-minority Males 132 69.11% $180,819,682 84.24%
TOTAL 191 100.00% $214,636,848 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 3 1.57% $1,980,836 0.92%
Minority Males 54 28.27% $31,735,209 14.79%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 57 29.84% $33,716,044 15.71% Woman Business Enterprises 5 2.62% $2,081,958 0.97%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
2. Architectural and Engineering Prime Contract Utilization: All Contracts
Table 1.20 lists all prime contract dollars expended by the City on architectural and engineering prime contracts. MBEs received 15.65%, WBEs received 18.26%, and non-M/WBEs received
69.61% of the architectural and engineering prime contract dollars.
African Americans received 1, or 0.89% of the architectural and engineering prime contracts awarded during the study period, representing $31,000, or 0.11% of the architectural and engineering prime contract dollars.
Asian Americans received 19, or 16.96% of the architectural and engineering prime contracts awarded during the study period, representing $3,864,963, or 13.52% of the architectural and engineering prime contract dollars.
Hispanic Americans received 8, or 7.14% of the architectural and engineering prime contracts awarded during the study period, representing $577,707, or 2.02% of the architectural and engineering prime contract dollars.
Native Americans received none of the architectural and engineering prime contracts awarded during the study period.
Caucasian Females received 17, or 15.18% of the architectural and engineering prime contracts awarded during the study period, representing $4,213,190, or 14.74% of the architectural and engineering prime contract dollars.
Minority Females received 5, or 4.46% of the architectural and engineering prime contracts awarded during the study period, representing $1,007,229, or 3.52% of the architectural and engineering prime contract dollars.
Non-minority Males received 67, or 59.82% of the architectural and engineering prime contracts awarded during the study period, representing $19,899,735, or 69.61% of the architectural and engineering prime contract dollars.
Minority Business Enterprises received 28, or 25.00% of the architectural and engineering prime contracts awarded during the study period, representing $4,473,670, or 15.65% of the architectural and engineering prime contract dollars.
Woman Business Enterprises received 22, or 19.64% of the architectural and engineering prime contracts awarded during the study period, representing $5,220,420, or 18.26% of the architectural and engineering prime contract dollars.
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City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
Table 1.20: Architectural and Engineering Prime Contract Utilization, All Contracts July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f Contracts of Dollars of Dollars
African Americans 1 0.89% $31,000 0.11%
Asian Americans 19 16.96% $3,864,963 13.52%
Hispanic Americans 8 7.14% $577,707 2.02%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 17 15.18% $4,213,190 14.74%
Non-minority Males 67 59.82% $19,899,735 69.61%
TOTAL 112 100.00% $28,586,595 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 1 0.89% $31,000 0.11%
Asian American Females 4 3.57% $992,229 3.47%
Asian American Males 15 13.39% $2,872,734 10.05%
Hispanic American Females 1 0.89% $15,000 0.05%
Hispanic American Males 7 6.25% $562,707 1.97%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 17 15.18% $4,213,190 14.74%
Non-minority Males 67 59.82% $19,899,735 69.61%
TOTAL 112 100.00% $28,586,595 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 5 4.46% $1,007,229 3.52%
Minority Males 23 20.54% $3,466,441 12.13%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 28 25.00% $4,473,670 15.65% Woman Business Enterprises 22 19.64% $5,220,420 18.26%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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Final Report
City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
3. Professional Services Prime Contract Utilization: All Contracts
Table 1.21 lists all prime contract dollars expended by the City on professional services prime contracts. MBEs received 16.38% , WBEs received 14.74% , and non- M/WBEs received
75.01% of the professional services prime contract dollars.
African Americans received 39, or 8.53% of the professional services prime contracts awarded during the study period, representing $4,874,086, or 6.18% of the professional services prime contract dollars.
Asian Americans received 28, or 6.13% of the professional services prime contracts awarded during the study period, representing $6,664,922, or 8.45% of the professional services prime contract dollars.
Hispanic Americans received 20, or 4.38% of the professional services prime contracts awarded during the study period, representing $1,384,440, or 1.76% of the professional services prime contract dollars.
Native Americans received none of the professional services prime contracts awarded during the study period.
Caucasian Females received 70, or 15.32% of the professional services prime contracts awarded during the study period, representing $6,787,337, or 8.60% of the professional services prime contract dollars.
Minority Females received 51, or 11.16% of the professional services prime contracts awarded during the study period, representing $4,837,981, or 6.13% of the professional services prime contract dollars.
Non-minority Males received 300, or 65.65% of the professional services prime contracts awarded during the study period, representing $59,172,559, or 75.01% of the professional services prime contract dollars.
Minority Business Enterprises received 87, or 19.04% of the professional services prime contracts awarded during the study period, representing $12,923,449, or 16.38% of the professional services prime contract dollars.
Woman Business Enterprises received 121, or 26.48% of the professional services prime contracts awarded during the study period, representing $11,625,319, or 14.74% of the professional services prime contract dollars.
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City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
Table 1.21: Professional Services Prime Contract Utilization, All Contracts July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f Contracts of Dollars of Dollars
African Americans 39 8.53% $4,874,086 6.18%
Asian Americans 28 6.13% $6,664,922 8.45%
Hispanic Americans 20 4.38% $1,384,440 1.76%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 70 15.32% $6,787,337 8.60%
Non-minority Males 300 65.65% $59,172,559 75.01%
TOTAL 457 100.00% $78,883,345 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 24 5.25% $3,317,240 4.21%
African American Males 15 3.28% $1,556,847 1.97%
Asian American Females 11 2.41% $227,763 0.29%
Asian American Males 17 3.72% $6,437,159 8.16%
Hispanic American Females 16 3.50% $1,292,979 1.64%
Hispanic American Males 4 0.88% $91,461 0.12%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 70 15.32% $6,787,337 8.60%
Non-minority Males 300 65.65% $59,172,559 75.01%
TOTAL 457 100.00% $78,883,345 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 51 11.16% $4,837,981 6.13%
Minority Males 36 7.88% $8,085,467 10.25%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 87 19.04% $12,923,449 16.38% Woman Business Enterprises 121 26.48% $11,625,319 14.74% Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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Final Report
City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
4. Goods and Services Prime Contract Utilization: All Contracts
Table 1.22 lists all prime contract dollars expended by the City on goods and services prime contracts. MBEs received 8.36%, WBEs received 6.90%, and non-M/WBEs received 87.54% of the goods and services prime contract dollars.
African Americans received 25, or 1.66% of the goods and services prime contracts awarded during the study period, representing $1,281,756, or 0.78% of the goods and services prime contract dollars.
Asian Americans received 80, or 5.32% of the goods and services prime contracts awarded during the study period, representing $7,786,477, or 4.73% of the goods and services prime contract dollars.
Hispanic Americans received 52, or 3.46% of the goods and services prime contracts awarded during the study period, representing $4,647,068, or 2.82% of the goods and services prime contract dollars.
Native Americans received 5, or 0.33% of the goods and services prime contracts awarded during the study period, representing $47,232, or 0.03% of the goods and services prime contract dollars.
Caucasian Females received 129, or 8.58% of the goods and services prime contracts awarded during the study period, representing $6,753,371, or 4.10% of the goods and services prime contract dollars.
Minority Females received 50, or 3.32% of the goods and services prime contracts awarded during the study period, representing $4,609,598, or 2.80% of the goods and services prime contract dollars.
Non-minority Males received 1,213, or 80.65% of the goods and services prime contracts awarded during the study period, representing $144,083,215, or 87.54% of the goods and services prime contract dollars.
Minority Business Enterprises received 162, or 10.77% of the goods and services prime contracts awarded during the study period, representing $13,762,533, or 8.36% of the goods and services prime contract dollars.
Woman Business Enterprises received 179, or 11.90% of the goods and services prime contracts awarded during the study period, representing $11,362,969, or 6.90% of the goods and services prime contract dollars.
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Final Report
City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
Table 1.22: Goods and Services Prime Contract Utilization, All Contracts July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f Contracts of Dollars of Dollars
African Americans 25 1.66% $1,281,756 0.78%
Asian Americans 80 5.32% $7,786,477 4.73%
Hispanic Americans 52 3.46% $4,647,068 2.82%
Native Americans 5 0.33% $47,232 0.03%
Caucasian Females 129 8.58% $6,753,371 4.10%
Non-minority Males 1,213 80.65% $144,083,215 87.54%
TOTAL 1,504 100.00% $164,599,118 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 15 1.00% $551,859 0.34%
African American Males 10 0.66% $729,897 0.44%
Asian American Females 8 0.53% $1,239,085 0.75%
Asian American Males 72 4.79% $6,547,392 3.98%
Hispanic American Females 22 1.46% $2,771,421 1.68%
Hispanic American Males 30 1.99% $1,875,646 1.14%
Native American Females 5 0.33% $47,232 0.03%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 129 8.58% $6,753,371 4.10%
Non-minority Males 1,213 80.65% $144,083,215 87.54%
TOTAL 1,504 100.00% $164,599,118 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 50 3.32% $4,609,598 2.80%
Minority Males 112 7.45% $9,152,935 5.56%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 162 10.77% $13,762,533 8.36% Woman Business Enterprises 179 11.90% $11,362,969 6.90% Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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Final Report
City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
D. Informal Prime Contracts by Industry
1. Construction Prime Contract Utilization: Contracts Valued at $50,000 and under
Table 1.23 lists all prime contract dollars expended by the City on construction prime contracts valued at $50,000 and under. MBEs received 23.97% , WBEs received 1.90% , and non- M/WBEs received 74.13% of the construction prime contract dollars.
African Americans received 4, or 8.16% of the construction prime contracts valued at $50,000 and under awarded during the study period, representing $23,326, or 2.45% of the construction prime contract dollars.
Asian Americans received 5, or 10.20% of the construction prime contracts valued at $50,000 and under awarded during the study period, representing $103,731, or 10.88% of the construction prime contract dollars.
Hispanic Americans received 6, or 12.24% of the construction prime contracts valued at $50,000 and under awarded during the study period, representing $101,515, or 10.65% of the construction prime contract dollars.
Native Americans received none of the construction prime contracts valued at $50,000 and under awarded during the study period.
Caucasian Females received 1, or 2.04% of the construction prime contracts valued at $50,000 and under awarded during the study period, representing $18,094, or 1.90% of the construction prime contract dollars.
Minority Females received none of the construction prime contracts valued at $50,000 and under awarded during the study period.
Non-minority Males received 33, or 67.35% of the construction prime contracts valued at $50,000 and under awarded during the study period, representing $706,946, or 74.13% of the construction prime contract dollars.
Minority Business Enterprises received 15, or 30.61% of the construction prime contracts valued at $50,000 and under awarded during the study period, representing $228,572, or
23.97% of the construction prime contract dollars.
Woman Business Enterprises received 1, or 2.04% of the construction prime contracts valued at $50,000 and under awarded during the study period, representing $18,094, or 1.90% of the construction prime contract dollars.
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Final Report
City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
Table 1.23: Construction Prime Contract Utilization, Contracts Valued at $50,000 and under, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f Contracts of Dollars of Dollars
African Americans 4 8.16% $23,326 2.45%
Asian Americans 5 10.20% $103,731 10.88%
Hispanic Americans 6 12.24% $101,515 10.65%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 1 2.04% $18,094 1.90%
Non-minority Males 33 67.35% $706,946 74.13%
TOTAL 49 100.00% $953,612 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 4 8.16% $23,326 2.45%
Asian American Females 0 0.00% $0 0.00%
Asian American Males 5 10.20% $103,731 10.88%
Hispanic American Females 0 0.00% $0 0.00%
Hispanic American Males 6 12.24% $101,515 10.65%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 1 2.04% $18,094 1.90%
Non-minority Males 33 67.35% $706,946 74.13%
TOTAL 49 100.00% $953,612 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 0 0.00% $0 0.00%
Minority Males 15 30.61% $228,572 23.97%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 15 30.61% $228,572 23.97% Woman Business Enterprises 1 2.04% $18,094 1.90%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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Final Report
City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
2. Architectural and Engineering Prime Contract Utilization: Contracts Valued at $50,000 and under
Table 1.24 lists all prime contract dollars expended by the City on architectural and engineering prime contracts for contracts valued at $50,000 and under. MBEs received 32.22% , WBEs received 18.44% , and non- M/WBEs received 51.07% of the architectural and engineering prime contract dollars.
African Americans received 1, or 2.27% of the architectural and engineering prime contracts valued at $50,000 and under awarded during the study period, representing $31,000, or 2.96% of the architectural and engineering prime contract dollars.
Asian Americans received 8, or 18.18% of the architectural and engineering prime contracts valued at $50,000 and under awarded during the study period, representing $188,793, or
18.03% of the architectural and engineering prime contract dollars.
Hispanic Americans received 5, or 11.36% of the architectural and engineering prime contracts valued at $50,000 and under awarded during the study period, representing $117,577, or 11.23% of the architectural and engineering prime contract dollars.
Native Americans received none of the architectural and engineering prime contracts valued at $50,000 and under awarded during the study period.
Caucasian Females received 7, or 15.91% of the architectural and engineering prime contracts valued at $50,000 and under awarded during the study period, representing $174,924, or
16.71% of the architectural and engineering prime contract dollars.
Minority Females received 2, or 4.55% of the architectural and engineering prime contracts valued at $50,000 and under awarded during the study period, representing $18,119, or 1.73% of the architectural and engineering prime contract dollars.
Non-minority Males received 23, or 52.27% of the architectural and engineering prime contracts valued at $50,000 and under awarded during the study period, representing $534,701, or 51.07% of the architectural and engineering prime contract dollars.
Minority Business Enterprises received 14, or 31.82% of the architectural and engineering prime contracts valued at $50,000 and under awarded during the study period, representing $337,370, or 32.22% of the architectural and engineering prime contract dollars.
Woman Business Enterprises received 9, or 20.45% of the architectural and engineering prime contracts valued at $50,000 and under awarded during the study period, representing $193,043, or 18.44% of the architectural and engineering prime contract dollars.
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Final Report
City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
Table 1.24: Architectural and Engineering Prime Contract Utilization, Contracts Valued at $50,000 and under, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f C ontracts of Dollars of Dollars
African Americans 1 2.27% $31,000 2.96%
Asian Americans 8 18.18% $188,793 18.03%
Hispanic Americans 5 11.36% $117,577 11.23%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 7 15.91% $174,924 16.71%
Non-minority Males 23 52.27% $534,701 51.07%
TOTAL 44 100.00% $1,046,996 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 1 2.27% $31,000 2.96%
Asian American Females 1 2.27% $3,119 0.30%
Asian American Males 7 15.91% $185,674 17.73%
Hispanic American Females 1 2.27% $15,000 1.43%
Hispanic American Males 4 9.09% $102,577 9.80%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 7 15.91% $174,924 16.71%
Non-minority Males 23 52.27% $534,701 51.07%
TOTAL 44 100.00% $1,046,996 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 2 4.55% $18,119 1.73%
Minority Males 12 27.27% $319,251 30.49%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 14 31.82% $337,370 32.22% Woman Business Enterprises 9 20.45% $193,043 18.44%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
3. Professional Services Prime Contract Utilization: Contracts Valued at $50,000 and under
Table 1.25 lists all prime contract dollars expended by the City on professional services prime contracts valued at $50,000 and under. MBEs received 17.99% , WBEs received 28.87%, and non-M/WBEs received 63.04% of the professional services prime contract dollars.
African Americans received 20, or 8.20% of the professional services prime contracts valued at $50,000 and under awarded during the study period, representing $518,722, or 8.65% of the professional services prime contract dollars.
Asian Americans received 14, or 5.74% of the professional services prime contracts valued at $50,000 and under awarded during the study period, representing $336,642, or 5.62% of the professional services prime contract dollars.
Hispanic Americans received 12, or 4.92% of the professional services prime contracts valued at $50,000 and under awarded during the study period, representing $222,885, or 3.72% of the professional services prime contract dollars.
Native Americans received none of the professional services prime contracts valued at $50,000 and under awarded during the study period.
Caucasian Females received 41, or 16.80% of the professional services prime contracts valued at $50,000 and under awarded during the study period, representing $1,137,044, or 18.97% of the professional services prime contract dollars.
Minority Females received 30, or 12.30% of the professional services prime contracts valued at $50,000 and under awarded during the study period, representing $593,222, or 9.90% of the professional services prime contract dollars.
Non-minority Males received 157, or 64.34% of the professional services prime contracts valued at $50,000 and under awarded during the study period, representing $3,778,345, or
63.04% of the professional services prime contract dollars.
Minority Business Enterprises received 46, or 18.85% of the professional services prime contracts valued at $50,000 and under awarded during the study period, representing $1,078,249, or 17.99% of the professional services prime contract dollars.
Woman Business Enterprises received 71, or 29.10% of the professional services prime contracts valued at $50,000 and under awarded during the study period, representing $1,730,266, or 28.87% of the professional services prime contract dollars.
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Final Report
City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
Table 1.25: Professional Services Prime Contract Utilization, Contracts Valued at $50,000 and under, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f Contracts of Dollars of Dollars
African Americans 20 8.20% $518,722 8.65%
Asian Americans 14 5.74% $336,642 5.62%
Hispanic Americans 12 4.92% $222,885 3.72%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 41 16.80% $1,137,044 18.97%
Non-minority Males 157 64.34% $3,778,345 63.04%
TOTAL 244 100.00% $5,993,637 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 12 4.92% $287,869 4.80%
African American Males 8 3.28% $230,854 3.85%
Asian American Females 10 4.10% $173,930 2.90%
Asian American Males 4 1.64% $162,711 2.71%
Hispanic American Females 8 3.28% $131,423 2.19%
Hispanic American Males 4 1.64% $91,461 1.53%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 41 16.80% $1,137,044 18.97%
Non-minority Males 157 64.34% $3,778,345 63.04%
TOTAL 244 100.00% $5,993,637 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 30 12.30% $593,222 9.90%
Minority Males 16 6.56% $485,026 8.09%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 46 18.85% $1,078,249 17.99% Woman Business Enterprises 71 29.10% $1,730,266 28.87%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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Final Report
City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
4. Goods and Services Prime Contract Utilization: Contracts Valued at $50,000 and under
Table 1.26 lists all prime contract dollars expended by the City on goods and services prime contracts valued at $50,000 and under. MBEs received 10.02% , WBEs received 10.23%, and non-M/WBEs received 82.36% of the goods and services prime contract dollars.
African Americans received 18, or 1.81% of the goods and services prime contracts valued at $50,000 and under awarded during the study period, representing $191,836, or 1.35% of the goods and services prime contract dollars.
Asian Americans received 45, or 4.52% of the goods and services prime contracts valued at $50,000 and under awarded during the study period, representing $740,919, or 5.23% of the goods and services prime contract dollars.
Hispanic Americans received 32, or 3.21% of the goods and services prime contracts valued at $50,000 and under awarded during the study period, representing $440,741, or 3.11% of the goods and services prime contract dollars.
Native Americans received 5, or 0.50% of the goods and services prime contracts valued at $50,000 and under awarded during the study period, representing $47,232, or 0.33% of the goods and services prime contract dollars.
Caucasian Females received 104, or 10.44% of the goods and services prime contracts valued at $50,000 and under awarded during the study period, representing $1,080,954, or 7.62% of the goods and services prime contract dollars.
Minority Females received 32, or 3.21% of the goods and services prime contracts valued at $50,000 and under awarded during the study period, representing $370,116, or 2.61% of the goods and services prime contract dollars.
Non-minority Males received 792, or 79.52% of the goods and services prime contracts valued at $50,000 and under awarded during the study period, representing $11,677,866, or 82.36% of the goods and services prime contract dollars.
Minority Business Enterprises received 100, or 10.04% of the goods and services prime contracts valued at $50,000 and under awarded during the study period, representing $1,420,727, or 10.02% of the goods and services prime contract dollars.
Woman Business Enterprises received 136, or 13.65% of the goods and services prime contracts valued at $50,000 and under awarded during the study period, representing $1,451,070, or 10.23% of the goods and services prime contract dollars.
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Final Report
City of Oakland Disparity Study
Chapter 1: Prime Contractor Utilization Analysis
Table 1.26: Goods and Services Prime Contract Utilization, Contracts Valued at $50,000 and under, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f Contracts of Dollars of Dollars
African Americans 18 1.81% $191,836 1.35%
Asian Americans 45 4.52% $740,919 5.23%
Hispanic Americans 32 3.21% $440,741 3.11%
Native Americans 5 0.50% $47,232 0.33%
Caucasian Females 104 10.44% $1,080,954 7.62%
Non-minority Males 792 79.52% $11,677,866 82.36%
TOTAL 996 100.00% $14,179,547 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 11 1.10% $69,637 0.49%
African American Males 7 0.70% $122,199 0.86%
Asian American Females 5 0.50% $97,072 0.68%
Asian American Males 40 4.02% $643,847 4.54%
Hispanic American Females 11 1.10% $156,176 1.10%
Hispanic American Males 21 2.11% $284,565 2.01%
Native American Females 5 0.50% $47,232 0.33%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 104 10.44% $1,080,954 7.62%
Non-minority Males 792 79.52% $11,677,866 82.36%
TOTAL 996 100.00% $14,179,547 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 32 3.21% $370,116 2.61%
Minority Males 68 6.83% $1,050,611 7.41%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 100 10.04% $1,420,727 10.02% Woman Business Enterprises 136 13.65% $1,451,070 10.23% Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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E. Formal Prime Contracts by Industry
1. Construction Prime Contract Utilization: Contracts Valued b etween $50,000 and $3,730,000
Table 1.27 lists all prime contract dollars expended by the City on construction prime contracts valued between $50,000 and $3,730,000. MBEs received 28.86%, WBEs received 1.78%, and non-M/WBEs received 71.07%. of the construction prime contract dollars
African Americans received 4, or 3.01% of the construction prime contracts valued between $50,000 and $3,730,000 awarded during the study period, representing $628,658, or 0.54% of the construction prime contract dollars.
Asian Americans received 8, or 6.02% of the construction prime contracts valued between $50,000 and $3,730,000 awarded during the study period, representing $4,511,277, or 3.89% of the construction prime contract dollars.
Hispanic Americans received 30, or 22.56% of the construction prime contracts valued between $50,000 and $3,730,000 awarded during the study period, representing $28,347,537, or 24.43% of the construction prime contract dollars.
Native Americans received none of the construction prime contracts valued between $50,000 and $3,730,000 awarded during the study period.
Caucasian Females received 1, or 0.75% of the construction prime contracts valued between $50,000 and $3,730,000 awarded during the study period, representing $83,028, or 0.07% of the construction prime contract dollars.
Minority Females received 3, or 2.26% of the construction prime contracts valued between $50,000 and $3,730,000 awarded during the study period, representing $1,980,836, or 1.71% of the construction prime contract dollars.
Non-minority Males received 90, or 67.67% of the construction prime contracts valued between $50,000 and $3,730,000 awarded during the study period, representing $82,475,933, or 71.07% of the construction prime contract dollars.
Minority Business Enterprises received 42, or 31.58% of the construction prime contracts valued between $50,000 and $3,730,000 awarded during the study period, representing $33,487,472, or 28.86% of the construction prime contract dollars.
Woman Business Enterprises received 4, or 3.01% of the construction prime contracts valued between $50,000 and $3,730,000 awarded during the study period, representing $2,063,864, or
1.78% of the construction prime contract dollars.
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Table 1.27: Construction Prime Contract Utilization, Contracts Valued between $50,000 and $3,730,000, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f Contracts of Dollars of Dollars
African Americans 4 3.01% $628,658 0.54%
Asian Americans 8 6.02% $4,511,277 3.89%
Hispanic Americans 30 22.56% $28,347,537 24.43%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 1 0.75% $83,028 0.07%
Non-minority Males 90 67.67% $82,475,933 71.07%
TOTAL 133 100.00% $116,046,433 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 1 0.75% $338,000 0.29%
African American Males 3 2.26% $290,658 0.25%
Asian American Females 2 1.50% $1,642,836 1.42%
Asian American Males 6 4.51% $2,868,441 2.47%
Hispanic American Females 0 0.00% $0 0.00%
Hispanic American Males 30 22.56% $28,347,537 24.43%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 1 0.75% $83,028 0.07%
Non-minority Males 90 67.67% $82,475,933 71.07%
TOTAL 133 100.00% $116,046,433 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 3 2.26% $1,980,836 1.71%
Minority Males 39 29.32% $31,506,636 27.15%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 42 31.58% $33,487,472 28.86% Woman Business Enterprises 4 3.01% $2,063,864 1.78%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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2. Architectural and Engineering Prime Contract Utilization: Contracts Valued between $50,000 and $790,000
Table 1.28 lists all prime contract dollars expended by the City on architectural and engineering prime contracts valued between $50,000 and $790,000. MBEs received 20.62% , WBEs received 22.43% , and non- M/WBEs received 65.68% of the architectural and engineering prime contract dollars.
African Americans received none of the architectural and engineering prime contracts valued between $50,000 and $790,000 awarded during the study period.
Asian Americans received 10, or 17.24% of the architectural and engineering prime contracts valued between $50,000 and $790,000 awarded during the study period, representing $1,876,170, or 16.56% of the architectural and engineering prime contract dollars.
Hispanic Americans received 3, or 5.17% of the architectural and engineering prime contracts valued between $50,000 and $790,000 awarded during the study period, representing $460,130, or 4.06% of the architectural and engineering prime contract dollars.
Native Americans received none of the architectural and engineering prime contracts valued between $50,000 and $790,000 awarded during the study period.
Caucasian Females received 9, or 15.52% of the architectural and engineering prime contracts valued between $50,000 and $790,000 awarded during the study period, representing $1,551,600, or 13.70% of the architectural and engineering prime contract dollars.
Minority Females received 3, or 5.17% of the architectural and engineering prime contracts valued between $50,000 and $790,000 awarded during the study period, representing $989,110, or 8.73% of the architectural and engineering prime contract dollars.
Non-minority Males received 36, or 62.07% of the architectural and engineering prime contracts valued between $50,000 and $790,000 awarded during the study period, representing $7,440,384, or 65.68% of the architectural and engineering prime contract dollars.
Minority Business Enterprises received 13, or 22.41% of the architectural and engineering prime contracts valued between $50,000 and $790,000 awarded during the study period, representing $2,336,300, or 20.62% of the architectural and engineering prime contract dollars.
Woman Business Enterprises received 12, or 20.69% of the architectural and engineering prime contracts valued between $50,000 and $790,000 awarded during the study period, representing $2,540,710, or 22.43% of the architectural and engineering prime contract dollars.
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Table 1.28: Architectural and Engineering Prime Contract Utilization, Contracts Valued between $50,000 and $790,000, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f Contracts of Dollars of Dollars
African Americans 0 0.00% $0 0.00%
Asian Americans 10 17.24% $1,876,170 16.56%
Hispanic Americans 3 5.17% $460,130 4.06%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 9 15.52% $1,551,600 13.70%
Non-minority Males 36 62.07% $7,440,384 65.68%
TOTAL 58 100.00% $11,328,284 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 0 0.00% $0 0.00%
Asian American Females 3 5.17% $989,110 8.73%
Asian American Males 7 12.07% $887,060 7.83%
Hispanic American Females 0 0.00% $0 0.00%
Hispanic American Males 3 5.17% $460,130 4.06%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 9 15.52% $1,551,600 13.70%
Non-minority Males 36 62.07% $7,440,384 65.68%
TOTAL 58 100.00% $11,328,284 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 3 5.17% $989,110 8.73%
Minority Males 10 17.24% $1,347,190 11.89%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 13 22.41% $2,336,300 20.62% Woman Business Enterprises 12 20.69% $2,540,710 22.43%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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3. Professional Services Prime Contract Utilization: Contracts Valued between $50,000 and $700,000
Table 1.29 lists all prime contract dollars expended by the City on professional services prime contracts valued between $50,000 and $700,000. MBEs received 18.90% , WBEs received
22.81%, and non-M/WBEs received 66.70% of the professional services prime contract dollars.
African Americans received 18, or 9.23% of the professional services prime contracts valued between $50,000 and $700,000 awarded during the study period, representing $3,407,173, or
8.69% of the professional services prime contract dollars.
Asian Americans received 12, or 6.15% of the professional services prime contracts valued between $50,000 and $700,000 awarded during the study period, representing $2,844,687, or
7.25% of the professional services prime contract dollars.
Hispanic Americans received 8, or 4.10% of the professional services prime contracts valued between $50,000 and $700,000 awarded during the study period, representing $1,161,556, or
2.96% of the professional services prime contract dollars.
Native Americans received none of the professional services prime contracts valued between $50,000 and $700,000 awarded during the study period.
Caucasian Females received 29, or 14.87% of the professional services prime contracts valued between $50,000 and $700,000 awarded during the study period, representing $5,650,294, or
14.40% of the professional services prime contract dollars.
Minority Females received 20, or 10.26% of the professional services prime contracts valued between $50,000 and $700,000 awarded during the study period, representing $3,296,568, or
8.40% of the professional services prime contract dollars.
Non-minority Males received 128, or 65.64% of the professional services prime contracts valued between $50,000 and $700,000 awarded during the study period, representing $26,164,563, or 66.70% of the professional services prime contract dollars.
Minority Business Enterprises received 38, or 19.49% of the professional services prime contracts valued between $50,000 and $700,000 awarded during the study period, representing $7,413,416, or 18.90% of the professional services prime contract dollars.
Woman Business Enterprises received 49, or 25.13% of the professional services prime contracts valued between $50,000 and $700,000 awarded during the study period, representing $8,946,862, or 22.81% of the professional services prime contract dollars.
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Table 1.29: Professional Services Prime Contract Utilization, Contracts Valued between $50,000 and $700,000, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f Contracts of Dollars of Dollars
African Americans 18 9.23% $3,407,173 8.69%
Asian Americans 12 6.15% $2,844,687 7.25%
Hispanic Americans 8 4.10% $1,161,556 2.96%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 29 14.87% $5,650,294 14.40%
Non-minority Males 128 65.64% $26,164,563 66.70%
TOTAL 195 100.00% $39,228,272 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 11 5.64% $2,081,180 5.31%
African American Males 7 3.59% $1,325,993 3.38%
Asian American Females 1 0.51% $53,832 0.14%
Asian American Males 11 5.64% $2,790,855 7.11%
Hispanic American Females 8 4.10% $1,161,556 2.96%
Hispanic American Males 0 0.00% $0 0.00%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 29 14.87% $5,650,294 14.40%
Non-minority Males 128 65.64% $26,164,563 66.70%
TOTAL 195 100.00% $39,228,272 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 20 10.26% $3,296,568 8.40%
Minority Males 18 9.23% $4,116,848 10.49%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 38 19.49% $7,413,416 18.90% Woman Business Enterprises 49 25.13% $8,946,862 22.81%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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4. Goods and Services Prime Contract Utilization: Contracts Valued between $50,000 and $590,000
Table 1.30 lists all prime contract dollars expended by the City on goods and services prime contracts valued between $50,000 and $590,000. MBEs received 11.43% , WBEs received
7.02%, and non-M/WBEs received 83.97% of the goods and services prime contract dollars.
African Americans received 7, or 1.58% of the goods and services prime contracts valued between $50,000 and $590,000 awarded during the study period, representing $1,089,921, or
1.49% of the goods and services prime contract dollars.
Asian Americans received 32, or 7.22% of the goods and services prime contracts valued between $50,000 and $590,000 awarded during the study period, representing $4,737,914, or
6.48% of the goods and services prime contract dollars.
Hispanic Americans received 19, or 4.29% of the goods and services prime contracts valued between $50,000 and $590,000 awarded during the study period, representing $2,531,970, or
3.46% of the goods and services prime contract dollars.
Native Americans received none of the goods and services prime contracts valued between $50,000 and $590,000 awarded during the study period.
Caucasian Females received 23, or 5.19% of the goods and services prime contracts valued between $50,000 and $590,000 awarded during the study period, representing $3,368,223, or
4.60% of the goods and services prime contract dollars.
Minority Females received 16, or 3.61% of the goods and services prime contracts valued between $50,000 and $590,000 awarded during the study period, representing $1,769,001, or
2.42% of the goods and services prime contract dollars.
Non-minority Males received 362, or 81.72% of the goods and services prime contracts valued between $50,000 and $590,000 awarded during the study period, representing $61,442,867, or
83.97% of the goods and services prime contract dollars.
Minority Business Enterprises received 58, or 13.09% of the goods and services prime contracts valued between $50,000 and $590,000 awarded during the study period, representing $8,359,805, or 11.43% of the goods and services prime contract dollars.
Woman Business Enterprises received 39, or 8.80% of the goods and services prime contracts valued between $50,000 and $590,000 awarded during the study period, representing $5,137,224, or 7.02% of the goods and services prime contract dollars.
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Table 1.30: Goods and Services Prime Contract Utilization, Contracts Valued between $50,000 and $590,000, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts o f Contracts of Dollars of Dollars
African Americans 7 1.58% $1,089,921 1.49%
Asian Americans 32 7.22% $4,737,914 6.48%
Hispanic Americans 19 4.29% $2,531,970 3.46%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 23 5.19% $3,368,223 4.60%
Non-minority Males 362 81.72% $61,442,867 83.97%
TOTAL 443 100.00% $73,170,896 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 4 0.90% $482,223 0.66%
African American Males 3 0.68% $607,698 0.83%
Asian American Females 2 0.45% $345,890 0.47%
Asian American Males 30 6.77% $4,392,024 6.00%
Hispanic American Females 10 2.26% $940,889 1.29%
Hispanic American Males 9 2.03% $1,591,082 2.17%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 23 5.19% $3,368,223 4.60%
Non-minority Males 362 81.72% $61,442,867 83.97%
TOTAL 443 100.00% $73,170,896 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 16 3.61% $1,769,001 2.42%
Minority Males 42 9.48% $6,590,804 9.01%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 58 13.09% $8,359,805 11.43% Woman Business Enterprises 39 8.80% $5,137,224 7.02%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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V. Conclusion
The City awarded $486,705,907 prime contract dollars from July 1, 2016 to June 30, 2021. The $486,705,907 expended included $214,636,848 for construction, $28,586,595 for architectural and engineering, $78,883,345 for professional services, and $164,599,118 for goods and services. A total of 2,264 prime contracts were analyzed, which included 191 for construction, 112 for architectural and engineering, 457 for professional services, and 1,504 for goods and services.
The analysis revealed that 27 prime contractors received $244,765,900, or 50% of the total prime contract dollars awarded in the four industries. The concentration of prime contract dollars with a small number of contractors indicates that most of the City's prime contract dollars were controlled by a relatively few businesses and, in turn, most of the subcontracts were awarded by the few prime contractors.
A. Discretionary Procurement Processes
Standards in the City’s procurement process allow the discretionary award of contracts with limited or no competition. These standards have contributed to the concentration of prime contract dollars with a small number of contractors. The most significant standards are the on- call, emergency, and cooperative procurements . In addition, there is the practice of the City Council authorizing departments to make awards without complying with the formal competitive selection process.
1. On-Call Contracts
The City may, under its discretion and when deemed by the City Administrator to be in its best interest, establish a list of pre -qualified businesses for on -call contracts to perform as needed and specified construction work valued at over $250,000. The City may also establish a list of pre-qualified businesses to perform on-call construction work valued at less than $250,000.
The City advertises a request for qualifications to create an on-call list. The request is advertised without a defined scope of work. Contractors are selected from the pre-qualified list at the time a scope of work is defined.
There were 180 contracts in the Oracle f inancial system identified as on- call contracts, and these were awarded to 111 prime contractors. The 111 on-call contractors were paid a total of $75,959,148. On-call contracts represented 15.61% of the total awards for the study period.
Only 79 of the contractors were local businesses, and 44 were M/WBEs . The M/WBEs received 22.84% of the total on-call contract dollar awards.
2. Emergency Contracts
In a situation deemed by the City Administrator to be an emergency for the immediate preservation of the public peace, health, or safety, the City Administrator may authorize an emergency contract. Emergency contracts are awarded without advertising or authorization by the City Council.
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A total of 125 contracts in the Oracle financial system were identified as emergency contracts.
During the study period, payments were made to 83 prime contractors under an emergency contract totaling $45,984,590. Emergency purchases represented 9.45% of the total awards for the study period. Only 29 of the contractors were local businesses, and 16 were M/WBEs. The M/WBEs received 29.07% of the total emergency contract dollar awards.
3. Cooperative Agreements
The City’s cooperative agreement policy allows departments to award contracts to businesses using agreements executed by another entity that employs procurement standards similar to Oakland. These awards are made without a competitive process.
The Oracle financial system identified 686 contracts as cooperative agreements. Payments totaling $116,503,288 were made to 300 prime contractors under a cooperative agreement during the study period. Cooperative agreements represented 23.94% of the total awards for the study period. Only 67 of the contractors were local businesses, and 43 were M/WBEs.
Local businesses were awarded 25.95% of the cooperative agreements and 21.61% of the dollars. The M/WBEs received 8.86% of the total cooperative agreement dollar awards.
4. Mitigation Measures
In sum, the City awarded 39.75% of its contracts and 40.26% of total dollar awards using a discretionary procurement process.
Measures exist that could mitigate the adverse impacts resulting from policies that limit the number of competitively bid contracts . The number of bidders is no doubt adversely affected by the City’s long- standing practice of issuing large, multi -year contracts and contract modifications for new services without competition. The analysis of highly used contractors performed in this disparity study indicates that only a few contractors have received most of the contract dollars for both large and small contracts. This trend is a deterrent to potential bidders who do not have relationships with department managers and any reason to assume a discretionary award would be received. Unbundling large contracts and advertising in smaller, more manageable components would align with small and local businesses ’ capability and capacity.
Restructuring the on-call contracting process could increase the utilization of small businesses.
Limiting the assignment of small contracts to businesses on a small contract rotation list would maximize the participation of small businesses on small contracts. Pre-qualification of this list could be done through an RFQ process that sets the qualification requirements commensurate with the size of the contracts in the program. A Small Contract Rotation Program would award informal contracts to small businesses on a rotational basis. Each specialty within construction, architectural and engineering, and professional services would have its own pre-qualified list.
Pre-qualified small businesses would be placed automatically on the rotation list according to their certification date and specialty. Businesses with the same certification date, industry, and specialty would be placed alphabetically, according to the owner’s last name.
Limiting the use of cooperative agreements should also increase the participation of local and M/WBE businesses on City contracts. Posting solicitation s with local trade organizations, advertising opportunities in ethnic media, and sending notice s to certified businesses offering
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the same or similar services before executing a cooperative agreement would provide more opportunities to local business es and could limit the use of cooperative agreements. A notice of the opportunity released no less than six weeks prior to the solicitation of a cooperative agreement could also reduce the need for cooperative agreements. Compliance with the City’s subcontracting goals should be required when a cooperative agreement is authorized.
B. Summary of Policies and Practices to Maximize the Utilization of Local Businesses
Government agencies in multi -racial urban centers employ numerous best procurement and contracting practices to facilitate the utilization of minority, woma n-owned, and small businesses. These practices are generally supported by policies intended to diversify the pool of certified vendors, remove barriers to utilize new businesses, increase the number of bids and proposals submitted, and mandate transparency in contracting. The implementation of these policies is generally prompted by a disparity study whi ch documented statistically significant underutilization in contracts awarded to M/WBEs. Given the disparity in the City’s award of prime contracts and its prime contractors’ utilization of M/WBEs during the 2016 to 2021 study period, the City’s considerat ion of the best practices of other government entities seems warranted. A summary of best practices that seem most relevant given the findings from the City’s current disparity study are discussed below.
1. Annual Contract Forecast
Contract forecasting, used to inform businesses about potential contracting opportunities early in the procurement process, can increase and diversify the pool of bidders. Federal executive agencies use forecasting platforms to allow businesses to view contract opportunities before the formal requirements are posted. The Forecast Tool
7 is used by the U.S. General Services
Administration. This tool posts a searchable list of anticipated federal contracting opportunities for the current and future fiscal years. Local governments post the forecasts on their website, and some distribute them directly to their registered vendors.
An annual contract forecast prepared by each department identifying upcoming solicitations for a 12 to 24- month period could allow more local businesses timely notice of anticipated contract opportunities. The forecast could be published on the City’s website and emailed to certified businesses, registered vendors, and professional and trade associations.
2. Diverse Selection Panel Membership
A diverse selection panel is a means to promote fair and equitable access for small, minority, and woman-owned businesses when the procurement is qualification-based. Portland, Oregon, reported in a June 28, 2012 publication8 that its diversity panel mandates each selection panel to have at least one minority evaluator in order to increase the award of professional services prime contracts to small, minority, and wom an-owned businesses. The report acknowledged that the award of contracts to M/WBEs and small businesses increased from 13.63% in 2008 to 15.12% in 2012. It also documented a surge of M/WBE subcontractors from 49.97% in 2008 to 80.74% in 2012. Portland, like Oakland, performed its first disparity study in the early 1990s.
7 The Forecast of Contracting Opportunities Tool, U.S. General Services Administration, Forecast of contracting opportunities | GSA.
8 Report to Mayor Sam Adams from Christine Moody, Chief Procurement Officer, City of Portland, Oregon, June 28,2012.
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Transparency, which is a good public policy and best practice, should govern the process. This policy would require panel members to sign their evaluation forms and the chairperson to publish the scores when the Notice of Intent to Award is issued.
3. Debriefing Sessions
Debriefing sessions, offered to all unsuccessful bidders, provide vital information to help small businesses prepare more competitive submittals that could enhance their capacity to be competitive. The City of Columbus, Ohio, in response to the findings in its 2019 Disparity Study, instituted post-award debriefings as a standard procedure and included the requirement in the City’s Minority and Women- owned Business Enterprise and Small Local Business Enterprise Program Manual.
9 Availability of the debriefing sessions could be published on the City’s website and included in the Notice of Intent to Award, which could be sent to all bidders before the contract is authorized for award. The procedures for scheduling a debriefing session and the timeframe for holding the meetings would need to be outlined in the s olicitation and the Notice of Intent to Award. If requested, the evaluators’ scores could be made available at the debriefing or beforehand.
4. Publication of Prime Contractor Payments
Regular and timely posting of prime contractor payments reduces the number of inquiries the government receives from both prime contractors and subcontractors regarding the payment of the prime contractor’s invoices. It also allows subcontractors to verify their prime contractor’s payments in real time. The City of Columbus, Ohio, requires prime contractor payments to be posted on a scheduled day(s) each month.
10 The City of Oakland has a Prompt Payment Policy, but there is no formal process to enable the subcontractors to verify the disbursement date in order to monitor their prime contractor’s compliance with the policy.
5. Invoice Dispute Resolution Process
Invoice disputes can be a source of delayed invoice payments to both the prime contractor and subcontractor. St Petersburg, Florida, has established a dispute resolution procedure based on the recommendations in its 2021 D isparity Study. These procedures outlined in the Procurement Operations Manual provide step- by-step instructions to resolve a dispute between the prime contractor and the City or its subcontractor. 11 9 Minority and Women-owned Business Enterprise and Small Local Business Enterprise Program Manual, April 2022, Office of Diversity and Inclusion, City of Columbus, Ohio, page 47.
10 Id. page 51.
11 The Procurement Operations Manual, Procurement and Supply Management Department, December 2021, the City of Saint Petersburg, Florida, page 8.
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The City of Oakland has an invoice dispute resolution policy that requires the City to notice its prime contractors within five days of receiving a disputed invoice.12 The contractor should be provided with a formal Invoice Dispute Notification detailing all disputed items. Undisputed invoice amounts should be paid in a timely manner, no later than 15 days after receipt. Disputed items should be resolved in a timely man ner and thereafter paid promptly. However, there is no process to monitor compliance.
6. Quarterly Utilization Reports
Regular utilization reports of all prime contracts and subcontracts awarded are necessary to track the utilization of M/WBEs. Publishing quarterly utilization reports is a standard practice used by various government agencies nationwide. The reports published on the website of the New York City Mayor’s Office of Contract services is an example of a comprehensive reporting process that summarizes prime contract and subcontract utilization data for City - certified M/WBEs.
13 7. Track Contract Award and Payment by Unique Contract Number
Tracking contract awards and payments by unique contract numbers is a best practice for ensuring efficient and transparent contract management. This method facilitates precise tracking, easy retrieval of contract data, and accountability.
The process of securing the City’s prime contract data for the statistical analysis evidenced the decentralized and fragmented management of contract data. The data in the Oracle system did not link task orders, work orders, and purchase orders to the master agreements, price agreements, or other contract documents used to authorize the order. For some purchase orders, information linking them to the authorizing agreement was embedded in the comments field instead of being recorded in the proper contract number field.
Capturing critical data in separate fields in the Oracle system would maintain a more comprehensive description of contracts. An input mask could be added to the data entry form, requiring all the contract numbers to be entered in the same format.
Furthermore, each vendor captured in the Oracle database should be issued an identification number, which is a unique identifier or vendor number assigned to each business when a required vendor registration form is prepared. The number should be uniquely linked to the vendor and included with the vendor’s name in all procurement and contracting transactions.
The vendors list should be updated every five years. The status of the vendor that does not renew could be marked inactive.
12 Oakland Municipal Code, Chapter 2.06 – Prompt Payment.
13 Mayor’s Office of Contract Services, New York City, M/WBE Reports | MOCS (nyc.gov).
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CHAPTER 2: Subcontractor Utilization
Analysis
I. Introduction
A disparity study, as required by City of Richmond v. J.A. Croson Co. (Croson) ,14 must document a local government’s utilization of available minority and woman- owned business enterprises (M/WBEs) as prime contractors and subcontractors. The objective of this chapter is to present the subcontractor utilization by ethnicity, gender, and industry in the construction, architectural and engineering, and professional services industries. The subcontracts examined were awarded by City of Oakland’s prime contractors during the July 1, 2016 to June 30, 2021 study period.
II. Data Sources
The collection of subcontract data was conducted in conjunction with the City . Prime contractors are required to list subcontractors on construction bid documents using Schedule R. Architectural and engineering, and professional services prime contractors are required to list subcontractors in their proposals using Schedule E.
Subcontract award data were extracted from the two schedules. An additional effort was made to verify the actual payments made to each listed subcontractor. This research was undertaken in cooperation with the City.
III. Data Collection Process
A. Subcontract Records from the City
The City provided prime contract bids and proposals awarded during the study period. The subcontract data were extracted from Schedule R, included in the bids, and Schedule E, included with the proposals. The subcontractor industry information reported on both schedules was evaluated as a source to determine the subcontractors’ six -digit NAICS code. There was no NAICS code information on the schedules and the required information was insufficient to classify the subcontracts according to a six- digit NAICS code. As a result, the subcontractors were assigned the same industry as the prime contractor.
Schedule R required the prime contractor to provide each listed construction subcontractor’s license number, type of work, company name, business address, telephone number, and award amount. For Schedule E, the prime contractor was required to include for each listed subcontractor the type of work, company name, address, telephone number, and percentage of project or work. The only industry-related information on the schedules was type of work. This information was insufficient to determine a six-digit NAICS code.
14 City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989).
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A total of 614 subcontractor records were reported on Schedules R and E and only 498 included an award amount. The schedules did not include payment data because they were produced at the time of the award.
There were 410 subcontractors listed on Schedule R documents, which were submitted by construction prime contractors, 136 reported on Schedule E documents submitted by architectural and engineering prime contractors, and 68 submitted by professional servic es prime contractors. Eight subcontracts were identified on one of the two schedules but without award or payment amounts. One schedule listed a subcontractor twice to perform two types of work. To determine the number of unique subcontracts, the types of work listed on the schedule to be performed by the same subcontractor was counted as one subcontract, which resulted in a total of 464 subcontracts.
B. Prime Contractor Expenditure Survey
A survey was conducted to collect subcontract payment data from prime contractors. The survey was emailed to prime contractors awarded either a construction prime contract or a professional services prime contract valued at $250,000 and over; or an archite ctural and engineering prime contract valued at $100,000 and over. Each prime contractor was asked to provide the name, award, and payment amount for each of their subcontractors. The survey was emailed to 133 prime contractors that submitted a Schedule R or E.
To maximize the response rate, each survey was accompanied by a letter from the City Administrator, requesting the prime contractor’s assistance. Mason Tillman made follow -up calls to each prime contractor to address any questions concerning the survey and encouraged the business to submit its subcontract payment records. Of the 133 prime contractors surveyed, seven completed the survey, and five responded and provided a total of 33 subcontractor records. Of the 33 records, 31 had both subcontractor award a nd payment amounts, one had subcontractors’ award amounts, and one had only the subcontractor payment amount. The surveyed prime contractors provided 25 new unique subcontracts which were added to the dataset for analysis.
C. Subcontract Data Analysis
The subcontract records Mason Tillman compiled from Schedules R and E and the prime expenditure survey were cleaned to remove duplicates. Once the data were cleaned, the ethnicity and gender of each subcontractor were verified through a combination of certification directories, internet research, and telephone surveys. The records were then appended to the relational database used to analyze the prime contract records. The analysis produced the subcontract utilization tables for the three industries. The subcontractor utilization analyzed by industry is presented below.
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IV. Subcontractor Utilization
A. All Subcontracts
As shown in Table 2.1, 489 subcontracts were analyzed. The subcontract data included records for 365 construction, 64 architectural and engineering, and 60 professional services subcontracts.
The total s ubcontract dollar amount analyzed was $42,937,441. Th is amount included $35,872,086 for construction, $5,025,729 for architectural and engineering, and $2,039,626 for professional services subcontracts.
Table 2.1: Subcontracts Awarded and Dollars Expended by Industry July 1, 2016 to June 30, 2021
Industry Total Number of
Subcontracts
Total Amount
Expended
Construction 365 $35,872,086
Architectural and Engineering 64 $5,025,729
Professional Services 60 $2,039,626
Total 489 $42,937,441
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B. Subcontracts by Industry
1. Construction Subcontracts
Table 2.2 lists the construction subcontracts awarded by the City ’s prime contractors. MBEs received 33.36%, WBEs received 14.09%, and n on-M/WBEs received 56.56% of the construction subcontract dollars during the study period.
African Americans received 10, or 2.74% of the construction subcontracts awarded during the study period, representing $755,675, or 2.11% of the construction subcontract dollars.
Asian Americans received 34, or 9.32% of the construction subcontracts awarded during the study period, representing $4,156,875, or 11.59% of the construction subcontract dollars.
Hispanic Americans received 44, or 12.05% of the construction subcontracts awarded during the study period, representing $6,716,937, or 18.72% of the construction subcontract dollars.
Native Americans received 5, or 1.37% of the construction subcontracts awarded during the study period, representing $337,564, or 0.94% of the construction subcontract dollars.
Caucasian Females received 22, or 6.03% of the construction subcontracts awarded during the study period, representing $3,615,420, or 10.08% of the construction subcontract dollars.
Minority Females received 6, or 1.64% of the construction subcontracts awarded during the study period, representing $1,440,597, or 4.02% of the construction subcontract dollars.
Non-minority Males received 250, or 68.49% of the construction subcontracts awarded during the study period, representing $20,289,615, or 56.56%, of the construction subcontract dollars.
Minority Business Enterprises received 93, or 25.48% of the construction subcontracts awarded during the study period, representing $11,967,051, or 33.36% of the construction subcontract dollars.
Woman Business Enterprises received 28, or 7.67% of the construction subcontracts awarded during the study period, representing $5,056,017, or 14.09% of the construction subcontract dollars.
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Table 2.2: Construction Subcontractor Utilization
July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 10 2.74% $755,675 2.11%
Asian Americans 34 9.32% $4,156,875 11.59%
Hispanic Americans 44 12.05% $6,716,937 18.72%
Native Americans 5 1.37% $337,564 0.94%
Caucasian Females 22 6.03% $3,615,420 10.08%
Non-minority Males 250 68.49% $20,289,615 56.56%
TOTAL 365 100.00% $35,872,086 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 1 0.27% $675 0.00%
African American Males 9 2.47% $755,000 2.10%
Asian American Females 1 0.27% $800,000 2.23%
Asian American Males 33 9.04% $3,356,875 9.36%
Hispanic American Females 3 0.82% $579,922 1.62%
Hispanic American Males 41 11.23% $6,137,016 17.11%
Native American Females 1 0.27% $60,000 0.17%
Native American Males 4 1.10% $277,564 0.77%
Caucasian Females 22 6.03% $3,615,420 10.08%
Non-minority Males 250 68.49% $20,289,615 56.56%
TOTAL 365 100.00% $35,872,086 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 6 1.64% $1,440,597 4.02%
Minority Males 87 23.84% $10,526,455 29.34%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 93 25.48% $11,967,051 33.36% Woman Business Enterprises 28 7.67% $5,056,017 14.09%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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2. Architectural and Engineering Subcontracts
Table 2.3 lists the architectural and engineering subcontracts awarded by the City’s prime contractors. MBEs received 10.75% , WBEs received 11.05% , and non -M/WBEs received
80.49% of the architectural and engineering subcontract dollars during the study period.
African Americans received 3, or 4.69% of the architectural and engineering subcontracts awarded during the study period, representing $117,815, or 2.34% of the architectural and engineering subcontract dollars.
Asian Americans received 5, or 7.81% of the architectural and engineering subcontracts awarded during the study period, representing $385,319, or 7.67% of the architectural and engineering subcontract dollars.
Hispanic Americans received 2, or 3.13% of the architectural and engineering subcontracts awarded during the study period, representing $37,000, or 0.74% of the architectural and engineering subcontract dollars.
Native Americans received none of the architectural and engineering subcontracts awarded during the study period.
Caucasian Females received 10, or 15.63% of the architectural and engineering subcontracts awarded during the study period, representing $440,579, or 8.77% of the architectural and engineering subcontract dollars.
Non-minority Males received 44, or 68.75% of the architectural and engineering subcontracts awarded during the study period, representing $4,045,016, or 80.49% of the architectural and engineering subcontract dollars.
Minority Females received 2, or 3.13% of the architectural and engineering subcontracts awarded during the study period, representing $115,000, or 2.29% of the architectural and engineering subcontract dollars.
Minority Business Enterprises received 10, or 15.63% of the architectural and engineering subcontracts awarded during the study period, representing $540,134, or 10.75% of the architectural and engineering subcontract dollars.
Woman Business Enterprises received 12, or 18.75% of the architectural and engineering subcontracts awarded during the study period, representing $555,579, or 11.05% of the architectural and engineering subcontract dollars.
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Table 2.3: Architectural and Engineering Subcontractor Utilization July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 3 4.69% $117,815 2.34%
Asian Americans 5 7.81% $385,319 7.67%
Hispanic Americans 2 3.13% $37,000 0.74%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 10 15.63% $440,579 8.77%
Non-minority Males 44 68.75% $4,045,016 80.49%
TOTAL 64 100.00% $5,025,729 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 1 1.56% $90,000 1.79%
African American Males 2 3.13% $27,815 0.55%
Asian American Females 0 0.00% $0 0.00%
Asian American Males 5 7.81% $385,319 7.67%
Hispanic American Females 1 1.56% $25,000 0.50%
Hispanic American Males 1 1.56% $12,000 0.24%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 10 15.63% $440,579 8.77%
Non-minority Males 44 68.75% $4,045,016 80.49%
TOTAL 64 100.00% $5,025,729 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 2 3.13% $115,000 2.29%
Minority Males 8 12.50% $425,134 8.46%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 10 15.63% $540,134 10.75% Woman Business Enterprises 12 18.75% $555,579 11.05%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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3. Professional Services Subcontracts
Table 2.4 lists the professional services subcontracts awarded by the City’s prime contractors.
MBEs received 13.11%, WBEs received 26.26%, and non-M/WBEs received 61.94% of the professional services subcontract dollars during the study period.
African Americans received 1, or 1.67% of the professional services subcontracts awarded during the study period, representing $6,376, or 0.31% of the professional services subcontract dollars.
Asian Americans received 7, or 11.67% of the professional services subcontracts awarded during the study period, representing $175,620, or 8.61% of the professional services subcontract dollars.
Hispanic Americans received 3, or 5.00% of the professional services subcontracts awarded during the study period, representing $85,500, or 4.19% of the professional services subcontract dollars.
Native Americans received none of the professional services subcontracts awarded during the study period.
Caucasian Females received 14, or 23.33% of the professional services subcontracts awarded during the study period , representing $508,855, or 24.95% of the professional services subcontract dollars.
Minority Females received 3, or 5.00% of the professional services subcontracts awarded during the study period, representing $26,716, or 1.31% of the professional services subcontract dollars.
Non-minority Males received 35, or 58.33% of the professional services subcontracts awarded during the study period, representing $1,263,275, or 61.94% of the professional services subcontract dollars.
Minority Business Enterprises received 11, or 18.33% of the professional services subcontracts awarded during the study period, representing $267,496, or 13.11% of the professional services subcontract dollars.
Woman Business Enterprises received 17, or 28.33% of the professional services subcontracts awarded during the study period, representing $535,571, or 26.26% of the professional services subcontract dollars.
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Table 2.4: Professional Services Subcontractor Utilization July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 1 1.67% $6,376 0.31%
Asian Americans 7 11.67% $175,620 8.61%
Hispanic Americans 3 5.00% $85,500 4.19%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 14 23.33% $508,855 24.95%
Non-minority Males 35 58.33% $1,263,275 61.94%
TOTAL 60 100.00% $2,039,626 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 1 1.67% $6,376 0.31%
African American Males 0 0.00% $0 0.00%
Asian American Females 1 1.67% $20,000 0.98%
Asian American Males 6 10.00% $155,620 7.63%
Hispanic American Females 1 1.67% $340 0.02%
Hispanic American Males 2 3.33% $85,160 4.18%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 14 23.33% $508,855 24.95%
Non-minority Males 35 58.33% $1,263,275 61.94%
TOTAL 60 100.00% $2,039,626 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 3 5.00% $26,716 1.31%
Minority Males 8 13.33% $240,780 11.81%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 11 18.33% $267,496 13.11% Woman Business Enterprises 17 28.33% $535,571 26.26%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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V. Conclusion
A total of 489 subcontracts, valued at $42,937,441, were analyzed. Most of the subcontracts were awarded by the 27 prime contractors that received 50% of the prime contract dollars the City of Oakland awarded . The subcontract utilization findings show that most subcontracts were awarded to non-M/WBE subcontractors that were not located in Oakland.
The City has no policy requiring prime contractors to use subcontractors. When subcontractors are used, prime contractors are required to report the award amount on one of two schedules— Schedule R for construction and Schedule E for professional services contracts. While the schedules require listing subcontractor award amounts, there is no process to ensure that each subcontractor’s award amounts are listed. Furthermore, there is no process to track the actual utilization of the listed subcontractors. There is a requirement for the City to withhold prime contractor payments if a subcontractor has not been paid; however, no process tracks subcontractor payments.
Most governments with an interest in maximizing the participation of businesses in their jurisdiction encourage and require the utilization of subcontractors. Best practices have been employed by these entities to increase prime contractors’ utilization of local, small, minority and woman-owned subcontractors.
1. Establish Subcontractor Utilization Policy
A subcontractor utilization policy is a standard used by local governments throughout the country to encourage the utilization of subcontractors within their jurisdictions. While the scope of the policies varies, the minimal standard usually includes setting subcontracting goals on solicitations for construction and professional services contracts. Governments that have completed a disparity study, as a rule, set the goals based on documented availability of the ethnic and gender groups with a disparity. The City of Columbus, Ohio, for example, in its Minority and Women-Owned Business Enterprise & Small Local Business Enterprise Program Manual, sets contract-specific goals based on step-by-step instructions. 15 The set goals are then
monitored through the reporting requirements set forth in the general contract terms and conditions.
2. Subcontract Goal Attainment Documentation at Bid Opening
Requiring documentation of subcontracting goal attainment at bid opening is a best practice to ensure the integrity of the subcontracting policy. Compliance with the subcontract goal requirement is enhanced when the requirement is a factor in determining a bidder’s responsiveness.
3. Subcontractors’ Commercially Useful Function Verification
The determination that the subcontractors can perform a commercially useful function at the time of bid opening is another best practice used to ensure the integrity of the subcontractor contracting program. Subcontractors must perform a distinct element of work and possess the
15 Minority and Women-owned Business Enterprise and Small Local Business Enterprise Program Manual, April 2022, Office of Diversity and Inclusion, City of Columbus, Ohio, page 27.
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skills, expertise, and responsibility for managing and supervising the work to deem it commercially useful. The commercially useful function requirement usually applies to all procurement activity, including change orders, substitutions, and task orders.
4. Subcontractor Substitution Standards Process
The use of a subcontractor substitution policy is a standard employed in most government contracts, although frequently it does not involve a due process clause and is generally not applied uniformly across the contracting units. For example, subcontractor substitution standards have been established by the City of Columbus in its Minority and Women- Owned Business Enterprise & Small Local Business Enterprise Program Manual . 16 The policy
includes a due process provision for both prime contractors and subcontractors.
Under the City of Columbus program, s ubstituting an M/WBE listed on a prime contract requires written approval of the awarding department and Office of Diversity and Inclusion.
The subcontractor must be afforded a hearing to present its written or oral statement of the facts. The hearing should be held within 48 hours of receiving a written request for substitution.
Attempts to mediate the dispute prior to the hearing could be made as well. If the substitution is granted, the substituted M/WBE could be replaced with another M/WBE with approval.
5. Subcontractor Mobilization Payments
Mobilization payments constitute a standard practice used by agencies to mitigate the adverse impact of the costs contractors incur to mobilize. Several governmental entities have extended their mobilization policy to include subcontractors, so that start -up costs for equipment, supplies, and other operations that must be performed in order to begin work on the project site are covered.
The Oakland Municipal Code under Section 2.06.050.A
17 authorizes mobilization payments to
subcontractors on construction projects . The mobilization payment is intended to cover site location costs, including equipment, supplies, trailers, and other operations that must be performed or costs incurred prior to beginning work on the project site. The Code, however, does not address procedures to pay mobilization fees to subcontractors nor does it include monitoring provisions to ensure that mobilization payments have been processed.
Procedures to pay mobilization fees to subcontractors are outlined in the City of Columbus ’ Minority and Women-Owned Business Enterprise & Small Local Business Enterprise Program Manual.
18 The policy requires prime contractors to release mobilization costs incurred by subcontractors when the subcontractor is directed to commence work.
16 Id., page 52.
17 Oakland Municipal Code, Section 2.06.050.A.
18 Minority and Women-owned Business Enterprise and Small Local Business Enterprise Program Manual, April 2022, Office of Diversity and Inclusion, City of Columbus, Ohio, page 52.
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6. Subcontractor Tracking
All subcontractor awards and payments should be tracked in a cloud-based system. The prime contractor should be required to set up a subcontractor profile in a web form before receiving the notice to proceed. The system sh ould require the prime contractor to report subcontractor payments and upload them to the system on a monthly basis. The system should require the subcontractor to verify receipt of the payment.
7. Subcontractor Monitoring
Monitoring subcontractor participation on prime contracts is a vital process for ensuring the integrity of the subcontractor utilization policy. A comprehensive subcontracting policy requires rigorous monitoring procedures to ensure that the participation of subcontractors is properly maintained.
The City of Columbus ’ Minority and Women- Owned Business Enterprise & Small Local Business Enterprise Program Manual provides monitoring and compliance procedures to ensure that prime contractors maintain the participation of listed subcontractors . 19 The City’s
Office of Diversity and Inclusion is authorized to monitor the prime contractors, subcontractors, suppliers, truckers, and vendors performing the contract and make site visits at any time, with or without notice.
19 Id., page 49.
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Chapter 3: Geographic Market Area Analysis
CHAPTER 3: Geographic Market Area
Analysis
I. Market Area Definition
A. Legal Criteria for Geographic Market Area
The Supreme Court’s decision in City of Richmond v. J.A. Croson Co. (Croson)20 held that programs established by local governments to set goals for the participation of minority-owned business enterprises (MBEs) in public contracting must be supported by evidence of past discrimination in the award of their contracts. Prior to the Croson decision, local agencies could implement race-conscious programs without developing a detailed public record to document the underutilization of MBEs in their award of contracts. Instead, they relied on widely recognized societal patterns of discrimination.21
Croson established that a local government could not rely on society- wide discrimination as the basis for a race- based program. Instead, a local government was required to identify discrimination within its own contracting jurisdiction.22 In Croson, the United States Supreme Court found the City of Richmond, Virginia’s MBE construction program to be unconstitutional because there was insufficient evidence of discrimination in the local construction market.
Croson was explicit in stating that the local construction market was the appropriate geographical area within which to perform the statistical comparisons of the availability of minority businesses to their utilization. The identification of the geographic market area is therefore particularly important because it establishes the parameters within which to conduct a disparity study.
B. Application of the Croson Standard
While Croson emphasized the importance of the geographic market area, it provided little assistance in defining its parameters. However, it is informative to review the Court’s definition of the City of Richmond, Virginia’s market area in the case. In discussing the geographic parameters within which the City of Richmond should have investigated the constitutional violation, the Court interchangeably used the terms “relevant market,” “Richmond construction industry,”
23 and “city’s construction industry.” 24 These terms were used to define the proper market for examining the existence of discrimination within the City. The Court’s interchangeable use of these terms lends support to a definition of geographic market area that coincides with the boundaries of a contracting jurisdiction.
20 City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989).
21 United Steelworkers v. Weber, 433 U.S. 193, 198, n. 1 (1979).
22 Croson, 488 U.S. at 497.
23 Id. at 500.
24 Id. at 470.
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An analysis of the cases following Croson reveals a pattern that provides additional guidance for defining the geographic market area. The body of cases examining a reasonable geographic market area definition employs a fact-based method, rather than one dictated by a specific formula.25 For example, i n Cone Corporation v. Hillsborough County ,26 the United States Eleventh Circuit Court of Appeals considered a study in support of Hillsborough County, Florida’s MBE Program, which used minority contractors located in Hillsborough County as the measure of available businesses . The program was found to be constitutional under the compelling governmental interest element of the strict scrutiny standard.
Hillsborough County’s program was based on statistics indicating that specific discrimination existed in the award of construction contracts by Hillsborough County, not in the construction industry in general. Hillsborough County extracted data from businesses within its own jurisdictional boundaries and assessed the percentage of minority construction businesses available in the county. The Court stated that the disparity study was properly conducted within the “local construction industry.”27
Similarly, in Associated General Contractors v. Coalition for Economic Equity (AGCCII) ,28 the United States Ninth Circuit Court of Appeals found the City and County of San Francisco, California’s MBE Program to have the factual predicate necessary to survive strict scrutiny.
The San Francisco MBE Program was supported by a study that assessed the number of available MBE contractors within the City and County of San Francisco. The Court found it appropriate to use the City and County of San Francisco’s jurisdictional boundaries as the relevant market area within which to conduct a disparity study. 29 In Coral Construction v. King County , the United States Ninth Circuit Court of Appeals held that “a set-aside program is valid only if actual, identifiable discrimination has occurred within the local industry affected by the program.”
30 In support of its MBE program, King County,
Washington, offered studies compiled by other jurisdictions, including entities completely within the c ounty, others coterminous with the boundaries of the c ounty, as well as a jurisdiction completely outside of the county. The plaintiffs contended that Croson required King County to compile its own data and cited Croson as prohibiting data sharing.
The Court found that data sharing could potentially lead to the improper use of societal discrimination data as the factual basis for a local MBE program and that innocent third parties could be unnecessarily burdened if an MBE program was based on outside data. However, the Court also found that the data from entities within King County and from coterminous jurisdictions were relevant to discrimination in the County and that the data posed no risk of unfairly burdening innocent third parties.
25 See e.g., Concrete Works of Colorado v. City of Denver, Colorado, 36 F.3d 1513, 1528 (10th Cir. 1994) (“Concrete Works”).
26 Cone Corporation v. Hillsborough County, 908 F.2d 908 (11th Cir. 1990).
27 Cone, 908 F.2d at 915.
28 Associated General Contractors of California v. Coalition for Economic Equity and City and County of San Francisco, 950 F.2d 1401 (9th Cir. 1991).
29 AGCCII, 950 F.2d at 1415.
30 Coral Construction Co. v. King County, 941 F.2d 910 (9th Cir. 1991).
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The Court concluded that data gathered by a neighboring county could not be used to support King County’s MBE program. The Court noted, “It is vital that a race-conscious program align itself as closely to the scope of the problem sought to be rectified by the governmental entity.
To prevent overbreadth, the enacting jurisdiction should limit its factual inquiry to the presence of discrimination within its own boundaries.”
31 However, the Court did note that the “world of
contracting does not conform itself neatly to jurisdictional boundaries.”32
Courts have approved a market area definition that extended beyond a jurisdiction’s geographic boundaries in other cases as well. In Concrete Works v. City and County of Denver (Concrete Works),
33 the United States Tenth Circuit Court of Appeals directly addressed the issue of whether extra-jurisdictional evidence of discrimination can be used to determine the “local market area” for a disparity study. In Concrete Works , the defendant relied on evidence of discrimination in the six -county Denver, Colorado Metropolitan Statistical Area ( Denver MSA) to support its MBE program. Plaintiffs argued that the federal constitution prohibited consideration of evidence beyond jurisdictional boundaries. The Court of Appeals disagreed.
Critical to the Court’s acceptance of the Denver MSA as the relevant local market was the finding that more than 80% of construction and design contracts awarded by the City and County of Denver were awarded to contractors within the Denver MSA. Another consideration was that the City and County of Denver’s analysis was based on United States Census data, which was available for the Denver MSA but not for the City of Denver itself. The Court concluded that t here was no undue burden placed on nonculpable par ties, as the City and County of Denver had expended a majority of its construction contract dollars within the area defined as the local market. Citing AGCCII,
34 the Court noted “that any plan that extends race-
conscious remedies beyond territorial boundaries must be based on very specific findings that actions that the city has taken in the past have visited racial discrimination on such individuals.”
35 State and local governments must pay special attention to the geographical scope of their disparity studies. Croson determined that the statistical analysis should focus on the number of qualified minority business owners in the government’s marketplace. 36 The text of Croson
itself suggests that the geographical boundaries of a government entity comprise an appropriate market area, and other courts have agreed with this finding.
It follows then that an entity may limit consideration of discrimination to evidence occurring within its own jurisdiction.
II. Geographic Market Area Analysis
Although Croson and its progeny do not provide a bright line rule for the delineation of the geographic market area, taken collectively, the case law supports a definition of the market
31 Coral Construction Co. v. King County, 941 F.2d at 917.
32 Id.
33 Concrete Works, 36 F.3d at 1528.
34 AGCC II, 950 F.2d at 1401.
35 Concrete Works, 36 F.3d at 1528.
36 Croson, 488 U.S. at 501.
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Chapter 3: Geographic Market Area Analysis
area as the geographical boundaries of the government entity. A total of 58.15% of the City of Oakland’s total prime contract spending was within the City. More than 50% of the City’s total expenditures were spent on construction, and 91.91% of prime contract construction dollars were concentrated in the City. Thus, the Study’s market area based upon the underlying facts is determined to be the jurisdictional boundaries of the City of Oakland. The determination of the market area mirrors the economic realities of the City’s overall high percentage of the City’s expenditures concentrated within the jurisdictional boundaries of the City of Oakland.
A. Summary of the Distribution of All Prime Contracts Awarded
The City awarded 2,264 prime contracts valued at $486,705,907 during the July 1, 2016 to June 30, 2021 study period. The distribution of all prime contracts awarded, and dollars received by all firms domiciled inside and outside of the geographic market area is depicted below in Table 3.1.
Table 3.1: Distribution of All Contracts Awarded
City Number of
Contracts
Percent of
Contracts
Total
Dollars
Percent of
Dollars
Oakland 791 34.94% $283,032,890 58.15%
San Ramon 23 1.02% $12,689,103 2.61%
San Francisco 71 3.14% $10,313,935 2.12%
San Leandro 49 2.16% $10,124,251 2.08%
Pleasanton 32 1.41% $9,031,937 1.86%
Livermore 41 1.81% $8,033,945 1.65%
San Jose 38 1.68% $6,511,829 1.34%
Hayward 46 2.03% $6,145,380 1.26%
Berkeley 34 1.50% $3,932,325 0.81%
Foster City 13 0.57% $3,857,598 0.79%
Walnut Creek 12 0.53% $3,808,431 0.78%
Mountain View 3 0.13% $2,151,237 0.44%
Dixon 7 0.31% $2,109,238 0.43%
Cotati 2 0.09% $1,875,942 0.39%
Antioch 6 0.27% $1,699,850 0.35%
Alameda 24 1.06% $1,647,979 0.34%
Concord 23 1.02% $1,511,796 0.31%
Fairfield 5 0.22% $1,445,774 0.30%
Santa Clara 24 1.06% $1,384,132 0.28%
Milpitas 8 0.35% $1,270,759 0.26%
Fremont 19 0.84% $1,216,049 0.25%
Sunnyvale 13 0.57% $1,171,663 0.24%
Benicia 11 0.49% $1,136,107 0.23%
Emeryville 5 0.22% $1,042,356 0.21%
Richmond 15 0.66% $805,059 0.17%
Campbell 9 0.40% $529,432 0.11%
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City Number of
Contracts
Percent of
Contracts
Total
Dollars
Percent of
Dollars
El Sobrante 3 0.13% $487,726 0.10%
Newark 5 0.22% $467,932 0.10%
San Bruno 4 0.18% $368,814 0.08%
Martinez 2 0.09% $316,700 0.07%
Mill Valley 2 0.09% $312,968 0.06%
Vacaville 2 0.09% $307,063 0.06%
San Mateo 5 0.22% $303,368 0.06%
Burlingame 8 0.35% $301,215 0.06%
Stanford 2 0.09% $264,585 0.05%
Vallejo 8 0.35% $259,114 0.05%
Cupertino 10 0.44% $253,500 0.05%
Discovery Bay 6 0.27% $198,061 0.04%
Dublin 5 0.22% $182,644 0.04%
Union City 7 0.31% $146,532 0.03%
Petaluma 5 0.22% $131,195 0.03%
Lafayette 4 0.18% $125,057 0.03%
Danville 3 0.13% $122,731 0.03%
Brisbane 5 0.22% $117,275 0.02%
Los Gatos 2 0.09% $113,127 0.02%
Santa Rosa 3 0.13% $86,012 0.02%
Palo Alto 2 0.09% $54,755 0.01%
Albany 1 0.04% $49,900 0.01%
Castro Valley 3 0.13% $39,089 0.01%
Pittsburg 3 0.13% $32,741 0.01%
Redwood City 2 0.09% $31,600 0.01%
San Rafael 1 0.04% $18,545 0.00%
San Carlos 1 0.04% $13,273 0.00%
So. San Francisco 1 0.04% $11,450 0.00%
Hercules 2 0.09% $10,000 0.00%
Pleasant Hill 1 0.04% $8,986 0.00%
Pt Richmond 1 0.04% $8,603 0.00%
Out-of-Bay Area 397 17.54% $61,511,846 12.64%
Out-of-State 419 18.51% $40,465,115 8.31%
Out-of-Country 15 0.66% $1,105,387 0.23%
Total 2,264 100.00% $486,705,907 100.00%
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III. Summary
During the study period, the City awarded 2,264 prime contracts valued at $486,705,907. The City awarded 58.15% of prime contract dollars to businesses domiciled within the geographic market area.
Table 3.2 below presents an overview of the number of prime contracts the City awarded, and the dollars spent in the geographic market area.
Table 3.2: City of Oakland Contract Distribution
County Number of
Contracts
Percent of
Contracts
Total
Dollars
Percent of
Dollars
Combined Industries
Market Area 791 34.94% $283,032,890 58.15%
Outside Market Area 1,473 65.06% $203,673,017 41.85%
Total 2,264 100.00% $486,705,907 100.00%
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis
CHAPTER 4: Prime Contractor and
Subcontractor Availability
Analysis
I. Introduction
According to City of Richmond v. J.A. Croson Co. ( Croson), availability is defined as the number of businesses in the jurisdiction’s market area that are ready, willing, and able to provide the goods or services procured by the jurisdiction. 37 To determine the availability of
minority and woman-owned business enterprises38 (M/WBEs) and non-minority male-owned businesses (non-M/WBEs) within the jurisdiction’s market area, businesses domiciled within the market area need to be enumerated. As defined in Chapter 3: Geographic Market Area Analysis, the market area is the City of Oakland.
When considering sources to determine the number of available M/WBEs and non- M/WBEs in the market area, the selection must be based on whether two aspects about the businesses can be gauged from the sources. One consideration is a business’ s interest in contracting with the jurisdiction, as implied by the term “willing.” The other is the business’s ability or capacity to provide a service or good, as implied by the term “able.” The businesses available within the City met these criteria.
This study also required an identification of available M/WBEs and non-M/WBEs by six-digit North American Industry Classification System (NAICS) codes. As discussed in Chapter 1:
Prime Contractor Utilization Analysis, the classification of business es by a six- digit NAICS code requires relevant descriptive information about the businesses’ primary good or service.
The utilization data determines the type of business needed to enumerate in this availability analysis. The NAICS code limitations in the utilization data render the availability analysis of prime contractors and subcontractors by six-digit NAICS codes impractical.
II. Prime Contractor Availability Data Sources
A. Identification of Willing Market Area Businesses
To identify willing businesses in the City that provide construction, architectural and engineering, professional services, and goods and services the City procures , three main sources of information were used: (1) the City’s contract records including vendors lists , (2) government certification lists , and ( 3) association membership lists. The enumerated businesses determined to be willing and able were added to the availability database.
Businesses that provide goods or services in more than one industry a re listed separately in each industry.
37 City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989).
38 Hereinafter referred to as Minority and Caucasian female-owned businesses in the statistical tables.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis The three sources were ranked according to their reliability in determining a business’ s willingness to contract with the City. The highest rank was assigned to utilized businesses from the City’s Oracle database including vendors lists. The government certification lists ranked second, and association membership lists ranked third.
The first source used to build the availability database was the City’s utilized businesses and the vendors registered on the City’s B2Gnow and iSupplier platforms. The second source was businesses identified from federal and local government certification agencies. The third source was the list of businesses identified from trade organizations, professional organizations, and chambers of commerce that affirmed their willingness to do business with the City.
B. Prime Contractor Sources
Extensive targeted outreach to business associations in the market area was performed to identify and secure business membership directories. Table 4.1 lists the sources from which at least one willing market area business was identified.
Table 4.1: Prime Contractor Availability Data Sources
Source Type of Information
City of Oakland Sources
PO Detail Report 2016 M/WBE and Non-minority Male
PO Detail Report 2017-2021 M/WBE and Non-minority Male
B2GNow cloud-based application_2023-05-24 M/WBE and Non-minority Male iSupplier_2023-06-20 M/WBE and Non-minority Male
SLBE Certification Program_2022-09-09 M/WBE and Non-minority Male Government Certification Lists
Alameda County Small, Local and Emerging Business
Program M/WBE and Non-minority Male
California Department of Transportation Office of
Business & Economic Opportunity DBE Program M/WBE
City and County of San Francisco, Directory of LBE,
LBE-PUC, and NPE-Certified Firms M/WBE and Non-minority Male Contra Costa County SBE Directory M/WBE and Non-minority Male Port of Oakland Small Local Business Certification M/WBE and Non-minority Male U.S. Small Business Administration, Alameda County,
Service-Disabled Veteran-Owned Businesses M/WBE and Non-minority Male U.S. Small Business Administration, Alameda County,
Small Disadvantaged Businesses M/WBE
U.S. Small Business Administration, Alameda County,
Woman-owned Businesses M/WBE
U.S. Small Business Administration, Alameda County,
8(a) Business Development Program M/WBE
U.S. Small Business Administration, Alameda County,
HUBzone Program M/WBE and Non-minority Male
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Source Type of Information
Association Membership Lists
Alameda Chamber of Commerce M/WBE and Non-minority Male Albany Chamber of Commerce M/WBE and Non-minority Male
American Council of Engineering Companies, East
Bay Chapter M/WBE and Non-minority Male
American Institute of Architects M/WBE and Non-minority Male Association of Environmental Contractors M/WBE and Non-minority Male Association of Professional Landscape Designers,
Bay Area District M/WBE and Non-minority Male
Bay Area Business Women M/WBE
Bay Area Organization of Black Owned Businesses
Business Directory M/WBE
Bay Area Sheet Metal & Air Conditioning Contractors M/WBE and Non-minority Male Berkeley Chamber of Commerce M/WBE and Non-minority Male Builders Exchange of Alameda County M/WBE and Non-minority Male California Association of General Contractors M/WBE and Non-minority Male California Land Surveyors Association M/WBE and Non-minority Male California Landscape Contractors Association, East
Bay Chapter M/WBE and Non-minority Male
California Precast Concrete Association M/WBE and Non-minority Male Castro Valley Chamber of Commerce M/WBE and Non-minority Male Concrete Masonry Association of California and
Nevada M/WBE and Non-minority Male
Danville Area Chamber of Commerce M/WBE and Non-minority Male Dimond Business and Professional Association M/WBE and Non-minority Male Dublin Chamber of Commerce M/WBE and Non-minority Male
Finishing Contractors Association M/WBE and Non-minority Male Floor Covering Institute M/WBE and Non-minority Male
Fremont Chamber of Commerce M/WBE and Non-minority Male Golden Gate Business Association M/WBE and Non-minority Male Greater Concord Chamber of Commerce M/WBE and Non-minority Male Heartland Merchants Association M/WBE and Non-minority Male Hispanic Chamber of Commerce Alameda County M/WBE
Koreatown North Gate M/WBE
Livermore Chamber of Commerce M/WBE and Non-minority Male Martinez Chamber of Commerce M/WBE and Non-minority Male Masonry Institute of America M/WBE and Non-minority Male Moraga Chamber of Commerce M/WBE and Non-minority Male
National Association of Landscape Professionals M/WBE and Non-minority Male National Association of Women Business Owners M/WBE
National Electrical Contractors Association M/WBE and Non-minority Male National Fire Sprinkler Association, San Francisco
Bay Chapter M/WBE and Non-minority Male
Newark Chamber of Commerce M/WBE and Non-minority Male
Northern California Engineering Contractors
Association M/WBE and Non-minority Male
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Northern California Mechanical Contractors
Association M/WBE and Non-minority Male
Source Type of Information
Association Membership Lists
Oakland African Chamber of Commerce M/WBE
Oakland Business Services Organizations Listing M/WBE and Non-minority Male Oakland Chinatown Chamber of Commerce M/WBE
Oakland Vietnamese Chamber of Commerce - Little
Saigon Directory M/WBE
Pleasanton Chamber of Commerce M/WBE and Non-minority Male Plumbing Heating Cooling Contractors Association M/WBE and Non-minority Male Roofing Contractors Association of California M/WBE and Non-minority Male San Francisco Electrical Contractors Association, Inc. M/WBE and Non-minority Male San Leandro Chamber of Commerce M/WBE and Non-minority Male Sealant Waterproofing and Restoration Institute M/WBE and Non-minority Male South Asian Alameda County Business List M/WBE
Western Dredging Association M/WBE and Non-minority Male Western Suppliers Association M/WBE and Non-minority Male C. D
etermination of Willingness
F
rom the three categories of sources listed in Table 4.1, 2,837 unique market area businesses that provide goods or services in one or more of the four industries were identified. A total of 1,173 unique market area businesses were added to the availability database from the City’s records, 887 out of 1,173 were added from the vendor lists; 1,632 were added from the government certification lists; and 32 were added from the association membership lists.
D. D
istribution of Available Prime Contractors by Source,
Ethnicity, and Gender
Tables 4.2 through 4.5 present the distribution of willing prime contractors according to the three sources. The distribution of available businesses by source was also calculated for each industry. As noted in Table 4.2, 99.29% of the construction businesses identified were derived from the City’s contract records, government certification lists, and vendor s lists. The remaining 0.71% percent was derived from the business association membership lists.
T
able 4.2: Distribution of Prime Contractor Availability Data Sources: Construction Sources M/WBEs
Percentage
Non-M/WBEs
Percentage
Source
Percentage
Prime Contractor Utilization 10.82% 10.33% 10.54%
Government Certification Lists 25.54% 47.42% 38.39%
Vendors Lists 62.34% 41.95% 50.36%
Subtotal 98.70% 99.70% 99.29%
Association Membership Lists 1.30% 0.30% 0.71%
Subtotal 1.30% 0.30% 0.71%
Grand Total* 100.00% 100.00% 100.00%
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Table 4.3 lists the data sources for the available architectural and engineering prime contractors. As noted, 99.80% of the architectural and engineering businesses identified were derived from the City’s records, government certification lists, and vendors lists. The remaining
0.20% percent was derived from the business association membership lists.
T
able 4.3: Distribution of Prime Contractor Availability Data Sources:
Architectural & Engineering
Sources M/WBEs
Percentage
Non-M/WBEs
Percentage
Source
Percentage
Prime Contractor Utilization 15.24% 15.75% 15.54%
Government Certification Lists 34.76% 45.55% 41.04%
Vendors Lists 50.00% 38.36% 43.23%
Subtotal 100.00% 99.66% 99.80%
Association Membership Lists 0.00% 0.34% 0.20%
Subtotal 0.00% 0.34% 0.20%
Grand Total* 100.00% 100.00% 100.00%
*The percentages may not total 100 percent due to rounding T
able 4.4 lists the data sources for the available professional services prime contractors. As noted, 98.49% of the professional services businesses identified were derived from the City’s records, government certification lists, and vendor s lists. The remaining 1.51% percent w as derived from the business association membership lists.
T
able 4.4: Distribution of Prime Contractor Availability Data Sources:
Professional Services
Sources M/WBEs
Percentage
Non-M/WBEs
Percentage
Source
Percentage
Prime Contractor Utilization 13.99% 8.97% 10.80%
Government Certification Lists 44.80% 68.00% 59.56%
Vendors Lists 38.37% 22.27% 28.13%
Subtotal 97.16% 99.24% 98.49%
Association Membership Lists 2.84% 0.76% 1.51%
Subtotal 2.84% 0.76% 1.51%
Grand Total* 100.00% 100.00% 100.00%
*The percentages may not total 100 percent due to rounding T
able 4.5 lists the data sources for the available goods and services prime contractors. As noted,
99.33% of the goods and services businesses identified were derived from the City’s records, government certification lists, and vendor s lists. The remaining 0.67% percent w as derived from the business association membership lists.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis
Table 4.5: Distribution of Prime Contractor Availability Data Sources:
Goods and Services
Sources M/WBEs
Percentage
Non-M/WBEs
Percentage
Source
Percentage
Prime Contractor Utilization 14.29% 11.75% 12.56%
Government Certification Lists 45.45% 63.53% 57.74%
Vendors Lists 38.70% 24.48% 29.03%
Subtotal 98.44% 99.76% 99.33%
Association Membership Lists 1.56% 0.24% 0.67%
Subtotal 1.56% 0.24% 0.67%
Grand Total* 100.00% 100.00% 100.00%
*The percentages may not total 100 percent due to rounding
III. Capacity
The second component of the availability requirement set forth in Croson is the capacity or ability of a business to perform the contracts the jurisdiction awarded.39 Capacity requirements are not delineated in Croson, but capacity has been considered in subsequent cases.
Specifically, the Third Circuit held certification to be a valid method of defining availability. 40 In Contractors Association of Eastern Pennsylvania v. City of Philadelphia (Philadelphia), the court held that utilizing a list of certified contractors was a rational approach to identify qualified and willing firms.
41 The court stated “[a]n analysis is not devoid of probative value simply because it may theoretically be possible to adopt a more refined approach [of qualification].”
42 Capacity was also a subject of review in North Shore Concrete and Assoc., Inc. v. City of New York (North Shore ). 43 The plaintiff, North Shore Concrete and Associates, challenged the constitutionality of a New York City M/WBE program. Although the plaintiff made several arguments in challenging the disparity study, which was the predicate for the City’s race and gender-conscious program, an argument of note to the discussion of availability is the Court’s consideration of the plaintiff’s challenge regarding the capacity of available M/WBE firms.
The plaintiff asserted the disparity study considered all M/WBE construction firms with one employee other than the owner qualified to perform any type of construction work, thus overstating the number of qualified M/WBEs. North Shore rejected the plaintiff’s argument that the study overstated the number of available M/WBE firms because it did not take into consideration the number of employees to determine capacity. The North Shore court concluded that firm size was not a proper indicator of capacity in determining the pool of
39 Croson, 488 U.S. 469.
40 Contractors Ass’n of E. Pa., 91 F.3d at 603.
41 Contractors Ass’n of E. Pa., 91 F.3d at 603.
42 Id. at 603; see also, Concrete Works IV, 321 F.3d at 966 (noting a less sophisticated method to calculate availability does not render a disparity study flawed).
43 North Shore Concrete and Assoc., Inc. v. City of New York, No. 94-CV-4017, 1998 WL 273027 (E.D.N.Y. April 12, 1998).
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis available firms. The district court accepted the defendant’s argument that in construction it is easy to obtain “qualifications” by hiring additional employees. The court noted that the plaintiff, North Shore, is a small construction firm with an owner, one employee, and a secretary, that had bid on construction projects worth more than one million dollars.44
As noted in Philadelphia, “[t]he issue of qualifications can be approached at different levels of specificity[.]”
45 Researchers have attempted to define capacity using census data by profiling the age of the business, education of the business owner, business revenue, number of employees, and bonding limits. However, these conventional indices are themselves impacted by race and gender -based discrimination.
46 Furthermore, not only are the indices difficult to
measure, but capacity should not be artificially capped due to discrimination.
Given the requirement to assess capacity and the challenges to measure it, Mason Tillman uses five methods to compare the capacity of M/WBEs to similarly situated non -M/WBE businesses. These measures also control for the impact of race and gender discrimination on the capacity findings. The capacity measures as applied in this study include: (1) a review of the distribution of contracts to determine the size of the contracts that the City awarded, (2) the identification of the largest prime contracts the City awarded to M/WBEs, (3) an analysis of the frequency distribution of the City contracts awarded to M/WBEs and non- M/WBE firms, and (4) a threshold set on the size of the formal prime contracts in the disparity analysis in order to remove outliers that would skew the disparity findings. A capacity survey was conducted to produce a socioeconomic profile of M/WBEs and similarly situated non-minority male-owned businesses in the pool of available businesses. This survey solicited the age of the business, education of the business owner, business revenue, number of employees, and bonding limits. However, the capacity survey did not yield a sufficient response rate to draw any statistically valid conclusions.
A. Prime Contract Size Distribution
The City’s prime contracts were ordered according to the size of the award to determine the distribution of the awarded contacts. The distribution gauged the capacity required to perform the City’s contracts. In Table 4.6 and Chart 4.1, the distribution of the contract awards in the four industries were grouped into nine ranges
47 and are presented under the groupings of non-
minority females, non-minority males, minority females, and minority males.
The distribution revealed that 70.94% of all the prime contracts the City awarded were less than $100,000. Additionally, 85.16% were less than $250,000; 91.65% were less than $500,000; 95.54% were less than $1,000,000; and 99.16% were less than $3,000,000. Only
0.84% of the awarded prime contracts were valued at $3,000,000 and greater.
44 North Shore Concrete and Assoc., Inc. v. City of New York, No. 94-CV-4017, 1998 WL 273027 at *25 (E.D.N.Y. April 12, 1998).
45 Contractors Ass’n of E. Pa., 91 F.3d at 610.
46 Blanchflower, D.G., Levine, P.B., and Zimmerman, D.J. (2003). “Discrimination in the Small-Business Credit Market.” In: The Review of Economics and Statistics, 85(4). Cambridge, MA: MIT Press. Mason Tillman Associates also conducted a business capacity survey that is a statistical analysis of the socioeconomic profile of MWBE businesses in the market area. The capacity survey did no t elicit a sufficient response rate to draw any statistically valid conclusions.
47 The nine-dollar ranges are $0 - $4,999, $5,000 - $24,999, $25,000 - $49,999, $50,000 - $99,999, $100,000 - $249,999, $250,000 - $499,999, $500,000 - $999,999, $1,000,000 - $2,999,999, and $3,000,000 and greater.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Table 4.6: All Industry Contracts by Size
July 1, 2016 to June 30, 2021
*The percentages may not total 100 percent due to rounding.
C
hart 4.1: All Industry Contracts by Size
July 1, 2016 to June 30, 2021
T
he size of the City ’s prime contracts is a determinant of the capacity that a willing business needs to be competitive as a prime contractor. The finding that 70.94% of the City’s contracts are less than $100,000 illustrates that the capacity needed to perform a significant number of the City’s prime contracts is not considerable.
B. L
argest M/WBE Prime Contracts Awarded by Industry
T
able 4.7 shows that M/WBEs demonstrated capacity to perform contracts as large as $3,701,555 in construction, $2,540,000 in architectural and engineering, $2,486,666 in professional services, and $1,674,357 in goods and services . The size of the largest prime contract that the City awarded to M/WBEs illustrates there are M/WBEs with the capacity to perform substantial prime contracts.
Non-minority Minority
Females Males Females Males
Freq Percent Freq Percent Freq Percent Freq Percent Freq Percent Under $5,000 54 2.39% 303 13.38% 16 0.71% 22 0.97% 395 17.45% $5,000 - $24,999 59 2.61% 426 18.82% 33 1.46% 56 2.47% 574 25.35% $25,000 - $49,999 39 1.72% 272 12.01% 14 0.62% 32 1.41% 357 15.77% $50,000 - $99,999 23 1.02% 207 9.14% 17 0.75% 33 1.46% 280 12.37% $100,000 - $249,999 27 1.19% 242 10.69% 16 0.71% 37 1.63% 322 14.22% $250,000 - $499,999 13 0.57% 104 4.59% 7 0.31% 23 1.02% 147 6.49% $500,000 - $999,999 0 0.00% 75 3.31% 5 0.22% 8 0.35% 88 3.89% $1,000,000 - $2,999,999 3 0.13% 65 2.87% 1 0.04% 13 0.57% 82 3.62% $3,000,000 and greater 0 0.00% 18 0.80% 0 0.00% 1 0.04% 19 0.84% Total 218 9.63% 1,712 75.62% 109 4.81% 225 9.94% 2,264 100.00% Size Total
0.00%
10.00%
20.00%
Under
$5,000
$5,000 -
$24,999
$25,000 -
$49,999
$50,000 -
$99,999
$100,000 -
$249,999
$250,000 -
$499,999
$500,000 -
$999,999
$1,000,000 -
$2,999,999
$3,000,000
and greater
Caucasian Females
Non-minority Males
Minority Females
Minority Males
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Table 4.7: Largest Prime Contracts Awarded by City of Oakland to M/WBEs
Ethnic/Gender Group Construction Architectural and
Engineering
Professional
Services
Goods and
Services
African American Female $338,000 $948,191 ---- $180,000 African American Male $121,183 $316,140 $31,000 $449,715 Asian American Female $973,197 $53,832 $371,474 $796,124 Asian American Male $1,495,038 $2,540,000 $1,800,000 $790,305 Hispanic American Female ---- $435,169 $15,000 $1,674,357 Hispanic American Male $3,701,555 $32,200 $250,000 $495,489 Native American Female ---- ---- ---- $14,994
Native American Male ---- ---- ---- ----
Caucasian Female $83,028 $456,746 $2,486,666 $1,263,955 Largest Dollar Amounts
MBEs $3,701,555 $2,540,000 $1,800,000 $1,674,357
Largest Dollar Amounts
WBEs $973,197 $948,191 $2,486,666 $1,674,357
(-----) Denotes a group that was not awarded any contracts within the respective industry.
C. Frequency Distribution
The City’s formal contracts range from $50,044 to $25,220,897. A frequency distribution was calculated for the City’s prime contracts to illustrate the median, where the size of a contract marks the mid point between the smallest and largest contracts. The same distribution was calculated separately for M/WBEs and non-M/WBEs. Within each frequency distribution, the median, or center point, of the dataset was determined. As shown in Chart 4.2, the median of the City’s prime contracts for all industries wa s $168,445. This median marks the value at which 50% of contracts were above and 50% were below $168,445. The median prime contract awarded to M/WBEs was $158,412 while the median awarded to non-M/WBEs was $171,604.
Mood’s Median Test
48 was conducted to determine that these differences are not statistically significant.
48 Mood’s Median Test is a nonparametric test that tests the null hypothesis that the medians of the populations from which two or more samples are drawn are identical.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Chart 4.2: Median Contract Value
These statistics show only a $13,192 difference between the median of contracts performed by non-M/WBEs and by M/WBEs. These data illustrate that M/WBEs have comparable capacity to perform a significant number of the prime contracts awarded by the City.
D. Formal Contract Threshold Analysis
An additional capacity measure was applied to ensure that available businesses have the ability to perform the contracts analyzed in the disparity analysis . The prime contracts subject to the statistical analysis of disparity were defined by removing the outliers. As discussed in Chapter 1: Prime Contractor Utilization Analysis , the prime contract disparity analysis included all prime contracts except the outliers. The decision to eliminate outliers was made in order to reduce the business capacity requirements and to increase the reliability of the statistical findings.
E. Business Capacity Assessment
A capacity survey was administered to compile relevant measures to profile the available businesses and to determine the percentage of the M/WBEs that are similarly situated to non- M/WBEs. The survey included questions on the business owner’s ethnicity, gender, education, and years in business. A profile of the company was solicited with questions on gross revenue, bonding limits, number of employees, and maximum number of contracts performed at one time.
The survey was sent to the 2,837 market area prime contractors and subcontractors in the availability database. Only 39 businesses responded, which represented less than two percent of the surveyed population. The response was less than the number needed for a meaningful analysis.
In addition to the demonstration that M/WBEs have the capacity to perform very large contracts, there are other methods commonly used by prime contractors to increase capacity in $150,000
$152,000
$154,000
$156,000
$158,000
$160,000
$162,000
$164,000
$166,000
$168,000
$170,000
$172,000
Median M/WBE
Contract
Median All
Contract
Median Non-
M/WBE Contract
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis the presence of contracting opportunities . These methods include subcontracting, joint ventures, and staff augmentation. The capacity of M/WBEs to perform the City prime contracts analyzed in the disparity chapter is clearly documented in this chapter.
IV. Prime Contractor Availability Analysis
The prime contractor availability analysis is based on the 2,837 willing market area businesses enumerated from the availability sources described above. The availability of willing market area businesses is presented by ethnicity, gender, and industry in the sections below.
A. Construction Prime Contractor Availability
The distribution of available construction prime contractors is summarized in Table 4.8 below.
African Americans account for 19.11% of the construction prime contractors in the City’s market area.
Asian Americans account for 7.32% of the construction prime contractors in the City’s market area.
Hispanic Americans account for 8.93% of the construction prime contractors in the City’s market area.
Native Americans account for 0.18% of the construction prime contractors in the City’s market area.
Caucasian Females account for 5.71% of the construction prime contractors in the City’s market area.
Minority Females account for 5.18% of the construction prime contractors in the City’s market area.
Non-minority Males account for 58.75% of the construction prime contractors in the City’s market area.
Minority Business Enterprises account for 35.54% of the construction prime contractors in the City’s market area.
Woman Business Enterprises account for 10.89% of the construction prime contractors in the City’s market area.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Table 4.8: Available Construction Prime Contractors
July 1, 2016 to June 30, 2021
Percent
of Businesses
African Americans 19.11%
Asian Americans 7.32%
Hispanic Americans 8.93%
Native Americans 0.18%
Caucasian Females 5.71%
Non-minority Males 58. 75%
TOTAL 100.00%
Percent
of Businesses
African American Females 3.21%
African American Males 15.89%
Asian American Females 1.07%
Asian American Males 6.25%
Hispanic American Females 0.71%
Hispanic American Males 8.21%
Native American Females 0.18%
Native American Males 0.00%
Caucasian Females 5.71%
Non-minority Males 58.75%
TOTAL 100.00%
Percent
of Businesses
Minority Females 5.18%
Minority Males 30.36%
Percent
of Businesses
Minority Business Enterprises 35.54%
Woman Business Enterprises 10.89%
Minority and Females
Ethnicity
Ethnicity and Gender
Minority and Gender
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis B. Architectural and Engineering Prime Contractor Availability
The distribution of available architectural and engineering prime contractors is summarized in Table 4.9 below.
African Americans account for 8.96% of the architectural and engineering prime contractors in the City’s market area.
Asian Americans account for 14.94% of the architectural and engineering prime contractors in the City’s market area.
Hispanic Americans account for 5.18% of the architectural and engineering prime contractors in the City’s market area.
Native Americans account for none of the architectural and engineering prime contractors in the City’s market area.
Caucasian Females account for 12.75% of the architectural and engineering prime contractors in the City’s market area.
Minority Females account for 7.57% of the architectural and engineering prime contractors in the City’s market area.
Non-minority Males account for 58.17% of the architectural and engineering prime contractors in the City’s market area.
Minority Business Enterprises account for 29.08% of the architectural and engineering prime contractors in the City’s market area.
Woman Business Enterprises account for 20.32% of the architectural and engineering prime contractors in the City’s market area.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Table 4.9: Available Architectural and Engineering Prime Contractors July 1, 2016 to June 30, 2021
Percent
of Businesses
African Americans 8.96%
Asian Americans 14.94%
Hispanic Americans 5.18%
Native Americans 0.00%
Caucasian Females 12.75%
Non-minority Males 58. 17%
TOTAL 100.00%
Percent
of Businesses
African American Females 1.79%
African American Males 7.17%
Asian American Females 3.78%
Asian American Males 11.16%
Hispanic American Females 1.99%
Hispanic American Males 3.19%
Native American Females 0.00%
Native American Males 0.00%
Caucasian Females 12.75%
Non-minority Males 58.17%
TOTAL 100.00%
Percent
of Businesses
Minority Females 7.57%
Minority Males 21.51%
Percent
of Businesses
Minority Business Enterprises 29.08%
Woman Business Enterprises 20.32%
Minority and Females
Ethnicity
Ethnicity and Gender
Minority and Gender
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis C. Professional Services Prime Contractor Availability
The distribution of available professional services prime contractors is summarized in Table
4.10 below.
African Americans account for 12.59% of the professional services prime contractors in the City’s market area.
Asian Americans account for 8.46% of the professional services prime contractors in the City’s market area.
Hispanic Americans account for 3.92% of the professional services prime contractors in the City’s market area.
Native Americans account for 0.21% of the professional services prime contractors in the City’s market area.
Caucasian Females account for 11.21% of the professional services prime contractors in the City’s market area.
Minority Females account for 10.59% of the professional services prime contractors in the City’s market area.
Non-minority Males account for 63.62% of the professional services prime contractors in the City’s market area.
Minority Business Enterprises account for 25.17% of the professional services prime contractors in the City’s market area.
Woman Business Enterprises account for 21.80% of the professional services prime contractors in the City’s market area.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Table 4.10: Available Professional Services Prime Contractors July 1, 2016 to June 30, 2021
Percent
of Businesses
African Americans 12.59%
Asian Americans 8.46%
Hispanic Americans 3.92%
Native Americans 0.21%
Caucasian Females 11.21%
Non-minority Males 63. 62%
TOTAL 100.00%
Percent
of Businesses
African American Females 5.36%
African American Males 7.22%
Asian American Females 3.16%
Asian American Males 5.30%
Hispanic American Females 1.93%
Hispanic American Males 1.99%
Native American Females 0.14%
Native American Males 0.07%
Caucasian Females 11.21%
Non-minority Males 63.62%
TOTAL 100.00%
Percent
of Businesses
Minority Females 10.59%
Minority Males 14.58%
Percent
of Businesses
Minority Business Enterprises 25.17%
Woman Business Enterprises 21.80%
Minority and Females
Ethnicity
Ethnicity and Gender
Minority and Gender
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis D. Goods and Services Prime Contractor Availability
The distribution of available goods and services prime contractors is summarized in Table 4.11 below.
African Americans account for 13.31% of the goods and services prime contractors in the City’s market area.
Asian Americans account for 6.91% of the goods and services prime contractors in the City’s market area.
Hispanic Americans account for 4.74% of the goods and services prime contractors in the City’s market area.
Native Americans account for 0.42% of the goods and services prime contractors in the City’s market area.
Caucasian Females account for 6.66% of the goods and services prime contractors in the City’s market area.
Minority Females account for 8.57% of the goods and services prime contractors in the City’s market area.
Non-minority Males account for 67.97% of the goods and services prime contractors in the City’s market area.
Minority Business Enterprises account for 25.37% of the goods and services prime contractors in the City’s market area.
Woman Business Enterprises account for 15.22% of the goods and services prime contractors in the City’s market area.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Table 4.11: Available Goods and Services Prime Contractors July 1, 2016 to June 30, 2021
Percent
of Businesses
African Americans 13.31%
Asian Americans 6.91%
Hispanic Americans 4.74%
Native Americans 0.42%
Caucasian Females 6.66%
Non-minority Males 67. 97%
TOTAL 100.00%
Percent
of Businesses
African American Females 4.83%
African American Males 8.49%
Asian American Females 2.00%
Asian American Males 4.91%
Hispanic American Females 1.50%
Hispanic American Males 3.24%
Native American Females 0.25%
Native American Males 0.17%
Caucasian Females 6.66%
Non-minority Males 67.97%
TOTAL 100.00%
Percent
of Businesses
Minority Females 8.57%
Minority Males 16.81%
Percent
of Businesses
Minority Business Enterprises 25.37%
Woman Business Enterprises 15.22%
Minority and Females
Ethnicity
Ethnicity and Gender
Minority and Gender
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis V. Subcontractor Availability Analysis
A. Source of Willing and Able Subcontractors
The calculation of subcontractor availability included the unique subcontractors identified in the subcontractor utilization analysis and the prime contractors that offer the type of services provided by the utilized subcontractors. The sources are presented in Table 4.12.
Subcontractor analysis was not performed for goods and services contracts. Thus, there was no availability calculated for the industry.
Table 4.12: Subcontractor Availability Data Sources
Record Type Information Type
Utilized subcontractors M/WBEs and non-M/WBEs
Prime contractors providing the same type of
services as utilized subcontractors
M/WBEs and non-M/WBEs
B. Determination of Willingness and Capacity
Subcontractor availability was limited to the utilized prime contractors and the unique businesses utilized as subcontractors. Thus, there was no need for fur ther assessment of willingness or capacity. It is noteworthy that Croson does not require a measure of capacity in the analysis of subcontractor availability.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis C. Construction Subcontractor Availability
The distribution of available construction subcontractors is summarized in Table 4.13 below.
African Americans account for 14.86% of the construction subcontractors in the City’s market area.
Asian Americans account for 8.98% of the construction subcontractors in the City’s market area.
Hispanic Americans account for 5.72% of the construction subcontractors in the City’s market area.
Native Americans account for 0.32% of the construction subcontractors in the City’s market area.
Caucasian Females account for 10.42% of the construction subcontractors in the City’s market area.
Minority Females account for 9.41% of the construction subcontractors in the City’s market area.
Non-minority Males account for 59.70% of the construction subcontractors in the City’s market area.
Minority Business Enterprises account for 29.88% of the construction subcontractors in the City’s market area.
Woman Business Enterprises account for 19.83% of the construction subcontractors in the City’s market area.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Table 4.13: Available Construction Subcontractors
July 1, 2016 to June 30, 2021
Percent
of Businesses
African Americans 14.86%
Asian Americans 8.98%
Hispanic Americans 5.72%
Native Americans 0.32%
Caucasian Females 10.42%
Non-minority Males 59.70%
TOTA
L 100.00%
Percent
of Businesses
African American Females 4.86%
African American Males 9.99%
Asian American Females 2.89%
Asian American Males 6.09%
Hispanic American Females 1.50%
Hispanic American Males 4.22%
Native American Females 0.16%
Native American Males 0.16%
Caucasian Females 10.42%
Non-minority Males 59.70%
TOTAL 100.00%
Percent
of Businesses
Minority Females 9.41%
Minority Males 20.47%
Percent
of Businesses
Minority Business Enterprises 29.88%
Woman Business Enterprises 19.83%
Minority and Females
Ethnicity
Ethnicity and Gender
Minority and Gender
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis D. Architectural and Engineering Subcontractor Availability
The distribution of available architectural and engineering subcontractors is summarized in Table 4.14 below.
African Americans account for 13.67% of the architectural and engineering subcontractors in the City’s market area.
Asian Americans account for 9.15% of the architectural and engineering subcontractors in the City’s market area.
Hispanic Americans account for 5.42% of the architectural and engineering subcontractors in the City’s market area.
Native Americans account for 0.18% of the architectural and engineering subcontractors in the City’s market area.
Caucasian Females account for 11.50% of the architectural and engineering subcontractors in the City’s market area.
Minority Females account for 9.75% of the architectural and engineering subcontractors in the City’s market area.
Non-minority Males account for 60.08% of the architectural and engineering subcontractors in the City’s market area.
Minority Business Enterprises account for 28.42% of the architectural and engineering subcontractors in the City’s market area.
Woman Business Enterprises account for 21.25% of the architectural and engineering subcontractors in the City’s market area.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Table 4.14: Available Architectural and Engineering Subcontractors July 1, 2016 to June 30, 2021
Percent
of Businesses
African Americans 13.67%
Asian Americans 9.15%
Hispanic Americans 5.42%
Native Americans 0.18%
Caucasian Females 11.50%
Non-minority Males 60. 08%
TOTAL 100.00%
Percent
of Businesses
African American Females 4.82%
African American Males 8.85%
Asian American Females 3.19%
Asian American Males 5.96%
Hispanic American Females 1.63%
Hispanic American Males 3.79%
Native American Females 0.12%
Native American Males 0.06%
Caucasian Females 11.50%
Non-minority Males 60.08%
TOTAL 100.00%
Percent
of Businesses
Minority Females 9.75%
Minority Males 18.66%
Percent
of Businesses
Minority Business Enterprises 28.42%
Woman Business Enterprises 21.25%
Minority and Females
Ethnicity
Ethnicity and Gender
Minority and Gender
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis E. Professional Services Subcontractor Availability
The distribution of available professional services subcontractors is summarized in Table 4.15 below.
African Americans account for 14.72% of the professional services subcontractors in the City’s market area.
Asian Americans account for 9.84% of the professional services subcontractors in the City’s market area.
Hispanic Americans account for 5.56% of the professional services subcontractors in the City’s market area.
Native Americans account for 0.34% of the professional services subcontractors in the City’s market area.
Caucasian Females account for 12.28% of the professional services subcontractors in the City’s market area.
Minority Females account for 11.13% of the professional services subcontractors in the City’s market area.
Non-minority Males account for 57.26% of the professional services subcontractors in the City’s market area.
Minority Business Enterprises account for 30.46% of the professional services subcontractors in the City’s market area.
Woman Business Enterprises account for 23.41% of the professional services subcontractors in the City’s market area.
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis Table 4.15: Available Professional Services Subcontractors July 1, 2016 to June 30, 2021
Percent
of Businesses
African Americans 14.72%
Asian Americans 9.84%
Hispanic Americans 5.56%
Native Americans 0.34%
Caucasian Females 12.28%
Non-minority Males 57. 26%
TOTAL 100.00%
Percent
of Businesses
African American Females 5.43%
African American Males 9.29%
Asian American Females 3.53%
Asian American Males 6.31%
Hispanic American Females 1.90%
Hispanic American Males 3.66%
Native American Females 0.27%
Native American Males 0.07%
Caucasian Females 12.28%
Non-minority Males 57.26%
TOTAL 100.00%
Percent
of Businesses
Minority Females 11.13%
Minority Males 19.34%
Percent
of Businesses
Minority Business Enterprises 30.46%
Woman Business Enterprises 23.41%
Minority and Females
Ethnicity
Ethnicity and Gender
Minority and Gender
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Chapter 4: Prime Contractor and Subcontractor Availability Analysis VI. Summary
This chapter presents the enumeration of willing and able market area businesses by ethnicity, gender, and industry. In compliance with the Croson standard, the capacity of the enumerated businesses was assessed. Four methods were successfully employed: (1) a review of the City’s contract size distribution to identify the capacity needed to perform most of the City contracts, (2) a determination of the largest contracts the City awarded to M/WBEs, (3) a frequency distribution to define the median size of contracts awarded to both M/WBEs and non-M/WBEs, and (4) a formal prime contract threshold set for each industry by the removal of outliers that would skew the disparity findings.
The findings from these analyses illustrate that M/WBEs and non- M/WBEs have comparable capacity. The City awarded large prime contracts to non-M/WBEs and M/WBEs. Furthermore, the statistics show the difference between the median value of the contracts awarded to M/WBEs and non-M/WBEs was less than $15,000.
While these data illustrate that M/WBEs and non -M/WBEs have comparable capacity to perform a considerable number of the prime contracts awarded by the City, business capacity is elastic. The elasticity of prime contractors is an important principle when assessing capacity because, as North Shore
49 found, businesses have various methods to increase capacity in the presence of contracting opportunities, including subcontracting, joint ventures, and staff augmentation.
49 North Shore Concrete and Assoc., Inc. v. City of New York, No. 94-CV-4017, 1998 WL 273027 (E.D.N.Y. April 12, 1998).
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Chapter 5: Prime Contract Disparity Analysis
CHAPTER 5: Prime Contract Disparity
Analysis
I. Introduction
The objective of this chapter is to determine if minority and woman- owned business enterprises (M/WBEs) available to perform the City of Oakland’s prime contracts were underutilized during the July 1, 2016 to June 30, 2021 study period. The four industries in this analysis are construction, architectural and engineering, professional services, and goods and services. The City requested an industry analysis by the six- digit North American Industry Classification System (NAICS) codes.
50 However, the City’s prime
contract data did not uniformly classify the utilized businesses by six- digit NAICS codes.
Consequently, the industries for the prime disparity analysis were determined at the two- digit level.
51 Under a fair and equitable system of awarding prime contracts, the proportion of prime contract dollars awarded to M/WBEs should be relatively close to the corresponding proportion of available M/WBEs
52 in the relevant market area. If the ratio of utilized M/WBE prime contractors compared to available M/WBE prime contractors is less than one, a statistical test is conducted to calculate the probability of observing the empirical disparity ratio. The analysis assumes a fair and equitable system. 53 City of Richmond v. J.A.
Croson Co. (Croson) 54 states that an inference of discrimination can be made if the disparity is statistically significant. Woman-owned businesses were not the subject of legal review in Croson. Therefore, the legal standard of review for woman-owned businesses is the intermediate scrutiny, which for a gender -based remedy only requires a finding of underutilization. Non- minority males, on the other hand, are not subject to a disparity analysis.
The first step in conducting the statistical test is to calculate the contract amount each ethnic and gender group is expected to receive based on their relative availability in the market
50 The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. busines s economy. NAICS was adopted in 1997 by the Office of Management and Budget to replace the Standard Industrial Classification System.
51 The data limitations that precluded the classification of the prime contract records by six -digit NAICS codes are described in Chapter 3: Prime Contractor Utilization Analysis.
52 Availability is defined as the number of ready, willing, and able firms. The methodology for determining willing and able firms is detailed in Chapter 5: Prime Contractor and Subcontractor Availability Analysis.
53 When conducting statistical tests, a confidence level must be established as a gauge for the level of certainty that an obser ved occurrence is not due to chance. It is important to note that a 100-percent confidence level or a level of absolute certainty can never be obtained in statistics. A 95-percent confidence level is the statistical standard used in physical and social sciences, and is thus used in the present report to determine if an inference of discrimination can be made.
54 City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989).
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Chapter 5: Prime Contract Disparity Analysis
area. This statistic is referred to as the expected contract amount . The next step is to compute the difference between each ethnic and gender group’s expected contract amount and the actual contract amount each group received. The disparity ratio is then computed by dividing the actual contract amount by the expected contract amount. The statistical significance of the disparity ratio is measured by the p-value.
In practice, a disparity ratio of less than 0.80 indicates a relevant degree of disparity. To test the significance of a disparity ratio, a P -value must be calculated. All disparity ratios less than one are subject to a statistical test of significance. Th e three methods employed to calculate statistical significance are a parametric analysis, a non-parametric analysis, and a simulation analysis. A parametric analysis is most commonly used when the number of contracts is sufficiently large, and the variatio n of the contract dollar amounts is not too large. When the variation in contract dollar amounts is large, a disparity may not be detectable using a parametric analysis. Therefore, a non -parametric analysis would be employed to analyze the contracts ranked by dollar amount. Both parametric and non- parametric analyses are effective due to the central limit theorem, which is strongest when the number of contracts is large, and the data are not skewed. When there are too few contracts or the contract dollar data are skewed, a simulation analysis is employed. The utility of the simulation analysis is also dependent on the severity of the disparity when there are too few contracts. The simulation analysis utilizes randomization to simulate a distribution for the contracts. By conducting multiple trials in the simulation, the empirical data can be used to test the distribution of contract awards for significance. Findings from one of the three methods are reported. If the p-value from any one of the three methods is less than 0.05, the finding is reported in the disparity tables as statistically significant. If the p-value is greater than 0.05, the finding is reported as not statistically significant.
II. Disparity Analysis
A prime contract disparity analysis was performed on informal and formal construction, architectural and engineering, professional services, and goods and services contracts awarded from July 1, 2016 to June 30, 2021. The informal thresholds defined in the City’s procurement policy are listed in Table 5.1.
Table 5.1: Informal Thresholds by Industry
Industry Informal Contract Threshold
Construction $50,000 and under
Architectural and Engineering $50,000 and under
Professional Services $50,000 and under
Goods and Services $50,000 and under
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Chapter 5: Prime Contract Disparity Analysis
The City’s procurement policy has no upper limits on the formal contract levels. However, upper limits were derived from a statistical calculation to avoid including outliers in the formal contract disparity analysis. The calculation determined the contract values that were outliers and could skew the disparity analysis. The statistical analysis performed to define the outliers is discussed in Chapter 1: Prime Contractor Utilization Analysis . The formal contract thresholds for each industry with the outliers removed are listed in Table 5.2.
Table 5.2: Formal Contract Thresholds by Industry without Outliers
Industry Formal Contract Threshold
Construction Between $50,000 and $3,730,000
Architectural and Engineering Between $50,000 and $790,000 Professional Services Between $50,000 and $700,000
Goods and Services Between $50,000 and $590,000
Statistical findings in each industry, for informal and formal prime contracts with outliers removed, are presented by ethnicity and gender below. The groups are defined in Table 1.2 in Chapter 1: Prime Contractor Utilization Analysis. The outcomes from the statistical analyses are presented in the “P -Value” column of each table. A description of these statistical outcomes, as shown in the disparity tables, is presented in Table 5.3.
Table 5.3: Statistical Outcome Descriptions
P-Value Outcome Definition of P-Value Outcome
< 0.05 * This underutilization is statistically significant. not significant
M/WBEs: This underutilization is not statistically significant.
Non-minority males: This overutilization is not statistically significant.
< 0.05 † This overutilization is statistically significant. ----
While this group was underutilized, there were no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance.
** This study does not statistically test the overutilization of M/WBEs or the underutilization of non-minority males.
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Final Report
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Chapter 5: Prime Contract Disparity Analysis
A. Disparity Analysis: Informal Prime Contracts by Industry
1. Construction Prime Contracts Valued at $50,000 and under
The disparity analysis of informal construction prime contracts valued at $50,000 and under is described below in Table 5.4 and shown in Chart 5.1.
African Americans represented 19.11% of the available construction businesses and received 2.45% of the dollars on construction prime contracts valued at $50,000 and under.
This underutilization is statistically significant.
Asian Americans represented 7.32% of the available construction businesses and received
10.88% of the dollars on construction prime contracts valued at $50,000 and under. This study does not statistically test the overutilization of M/WBEs.
Hispanic Americans represented 8.93% of the available construction businesses and received 10.65% of the dollars on construction prime contracts valued at $50,000 and under. This study does not statistically test the overutilization of M/WBEs.
Native Americans represented 0.18% of the available construction businesses and received no construction prime contracts valued at $50,000 and under. This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 5.71% of the available construction businesses and received 1.90% of the dollars on construction prime contracts valued at $50,000 and under.
This underutilization is not statistically significant.
Minority Females represented 5.18% of the available construction businesses and received no construction prime contracts valued at $50,000 and under. This underutilization could not be tested because there were too few businesses and no contracts awarded.
Non-minority Males represented 58.75% of the available construction businesses and received 74.13% of the dollars on construction prime contracts valued at $50,000 and under. This overutilization is statistically significant.
Minority Business Enterprises represented 35.54% of the available construction businesses and received 23.97% of the dollars on construction prime contracts valued at $50,000 and under. This underutilization is not statistically significant.
Woman Business Enterprises represented 10.89% of the available construction businesses and received 1.90% of the dollars on construction prime contracts valued at $50,000 and under. This underutilization is statistically significant.
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Chapter 5: Prime Contract Disparity Analysis
Table 5.4: Disparity Analysis: Construction Prime Contracts Valued at $50,000 and under July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization A vailability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $23,326 2.45% 19.11% $182,208 -$158,882 0.13 < .05 * Asian Americans $103,731 10.88% 7.32% $69,818 $33,913 1.49 ** Hispanic Americans $101,515 10.65% 8.93% $85,144 $16,371 1.19 ** Native Americans $0 0.00% 0.18% $1,703 -$1,703 0.00 ---- Caucasian Females $18,094 1.90% 5.71% $54,492 -$36,398 0.33 not significant Non-minority Males $706,946 74.13% 58.75% $560,247 $146,699 1.26 < .05 † TOTAL $953,612 100.00% 100.00% $953,612
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $0 0.00% 3.21% $30,652 -$30,652 0.00 ---- African American Males $23,326 2.45% 15.89% $151,556 -$128,230 0.15 < .05 * Asian American Females $0 0.00% 1.07% $10,217 -$10,217 0.00 ---- Asian American Males $103,731 10.88% 6.25% $59,601 $44,130 1.74 ** Hispanic American Females $0 0.00% 0.71% $6,812 -$6,812 0.00 ---- Hispanic American Males $101,515 10.65% 8.21% $78,332 $23,183 1.30 ** Native American Females $0 0.00% 0.18% $1,703 -$1,703 0.00 ---- Native American Males $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $18,094 1.90% 5.71% $54,492 -$36,398 0.33 not significant Non-minority Males $706,946 74.13% 58.75% $560,247 $146,699 1.26 < .05 † TOTAL $953,612 100.00% 100.00% $953,612
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $0 0.00% 5.18% $49,383 -$49,383 0.00 ---- Minority Males $228,572 23.97% 30.36% $289,489 -$60,917 0.79 not significant Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $228,572 23.97% 35.54% $338,873 -$110,301 0.67 not significant Woman Business Enterprises $18,094 1.90% 10.89% $103,876 -$85,782 0.17 < .05 * ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Chapter 5: Prime Contract Disparity Analysis
Chart 5.1: Disparity Analysis: Construction Prime Contracts Valued at $50,000 and under July 1, 2016 to June 30, 2021
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
African
Americans
Asian
Americans
Hispanic
Americans
Native
Americans
Caucasian
Females
Minority
Females
Non-minority
Males
Dollars
Ethnic/Gender Groups
Actual Dollars
Expected Dollars
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Final Report
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Chapter 5: Prime Contract Disparity Analysis
2. Architectural and Engineering Prime Contracts Valued at $50,000 and under
The disparity analysis of informal architectural and engineering prime contracts valued at $50,000 and under is described below in Table 5.5 and shown in Chart 5.2.
African Americans represented 8.96% of the available architectural and engineering businesses and received 2.96% of the dollars on architectural and engineering prime contracts valued at $50,000 and under. This underutilization is not statistically significant.
Asian Americans represented 14.94% of the available architectural and engineering businesses and received 18.03% of the dollars on architectural and engineering prime contracts valued at $50,000 and under. This study does not statistically test the overutilization of M/WBEs.
Hispanic Americans represented 5.18% of the available architectural and engineering businesses and received 11.23% of the dollars on architectural and engineering prime contracts valued at $50,000 and under. This study does not statistically test the overutilization of M/WBEs.
Native Americans represented none of the available architectural and engineering businesses and received no architectural and engineering prime contracts valued at $50,000 and under. The statistical significance of utilization could not be tested because there were no available businesses and no contracts awarded.
Caucasian Females represented 12.75% of the available architectural and engineering businesses and received 16.71% of the dollars on architectural and engineering prime contracts valued at $50,000 and under. This study does not statistically test the overutilization of M/WBEs.
Minority Females represented 7.57% of the available architectural and engineering businesses and received 1.73% of the dollars on architectural and engineering prime contracts valued at $50,000 and under. This underutilization is not statistically significant.
Non-minority Males represented 58.17% of the available architectural and engineering businesses and received 51.07% of the dollars on architectural and engineering prime contracts valued at $50,000 and under. This study does not statistically test the underutilization of non-minority males.
Minority Business Enterprises represented 29.08% of the available architectural and engineering businesses and received 32.22% of the dollars on architectural and engineering prime contracts valued at $50,000 and under. This study does not statistically test the overutilization of M/WBEs.
Woman Business Enterprises represented 20.32% of the available architectural and engineering businesses and received 18.44% of the dollars on architectural and engineering prime contracts valued at $50,000 and under. This underutilization is not statistically significant.
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Final Report
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Chapter 5: Prime Contract Disparity Analysis
Table 5.5: Disparity Analysis: Architectural and Engineering Prime Contracts Valued at $50,000 and under July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization A vailability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $31,000 2.96% 8.96% $93,854 -$62,854 0.33 not significant Asian Americans $188,793 18.03% 14.94% $156,424 $32,369 1.21 ** Hispanic Americans $117,577 11.23% 5.18% $54,227 $63,350 2.17 ** Native Americans $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $174,924 16.71% 12.75% $133,482 $41,443 1.31 ** Non-minority Males $534,701 51.07% 58.17% $609,009 -$74,308 0.88 ** TOTAL $1,046,996 100.00% 100.00% $1,046,996
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $0 0.00% 1.79% $18,771 -$18,771 0.00 ---- African American Males $31,000 2.96% 7.17% $75,083 -$44,083 0.41 not significant Asian American Females $3,119 0.30% 3.78% $39,627 -$36,508 0.08 not significant Asian American Males $185,674 17.73% 11.16% $116,796 $68,878 1.59 ** Hispanic American Females $15,000 1.43% 1.99% $20,856 -$5,856 0.72 not significant Hispanic American Males $102,577 9.80% 3.19% $33,370 $69,207 3.07 ** Native American Females $0 0.00% 0.00% $0 $0 ---- ----
Native American Males $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $174,924 16.71% 12.75% $133,482 $41,443 1.31 ** Non-minority Males $534,701 51.07% 58.17% $609,009 -$74,308 0.88 ** TOTAL $1,046,996 100.00% 100.00% $1,046,996
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $18,119 1.73% 7.57% $79,255 -$61,135 0.23 not significant Minority Males $319,251 30.49% 21.51% $225,250 $94,001 1.42 ** Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $337,370 32.22% 29.08% $304,505 $32,866 1.11 ** Woman Business Enterprises $193,043 18.44% 20.32% $212,736 -$19,693 0.91 not significant ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Final Report
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Chapter 5: Prime Contract Disparity Analysis
Chart 5.2: Disparity Analysis: Architectural and Engineering Prime Contracts Valued at $50,000 and under July 1, 2016 to June 30, 2021
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
African
Americans
Asian
Americans
Hispanic
Americans
Native
Americans
Caucasian
Females
Minority
Females
Non-minority
Males
Dollars
Ethnic/Gender Groups
Actual Dollars
Expected Dollars
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Chapter 5: Prime Contract Disparity Analysis
3. Professional Services Prime Contracts Valued at $50,000 and under
The disparity analysis of professional services prime contracts valued at $50,000 and under is described below and shown in Table 5.6 and Chart 5.3.
African Americans represented 12.59% of the available professional services businesses and received 8.65% of the dollars on professional services prime contracts valued at $50,000 and under. This underutilization is not statistically significant.
Asian Americans represented 8.46% of the available professional services businesses and received 5.62% of the dollars on professional services prime contracts valued at $50,000 and under. This underutilization is not statistically significant.
Hispanic Americans represented 3.92% of the available professional services businesses and received 3.72% of the dollars on professional services prime contracts valued at $50,000 and under. This underutilization is not statistically significant.
Native Americans represented 0.21% of the available professional services businesses and received no professional services prime contracts valued at $50,000 and under. This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 11.21% of the available professional services businesses and received 18.97% of the dollars on professional services prime contracts valued at $50,000 and under. This study does not statistically test the overutilization of M/WBEs.
Minority Females represented 10.59% of the available professional services businesses and received 9.90% of the dollars on professional services prime contracts valued at $50,000 and under. This underutilization is not statistically significant.
Non-minority Males represented 63.62% of the available professional services businesses and received 63.04% of the dollars on professional services prime contracts valued at $50,000 and under. This study does not statistically test the underutilization of non - minority males.
Minority Business Enterprises represented 25.17% of the available professional services businesses and received 17.99% of the dollars on professional services prime contracts valued at $50,000 and under. This underutilization is statistically significant.
Woman Business Enterprises represented 21.80% of the available professional services businesses and received 28.87% of the dollars on professional services prime contracts valued at $50,000 and under. This study does not statistically test the overutilization of M/WBEs.
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Chapter 5: Prime Contract Disparity Analysis
Table 5.6: Disparity Analysis: Professional Services Prime Contracts Valued at $50,000 and under July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization A vailability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $518,722 8.65% 12.59% $754,357 -$235,635 0.69 not significant Asian Americans $336,642 5.62% 8.46% $507,027 -$170,385 0.66 not significant Hispanic Americans $222,885 3.72% 3.92% $234,964 -$12,079 0.95 not significant Native Americans $0 0.00% 0.21% $12,367 -$12,367 0.00 ---- Caucasian Females $1,137,044 18.97% 11.21% $671,914 $465,130 1.69 ** Non-minority Males $3,778,345 63.04% 63.62% $3,813,009 -$34,664 0.99 ** TOTAL $5,993,637 100.00% 100.00% $5,993,637
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $287,869 4.80% 5.36% $321,529 -$33,661 0.90 not significant African American Males $230,854 3.85% 7.22% $432,828 -$201,974 0.53 < .05 * Asian American Females $173,930 2.90% 3.16% $189,620 -$15,690 0.92 not significant Asian American Males $162,711 2.71% 5.30% $317,407 -$154,696 0.51 not significant Hispanic American Females $131,423 2.19% 1.93% $115,421 $16,003 1.14 ** Hispanic American Males $91,461 1.53% 1.99% $119,543 -$28,082 0.77 not significant Native American Females $0 0.00% 0.14% $8,244 -$8,244 0.00 ---- Native American Males $0 0.00% 0.07% $4,122 -$4,122 0.00 ---- Caucasian Females $1,137,044 18.97% 11.21% $671,914 $465,130 1.69 ** Non-minority Males $3,778,345 63.04% 63.62% $3,813,009 -$34,664 0.99 ** TOTAL $5,993,637 100.00% 100.00% $5,993,637
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $593,222 9.90% 10.59% $634,814 -$41,592 0.93 not significant Minority Males $485,026 8.09% 14.58% $873,900 -$388,874 0.56 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $1,078,249 17.99% 25.17% $1,508,715 -$430,466 0.71 < .05 * Woman Business Enterprises $1,730,266 28.87% 21.80% $1,306,728 $423,538 1.32 ** ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Final Report
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Chapter 5: Prime Contract Disparity Analysis
Chart 5.3: Disparity Analysis: Professional Services Prime Contracts Valued at $50,000 and under July 1, 2016 to June 30, 2021
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
African
Americans
Asian
Americans
Hispanic
Americans
Native
Americans
Caucasian
Females
Minority
Females
Non-minority
Males
Dollars
Ethnic/Gender Groups
Actual Dollars
Expected Dollars
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Final Report
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Chapter 5: Prime Contract Disparity Analysis
4. Goods and Services Prime Contracts Valued at $50,000 and under
The disparity analysis of goods and services prime contracts valued at $50,000 and under is described below and shown in Table 5.7 and Chart 5.4.
African Americans represented 13.31% of the available goods and services businesses and received 1.35% of the dollars on goods and services prime contracts valued at $50,000 and under. This underutilization is statistically significant.
Asian Americans represented 6.91% of the available goods and services businesses and received 5.23% of the dollars on goods and services prime contracts valued at $50,000 and under. This underutilization is statistically significant.
Hispanic Americans represented 4.74% of the available goods and services businesses and received 3.11% of the dollars on goods and services prime contracts valued at $50,000 and under. This underutilization is statistically significant.
Native Americans represented 0.42% of the available goods and services businesses and received 0.33% of the dollars on goods and services prime contracts valued at $50,000 and under. This underutilization could not be tested because there were too few businesses and too few contracts awarded.
Caucasian Females represented 6.66% of the available goods and services businesses and received 7.62% of the dollars on goods and services prime contracts valued at $50,000 and under. This study does not statistically test the overutilization of M/WBEs.
Minority Females represented 8.57% of the available goods and services businesses and received 2.61% of the dollars on goods and services prime contracts valued at $50,000 and under. This underutilization is statistically significant.
Non-minority Males represented 67.97% of the available goods and services businesses and received 82.36% of the dollars on goods and services prime contracts valued at $50,000 and under. This overutilization is statistically significant.
Minority Business Enterprises represented 25.37% of the available goods and services businesses and received 10.02% of the dollars on goods and services prime contracts valued at $50,000 and under. This underutilization is statistically significant.
Woman Business Enterprises represented 15.22% of the available goods and services businesses and received 10.23% of the dollars on goods and services prime contracts valued at $50,000 and under. This underutilization is statistically significant.
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Chapter 5: Prime Contract Disparity Analysis
Table 5.7: Disparity Analysis: Goods and Services Prime Contracts Valued at $50,000 and under July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization A vailability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $191,836 1.35% 13.31% $1,887,461 -$1,695,625 0.10 < .05 * Asian Americans $740,919 5.23% 6.91% $979,120 -$238,201 0.76 < .05 * Hispanic Americans $440,741 3.11% 4.74% $672,408 -$231,667 0.66 < .05 * Native Americans $47,232 0.33% 0.42% $58,983 -$11,751 0.80 ---- Caucasian Females $1,080,954 7.62% 6.66% $943,730 $137,224 1.15 ** Non-minority Males $11,677,866 82.36% 67.97% $9,637,845 $2,040,021 1.21 < .05 † TOTAL $14,179,547 100.00% 100.00% $14,179,547
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $69,637 0.49% 4.83% $684,204 -$614,568 0.10 < .05 * African American Males $122,199 0.86% 8.49% $1,203,256 -$1,081,057 0.10 < .05 * Asian American Females $97,072 0.68% 2.00% $283,119 -$186,048 0.34 < .05 * Asian American Males $643,847 4.54% 4.91% $696,001 -$52,154 0.93 not significant Hispanic American Females $156,176 1.10% 1.50% $212,339 -$56,164 0.74 not significant Hispanic American Males $284,565 2.01% 3.24% $460,068 -$175,504 0.62 < .05 * Native American Females $47,232 0.33% 0.25% $35,390 $11,842 1.33 ** Native American Males $0 0.00% 0.17% $23,593 -$23,593 0.00 ---- Caucasian Females $1,080,954 7.62% 6.66% $943,730 $137,224 1.15 ** Non-minority Males $11,677,866 82.36% 67.97% $9,637,845 $2,040,021 1.21 < .05 † TOTAL $14,179,547 100.00% 100.00% $14,179,547
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $370,116 2.61% 8.57% $1,215,053 -$844,937 0.30 < .05 * Minority Males $1,050,611 7.41% 16.81% $2,382,919 -$1,332,308 0.44 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $1,420,727 10.02% 25.37% $3,597,972 -$2,177,244 0.39 < .05 * Woman Business Enterprises $1,451,070 10.23% 15.22% $2,158,783 -$707,713 0.67 < .05 * ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Chapter 5: Prime Contract Disparity Analysis
Chart 5.4: Disparity Analysis: Goods and Services Prime Contracts Valued at $50,000 and under July 1, 2016 to June 30, 2021
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
African
Americans
Asian
Americans
Hispanic
Americans
Native
Americans
Caucasian
Females
Minority
Females
Non-minority
Males
Dollars
Ethnic/Gender Groups
Actual Dollars
Expected Dollars
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Chapter 5: Prime Contract Disparity Analysis
B. Disparity Analysis: Formal Prime Contracts by Industry
1. Construction Prime Contracts Valued between $50,000 and $3,730,000
The disparity analysis of formal construction prime contracts valued between $50,000 and $3,730,000 is described below in Table 5.8 and Chart 5.5.
African Americans represented 19.11% of the available construction businesses and received 0.54% of the dollars on construction prime contracts valued between $50,000 and $3,730,000. This underutilization is statistically significant.
Asian Americans represented 7.32% of the available construction businesses and received
3.89% of the dollars on construction prime contracts valued between $50,000 and $3,730,000. This underutilization is not statistically significant.
Hispanic Americans represented 8.93% of the available construction businesses and received 24.43% of the dollars on construction prime contracts valued between $50,000 and $3,730,000. This study does not statistically test the overutilization of M/WBEs.
Native Americans represented 0.18% of the available construction businesses and received no construction prime contracts valued between $50,000 and $3,730,000. This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 5.71% of the available construction businesses and received 0.07% of the dollars on construction prime contracts valued between $50,000 and $3,730,000. This underutilization is statistically significant.
Minority Females represented 5.18% of the available construction businesses and received
1.71% of the dollars on construction prime contracts valued between $50,000 and $3,730,000. This underutilization is not statistically significant.
Non-minority Males represented 58.75% of the available construction businesses and received 71.07% of the dollars on construction prime contracts valued between $50,000 and $3,730,000. This overutilization is statistically significant.
Minority Business Enterprises represented 35.54% of the available construction businesses and received 28.86% of the dollars on construction prime contracts valued between $50,000 and $3,730,000. This underutilization is not statistically significant.
Woman Business Enterprises represented 10.89% of the available construction businesses and received 1.78% of the dollars on construction prime contracts valued between $50,000 and $3,730,000. This underutilization is statistically significant.
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Chapter 5: Prime Contract Disparity Analysis
Table 5.8: Disparity Analysis: Construction Prime Contracts Valued between $50,000 and $3,730,000 July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization A vailability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $628,658 0.54% 19.11% $22,173,158 -$21,544,499 0.03 < .05 * Asian Americans $4,511,277 3.89% 7.32% $8,496,257 -$3,984,980 0.53 not significant Hispanic Americans $28,347,537 24.43% 8.93% $10,361,289 $17,986,248 2.74 ** Native Americans $0 0.00% 0.18% $207,226 -$207,226 0.00 ---- Caucasian Females $83,028 0.07% 5.71% $6,631,225 -$6,548,197 0.01 < .05 * Non-minority Males $82,475,933 71.07% 58.75% $68,177,280 $14,298,654 1.21 < .05 † TOTAL $116,046,433 100.00% 100.00% $116,046,433
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $338,000 0.29% 3.21% $3,730,064 -$3,392,064 0.09 not significant African American Males $290,658 0.25% 15.89% $18,443,094 -$18,152,435 0.02 < .05 * Asian American Females $1,642,836 1.42% 1.07% $1,243,355 $399,481 1.32 ** Asian American Males $2,868,441 2.47% 6.25% $7,252,902 -$4,384,461 0.40 not significant Hispanic American Females $0 0.00% 0.71% $828,903 -$828,903 0.00 ---- Hispanic American Males $28,347,537 24.43% 8.21% $9,532,386 $18,815,151 2.97 ** Native American Females $0 0.00% 0.18% $207,226 -$207,226 0.00 ---- Native American Males $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $83,028 0.07% 5.71% $6,631,225 -$6,548,197 0.01 < .05 * Non-minority Males $82,475,933 71.07% 58.75% $68,177,280 $14,298,654 1.21 < .05 † TOTAL $116,046,433 100.00% 100.00% $116,046,433
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $1,980,836 1.71% 5.18% $6,009,547 -$4,028,712 0.33 not significant Minority Males $31,506,636 27.15% 30.36% $35,228,382 -$3,721,745 0.89 not significant Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $33,487,472 28.86% 35.54% $41,237,929 -$7,750,457 0.81 not significant Woman Business Enterprises $2,063,864 1.78% 10.89% $12,640,772 -$10,576,908 0.16 < .05 * ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Chart 5.5: Disparity Analysis: Construction Prime Contracts Valued between $50,000 and $3,730,000 July 1, 2016 to June 30, 2021
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
African
Americans
Asian
Americans
Hispanic
Americans
Native
Americans
Caucasian
Females
Minority
Females
Non-minority
Males
Dollars
Ethnic/Gender Groups
Actual Dollars
Expected Dollars
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2. Architectural and Engineering Prime Contracts Valued b etween $50,000 and $790,000
The disparity analysis of architectural and engineering prime contracts valued between $50,000 and $790,000 is described below and shown in Table 5.9 and Chart 5.6.
African Americans represented 8.96% of the available architectural and engineering businesses and received none of the dollars on architectural and engineering prime contracts valued between $50,000 and $790,000. This underutilization is statistically significant.
Asian Americans represented 14.94% of the available architectural and engineering businesses and received 16.56% of the dollars on architectural and engineering prime contracts valued between $50,000 and $790,000. This study does not statistically test the overutilization of M/WBEs.
Hispanic Americans represented 5.18% of the available architectural and engineering businesses and received 4.06% of the dollars on architectural and engineering prime contracts valued between $50,000 and $790,000. This underutilization is not statistically significant.
Native Americans represented none of the available architectural and engineering businesses and received no architectural and engineering prime contracts valued between $50,000 and $790,000. The statistical significance of utilization could not be tested because there were no available businesses and no contracts awarded.
Caucasian Females represented 12.75% of the available architectural and engineering businesses and received 13.70% of the dollars on architectural and engineering prime contracts valued between $50,000 and $790,000. This study does not statistically test the overutilization of M/WBEs.
Minority Females represented 7.57% of the available architectural and engineering businesses and received 8.73% of the dollars on architectural and engineering prime contracts valued between $50,000 and $790,000. This study does not statistically test the overutilization of M/WBEs.
Non-minority Males represented 58.17% of the available architectural and engineering businesses and received 65.68% of the dollars on architectural and engineering prime contracts valued between $50,000 and $790,000. This overutilization is not statistically significant.
Minority Business Enterprises represented 29.08% of the available architectural and engineering businesses and received 20.62% of the dollars on architectural and engineering prime contracts valued between $50,000 and $790,000. This underutilization is not statistically significant.
Woman Business Enterprises represented 20.32% of the available architectural and engineering businesses and received 22.43% of the dollars on architectural and engineering prime contracts valued between $50,000 and $790,000. This study does not statistically test the overutilization of M/WBEs.
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Table 5.9: Disparity Analysis: Architectural and Engineering Prime Contracts Valued between $50,000 and $790,000 July 1, 2016 to July 30, 2021
Ethnicity Actual Dollars Utilization A vailability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $0 0.00% 8.96% $1,015,484 -$1,015,484 0.00 < .05 * Asian Americans $1,876,170 16.56% 14.94% $1,692,473 $183,698 1.11 ** Hispanic Americans $460,130 4.06% 5.18% $586,724 -$126,594 0.78 not significant Native Americans $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $1,551,600 13.70% 12.75% $1,444,243 $107,357 1.07 ** Non-minority Males $7,440,384 65.68% 58.17% $6,589,361 $851,023 1.13 not significant TOTAL $11,328,284 100.00% 100.00% $11,328,284
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $0 0.00% 1.79% $203,097 -$203,097 0.00 ---- African American Males $0 0.00% 7.17% $812,387 -$812,387 0.00 < .05 * Asian American Females $989,110 8.73% 3.78% $428,760 $560,350 2.31 ** Asian American Males $887,060 7.83% 11.16% $1,263,713 -$376,653 0.70 not significant Hispanic American Females $0 0.00% 1.99% $225,663 -$225,663 0.00 ---- Hispanic American Males $460,130 4.06% 3.19% $361,061 $99,069 1.27 ** Native American Females $0 0.00% 0.00% $0 $0 ---- ----
Native American Males $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $1,551,600 13.70% 12.75% $1,444,243 $107,357 1.07 ** Non-minority Males $7,440,384 65.68% 58.17% $6,589,361 $851,023 1.13 not significant TOTAL $11,328,284 100.00% 100.00% $11,328,284
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $989,110 8.73% 7.57% $857,520 $131,590 1.15 ** Minority Males $1,347,190 11.89% 21.51% $2,437,161 -$1,089,971 0.55 not significant Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $2,336,300 20.62% 29.08% $3,294,680 -$958,380 0.71 not significant Woman Business Enterprises $2,540,710 22.43% 20.32% $2,301,763 $238,947 1.10 ** ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Chart 5.6: Disparity Analysis: Architectural and Engineering Prime Contracts Valued between $50,000 and $790,000 July 1, 2016 to June 30, 2021
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
African
Americans
Asian
Americans
Hispanic
Americans
Native
Americans
Caucasian
Females
Minority
Females
Non-minority
Males
Dollars
Ethnic/Gender Groups
Actual Dollars
Expected Dollars
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3. Professional Services Prime Contracts Valued b etween $50,000 and $700,000
The disparity analysis of professional services prime contracts valued between $50,000 and $700,000 is described below and shown in Table 5.10 and Chart 5.7.
African Americans represented 12.59% of the available professional services businesses and received 8.69% of the dollars on professional services prime contracts valued between $50,000 and $700,000. This underutilization is not statistically significant.
Asian Americans represented 8.46% of the available professional services businesses and received 7.25% of the dollars on professional services prime contracts valued between $50,000 and $700,000. This underutilization is not statistically significant.
Hispanic Americans represented 3.92% of the available professional services businesses and received 2.96% of the dollars on professional services prime contracts valued between $50,000 and $700,000. This underutilization is not statistically significant.
Native Americans represented 0.21% of the available professional services businesses and received no professional services prime contracts valued between $50,000 and $700,000.
This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 11.21% of the available professional services businesses and received 14.40% of the dollars on professional services prime contracts valued between $50,000 and $700,000. This study does not statistically test the overutilization of M/WBEs.
Minority Females represented 10.59% of the available professional services businesses and received 8.40% of the dollars on professional services prime contracts valued between $50,000 and $700,000. This underutilization is not statistically significant.
Non-minority Males represented 63.62% of the available professional services businesses and received 66.70% of the dollars on professional services prime contracts valued between $50,000 and $700,000. This overutilization is not statistically significant.
Minority Business Enterprises represented 25.17% of the available professional services businesses and received 18.90% of the dollars on professional services prime contracts valued between $50,000 and $700,000. This underutilization is statistically significant.
Woman Business Enterprises represented 21.80% of the available professional services businesses and received 22.81% of the dollars on professional services prime contracts valued between $50,000 and $700,000. This study does not statistically test the overutilization of M/WBEs.
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Table 5.10: Disparity Analysis: Professional Services Contracts Valued between $50,000 and $700,000 July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization A vailability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $3,407,173 8.69% 12.59% $4,937,258 -$1,530,086 0.69 not significant Asian Americans $2,844,687 7.25% 8.46% $3,318,485 -$473,798 0.86 not significant Hispanic Americans $1,161,556 2.96% 3.92% $1,537,835 -$376,279 0.76 not significant Native Americans $0 0.00% 0.21% $80,939 -$80,939 0.00 ---- Caucasian Females $5,650,294 14.40% 11.21% $4,397,667 $1,252,626 1.28 ** Non-minority Males $26,164,563 66.70% 63.62% $24,956,088 $1,208,475 1.05 not significant TOTAL $39,228,272 100.00% 100.00% $39,228,272
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $2,081,180 5.31% 5.36% $2,104,405 -$23,225 0.99 not significant African American Males $1,325,993 3.38% 7.22% $2,832,853 -$1,506,860 0.47 < .05 * Asian American Females $53,832 0.14% 3.16% $1,241,059 -$1,187,227 0.04 < .05 * Asian American Males $2,790,855 7.11% 5.30% $2,077,426 $713,429 1.34 ** Hispanic American Females $1,161,556 2.96% 1.93% $755,428 $406,128 1.54 ** Hispanic American Males $0 0.00% 1.99% $782,407 -$782,407 0.00 < .05 * Native American Females $0 0.00% 0.14% $53,959 -$53,959 0.00 ---- Native American Males $0 0.00% 0.07% $26,980 -$26,980 0.00 ---- Caucasian Females $5,650,294 14.40% 11.21% $4,397,667 $1,252,626 1.28 ** Non-minority Males $26,164,563 66.70% 63.62% $24,956,088 $1,208,475 1.05 not significant TOTAL $39,228,272 100.00% 100.00% $39,228,272
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $3,296,568 8.40% 10.59% $4,154,851 -$858,283 0.79 not significant Minority Males $4,116,848 10.49% 14.58% $5,719,666 -$1,602,818 0.72 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $7,413,416 18.90% 25.17% $9,874,517 -$2,461,101 0.75 < .05 * Woman Business Enterprises $8,946,862 22.81% 21.80% $8,552,519 $394,343 1.05 ** ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Chart 5.7: Disparity Analysis: Professional Services Contracts Valued between $50,000 and $700,000 July 1, 2016 to July 1, 2021
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
African
Americans
Asian
Americans
Hispanic
Americans
Native
Americans
Caucasian
Females
Minority
Females
Non-minority
Males
Dollars
Ethnic/Gender Groups
Actual Dollars
Expected Dollars
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4. Goods and Services Prime Contracts Valued between $50,000 and $590,000
The disparity analysis of goods and services prime contracts valued between $50,000 and $590,000 is described below and shown in Table 5.11 and Chart 5.8.
African Americans represented 13.31% of the available goods and services businesses and received 1.49% of the dollars on goods and services prime contracts valued between $50,000 and $590,000. This underutilization is statistically significant.
Asian Americans represented 6.91% of the available goods and services businesses and received 6.48% of the dollars on goods and services prime contracts valued between $50,000 and $590,000. This underutilization is not statistically significant.
Hispanic Americans represented 4.74% of the available goods and services businesses and received 3.46% of the dollars on goods and services prime contracts valued between $50,000 and $590,000. This underutilization is not statistically significant.
Native Americans represented 0.42% of the available goods and services businesses and received no goods and services prime contracts valued between $50,000 and $590,000.
This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 6.66% of the available goods and services businesses and received 4.60% of the dollars on goods and services prime contracts valued between $50,000 and $590,000. This underutilization is not statistically significant.
Minority Females represented 8.57% of the available goods and services businesses and received 2.42% of the dollars on goods and services prime contracts valued between $50,000 and $590,000. This underutilization is statistically significant.
Non-minority Males represented 67.97% of the available goods and services businesses and received 83.97% of the dollars on goods and services prime contracts valued between $50,000 and $590,000. This overutilization is statistically significant.
Minority Business Enterprises represented 25.37% of the available goods and services businesses and received 11.43% of the dollars on goods and services prime contracts valued between $50,000 and $590,000. This underutilization is statistically significant.
Woman Business Enterprises represented 15.22% of the available goods and services businesses and received 7.02% of the dollars on goods and services prime contracts valued between $50,000 and $590,000. This underutilization is statistically significant.
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Table 5.11: Disparity Analysis: Goods and Services Prime Contracts Valued between $50,000 and $590,000 July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization A vailability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $1,089,921 1.49% 13.31% $9,739,886 -$8,649,966 0.11 < .05 * Asian Americans $4,737,914 6.48% 6.91% $5,052,566 -$314,652 0.94 not significant Hispanic Americans $2,531,970 3.46% 4.74% $3,469,834 -$937,864 0.73 not significant Native Americans $0 0.00% 0.42% $304,371 -$304,371 0.00 ---- Caucasian Females $3,368,223 4.60% 6.66% $4,869,943 -$1,501,720 0.69 not significant Non-minority Males $61,442,867 83.97% 67.97% $49,734,294 $11,708,573 1.24 < .05 † TOTAL $73,170,896 100.00% 100.00% $73,170,896
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $482,223 0.66% 4.83% $3,530,709 -$3,048,486 0.14 < .05 * African American Males $607,698 0.83% 8.49% $6,209,177 -$5,601,480 0.10 < .05 * Asian American Females $345,890 0.47% 2.00% $1,460,983 -$1,115,093 0.24 < .05 * Asian American Males $4,392,024 6.00% 4.91% $3,591,583 $800,441 1.22 ** Hispanic American Females $940,889 1.29% 1.50% $1,095,737 -$154,849 0.86 not significant Hispanic American Males $1,591,082 2.17% 3.24% $2,374,097 -$783,016 0.67 not significant Native American Females $0 0.00% 0.25% $182,623 -$182,623 0.00 ---- Native American Males $0 0.00% 0.17% $121,749 -$121,749 0.00 ---- Caucasian Females $3,368,223 4.60% 6.66% $4,869,943 -$1,501,720 0.69 not significant Non-minority Males $61,442,867 83.97% 67.97% $49,734,294 $11,708,573 1.24 < .05 † TOTAL $73,170,896 100.00% 100.00% $73,170,896
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $1,769,001 2.42% 8.57% $6,270,052 -$4,501,051 0.28 < .05 * Minority Males $6,590,804 9.01% 16.81% $12,296,606 -$5,705,802 0.54 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $8,359,805 11.43% 25.37% $18,566,658 -$10,206,853 0.45 < .05 * Woman Business Enterprises $5,137,224 7.02% 15.22% $11,139,995 -$6,002,771 0.46 < .05 * ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Chart 5.8: Disparity Analysis: Goods and Services Prime Contracts Valued between $50,000 and $590,000 July 1, 2016 to June 30, 2021
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
African
Americans
Asian
Americans
Hispanic
Americans
Native
Americans
Caucasian
Females
Minority
Females
Non-minority
Males
Dollars
Ethnic/Gender Groups
Actual Dollars
Expected Dollars
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III. Conclusion
This chapter documents the City of Oakland’s active participation in purposeful and intentional discrimination in the award of its prime contracts to minorities and women. The State of California’s Constitution prohibits the use of race and gender remedies to address disparities in public contracting. Nevertheless, in Coral Construction v. San Francisco , 55 the State Supreme
Court found purposeful and intentional discrimination as a condition under which the F ederal Constitution trumps the State Constitution. Given the Coral Construction decision, the City of Oakland’s purposeful and intentional discrimination against M/WBEs documented in this study and the three previous studies conducted between 2004 and 2017 should be remedied using race - and gender-based measures as defined under federal law.
A. Disparity Findings
The City of Oakland’s purposeful and intentional discrimination in the award of prime contracts was documented in the four industries examined in this study. Intentional discrimination against M/WBEs was also documented in the City’s award of federally ass isted prime contracts and the contracts awarded under the Local and Small Local Business Enterprise Program.56
As indicated in the tables below, the City was an active participant in discrimination against African Americans in each of the four industries examined. Females were mostly underutilized in all four industries, although not at a statistically significant level.57
As indicated in Table 5.12, disparity was found for African American male prime contractors on construction contracts valued at $50,000 and under. Caucasian female prime contractors were also underutilized on these contracts. Disparity was also found for African American male and Caucasian female prime contractors on construction contracts valued between $50,000 and $3,730,000. African American female prime contractors were underutilized on these contracts.
55 Coral Construction v. San Francisco, 113 Cal.Rptr. 3d 279 (2010).
56 Chapter 1: Local and Small Local Business Enterprise Program and Chapter 2: Federally Funded Contracts Analysis , City of Oakland Disparity Study, Part II, 2024.
57 Women-owned businesses were not the subject of legal review in Croson. Therefore, the legal standard of review for woman -owned businesses is the intermediate scrutiny, which for a gender-based remedy only requires a finding of underutilization.
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Table 5.12: Disparity Summary: Construction Prime Contract Dollars July 1, 2016 to June 30, 2021
Ethnicity/Gender
Construction
Contracts Valued at $50,000
and under
Contracts Valued between
$50,000 and $3,730,000
African American Females Insufficient Data Underutilization African American Males Disparity Disparity
Asian American Females Insufficient Data No Disparity
Caucasian Females Underutilization Disparity
As indicated in Table 5.13, disparity was found for African American male prime contractors on architectural and engineering contracts valued between $50,000 and $790,000. Asian American female and Hispanic American female prime contractors were underutilized on architectural and engineering contracts valued at $50,000 and under.
Table 5.13: Disparity Summary: Architectural and Engineering Prime Contract Dollars July 1, 2016 to June 30, 2021
Ethnicity/Gender
Architectural and Engineering
Contracts Valued at $50,000
and under
Contracts Valued between
$50,000 and $790,000
African American Males No Disparity Disparity
Asian American Females Underutilization No Disparity
Hispanic American Females Underutilization Insufficient Data
As indicated in Table 5.14, disparity was found for African American male prime contractors on professional services contracts valued at $50,000 and under. African American female and Asian American female prime contractors were underutilized on these contracts . D isparity was also found for African American male, Asian American female, and Hispanic American male prime
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contractors on professional services contracts valued between $50,000 and $700,000. African American female prime contractors were underutilized on these contracts.
Table 5.14: Disparity Summary: Professional Services Prime Contract Dollars July 1, 2016 to June 30, 2021
Ethnicity/Gender
Professional Services
Contracts Valued at $50,000
and under
Contracts Valued between
$50,000 and $700,000
African American Females Underutilization Underutilization African American Males Disparity Disparity
Asian American Females Underutilization Disparity
Hispanic American Males No Disparity Disparity
Caucasian Females No Disparity No Disparity
As indicated in Table 5.15, disparity was found for African American female, African American male, Asian American female, and Hispanic American male prime contractors on goods and services contracts valued at $50,000 and under. Hispanic American female prime contractors were underutilized on these contracts. D isparity was also found for African American female, African American male, and Asian American female prime contractors on goods and services contracts valued between $50,000 and $590,000. Hispanic American female and Caucasian female prime contractors were underutilized on these contracts.
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Table 5.15: Disparity Summary: Goods and Services Prime Contract Dollars July 1, 2016 to June 30, 2021
Ethnicity/Gender
Goods and Services
Contracts Valued at $50,000
and under
Contracts Valued between
$50,000 and $590,000
African American Females Disparity Disparity
African American Males Disparity Disparity
Asian American Females Disparity Disparity
Hispanic American Females Underutilization Underutilization Hispanic American Males Disparity No Disparity
Caucasian Females No Disparity Underutilization
As reported in Chapter 2: Federally Funded Contracts Analysis, Part II, intentional discrimination was also found in the award of federally assisted contracts. Title VI prohibits discrimination in the award of federally assisted contracts. Thus, the disparity documented in the award of the federally assisted prime contracts is evidence that the City did not comply with the federal regulations prohibiting discrimination in contracting.
As indicated in Table 5.16, disparity was found for African Americans and Asian American female prime contractors on federally assisted contracts. Hispanic American female and Caucasian female prime contractors were underutilized on these contracts.
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Table 5.16: Disparity Summary: Federally Assisted Prime Contract Dollars July 1, 2016 to June 30, 2021
Ethnicity/Gender Federally Assisted Contracts
African American Females Disparity
African American Males Disparity
Asian American Females Disparity
Hispanic American Females Underutilization
Caucasian Females Underutilization
The contracts awarded with USDOT financial assistance had a specific provision requiring 17.6% disadvantaged business enterprise (DBE) participation. This goal was not achieved either.
As indicated in Table 5.17, of 66 contracts the City awarded with USDOT financial assistance, DBEs received only 4, or 6.06% of contracts with a total award amount of $697,489. These dollars represented 2.16% of the total dollars awarded. Non- DBEs received 62 of the 66 prime contracts awarded and 97.84% of the total $44,879,298 awarded.
Table 5.17: Caltrans Federally Assisted Prime Contracts by DBE Status
The City has institutionalized active discrimination using non -competitive procurement methods that have perpetuated purposeful and intentional discrimination against African Americans and women. These methods include on- call contracts, emergency contracts , and cooperative agreements. Active discrimination was documented in the award of non- competitive prime contracts. These procurement methods are described in Chapter 1: Local and Small Local Business Enterprise Program included in Part II of this report.
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
DBE 4 6.06% $967,489 2.16%
Non-DBE 62 93.94% $43,911,809 97.84%
TOTAL 66 100.00% $44,879,298 100.00%
Certified Status
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As indicated in Table 5.18, disparity was found for African American s, Asian American female, and Caucasian female prime contractors on on -call, emergency, and cooperative agreement contracts which were non-competitive awards. Hispanic American female prime contractors were underutilized on these contracts.
Table 5.18: Disparity Analysis: On-Call, Emergency, and Cooperative Agreements July 1, 2016 to June 30, 2021
Ethnicity/Gender On-Call, Emergency, and
Cooperative Agreements
African American Females Disparity
African American Males Disparity
Asian American Females Disparity
Hispanic American Females Underutilization
Caucasian Females Disparity
The existence of disparity in the City’s procurement of prime contracts and its prime contractors’ award of subcontracts h as been documented every five years for nearly two decades . The active and passive discrimination documented in this report through a statistical analysis of contracts funded with both local and federal dollars is clearly purposeful, intentional, and long-standing.
Every five years for two decades, the City has commissioned a disparity study. Each study has found the City to be both an active and passive participant in a system of egregious discrimination against M/WBEs. The City’s longstanding procurement policies and practices undergird the discrimination. Any meaningful change in the City’s active or passive role in discrimination will require a systemic overhaul of the procurement policies, practices, and staff responsible for the award and management of the City’s contracts.
In accordance with State law, the documented purposeful and intentional discrimination should be remedied by the application of remedial measures provided in federal law. The mitigating measures discussed below are best practices widely utilized by local governments to eliminate evidence of active discrimination in the award of contracts to M/WBEs.
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B. Best Practices in Public Contracting
1. Minority and Woman-owned Business Enterprise Program
For nearly three decades, a longstanding best practice of local governments upon completing a disparity study is to enact a Minority and Wom an-owned Business Enterprise Program (M/WBE Program) with policies to address documented discrimination and to authorize and fund a department to oversee the process. Although the policies enacted by local governments over the last 30 years have varied, there are several components that are frequently included in an M/WBE program. These common policies include M/WBE contract -specific subcontract goals, bid discounts, and preference points for prime contractors; monitoring and reporting criteria ; and targeted outreach. These components have been effective in increasing M/WBE participation on public contracts for various municipalities across the country.
The City of Columbus, Ohio, for example, established its Minority and Women- Owned Business Enterprise Program in 2022 to eradicate the statistically significant disparity in its utilization of M/WBEs documented in its 2022 Disparity Study.
58 In pursuit of promot ing business and
economic development for minority and wom an-owned businesses, the City of St. Petersburg, Florida, authorized its M/WBE Program predicated on its 2021 Disparity Study. An Office of Supplier Diversity was created to implement the program. 59 2. M/WBE Certification
Certification is critical to ensuring the integrity of an M/WBE program intended to benefit eligible M/WBEs. Thus, a best practice is for the certification program to have processes to verify the business’ ownership, control, and location. The more rigorous certification programs conduct both a desk and site audit to verify the applicant’s eligibility.
3. Contract Compliance Reviews
Contract compliance reviews constitute another best practice used to protect a program’s integrity and the viability of subcontractors listed by the prime contractor to perform contract work.
Monetary penalties are levied by some governments on prime contractors who fail to use the subcontractors listed on their bids.
58 Minority and Women -owned Business Enterprise and Small Local Business Enterprise Program Manual, April 2022, Office of Diversity and Inclusion, City of Columbus, Ohio, Section I: Overview, page 1.
59 Minority & Women Business Enterprise Program (stpete.org).
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CHAPTER 6: Subcontract Disparity
Analysis
I. Introduction
The objective of this chapter is to determine if available m inority and woman-owned business enterprises (M/WBEs) were underutilized in the award of the City of Oakland’s subcontracts during the July 1, 2016 to June 30, 2021 study period. A detailed discussion of the statistical procedures for conducting a disparity analysis is set forth in Chapter 5:
Prime Contract Disparity Analysis. These same statistical procedures are used to perform the subcontract disparity analysis.
The City requested that this analysis be undertaken according to six-digit North American Industry Classification System (NAICS) codes.
60 However, the work descriptions of the
utilized and available subcontractors and datasets were insufficient to classify records in either dataset by a six-digit NAICS code. 61 Consequently, the disparity analysis of the awarded subcontracts was performed at the industry level defined by the two-digit NAICS code. The three industries in this analysis are construction, architectural and engineering, and professional services.
The assumption in the disparity analysis is that the proportion of subcontracts and subcontract dollars awarded to M/WBE subcontractors, under a fair and equitable system, should be relatively close to the proportion of available M/WBE subcontractors in the City’s market area. Availability is defined as the number of willing and able businesses in the market area. The methodology for determining willing and able businesses is detailed in Chapter 4: Prime Contractor and Subcontractor Availability Analysis.
If the ratio of utilized M/WBE subcontractors to available M/WBE subcontractors is less than one, a statistical test is conducted to calculate the probability of observing the empirical disparity ratio or any event which is less probable. 62 Croson states that an
inference of discrimination can be made prima facie if the observed disparity in the award of contracts to minority -owned businesses is statistically significant. Woman -owned businesses are not subject to the strict scrutiny standard set forth in Croson. Furthermore,
60 The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. busines s economy. NAICS was adopted in 1997 by the Office of Management and Budget to replace the Standard Industrial Classification System.
61 The data limitations that precluded the classification of the subcontract records and the available subcontractors by six-digit NAICS codes are described in Chapter 2: Subcontractor Utilization Analysis.
62 When conducting statistical tests, a confidence level must be established as a gauge for the level of certainty that an obser ved occurrence is not due to chance. It is important to note that a 100-percent confidence level or a level of absolute certainty can never be obtained in statistics. A 95-percent confidence level is the statistical standard used in physical and social sciences and is thus used in the present report to determine if an inference of discrimination can be made.
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under the Croson standard, non-minority male-owned businesses (non-M/WBEs) are also not subjected to a statistical test of underutilization.63
II. Disparity Analysis
As detailed in Chapter 2: Subcontractor Utilization Analysis, the City provided subcontractor records for construction, architectural and engineering, and professional services prime contracts issued during the July 1, 2016 to June 30, 2021 study period.
Mason Tillman also collected additional subcontracts directly from the prime contractors.
The disparity analysis was performed on the compiled subcontracts.
The underutilized ethnic groups are subject to a test of statistical significance to determine if the underutilization is due to chance. A p- value of 0.05 is a measure of statistical significance and is reported in the disparity tables as a disparity. WBE programs were not under review in Croson; therefore, female groups are only subject to intermediate scrutiny, a lesser legal standard than strict scrutiny. In this study, each female group with a disparity is also subject to the statistical significance test. When there is a finding of disparity for a female group that is statistically significant, the outcome is reported as disparity. When the underutilization is not statistically significant, the outcome is reported as underutilization.
If the group is not underutilized, the finding is reported as no disparity.
The subcontract disparity findings in the three industries are detailed in Section III .
Disparity Analysis: All Subcontracts by Industry . The outcomes of the test of statistical significance are presented in the “p -value” column of the tables. D escriptions of the statistical outcomes in the disparity tables are listed in Table 6.1. Where there is insufficient data to test the statistical significance of the disparity, there is no reported p-value.
Table 6.1: Statistical Outcome Descriptions
P-Value Outcome Definition of P-Value Outcome
< .05 * This underutilization is statistically significant. not significant
M/WBEs: This underutilization is not statistically significant.
Non-minority males: This overutilization is not statistically significant.
< .05 † This overutilization is statistically significant. ----
While this group was underutilized, there were no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance.
**
This study does not test the statistical significance of the overutilization of M/WBEs or the underutilization of non-minority males.
63 City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989).
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III. Disparity Analysis: All Subcontracts by Industry
A. Construction Subcontracts
The disparity analysis of construction subcontracts is described below and listed in Table
6.2 and Chart 6.1.
African Americans represented 14.86% of the available construction businesses and received 2.11% of construction subcontract dollars. This underutilization is statistically significant.
Asian Americans represented 8.98% of the available construction businesses and received
11.59% of the dollars on construction subcontracts. This study does not statistically test the overutilization of M/WBEs.
Hispanic Americans represented 5.72% of the available construction businesses and received 18.72% of the dollars on construction subcontracts. This study does not statistically test the overutilization of M/WBEs.
Native Americans represented 0.32% of the available construction businesses and received
0.94% of the dollars on construction subcontracts. This study does not statistically test the overutilization of M/WBEs.
Caucasian Females represented 10.42% of the available construction businesses and received 10.08% of the dollars on construction subcontracts. This underutilization is not statistically significant.
Minority Females represented 9.41% of the available construction businesses and received
4.02% of the dollars on construction subcontracts. This underutilization is statistically significant.
Non-minority Males represented 59.70% of the available construction businesses and received 56.56% of the dollars on construction subcontracts. This study does not statistically test the underutilization of non-minority males.
Minority Business Enterprises represented 29.88% of the available construction businesses and received 33.36% of the construction subcontract dollars. This study does not statistically test the overutilization of M/WBEs.
Woman Business Enterprises represented 19.83% of the available construction businesses and received 14.09% of the dollars on construction subcontracts. This underutilization is statistically significant.
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Table 6.2: Disparity Analysis: Construction Subcontracts July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization A vailability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $755,675 2.11% 14.86% $5,330,005 -$4,574,330 0.14 < .05 * Asian Americans $4,156,875 11.59% 8.98% $3,221,010 $935,865 1.29 ** Hispanic Americans $6,716,937 18.72% 5.72% $2,051,477 $4,665,460 3.27 ** Native Americans $337,564 0.94% 0.32% $115,036 $222,528 2.93 ** Caucasian Females $3,615,420 10.08% 10.42% $3,738,673 -$123,253 0.97 not significant Non-minority Males $20,289,615 56.56% 59.70% $21,415,885 -$1,126,270 0.95 ** TOTAL $35,872,086 100.00% 100.00% $35,872,086
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $675 0.00% 4.86% $1,744,714 -$1,744,039 0.00 < .05 * African American Males $755,000 2.10% 9.99% $3,585,291 -$2,830,291 0.21 < .05 * Asian American Females $800,000 2.23% 2.89% $1,035,325 -$235,325 0.77 < .05 * Asian American Males $3,356,875 9.36% 6.09% $2,185,686 $1,171,189 1.54 ** Hispanic American Females $579,922 1.62% 1.50% $536,835 $43,086 1.08 ** Hispanic American Males $6,137,016 17.11% 4.22% $1,514,642 $4,622,374 4.05 ** Native American Females $60,000 0.17% 0.16% $57,518 $2,482 1.04 ** Native American Males $277,564 0.77% 0.16% $57,518 $220,046 4.83 ** Caucasian Females $3,615,420 10.08% 10.42% $3,738,673 -$123,253 0.97 not significant Non-minority Males $20,289,615 56.56% 59.70% $21,415,885 -$1,126,270 0.95 ** TOTAL $35,872,086 100.00% 100.00% $35,872,086
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $1,440,597 4.02% 9.41% $3,374,392 -$1,933,795 0.43 < .05 * Minority Males $10,526,455 29.34% 20.47% $7,343,137 $3,183,318 1.43 ** Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $11,967,051 33.36% 29.88% $10,717,529 $1,249,523 1.12 ** Woman Business Enterprises $5,056,017 14.09% 19.83% $7,113,065 -$2,057,048 0.71 < .05 * ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) denotes that this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Chart 6.1: Disparity Analysis: Construction Subcontracts July 1, 2016 to June 30, 2021
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
African
Americans
Asian
Americans
Hispanic
Americans
Native
Americans
Caucasian
Females
Minority
Females
Non-minority
Males
Dollars
Ethnic/Gender Groups
Actual Dollars
Expected Dollars
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B. Architectural and Engineering Subcontracts
The disparity analysis of architectural and engineering subcontracts is described below and listed in Table 6.3 and Chart 6.2.
African Americans represented 13.67% of the available architectural and engineering businesses and received 2.34% of the dollars on architectural and engineering subcontracts.
This underutilization is statistically significant.
Asian Americans represented 9.15% of the available architectural and engineering businesses and received 7.67% of the dollars on architectural and engineering subcontracts.
This underutilization is not statistically significant.
Hispanic Americans represented 5.42% of the available architectural and engineering businesses and received 0.74% of the dollars on architectural and engineering subcontracts.
This underutilization is not statistically significant.
Native Americans represented 0.18% of the available architectural and engineering businesses and received no architectural and engineering subcontracts . This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 11.50% of the available architectural and engineering businesses and received 8.77% of the dollars on architectural and engineering subcontracts.
This underutilization is not statistically significant.
Minority Females represented 9.75% of the available architectural and engineering businesses and received 2.29% of the dollars on architectural and engineering subcontracts.
This underutilization is not statistically significant.
Non-minority Males represented 60.08% of the available architectural and engineering businesses and received 80.49% of the dollars on architectural and engineering subcontracts. This overutilization is statistically significant.
Minority Business Enterprises represented 28.42% of the available architectural and engineering businesses and received 10.75% of the dollars on architectural and engineering subcontracts. This underutilization is statistically significant.
Woman Business Enterprises represented 21.25% of the available architectural and engineering businesses and received 11.05% of the dollars on architectural and engineering subcontracts. This underutilization is not statistically significant.
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Table 6.3: Disparity Analysis: Architectural and Engineering Subcontracts July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization A vailability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $117,815 2.34% 13.67% $686,840 -$569,025 0.17 < .05 * Asian Americans $385,319 7.67% 9.15% $459,910 -$74,591 0.84 not significant Hispanic Americans $37,000 0.74% 5.42% $272,315 -$235,315 0.14 not significant Native Americans $0 0.00% 0.18% $9,077 -$9,077 0.00 ---- Caucasian Females $440,579 8.77% 11.50% $577,913 -$137,334 0.76 not significant Non-minority Males $4,045,016 80.49% 60.08% $3,019,674 $1,025,343 1.34 < .05 † TOTAL $5,025,729 100.00% 100.00% $5,025,729
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $90,000 1.79% 4.82% $242,058 -$152,058 0.37 not significant African American Males $27,815 0.55% 8.85% $444,782 -$416,967 0.06 < .05 * Asian American Females $0 0.00% 3.19% $160,363 -$160,363 0.00 ---- Asian American Males $385,319 7.67% 5.96% $299,547 $85,772 1.29 ** Hispanic American Females $25,000 0.50% 1.63% $81,695 -$56,695 0.31 not significant Hispanic American Males $12,000 0.24% 3.79% $190,621 -$178,621 0.06 not significant Native American Females $0 0.00% 0.12% $6,051 -$6,051 0.00 ---- Native American Males $0 0.00% 0.06% $3,026 -$3,026 0.00 ---- Caucasian Females $440,579 8.77% 11.50% $577,913 -$137,334 0.76 not significant Non-minority Males $4,045,016 80.49% 60.08% $3,019,674 $1,025,343 1.34 < .05 † TOTAL $5,025,729 100.00% 100.00% $5,025,729
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $115,000 2.29% 9.75% $490,167 -$375,167 0.23 not significant Minority Males $425,134 8.46% 18.66% $937,975 -$512,841 0.45 not significant Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $540,134 10.75% 28.42% $1,428,142 -$888,008 0.38 < .05 * Woman Business Enterprises $555,579 11.05% 21.25% $1,068,081 -$512,502 0.52 not significant ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denot es a statistically significant overutilization. ( ** ) denotes that this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Chart 6.2: Disparity Analysis: Architectural and Engineering Subcontracts July 1, 2016 to June 30, 2021
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
African
Americans
Asian
Americans
Hispanic
Americans
Native
Americans
Caucasian
Females
Minority
Females
Non-minority
Males
Dollars
Ethnic/Gender Groups
Actual Dollars
Expected Dollars
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C. Professional Services Subcontracts
The disparity analysis of professional services subcontracts is described below and listed in Table 6.4 and Chart 6.3.
African Americans represented 14.72% of the available professional services businesses and received 0.31% of the dollars on professional services subcontracts . This underutilization is statistically significant.
Asian Americans represented 9.84% of the available professional services businesses and received 8.61% of the dollars on professional services subcontracts . This underutilization is not statistically significant.
Hispanic Americans represented 5.56% of the available professional services businesses and received 4.19% of the dollars on professional services subcontracts . This underutilization is not statistically significant.
Native Americans represented 0.34% of the available professional services businesses and received no professional services subcontracts . This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 12.28% of the available professional services businesses and received 24.95% of the dollars on professional services subcontracts. This study does not statistically test the overutilization of M/WBEs.
Minority Females represented 11.13% of the available professional services businesses and received 1.31% of the dollars on professional services subcontracts . This underutilization is statistically significant.
Non-minority Males represented 57.26% of the available professional services businesses and received 61.94% of the dollars on professional services subcontracts . This overutilization is not statistically significant.
Minority Business Enterprises represented 30.46% of the available professional services businesses and received 13.11% of the dollars on professional services subcontracts . This underutilization is statistically significant.
Woman Business Enterprises represented 23.41% of the available professional services businesses and received 26.26% of the dollars on professional services subcontracts . This study does not statistically test the overutilization of M/WBEs.
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Table 6.4: Disparity Analysis: Professional Services Subcontracts July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization A vailability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $6,376 0.31% 14.72% $300,271 -$293,894 0.02 < .05 * Asian Americans $175,620 8.61% 9.84% $200,642 -$25,022 0.88 not significant Hispanic Americans $85,500 4.19% 5.56% $113,466 -$27,966 0.75 not significant Native Americans $0 0.00% 0.34% $6,919 -$6,919 0.00 ---- Caucasian Females $508,855 24.95% 12.28% $250,456 $258,399 2.03 ** Non-minority Males $1,263,275 61.94% 57.26% $1,167,873 $95,402 1.08 not significant TOTAL $2,039,626 100.00% 100.00% $2,039,626
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $6,376 0.31% 5.43% $110,699 -$104,323 0.06 not significant African American Males $0 0.00% 9.29% $189,572 -$189,572 0.00 < .05 * Asian American Females $20,000 0.98% 3.53% $71,954 -$51,954 0.28 not significant Asian American Males $155,620 7.63% 6.31% $128,687 $26,933 1.21 ** Hispanic American Females $340 0.02% 1.90% $38,745 -$38,405 0.01 not significant Hispanic American Males $85,160 4.18% 3.66% $74,722 $10,438 1.14 ** Native American Females $0 0.00% 0.27% $5,535 -$5,535 0.00 ---- Native American Males $0 0.00% 0.07% $1,384 -$1,384 0.00 ---- Caucasian Females $508,855 24.95% 12.28% $250,456 $258,399 2.03 ** Non-minority Males $1,263,275 61.94% 57.26% $1,167,873 $95,402 1.08 not significant TOTAL $2,039,626 100.00% 100.00% $2,039,626
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $26,716 1.31% 11.13% $226,933 -$200,216 0.12 < .05 * Minority Males $240,780 11.81% 19.34% $394,365 -$153,584 0.61 not significant Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $267,496 13.11% 30.46% $621,297 -$353,801 0.43 < .05 * Woman Business Enterprises $535,571 26.26% 23.41% $477,389 $58,182 1.12 ** ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denot es a statistically significant overutilization. ( ** ) denotes that this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Chart 6.3: Disparity Analysis: Professional Services Subcontracts July 1, 2016 to June 30, 2021
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000
$1,400,000
African
Americans
Asian
Americans
Hispanic
Americans
Native
Americans
Caucasian
Females
Minority
Females
Non-minority
Males
Dollars
Ethnic/Gender Groups
Actual Dollars
Expected Dollars
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IV. Conclusion
A. Disparity findings
As shown in Table 6.5, disparity was found for African American female, African American male, and Asian American female subcontractors in the award of construction contracts. Caucasian female subcontractors were underutilized on these contracts , but the underutilization was not statistically significant. On architectural and engineering contracts, disparity was found for African American male subcontractors. African American female, Hispanic American female, and Caucasian female subcontractors were underutilized on these contracts, but the underutilization was not statistically significant. In the award of professional services contracts, disparity was found for African American male subcontractors. African American female, Asian American female, and Hispanic American female subcontractors were underutilized on these contracts , but the underutilization was not statistically significant.
Table 6.5: Subcontract Disparity Summary, July 1, 2016 to June 30, 2021
Ethnicity/Gender Construction Architectural and
Engineering Professional Services
African American
Females Disparity Underutilization Underutilization
African American
Males Disparity Disparity Disparity
Asian-American
Females Disparity Insufficient Data Underutilization
Hispanic American
Females No Disparity Underutilization Underutilization
Caucasian Females Underutilization Underutilization No Disparity
As noted in Chapter 5: Prime Contract Disparity Analysis , these findings of purposeful and intentional discrimination obligate the City to take affirmative steps to eliminate the conditions that account for the statistically significant disparity . Given the City’s passive participation in its prime contractors’ discrimination in the award of subcontracts for nearly two decades, the City should remove the structural barriers that limit certain ethnic groups’ access to its prime contracts and subcontracts.
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B. Summary of Policies and Practices to Remedy Statistical Disparities on Subcontracts
Municipal and other local governments utilize a number of best practices that the City could implement to eliminate the purposeful and intentional discrimination of subcontractors by their prime contractors.
1. M/WBE Subcontracting Goals
Various government agencies establish M/WBE subcontracting goals on their prime contracts.
This practice promotes equity and inclusion in contracting and procurement, since M/WBEs, due to their business size, are often involved as subcontractors on prime contracts.
The utilization of contract-specific goals targeting M/WBEs based upon their availability has been proven to be an effective remedy. The solicitation specifies the subcontract goals and requirements for compliance with the goals. A good faith effort provision included in each solicitation allow s bidders who could not meet the goals to document specific efforts. The determination of responsiveness could be based on meeting the goals or the submission of the documents.
2. DBE Subcontracting Goals
To comply with USDOT DBE Program requirements, local governments across the country establish DBE subcontracting goals on their prime contracts with USDOT financial assistance.
This practice ensures fair competition and equal opportunity for DBEs and compliance with federal nondiscrimination requirements.
Ensuring compliance with DBE goals necessitates rigorous monitoring and enforcement procedures. DBE participation requirements should be included in contract provisions. Conducting regular compliance reviews would ensure the achievement of DBE goals. This would also require regular reporting from prime contractors on their DBE participation holding them accountable for meeting the goals.
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CHAPTER 7: Regression Analysis
I. Introduction
Private sector business practices that are not subject to government Minority and Woman -owned Business Enterprise (M/WBE) requirements are indicators of marketplace conditions that could adversely affect the formation and growth of M/WBEs. The adverse marketplace conditions thereby could depress the current availability of M/WBEs. Concrete Works of Colorado v. City and County of Denver (Concrete Works III )
64 sets forth a framework for considering a passive
participant model for an analysis of discrimination in private sector business practices. In accordance with Concrete Works III, regression analyses were conducted to examine two outcome variables—business ownership rates and business earnings —to determine if the City of Oakland is passively participating in ethnic and gender discrimination. These two regression analyses examined possible impediments to minority and woman business ownership, as well as factors affecting M/WBE business earnings. Further details are provided in the current chapter under Section IV: Datasets Analyzed.
Each regression analysis compared minority group members 65 and Caucasian f emales to non -
minority male-owned business enterprises by controlling for race and gender-neutral explanatory variables, such as age, education, marital status, and access to capital. The impact of the explanatory variables on the outcome variables is described in this chapter. These findings elucidate the socioeconomic conditions in the City ’s market area that could adversely affect the measuring of relative availability of M/WBEs and Non -minority Male -owned Business Enterprises. Statistically significant findings for lower M/WBE business earnings and lower likelihoods of m inority and Caucasian female Business ownership could indicate patterns of discrimination that might result in disproportionately smaller numbers of willing and capable M/WBEs.
The United States Census Public Use Microdata Sample (PUMS) data were used to compare a minority male’s, minority female’s, and Caucasian female’s probability of owning a business to the probability of a n on-minority male owning a business. Logistic regression was used to determine if race and gender have a statistically significant effect on the probability of business ownership. The PUMS data were also used to compare the business earnings of M/WBEs to non- minority male-owned businesses. An Ordinary Least Squares (OLS) regression was utilized to analyze the PUMS data for disparities in owner -reported incomes when controlling for race and gender-neutral factors.
The applicable limits of the private sector discrimination findings are set forth in Builders Association of Greater Chicago v. City of Chicago
66 (City of Chicago) , in which the court
64 Concrete Works of Colo., Inc. v. Denver, 86 F. Supp. 2d 1042, 1057-61 (D. Colo. 2000), rev'd on other grounds, 321 F.3d 950 (10th Cir. 2003), cert. denied, 540 U.S. 1027 (2003) (“Concrete Works III”).
65 Minority group members include both males and females.
66 Builders Ass’n of Greater Chicago v. Chicago, 298 F. Supp. 2d 725 (N.D. III. 2003).
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established that even when there is evidence of private sector discrimination, the findings cannot be used as the factual predicate for a government -sponsored, race-conscious M/WBE program unless there is a nexus between the private sector data and the public agency actions. The private sector findings, however, can be used to develop race -neutral programs to address barriers to the formation and development of M/WBEs. Given the case law, caution must be exercised in the interpretation and application of the regression findings. Case law regarding the application of private sector discrimination is discussed below in detail.
II. Legal Analysis
A. Passive Discrimination
The controlling legal precedent set forth in the 1989 City of Richmond v. J.A. Croson Co.67 decision authorized state and local governments to remedy discrimination in the awarding of subcontracts by its prime contractors on the grounds that the government cannot be a “passive participant” in such discrimination. In January 2003, Concrete Works IV 68 and City of Chicago 69 extended the
private sector analysis to the investigation of discriminatory barriers that M/WBEs encountered in the formation and development of businesses and their consequence for state and local remedial programs. Concrete Works IV set forth a framework for considering such private sector discrimination as a passive participant model for analysis. However, the obligation of presenting an appropriate nexus between the government remedy and the private sector discrimination was first addressed in City of Chicago.
The Tenth Circuit Court decided in Concrete Works IV that business activities conducted in the private sector, if within the government’s market area, are also appropriate areas to explore the issue of passive participation .
70 However, the appropriateness of the C ity’s remedy, given the finding of private sector discrimination, was not at issue before the court. The question before the court was whether sufficient facts existed to determine if the private sector business practices under consideration constituted discrimination. For technical legal reasons, 71 the court did not examine
whether a consequent public sector remedy, i.e., one involving a goal requirement on the City of Denver’s contracts, was “narrowly tailored” or otherwise supported by the C ity’s private sector findings of discrimination.
B. Narrow Tailoring
The question of whether a particular public sector remedy is narrowly tailored when it is based solely on business practices within the private sector was at issue in City of Chicago. The case, decided ten months after Concrete Works IV , found that certain private sector business practices
67 488 U.S. 469 (1989).
68 Concrete Works of Colo., Inc. v. Denver, 321 F.3d 950, 965-69 (10th Cir. 2003) (“Concrete Works IV”).
69 City of Chicago, 298 F. Supp. 2d at 738-39.
70 Concrete Works IV, 321 F.3d at 966-67.
71 Plaintiff had not preserved the issue on appeal. Therefore, it was no longer part of the case.
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constituted discrimination against minorities in the Chicago market area. However, the district court did not find the City of Chicago’s M/WBE subcontracting goal to be a remedy “narrowly tailored” to address the documented private sector discriminatory business practices that had been discovered within the City’s market area.
72 The court explicitly stated that certain discriminatory business practices documented by regression analyses constituted private sector discrimination. 73 It is also notable that the documented discriminatory business practices reviewed by the court in City of Chicago were similar to those reviewed in Concrete Works IV . Notwithstanding the fact that discrimination in the City of Chicago’s market area was documented, the court determined that the evidence was insufficient to support the city’s race-based subcontracting goals.74 The court ordered an injunction to invalidate the City of Chicago’s race-based program.75
The following statements from that opinion are noteworthy:
Racial preferences are, by their nature, highly suspect, and they cannot be used to benefit one group that, by definition, is not either individually or collectively the present victim of discrimination. There may well also be (and the evidence suggests that there are) minorities and women who do not enter the industry because they perceive barriers to entry. If there is none, and their perception is in error, that false perception cannot be used to provide additional opportunities to M/WBEs already in the market to the detriment of other firms who, again by definition, neither individually nor collectively, are engaged in discriminatory practices. 76 Given these distortions of the market and these barriers, is City’s program narrowly tailored as a remedy? It is here that I believe the program fails. There is no “meaningful individualized review” of M/WBEs. Gratz v. Bollinger, 539 U.S. 244, 156 L. Ed. 2d 257, 123 S.Ct. 2411, 2431 (2003) (Justice O’Connor concurring).
Chicago’s program is more expansive and more rigid than plans that have been sustained in the courts. It has no termination date, nor has it any means for determining a termination date. The “graduation” revenue amount is very high, $27,500,000, and very few have graduated. There is no net worth threshold. A third- generation Japanese American from a wealthy family, with a graduate degree from MIT, qualifies (and an Iraqi immigrant does not). Waivers are rarely or never granted on construction contracts, but “regarding flexibility, ‘the availability of waivers’ is of particular importance a ‘rigid numerical quota’ particularly disserves the cause of narrow tailoring.” Adarand Constructors v. Slater, supra, at 1177. The City’s program is “rigid numerical quota,” a quota not related to the number of available, willing, and able firms but to concepts of how many of those firms there
72 City of Chicago, 298 F. Supp. 2d at 739.
73 Id. at 731-32.
74 Id. at 742.
75 Id.
76 Id. at 734-35.
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should be. Formalistic points did not survive strict scrutiny in Gratz v. Bollinger, supra, and formalistic percentages cannot survive scrutiny.77
C. Conclusion
As established in City of Chicago, private sector discrimination cannot be used as the factual basis for a government -sponsored, race-based M/WBE program without a nexus to the government’s actions. Therefore, the discrimination that might be revealed in the regression analysis is not a sufficient factual predicate for the City to establish a race-based M/WBE program unless a nexus is established between the City and the private sector data. These economic indicators, albeit not a measure of passive discrim ination, are illustrative of private sector discrimination and can support the City-sponsored, race-neutral programs.
III. Regression Analysis Methodology
A regression analysis is the methodology employed to ascertain whether there are private sector economic indicators of discrimination in the City’s market area that could impact the formation and development of M/WBEs. The two regression analyses focus on the construction, architectural and engineering, professional services, and goods and services industries. The datasets used for the regression analyses did not allow for an exact match of the industries used in the City’s Disparity Study. Therefore, the four industries were selected to most closely mirror the industries used in the City’s Study.
As noted, two separate regression analyses were conducted —Business Ownership Analysis and Earnings Disparity Analysis. Both take into consideration race and gender-neutral factors, such as age, education, and creditworthiness in assessing whether the expla natory factors examined are disproportionately affecting minorities and females compared to similarly situated non -minority males.
IV. Datasets Analyzed
The 2016 through 2021 PUMS dataset produced by the United States Census Bureau was used to analyze business ownership and earnings disparities within the City of Oakland. The dataset represented the most recent data that most closely matched the July 1, 2016 to June 30, 2021 study period. The data for the City of Oakland was identified using Public Use Microdata Areas (PUMA), a variable within the PUMS dataset that reports data for counties and cities within states.
The dataset includes information on personal profile, industry, work characteristics, and family structure. The PUMS data enabled an analysis by an individual’s ethnicity and gender.
Unemployment rates by ethnicity within the State of California were examined using the 2021 2Q EPI analysis of Bureau of Labor Statistics Local Area Unemployment Statistics (LAUS) data and Current Population Survey (CPS) data. These data represent the most recent information within the study period available on access to observations for unemploym ent status by an individual’s
77 City of Chicago, 298 F.Supp.2d at 739-40.
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ethnicity. The dataset uses a defining variable that can specify the geographical boundaries and the area variable was used to determine the unemployment rates within the State of California . Table
7.1 lists the percentage of unemployed individuals by ethnicity.
Table 7.1: Unemployment Rate by Ethnicity
Ethnicity Unemployment Rate
All Ethnicity 7.8%
Caucasian American 6.3%
African American 11.9%
Asian American 7.4%
Hispanic American 8.7%
In the State of California, 6.3% of Caucasian Americans were unemployed, while 7.8% of all ethnicities in the State were unemployed. 7.4% of Asian Americans were unemployed, which is also lower than the state average. Meanwhile, 11.9% of African Americans and 8.7% of Hispanic Americans were unemployed, which is higher than the state average.
V. Regression Models Defined
A. Business Ownership Analysis
The Business Ownership Analysis examines the relationship between the likelihood of being a business owner and independent socioeconomic variables. Business ownership, the dependent variable, includes business owners of incorporated and non- incorporated firms. The business ownership variable utilizes two values. A value of “1” indicates that a person is a business owner, whereas a value of “0” indicates that a person is not a business owner. When the dependent variable is defined this way, it is called a binary variable. In this case, a logistic regression model is utilized to predict the likelihood of business ownership using independent socioeconomic variables. Four logistic models are run to predict the probability of business ownership in each of the four industries examined in the City’s Study. Categories of the independent variables analyzed include educational level, citizenship status, personal characteristics, and race/gender.
In the table below, a finding of disparity is denoted by an asterisk (*) when the independent variable is statistically significant at or above the 95% confidence level. A finding of disparity indicates that there is a non-random relationship between the probability of owning a business and the independent variable. Tables of regression results indicate the sign of each variable’s coefficient from the regression output. If the coefficient sign is positive, it indicates that there is a positive relationship between the dependent variable and that independent variable. For example, having an advanced degree is positively related to the likelihood of being a business owner, holding all other variables constant. If the coefficient sign for the independent variab le is negative, this implies an inverse relationship between the dependent variable and that independent variable. For instance, an individual with children under the age of 6 has a lower likelihood of owning a business, holding all other variables constant.
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For each of the four industries, the logistic regression is used to identify the likelihood that an individual owns a business given his or her background, including race, gender, and race and gender-neutral factors. The dependent variables in all regressions are binary varia bles coded as “1” for individuals who are self -employed and “0” for individuals who are not self -employed.78 Table 7.2 presents the independent variables used for the Business Ownership Analysis.
Table 7.2: Independent Variables Used in the Business Ownership Analysis
Personal
Characteristics
Educational
Attainment Ethnicity Gender
1. Age
2. A ge Squared
3. H ome Ownership
4. H ome Value
5. M onthly Mortgage
Payments
6. I nterest and
Dividends
7. S peaks English at
Home
8. C hildren Under the
Age of Six in the
Household
9. Marital Status
10. Bachelor’s Degree
11. Advanced Degree
12. Caucasian
American
13. African American
14. Asian American
15. Hispanic American
16. Native American
17. Other Minority
Group79
18. Female
B. The Earnings Disparity Analysis
The Earnings Disparity Analysis examines the relationship between the annual self -employment income and independent socioeconomic variables. “Wages” are defined as the individual’s total dollar income earned in the previous 12 months. Categories of independent socioeconomic variables analyzed include educational level, citizenship status, personal characteristics, business characteristics, ethnicity, and gender.
All the independent variables are regressed against wages in an Ordinary Least Squares (OLS) regression model. The OLS model estimates a linear relationship between the independent variables and the dependent variable. This multivariate regression model es timates a line similar to the standard y = mx+b format , but with additional independent variables. The mathematical purpose of a regression analysis is to estimate the best -fit line for the model and assess which findings are statistically significant.
In the table below, a finding of disparity is denoted by an asterisk (*) when an independent variable is statistically significant at or above the 95% confidence level. A finding of disparity indicates that there is a non- random relationship between wages and the independent variable. If the coefficient sign is positive, it means there is a positive relationship between the dependent variable
78 Note: The terms “business owner” and “self-employed” are used interchangeably throughout the chapter.
79 Other Minority Group includes individuals who belong to two or more racial groups.
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and that independent variable. If the coefficient sign for the independent variable is negative, this implies an inverse relationship between the dependent variable and that independent variable.
An OLS regression analysis is used to assess the presence of business earning disparities. OLS regressions have been conducted separately for each industry. Table 7.3 presents the independent variables used for the Earnings Disparity Analysis.
80 Table 7.3: Independent Variables Used for the Earnings Disparity Analysis
Personal
Characteristics
Educational
Attainment Ethnicity Gender
1. Age
2. A ge Squared
3. I ncorporated
Business
4. H ome Ownership
5. H ome Value
6. M onthly Mortgage
Payments
7. I nterest and
Dividends
8. S peaks English at
Home
9. C hildren Under the
Age of Six in the
Household
10. Marital Status
11. Bachelor’s Degree
12. Advanced Degree
13. Caucasian
American
14. African American
15. Asian American
16. Hispanic American
17. Native American
18. Other Minority
Group
19. Female
VI. Findings
A. Business Ownership Analysis
The business ownership variable is defined by the number of self-employed individuals in each of the four industries. The analysis considered incorporated and non- incorporated businesses. The data in this section come from the City of Oakland, which was specified using PUMA, a variable within the PUMS dataset that can specify the different counties and cities within states.81 As noted in Section IV, because each PUMA is determined by the United States Census, the region analyzed in the regression analyses could be limited to the City of Oakland.
Previous studies have shown that many non- discriminatory factors, such as education, age, and marital status, are associated with self -employment. In this analysis, race and gender -neutral factors are combined with race and gender -specific factors in a log istic regression model. The purpose of this model is to determine whether observed race or gender disparities are independent
80 If an independent variable is a binary variable, it will be coded as “1” if the individual has that variable present and “0” if otherwise (i.e., for the Hispanic American variable, it is coded as “1” if the individual is Hispanic American and “0” if otherwise). If an independent variable is a continuous variable, a value will be used (i.e., one’s age can be labeled as 35).
81 The PUMS data were collected by the United States Census Bureau from a five-percent sample of United States households. The observations were weighted to preserve the representative nature of the sample in relation to the population as a whole.
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of the race and gender -neutral factors known to be associated with self -employment. It must be noted that many of these variables, such as having an advanced degree, while seeming to be race and gender-neutral, may be correlated with race and gender. For e xample, if Caucasian females are less likely to have advanced degrees and the regression results show that individuals with advanced degrees are significantly more likely to own a business, Caucasian females may be disadvantaged in multiple ways. First, Caucasian females may have statistically significantly lower business ownership rates, so they face a direct disadvantage as a group. Secondly, they are indirectly disadvantaged, as fewer of them tend to have advanced degrees, which significantly increases one’s chances of owning a business.
1. Logistic Model Results for Construction Business Ownership
Table 7.4 presents the logistic regression results for the likelihood of owning a business in the construction industry based on the 23 variables analyzed in this model.
Table 7.4: Construction Industry Logistic Model
Business Ownership Model Coefficient Significance Standard Error Z-score P>|z| Age 0.107896 0.086839 1.24 0.214
Age-squared -0.000459 0.000841 -0.55 0.585
Bachelor's Degree (a) -0.469322 0.465358 -1.01 0.313
Advanced Degree (a) -0.343568 0.470932 -0.73 0.466
Home Owner -0.628540 0.475191 -1.32 0.186
Home Value 0.000000 0.000000 1.16 0.248
Monthly Mortgage Payment -0.000071 0.000119 -0.60 0.550 Interest and Dividends 0.000010 0.000013 0.79 0.428
Speaks English at Home 0.223783 0.397356 0.56 0.573
Has a Child under the Age of Six -0.252323 0.844431 -0.30 0.765 Married 0.292729 0.354162 0.83 0.408
Caucasian Female (b) 0.804558 0.510147 1.58 0.115
African American (b) -0.763788 0.758458 -1.01 0.314
Asian American (b) -0.953786 0.603876 -1.58 0.114
Hispanic American (b) 0.292448 0.472281 0.62 0.536
Native American (b) - - - -
Other Minority (b) 0.689701 0.940544 0.73 0.463
Year 2017 (c) 0.003479 0.545136 0.01 0.995
Year 2018 (c) -0.008663 0.499349 -0.02 0.986
Year 2019 (c) 0.324438 0.534530 0.61 0.544
Year 2020 (c) 0.409598 0.488376 0.84 0.402
Year 2021 (c) 0.825013 0.430546 1.92 0.055
Constant -5.938016 * 2.135033 -2.78 0.005
(a) For the variables Bachelor's Degree and Advanced Degree, the baseline variable is high school. (b) For the Ethnicity variables, the baseline variable is Caucasian males. (c) For the Year variables, the baseline variable is Year 2016. (P>|z|) of less than 0.05 denotes findings of statistical significance. (*) denotes a statistically significant variable with 95% confidence. (-) denotes an omitted variable due to insufficient observations.
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The construction industry logistic regression results do not indicate significant findings in relation to personal characteristics and ethnicity/gender variables.
2. Logistic Model Results for Architectural and Engineering Business Ownership
Table 7.5 presents the logistic regression results for the likelihood of owning a business in the architectural and engineering industry based on the 23 variables analyzed in this model.
Table 7.5: Architectural and Engineering Industry Logistic Model
Business Ownership Model Coefficient Significance Standard Error Z-score P>|z| Age -0.027014 0.045675 -0.59 0.554
Age-squared 0.000722 0.000475 1.52 0.129
Bachelor's Degree (a) -0.183084 0.258646 -0.71 0.479
Advanced Degree (a) -0.890573 0.529113 -1.68 0.092
Home Owner -0.252010 0.283625 -0.89 0.374
Home Value 0.000000 0.000000 1.12 0.264
Monthly Mortgage Payment -0.000087 0.000101 -0.86 0.388 Interest and Dividends -0.000002 0.000003 -0.65 0.518 Speaks English at Home 0.452477 0.440192 1.03 0.304
Has a Child under the Age of Six -0.726880 0.987985 -0.74 0.462 Married 0.207192 0.245577 0.84 0.399
Caucasian Female (b) -0.518877 0.484181 -1.07 0.284
African American (b) -0.480817 0.452830 -1.06 0.288
Asian American (b) 0.433365 0.477473 0.91 0.364
Hispanic American (b) 0.272982 0.456557 0.60 0.550
Native American (b) 0.010955 0.964217 0.010 0.991
Other Minority (b) 0.139650 0.672099 0.21 0.835
Year 2017 (c) -0.032512 0.295193 -0.11 0.912
Year 2018 (c) -0.187957 0.286140 -0.66 0.511
Year 2019 (c) -0.543568 0.307972 -1.76 0.078
Year 2020 (c) -0.273249 0.321651 -0.85 0.396
Year 2021 (c) -0.361329 0.283762 -1.27 0.203
Constant -1.486548 1.172784 -1.27 0.205
(a) For the variables Bachelor's Degree and Advanced Degree, the baseline variable is high school. (b) For the Ethnicity variables, the baseline variable is Caucasian males. (c) For the Year variables, the baseline variable is Year 2016. (P>|z|) of less than 0.05 denotes findings of statistical significance. (*) denotes a statistically significant variable with 95% confidence. (-) denotes an omitted variable due to insufficient observations.
The architectural and engineering industry logistic regression results do not indicate significant findings in relation to personal characteristics and ethnicity/gender variables.
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3. Logistic Model Results for Professional Services Business Ownership
Table 7.6 presents the logistic regression results for the likelihood of owning a business in the professional services industry based on the 23 variables analyzed in this model.
Table 7.6: Professional Services Industry Logistic Model
Business Ownership Model Coefficient Significance Standard Error Z-score P>|z| Age 0.107664 * 0.030913 3.48 0.000
Age-squared -0.000465 0.000305 -1.52 0.128
Bachelor's Degree (a) 0.010476 0.233754 0.04 0.964
Advanced Degree (a) -0.061933 0.235058 -0.26 0.792
Home Owner -0.342084 0.193837 -1.76 0.078
Home Value 0.000000 * 0.000000 2.82 0.005
Monthly Mortgage Payment 0.000004 0.000050 0.07 0.944 Interest and Dividends 0.000007 * 0.000002 2.81 0.005
Speaks English at Home 0.390104 0.215539 1.81 0.070
Has a Child under the Age of Six 0.747495 * 0.314099 2.38 0.017 Married -0.091023 0.162751 -0.56 0.576
Caucasian Female (b) 0.378990 * 0.164601 2.30 0.021
African American (b) 0.487808 0.312371 1.56 0.118
Asian American (b) 0.018036 0.234811 0.08 0.939
Hispanic American (b) 0.270594 0.267124 1.01 0.311
Native American (b) - - - -
Other Minority (b) -0.376945 0.318760 -1.18 0.237
Year 2017 (c) -0.074570 0.188415 -0.40 0.692
Year 2018 (c) 0.034792 0.195782 0.18 0.859
Year 2019 (c) -0.481879 * 0.215412 -2.24 0.025
Year 2020 (c) -0.445638 * 0.199616 -2.23 0.026
Year 2021 (c) -0.273432 0.191379 -1.43 0.153
Constant -5.453376 * 0.797121 -6.84 0.000
(a) For the variables Bachelor's Degree and Advanced Degree, the baseline variable is high school. (b) For the Ethnicity variables, the baseline variable is Caucasian males. (c) For the Year variables, the baseline variable is Year 2016. (P>|z|) of less than 0.05 denotes findings of statistical significance. (*) denotes a statistically significant variable with 95% confidence. (-) denotes an omitted variable due to insufficient observations.
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The professional services industry logistic regression results indicate the following:
• The likelihood of professional services business ownership is positively associated with increased age. Older individuals are significantly more likely to be business owners in the professional services industry.
• Individuals who have a higher -valued home are significantly more likely to be business owners in the professional services industry.
• Individuals who have higher interest and dividends income are significantly more likely to be business owners in the professional services industry.
• Individuals who have a child under the age of six are significantly more likely to be business owners in the professional services industry.
• Caucasian females are significantly more likely to be business owners in the professional services industry.
• In 2019 and 2020, individuals were significantly less likely to be business owners in the professional services industry than in 2016.
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4. Logistic Model Results for Goods and Services Business Ownership
Table 7.7 presents the logistic regression results for the likelihood of owning a business in the goods and services industry based on the 23 variables analyzed in this model.
Table 7.7: Goods and Services Industry Logistic Model
Business Ownership Model Coefficient Significance Standard Error Z-score P>|z| Age 0.115603 * 0.042853 2.70 0.007
Age-squared -0.000936 * 0.000433 -2.16 0.030
Bachelor's Degree (a) -0.198067 0.286182 -0.69 0.489
Advanced Degree (a) -0.561887 0.417750 -1.35 0.179
Home Owner -0.426715 0.259983 -1.64 0.101
Home Value 0.000000 * 0.000000 2.09 0.037
Monthly Mortgage Payment -0.000080 0.000114 -0.70 0.483 Interest and Dividends 0.000013 0.000009 1.50 0.133
Speaks English at Home -0.094164 0.303512 -0.31 0.756 Has a Child under the Age of Six -0.320780 0.589591 -0.54 0.586 Married 0.077836 0.216093 0.36 0.719
Caucasian Female (b) 0.396689 0.370787 1.07 0.285
African American (b) -0.415590 0.399156 -1.04 0.298
Asian American (b) -0.283322 0.407828 -0.69 0.487
Hispanic American (b) -0.032162 0.372727 -0.09 0.931
Native American (b) -2.165729 1.260650 -1.72 0.086
Other Minority (b) -0.741235 0.586867 -1.26 0.207
Year 2017 (c) 0.325196 0.334510 0.97 0.331
Year 2018 (c) 0.592729 0.309511 1.92 0.055
Year 2019 (c) 0.223384 0.355402 0.63 0.530
Year 2020 (c) 0.073246 0.354919 0.21 0.836
Year 2021 (c) 0.473778 0.298140 1.59 0.112
Constant -4.622217 * 1.039237 -4.45 0.000
(a) For the variables bachelor's degree and advanced degree, the baseline variable is high school. (b) For the ethnicity variables, the baseline variable is Caucasian males. (c) For the year variables, the baseline variable is Year 2016. (P>|z|) of less than 0.05 denotes findings of statistical significance. (*) denotes a statistically significant variable with 95% confidence. (-) denotes an omitted variable due to insufficient observations.
The goods and services industry logistic regression results indicate the following:
• The likelihood of goods and services business ownership is positively associated with increased age. Older individuals are significantly more likely to be business owners in the goods and services industry. However, as individuals reach advanced age, the likelihood of being a business owner significantly decreases in the goods and services industry.
• Individuals who have a higher -valued home are significantly more likely to be business owners in the goods and services industry.
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B. Business Ownership Analysis Conclusion
The Business Ownership Analysis examined the impact of different explanatory variables on an individual’s likelihood of owning a business in the construction, architectural and engineering, professional services, and goods and services industries. Controlling for race and gender -neutral factors, the Business Ownership Analysis results show the model that can find statistically significant disparities in the likelihood of owning a business, which exist for minorities compared to similarly situated non-minority males.
The business ownership regression analysis results do not indicate significant disparities in relation to industry and ethnicity/gender variables. Table 7.8 shows the business ownership regression analysis results by ethnicity, gender, and industry.
Table 7.8: Statistically Significant Business Ownership Disparities
Ethnicity/Gender Construction Architectural
and Engineering
Professional
Services
Goods and
Services
Caucasian Female Not Significant Not Significant Not Significant Not Significant African American Not Significant Not Significant Not Significant Not Significant Asian American Not Significant Not Significant Not Significant Not Significant Hispanic American Not Significant Not Significant Not Significant Not Significant Native American Not Significant Not Significant Not Significant Not Significant Other Minority Not Significant Not Significant Not Significant Not Significant
C. Business Earnings Analysis
The business earnings variable is identified by self -employment income 82 from 2016 to 2021 for
the four industries: construction, architectural and engineering, professional services, and goods and services. The analysis considered incorporated and non-incorporated businesses.
Previous studies have shown that many non- discriminatory factors, such as education, age, and marital status, are associated with self -employment income. In this analysis, race and gender - neutral factors are combined with race and gender groups in an OLS regression model to determine whether observed race or gender disparities were independent of the race and gender -neutral factors known to be associated with self-employment income.
82 The terms “business earnings” and “self-employment income” are used interchangeably.
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1. OLS Regression Results in the Construction Industry
Table 7.9 shows the results of the OLS regression for business earnings in the construction industry based on the 24 variables analyzed in this model.
Table 7.9: Construction Industry OLS Regression
Business Earnings Model Coefficient Significance Standard Error t-value P>|t| Age 5365.64 * 1215.522 4.41 0.000
Age-squared -52.82 * 13.558 -3.90 0.000
Incorporated Business 6833.62 21817.690 0.31 0.754
Bachelor's Degree (a) 37104.88 * 7908.609 4.69 0.000
Advanced Degree (a) 29755.73 * 10747.220 2.77 0.006
Home Owner 18045.42 10599.840 1.70 0.089
Home Value -0.01 0.013 -0.80 0.422
Monthly Mortgage Payment 8.92 * 3.928 2.27 0.024
Interest and Dividends 0.65 0.467 1.40 0.162
Speaks English at Home 17459.10 * 7581.404 2.30 0.022
Has a Child under the Age of Six 8340.66 13898.140000 0.60 0.549 Married 6968.40 6486.536 1.07 0.283
Caucasian Female (b) -20049.99 * 9025.071000 -2.22 0.027 African American (b) -49662.27 * 12968.570 -3.83 0.000
Asian American (b) -15654.70 9228.294 -1.70 0.091
Hispanic American (b) -31145.81 * 11103.040 -2.81 0.005 Native American (b) 74230.64 * 12183.510 6.09 0.000
Other Minority (b) -10041.43 15252.300 -0.66 0.511
Year 2017 (c) 20059.71 10699.460000 1.87 0.062
Year 2018 (c) 3081.86 5853.521000 0.53 0.599
Year 2019 (c) -4581.91 8325.709000 -0.55 0.582
Year 2020 (c) 12453.72 7711.471000 1.61 0.107
Year 2021 (c) -1672.67 7632.394000 -0.22 0.827
Constant -90257.40 * 29649.750 -3.04 0.002
(a) For the variables Bachelor's Degree and Advanced Degree, the baseline variable is high school. (b) For the Ethnicity variables, the baseline variable is Caucasian males. (c) For the Year variables, the baseline variable is Year 2016. (P>|z|) of less than 0.05 denotes findings of statistical significance. (*) denotes a statistically significant variable with 95% confidence. (-) denotes an omitted variable due to insufficient observations.
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The OLS regression results for business earnings in the construction industry indicate the following:
• Older business owners have significantly higher business earnings in the construction industry. However, as business owners reach an advanced age, they have significantly lower business earnings in the construction industry.
• Business owners with a bachelor’s degree or an advanced degree have significantly higher business earnings in the construction industry.
• Business owners with a higher monthly mortgage payment have significantly higher business earnings in the construction industry.
• Business owners who speak English at home have significantly higher business earnings in the construction industry.
• Caucasian female, African American , and Hispanic American business owners have significantly lower business earnings than do non-minority males in the construction industry.
• Native American business owners have significantly higher business earnings than non- minority males in the construction industry.
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2. OLS Regression Results in the Architectural and Engineering Industry
Table 7.10 shows the results of the OLS regression for business earnings in the architectural and engineering industry based on the 24 variables analyzed in this model.
Table 7.10: Architectural and Engineering Industry OLS Regression
Business Earnings Model Coefficient Significance Standard Error t-value P>|t| Age 1926.246 1640.119 1.17 0.241
Age-squared -11.963 20.692 -0.58 0.563
Incorporated Business 4412.694 12187.620 0.36 0.717
Bachelor's Degree (a) 26615.850 * 6931.892 3.84 0.000
Advanced Degree (a) 63531.760 * 14706.330 4.32 0.000
Home Owner 915.415 7992.147 0.11 0.909
Home Value 0.007 0.011 0.61 0.544
Monthly Mortgage Payment 8.989 * 2.866 3.14 0.002
Interest and Dividends 0.843 * 0.366 2.31 0.021
Speaks English at Home 5460.501 7688.345 0.71 0.478
Has a Child under the Age of Six 5323.626 12669.950000 0.42 0.674 Married 4918.017 4854.962 1.01 0.311
Caucasian Female (b) -8270.422 16201.990000 -0.51 0.610 African American (b) -13003.660 11682.180 -1.11 0.266 Asian American (b) -21673.780 11574.220 -1.87 0.061
Hispanic American (b) -21642.160 11926.540 -1.81 0.070 Native American (b) -12790.210 18991.700 -0.67 0.501
Other Minority (b) -6786.844 15751.520 -0.43 0.667
Year 2017 (c) -2692.271 7385.658000 -0.36 0.716
Year 2018 (c) 1886.584 6886.118000 0.27 0.784
Year 2019 (c) -6090.646 8145.240000 -0.75 0.455
Year 2020 (c) 3345.226 7123.369000 0.47 0.639
Year 2021 (c) 3440.151 6904.016000 0.50 0.618
Constant -14784.440 29300.630 -0.50 0.614
(a) For the variables Bachelor's Degree and Advanced Degree, the baseline variable is high school. (b) For the Ethnicity variables, the baseline variable is Caucasian males. (c) For the Year variables, the baseline variable is Year 2016. (P>|z|) of less than 0.05 denotes findings of statistical significance. (*) denotes a statistically significant variable with 95% confidence. (-) denotes an omitted variable due to insufficient observations.
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The OLS regression results for business earnings in the architectural and engineering industry indicate the following:
• Business owners with a bachelor’s degree or an advanced degree have significantly higher business earnings in the architectural and engineering industry.
• Business owners with a higher monthly mortgage payment have significantly higher business earnings in the architectural and engineering industry.
• Business owners who have higher interest and dividend income have significantly higher business earnings in the architectural and engineering industry.
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3. OLS Regression Results in the Professional Services Industry
Table 7.11 shows the results of the OLS regression for business earnings in the professional services industry based on the 24 variables analyzed in this model.
Table 7.11: Professional Services Industry OLS Regression
Business Earnings Model Coefficient Significance Standard Error t-value P>|t| Age 10110.07 * 1247.700 8.10 0.000
Age-squared -103.80 * 14.307 -7.25 0.000
Incorporated Business -18068.20 13345.870 -1.35 0.176 Bachelor's Degree (a) 30257.70 * 6806.669 4.45 0.000
Advanced Degree (a) 62421.48 * 8273.365 7.54 0.000
Home Owner -2965.51 8387.143 -0.35 0.724
Home Value 0.02 * 0.007 3.01 0.003
Monthly Mortgage Payment 14.38 * 2.605 5.52 0.000
Interest and Dividends 0.42 * 0.198 2.13 0.033
Speaks English at Home -847.24 6798.206 -0.12 0.901
Has a Child under the Age of Six -6310.31 10577.970000 -0.60 0.551 Married 10687.46 5717.530 1.87 0.062
Caucasian Female (b) -28963.84 * 7393.321000 -3.92 0.000 African American (b) -18798.61 14733.230 -1.28 0.202
Asian American (b) -26092.90 * 8214.169 -3.18 0.002
Hispanic American (b) -23523.77 * 9039.872 -2.60 0.009
Native American (b) -90884.34 * 9873.993 -9.20 0.000
Other Minority (b) -36648.34 * 10680.070 -3.43 0.001
Year 2017 (c) 11217.03 7665.464000 1.46 0.144
Year 2018 (c) 18505.78 * 6954.360000 2.66 0.008
Year 2019 (c) 15946.01 * 6954.759000 2.29 0.022
Year 2020 (c) 22382.55 * 7172.083000 3.12 0.002
Year 2021 (c) 16494.70 * 6686.728000 2.47 0.014
Constant -178559.00 * 27485.430 -6.50 0.000
(a) For the variables Bachelor's Degree and Advanced Degree, the baseline variable is high school. (b) For the Ethnicity variables, the baseline variable is Caucasian males. (c) For the Year variables, the baseline variable is Year 2016. (P>|z|) of less than 0.05 denotes findings of statistical significance. (*) denotes a statistically significant variable with 95% confidence. (-) denotes an omitted variable due to insufficient observations.
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The OLS regression results for business earnings in the professional services industry indicate the following:
• Older business owners have significantly higher business earnings in the professional services industry. However, as business owners reach an advanced age, the y have significantly lower business earnings in the professional services industry.
• Business owners with a bachelor’s degree or an advanced degree have significantly higher business earnings in the industry.
• Business owners who have a higher -valued home have significantly higher business earnings in the professional services industry.
• Business owners with a higher monthly mortgage payment have significantly higher business earnings in the professional services industry.
• Business owners who have higher interest and dividend income have significantly higher business earnings in the professional services industry.
• Caucasian female, Asian American, Hispanic American, Native American and other minority business owners have significantly lower business earnings than do non-minority males in the professional services industry.
• In 2018, 2019, 2020, and 2021, business owners had significantly higher business earnings in the professional services industry than in 2016.
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4. OLS Regression Results in the Goods and Services Industry
Table 7.12 shows the results of the OLS regression for business earnings in the goods and services industry based on the 24 variables analyzed in this model.
Table 7.12: Goods and Services Industry OLS Regression
Business Earnings Model Coefficient Significance Standard Error t-value P>|t| Age 3390.23 * 648.705 5.23 0.000
Age-squared -36.57 * 6.972 -5.24 0.000
Incorporated Business -12008.40 * 5431.255 -2.21 0.027
Bachelor's Degree (a) 24229.75 * 5005.380 4.84 0.000
Advanced Degree (a) 35069.57 * 10128.560 3.46 0.001
Home Owner 7959.23 * 3815.279 2.09 0.037
Home Value 0.00 0.003 1.48 0.139
Monthly Mortgage Payment 9.52 * 1.649 5.77 0.000
Interest and Dividends 0.14 0.279 0.49 0.624
Speaks English at Home 8208.06 4891.447 1.68 0.094
Has a Child under the Age of Six -9199.18 5752.065000 -1.60 0.110 Married 6020.95 3646.096 1.65 0.099
Caucasian Female (b) -22281.09 * 10712.780000 -2.08 0.038 African American (b) -34672.07 * 7498.095 -4.62 0.000
Asian American (b) -29470.54 * 8799.452 -3.35 0.001
Hispanic American (b) -26427.51 * 8491.972 -3.11 0.002
Native American (b) -14752.04 8920.869 -1.65 0.099
Other Minority (b) -28668.98 * 12408.230 -2.31 0.021
Year 2017 (c) 1467.17 3932.928000 0.37 0.709
Year 2018 (c) 7357.94 4372.427000 1.68 0.093
Year 2019 (c) 7735.87 4750.828000 1.63 0.104
Year 2020 (c) 7725.38 5159.338000 1.50 0.135
Year 2021 (c) 4006.40 3892.533000 1.03 0.304
Constant -34541.96 * 15208.800 -2.27 0.023
(a) For the variables Bachelor's Degree and Advanced Degree, the baseline variable is high school. (b) For the Ethnicity variables, the baseline variable is Caucasian males. (c) For the Year variables, the baseline variable is Year 2016. (P>|z|) of less than 0.05 denotes findings of statistical significance. (*) denotes a statistically significant variable with 95% confidence. (-) denotes an omitted variable due to insufficient observations.
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The OLS regression results for business earnings in the goods and services industry indicate the following:
• Older business owners have significantly higher business earnings in the goods and services industry. However, as business owners reach an advanced age, they have significantly lower business earnings in the goods and services industry.
• Incorporated business owners have significantly lower business earnings in the goods and services industry.
• Business owners with a bachelor’s degree or an advanced degree have significantly higher business earnings in the goods and services industry.
• Business owners who own a home have significantly higher business earnings in the goods and services industry.
• Business owners with a higher monthly mortgage payment have significantly higher business earnings in the goods and services industry.
• Caucasian female, African American , Asian American, Hispanic American, and other minority business owners have significantly lower business earnings than do non-minority males in the goods and services industry.
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D. Business Earnings Analysis Conclusion
Controlling for race and gender -neutral factors, the Business Earnings Analysis documented statistically significant disparities in business earnings for minorities and Caucasian females compared to similarly situated non- minority males . Caucasian female and Hispanic American business owners experience the greatest disparity, as they have significantly lower business earnings in the construction, professional services, and goods and services industries than do similarly situated non-minority males. African American business owners have significantly lower business earnings in the construction and goods and services industries. Asian American and other minority business owners have significant ly lower business earnings in the professional services and goods and services industries. Native American business owners have significant ly lower business earnings in the professional services industry. Table 7.13 shows the earnings disparity regression results by ethnicity, gender, and industry.
Table 7.13: Statistically Significant Business Earnings Disparities
Ethnicity/Gender Construction Architectural
and Engineering
Professional
Services
Goods and
Services
Caucasian Female Significant Not Significant Significant Significant African American Significant Not Significant Not Significant Significant Asian American Not Significant Not Significant Significant Significant Hispanic American Significant Not Significant Significant Significant Native American Not Significant Not Significant Significant Not Significant Other Minority Not Significant Not Significant Significant Significant
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VII. Conclusion
Two regression analyses were conducted to determine whether there were factors in the private sector that may help explain the current levels of M/WBE availability and any statistical disparities between M/WBE availability and utilization identified in the Study. The analyses examined the following outcome variables: business ownership and business earnings.
These analyses were performed for the four industries —construction, architectural and engineering, professional services, and goods and services—included in the Study. The regression analyses examined the effect of race and gender on the two outc ome variables. The Business Ownership Analysis and the Earnings Disparity Analysis used data from the 2016 through 2021 PUMS datasets for the City and compared business ownership rates and earnings for M/WBEs to those of similarly situated non-minority males.
The analyses of the two outcome variables document disparities that could adversely affect the formation and growth of M/WBEs within the construction, architectural and engineering professional services, and goods and services industries. In the absence of a race and gender - neutral explanation for the disparities, the regression findings point to racial and gender discrimination that depressed business ownership and business earnings. Such discrimination is a manifestation of economic conditions in the private sector that impede minorities and Caucasian females’ efforts to own, expand, and sustain businesses. It can be inferred that these private sector conditions are manifested in the current M/WBEs’ experiences and likely contributed to lower levels of willing and able M/WBEs.
It is important to note there are limitations to using the regression findings in order to access disparity between the utilization and availability of businesses. No matter how discriminatory the private sector may be, the findings cannot be used as the factual basis for a government-sponsored race-conscious M/WBE program. Therefore, caution must be exercised in the interpretation and application of the regression findings in a disparity study. Nevertheless, the findings can be used to enhance the race- neutral recommendations to eliminate identified statistically significant disparities in the City’s use of available M/WBEs.
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Chapter 8: Anecdotal Analysis
CHAPTER 8: Anecdotal Analysis
I. Introduction
This chapter presents anecdotal evidence from a focus group, in-depth one-on-one interviews, and other current anecdotal data provided by the City of Oakland. The anecdotal evidence is presented to highlight actions that may have prevented minority and wom an-owned business enterprises (M/WBEs) from accessing contract opportunities from the City. The anecdotal data is also intended to supplement the statistical findings of the Study.
The value of anecdotal testimony in a disparity study was discussed in the landmark case , City of Richmond v. J.A. Croson Co. (Croson)83 in 1989. In this decision, the United States Supreme Court considered anecdotal testimony to determine whether remedial, race- conscious relief may be justified in a market area. The Court opined that “evidence of a pattern of individual discriminatory acts can if supported by appropriate statistical proof, lend support to a [local entity's] determination that broader remedial relief [be] justified.” 84 However, the Court found anecdotal evidence alone cannot provide the predicate for a race-based remedy.
The anecdotal data provides information on the types of barriers perceived within the market area and their effect on the development of M/WBEs. When paired with statistical data, anecdotal data can document the routine practices involving M /WBEs’ access to contracting opportunities. The statistical data can quantify the results of discriminatory practices, while anecdotal data provides the human context to understand the numbers.
A. Anecdotal Evidence of Active and Passive Discrimination Croson authorizes anecdotal inquiries along two lines of inquiry. The first line investigates active government discrimination as reflected in the award of prime contracts or acts of exclusion committed by contractors working on behalf of a governmental entity. The second line of anecdotal inquiry
examines the government’s passive support of exclusionary practices in the market area where its funds are infused.
Anecdotal evidence of passive exclusion pertains to the discriminatory activities of private sector entities. Passive exclusion results from government officials who knowingly use public funds to contract with companies that discriminate against M/WBEs or fail to take positive steps to prevent discrimination by contractors who receive public contracts.85 The Court has cautioned that anecdotal evidence of discrimination is entitled to less evidentiary weight than statistical findings because the evidence concerns more private than government - sponsored activities. Less weight should be afforded to personal accounts of discrimination that 83 C ity of Richmond v. J.A. Croson Co. , 488 U.S. 509 (1989). 84 Id .
85 C roson , 488 U.S. at 491-93, 509.
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reflect isolated incidents compared to anecdotal evidence of a municipality’s institutional practices because of the impact that institutional practices have on market conditions. 86 Nonetheless, when paired with appropriate statistical data, anecdotal evidence of either active or passive forms of discrimination can support the imposition of a race or gender-conscious remedial program. 87 As Croson points out, jurisdictions have at their disposal “a whole array of race-neutral devices to increase the accessibility of contracting opportunities to small entrepreneurs of all races.” 88 Nevertheless, the Court found that anecdotal evidence has value because it can paint a portrait of the practices and procedures that generally govern the award of public contracts in the relevant market area. According to Croson, these narratives can identify specific generic practices that the governmental entity can implement, improve, or eliminate to increase contracting opportunities for businesses owned by all citizens. In this study, the utility of anecdotal evidence is considered within the parameters of the law.
B. Anecdotal Methodology
The methods used to collect the anecdotal information include public comments solicited from:
1) a focus group discussion; 2) anecdotal data provided by the City, including print and social medial articles and judicial complaints; and 3) one-on-one interviews with business owners located in the City’s market area . The boundaries of the market area are described in Chapter 3:
Geographic Market Area Analysis.
1. Focus Group Discussion
A focus group discussion with local business owners was held on October 9, 2023, to explore and understand the issues and challenges experienced by M /WBEs related to possible discrimination in the City’s procurement process. The focus group discussion sought anecdotal accounts of discrimination or biased treatment in the awarding of the City’s contracts at the prime contract or subcontract level, based on factors such as race, gender, or ethnicity, rather than merit, qualifications, or competitive bidding.
a. Discussion Probes
The focus group discussion delved into the complex issue of discrimination in public contracting and sought to disclose the business owners’ experiences and the root causes, as well as potential recommendations by:
86 Concrete Works of Colorado v. City and County of Denver, 36 F.3d at 1530 (10th Cir. 1994): "while a fact finder should accord less weight to personal accounts of discrimination that reflect isolated incidents, anecdotal evidence of a municipality’s institutional practices carry more weight due to the systemic impact that such institutional practices have on market conditions.”
87 Croson, 488 U.S. at 509.
88 Id.
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• Providing a platform for M /WBEs who have experienced or witnessed discrimination while navigating the City’s contracting process.
• Identifying and analyzing patterns and practices within the City’s procurement process, including bias, favoritism, and exclusionary practices. • Investigating the root causes of discrimination in public contracting, including systemic issues.
• Understanding the economic implications of discrimination in public contracting and its impact on M/WBEs.
• Soliciting policy recommendations and best practices to mitigate discrimination and promote fair and transparent procurement policies, procedures, and practices.
b. Participants
A total of 19 business owners participated in the focus group discussion. In order to foster a candid conversation, a diverse group of participants was selected to represent various stakeholder perspectives. The discussion was led by an experienced facilit ator with extensive knowledge of government contracting practices. The participants in the focus group include:
• Business owners headquartered in the City of Oakland who have bid on or been awarded a City prime contract or subcontract, with a focus on those who have encountered discrimination.
• Community leaders who can speak to the broader societal impact of contracting discrimination, including its effects on marginalized communities.
In addition to anecdotal probes, an open discussion was allowed for questions and candid dialogue among all participants. Testimony from the focus group is incorporated in this chapter.
2. Print and Social Media News Articles
The anecdotal data presenting instances of public contracting discrimination in local print and social media articles offers another method to present patterns and practices that may impede the participation of M /WBEs on the City’s contracts. The local news articles describe instances of inequality in the City’s market area. Shedding light on instances of public contracting discrimination in the City’s market area can promote transparency, accountability, and drive positive change in the contracting process.
3. Judicial Complaints
Administrative hearings are an essential part of the legal process by offering a forum for business owners to seek resolution when they believe they have experienced discrimination in public contracting. The administrative hearings discuss possible public contracting discrimination and the role they play in upholding fairness and justice in the City’s market area. An effective complaint mechanism can provide business owners the opportunity to be heard and hold government agencies accountable for their actions.
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Complaints filed with the Superior Court of the State of California, Alameda County and the Court of Appeal of the State of California, First Appellate District in Division Five during the study period were analyzed. The complaints were reviewed to identify possible systemic issues that may highlight recurring problems or patterns within the City’s procurement process and procedures.
The judicial review also allows for a thorough examination of evidence —including documentation, testimony, and expert witnesses —to determine whether discrimination occurred.
Following the hearings, the judge may issue a decision that may include recommendations the City could adopt to address any identified bias or discrimination.
4. One-on-One Interviews
The final phase of the anecdotal process included 54 one-on-one interviews. Business owners were screened for their interest in being interviewed. The screener collected basic demographic data and specific information to determine the relevant experiences of the business owners. The screener also captured information regarding the interviewee’s experiences wit h public contracting and willingness to recount experiences to a trained interviewer.
In the one -on-one interviews, anecdotal probes were used to solicit information from the interviewees. The questions sought to determine if the business owner encountered or had specific knowledge of instances where the City’s formal or informal contracting practices positively or adversely impacted them during the study period of July 1, 2016 to June 30, 2021.
II. Anecdotal Findings
Croson held that anecdotal evidence can breathe life into the findings of statistically significant underutilization of M /WBEs on government contracts. Dating back 33 years, disparity studies commissioned by the City have documented statistical evidence demonstrating preferential treatment toward non-minority males on the City’s competitively bid contracts. This evidence was presented in the City’s 1991, 2007, 2017, and 2024 disparity studies.
The obstacles reported in the 2017 anecdotal analysis mirrored the barriers to participation that are reported in the 2024 Disparity Study. Interviewees continue to report discriminatory practices by the City, including the use of preferred contracts. Non-minority males continue to be overutilized in the City’s construction, architectur al and engineering, professional services , and goods and services contracts. The 2017 anecdotal barriers are presented in Chart 8.1.
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Chart 8.1: 2019 Anecdotal Barriers
Many of the anecdotes are corroborated with statistical data which found that minority and woman- owned businesses were statistically underutilized in the City’s construction, architectural and engineering, professional services, and goods and services projects at the prime contract and subcontract levels.
A. Focus Group Responses
1. Barriers
The business owners who participated in the focus group discussion were asked what barriers, if any, prevented them from being a successful bidder or effectively completing their scope of work.
Their responses focused on the failure by City officials to enforce policies that were intended to ensure fair and transparent contracting practices.
A minority male construction contractor thinks that the City’s selection process is subjective:
I think the process is highly subjective; it is so
bad we can’t buy a bid. When I went through
the bidding process, I learned that the deck
was stacked against us. I knew that as a
minority-owned business we have to do more
than our counterparts. So, we came with a
complete plan including letters of support. Our
competitor came with nothing and still got the
gig. Then, they sat on the project for seven years. If it was a Black company, the developers would not have allowed them to sit on a project and not perform for seven years.
Seven of the 60 prime contractors
received $152,425,256, or 71% of
the total construction prime
contract dollars during the study
period.
Discriminatory
practices
Difficulty breaking
into the
contracting
community
Difficulty
navigating the
bidding process
Difficulty meeting
bonding and
insurance
requirements
Late payments
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A minority female professional services consultant believes that being certified with the City of Oakland has not benefited her business:
When I first started my business many years ago, we received certifications from several agencies including Alameda County and the City of Oakland. But I never heard a thing from the City of Oakland. To this day, I am not certified with the City of Oakland, and I have no plans to be certified with them. It seems like there is a lot of favoritism within the City. They only work with specific individuals that they have a history with.
A m inority male construction contractor has not received work from the City even though he invested in insurance to meet the City’s requirements:
I shelled out thousands of dollars on insurance to meet the City’s requirements. Oakland has a gray area regarding cleaning and dumping services, and I have not received work. I am trying to find people that will support me in getting work.
A minority male construction contractor believes that the City needs to provide more oversight on prime contractors’ utilization of subcontractors:
The City of Oakland unfortunately does not have enough oversight to make sure general contractors are utilizing certified subcontractors. I have been in business for 13 years now. I had one project opportunity with [contractor name withheld], and they and a subcontractor who was also my competitor basically just tried to squish me out. They required that I get a bond for a brick project for a scope of work that was only $145,000. I have done bigger projects and never needed a bond. It was just a bad contract. They were adding work to the scope of work, basically trying to make me do work that was not in my bid. So, I do not respond to the City’s bids anymore. They need to make sure their prime contractors are doing the right thing.
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A minority male construction contractor also believes that the City needs to make sure that contract terms are being met:
I have had trouble with prime contractors not abiding by what is in our contract, but the City does not either. The City needs to abide by their own policies, and their contractors should be forced to abide by the contract terms.
I worked on a project where the prime contractor removed the concrete portion and had us credit them back that portion of the contract. Then, they had another subcontractor do that portion of the work. We told the City, but they got a whole bunch of dogs with no teeth, so nothing happened. At the end of the day, it cost us too much money to go after the lost work. They need more dogs with teeth.
A minority male construction contractor thinks the City should do a better job in keeping general contractors accountable to contract terms in their effort to support small businesses:
The City should hold general contractors accountable. Not just through policies, but monetary penalties so they have a price to pay for wrongdoing. If they are subjected to penalties, they will follow policy. A lot of prime contractors know that micro small companies will allow their business to be listed and then dumped. They do not have the money to fight, so they just walk away. This is very discouraging as a micro small company. The City should make sure micro small companies get actual work on their projects because they are the backbones of the community. It is somewhat of a disconnect because they are part of the good old network. But they are still playing that game.
A minority male construction contractor suggests that the City enforce its prompt payment and mobilization payment policies:
We did our research on prompt payment and how it works to be educated about the City’s prompt payment policy. It’s sad because they do not enforce the ordinance. We put in a complaint because the general contractor violated the prompt payment policy, and the City did not know how to enforce it. And not only that, but there is also a mobilization clause included in the prompt payment ordinance. If the prime contractor receives mobilization funding, they owe the subcontractor mobilization for their portion of the work within five days of receipt of their payment. Sometimes the contractors hold the mobilization for a whole year.
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A minority male construction contractor recommends that the City monitor subcontractor payments:
They also need to monitor whether subcontractors were paid. If not, there should be penalties. The City should include terms in their contract requiring subcontractors to be paid within a certain timeframe of the prime contractor’s receipt of payment.
A minority male professional services consultant wishes that the playing field was made equal so that minority-owned companies can receive the same opportunities as others:
A lot of times as an African-American company or a brown company, we don't get the same opportunities. We want to figure out how to make the playing field equal. When the math is done at the end of the day, the scales of justice are skewed. Not just a little but in a big way.
A minority male construction contractor recommends that the City consult with the City of San Francisco to learn how they run their small business program:
I suggest that the City of Oakland meet with the City of San Francisco to discuss how they run their program. They have a good program for small businesses.
A minority male professional services consultant also recommends that the City better enforce rules that support small businesses:
There seems to be no one enforcing the rules that support small businesses. If they enforced the rules that are in place, small businesses could experience a lot more advancements. The mayor and the City Council’s leadership need to understand that they were not elected to do favors for a select group of rich small business owners. They should do their best for all citizens and take better care of the local construction and professional services companies.
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2. Community Workforce Agreement
Several focus group participants discussed the Community Workforce Agreement (CWA) Taskforce Report. In October 2021, by unanimous vote, the Oakland City Council commissioned the report by directing staff to “create a task force to address inclusion of social and racial equity provisions in the community workforce agreement.” In January 2022, Davillier-Sloan, Inc. (DSI) was contracted to facilitate the task force meetings and prepare a report on findings. 89 Some of the
key recommendations from the report are presented below in Tables 8.1 and 8.2.
Table 8.1: Key Recommendations from the DSI Report to Address Barriers in the Construction Industry
Recommendations to Address Barriers in Construction
Include language such as “best value” or “most
responsible bidder,” as opposed to “lowest bidder”
in bid solicitations.
Incorporate anti-bias training by unions to educate
their workforces on the benefits of having a
diverse set of contractors and take affirmative
action to make a workplace welcoming to all
workers, especially to Black workers and women.
Establish committees open to public participation
for contractors to present complaints about union
actions.
Require unions to create measurable programs
that address the challenges minority and non-
union businesses face when becoming a union
signatory.
Enact policies that encourage justice, diversity,
and sexual harassment training for union business
agents and pension trust administrators.
Require unions to host workshops to assist small
local businesses, including tours of training
facilities.
Offer technical assistance for:
• Access to non-traditional financing options.
• Prevailing wages compliance.
• Workers’ compensation compliance.
• Bonding.
• Competitive bidding.
• Managing progress payments.
• Accounting and auditing preparation.
Mandate the unions and the trusts to post board
positions.
Require unions and prime contractors to pay
benefits into a Social Justice Trust fund to help
with legal fees, accounting, childcare,
transportation, union dues, access to capital, etc.
Allow local contractors to cancel a union
relationship in a relatively easy manner without
facing legal duress unless a worker is owed
wages or benefits.
89 Community Workforce Agreement Task Force Report, Davillier-Sloan, Inc., June 2022.
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Table 8.2: Key Suggestions for Compliance and Monitoring from the DSI Report
Suggestions for Compliance and Monitoring in Local Hiring and Local Business
Require adequate monitoring and compliance
oversight by independent, outside, third-party
consultant(s) working in close coordination with
designated City staff.
Require that City staff or third- party consultant(s)
conduct regular field site visits on each CWA-
covered project.
Establish committees open to public participation
to work with City or third-party consultant(s) on
compliance oversight for both contractors and
unions.
Establish strong, enforceable financial penalties
for both non-compliant parties.
Include clear language that lays out good faith
efforts steps contractors are to make in hiring
locally.
Provide off-site credit for Oakland apprentices
working on other projects concurrently.
Comments regarding the Community Workforce Agreement Taskforce are presented below:
A minority male construction contractor described how he served on the CWA Taskforce:
About a year ago, myself and a bunch of other contractors and professional services consultants served on the Community Workforce Agreement Task Force. We gave a host of recommendations that should be incorporated into this Study.
A minority male construction contractor believes that the City is not heeding the recommendations developed by the task force:
The CWA Task Force developed 10 to 15 pages of recommendations. The recommendations were from a variety of different people and organizations with different experiences. It is a really nice piece of work. But, in my opinion, the City is trying to kill it. They have this Project Labor Agreement that will destroy contractors because it includes residential work. In fact, the union shouldn't include residential work.
Several business owners discussed the need to enforce the City’s procurement policies that are intended to support SLBEs. This minority male construction contractor offered his opinion:
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The City officials need to be held accountable for their own policies. Every time the City Council meets, we should attend to make sure our issues are being addressed.
A minority female construction contractor believes more enforcement is needed as well:
There are policies in place. The problem is the people who are responsible to enforce them do not know that they are in place.
B. Print and Social Media News Articles
Several news articles the City provided highlighted obstacles that M/WBEs experienced that raise the issue of more accountability from the City’s leaders and procurement decision- makers. One article discussed the City’s reluctance to release the 2017 Disparity Study. The City withheld the study for approximately eight months.90 Representatives from the City reported that the 2017 Race and Gender Disparity Study was incomplete and needed to be updated and supplemented. The business community hoped the Study release would yield new policies to address the documented disparities.
1. “City Releases Long-Awaited Study of Contracting Disparity Following Public Outcry”
The Study revealed that African American -
certified L/SLBEs lost $42.9 million in City
contracts during the 2001 to 2016 study period.
They were expected to be awarded $42.9 million
during the study period to achieve parity based on
their availability in th e City’s market area. The
2017 Study reported that “despite the L/SLBE
Program's rigorous and aggressive race and
gender-neutral goals, there is still a statistically
significant disparity in the award of prime
contracts to L/SLBE -certified African American
businesses.”
Oakland City Councilmember Loren Taylor lamented, “The public outcry has been loud and clear, and it is absolutely critical that we learn from this experience and that we, as C ity government, listen and not be forced to respond.” The Study was released shortly after the release of the news article.
90 https://www.sfgate.com/news/bayarea/article/City-Releases-Long-Awaited-Study-Of-Contracting-15752676.php.
City Releases Long-Awaited Study of Contracting Disparity Following Public Outcry
Despite the L/SLBE Program's rigorous and aggressive race and gender-neutral goals, there is still a statistically significant disparity in the award of prime contracts to L/SLBE-certified African American businesses.
SF Gate, November 24, 2020
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2. “Oakland Adopts New Rules to Help Local Small Businesses Compete for City Contracts”
The disparity findings reported in the 2017 Study were the impetus for a new City ordinance, Local Business Empowerment through Contracting, according to the Oaklandside Newspaper.91 In 2021, a City Ordinance was enacted to increase
access for M/WBEs and other small local
businesses on the City’s contracts. The
Ordinance includes set-asides on the City’s
public works projects and professional
service contracts valued at $50,000 and
under to local small businesses. The City’s
Contracts Compliance O ffice was also
required to review and analyze companies
doing business with the City thoroughly.
Councilperson Loren Taylor’s office
hosted a virtual town hall attended by local
African American contractors and City employees. The attendees supported the proposed legislation and hoped it would increase revenue to the City’s Black community. Councilperson Taylor said, “We have a long way to go to reverse systemic racism and structural barriers that have long plagued Black-owned businesses and woman-owned businesses when it comes to accessing their fair share of contracting opportunities.”
3. “Oakland City Council to Take Aim at Equity in City Contracting” The CBS News Bay Area Newspaper reported on the second reading of the Local Business Empowerment through Contracting Ordinance on February 16, 2021. 92 The second reading
focused on the cost implications for the City
based on implementing the new ordinance. The
City representatives reported that the cost would
be negligible compared to the impact on African
American businesses due to the disparities they
experience in the award of the City’s contracts,
as reported in the 2017 Disparity Study.
The Ordinance includes a total of eight changes
to the City’s procurement policies. One
significant change consists of a new business
certification category, the Small Business
Administration – Local Oakland Business
91 https://oaklandside.org/2021/02/17/oakland-adopts-new-rules-to-help-local-small-businesses-compete-for-city-contracts/.
92 https://www.cbsnews.com/sanfrancisco/news/oakland-city-council-to-take-aim-at-equity-in-city-contracting/.
Oakland adopts new rules to help local small businesses compete for City contracts.
Across each of the four industries examined in the study— construction, professional services, goods, and services—Black contractors, and female contractors of all races, were shown to receive a disproportionately low share of city contracts. White men received a disproportionately higher share of contracts than they would have under a fair system.
The Oaklandside, February 17, 2021
Oakland City Council to Take Aim at Equity in City
Contracting
African American businesses certified as Local/Small
Local Business Enterprises lost $42.9 million in City
contracts over the study period. In other words, African American businesses were expected to be awarded $42.9
million more, given their eligibility.
CBS News Bay Area, January 28, 2021
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Enterprise, that expands the meaning of a “substantial business presence” and “local manufacturer” as evidence of a business’s presence in the City.
African American contractors were urged to get certified with the City to take advantage of the components of the new Ordinance. However, some business owners reported that they struggl ed to remain solvent because of COVID’s impact on their businesses.
4. “Black Contractors Say That Oakland’s N ew Business Initiative Leaves Them Out of City Contracts”
In 2021 the Ark Republic reported on a new City
initiative that was intended to support local
businesses. According to a 2013 report by City
Auditor Courtney Ruby, high- ranking officials
are willing to look the other way when
councilmembers break the law.
93 The Oakland
City Council routinely waived legally mandated
competitive bid requirements for awarding
construction contracts worth more than $50,000
by negotiating contracts directly with firms of its
choice.
For example, a bid was awarded to a contractor
that failed to meet the City’s L/SLBE goals, and
another contractor was deemed the successful
bidder despite over-bidding the project. It was noted that the City’s procurement procedures did not render a bid nonresponsive if it failed to meet the small business goals or if the bid was over the project price.
The article also highlighted that the City was known for “awarding fraudulent contracts and routinely sole sourcing its projects, which signals entrenched problems in how Oakland does business and how that affects residents.” The City Council improperly awarded a $1.5 billion trash collection contract to an unqualified recycler. The 2014 award resulted in garbage colle ction fees skyrocketing to exorbitant heights.
The City Auditor’s report also provided, “For many years, there have been signs that problems exist with councilmember interference, and there is a general culture of interference within the City that appears to be felt across many City departments and is perceived to come from multiple councilmembers.”
After implementing the new ordinance to improve equity in the City’s contracting, a City council member reported that there had been relatively little change in two and a half years.94 City
93 https://www.arkrepublic.com/2021/06/28/black-contractors-say-that-oaklands-new-business-initiative-leaves-them-out-of-city-contracts/.
94 https://sfbayview.com/2021/05/black-contractors-getting-little-if-any-more-city-contracts-since-new-law/.
Black contractors say that Oakland’s new business
initiative leaves them out of City contracts
The City Council unanimously passed the Local Business
Empowerment Through Contracting ordinance in February,
but Black contractors have not received any of the available contracts. In the report, a minority male contractor
described why African American contractors received less than 1 percent of the City’s contracts from findings in a study during July 1, 2011 to June 301, 2016.
Ark Republic, June 28, 2021
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Councilmember Loren Taylor said, “Anecdotal evidence suggests improvement, but there are no numbers to back it up.” Additionally, contractors reported that they had attended numerous meetings with City officials, and nothing had changed, leaving them frustrated.
5. “Black Contractors Getting Few if Any More City Contracts Since New Law”
In this article, a prominent business owner expressed frustration that many City townhall meetings were held, but African American businesses
were unable to get the answers they needed to
do business with the City of Oakland. A former
president of the Black Chamber of Commerce
reported that an entire community is being left
behind,” fearing that Black c ontractors are
going extinct.
The City’s informal solicitations are not
required to be publicly advertised. Thus, the
City’s staff has discretion to award contracts
valued up to $50,000. Additionally, the former
president of the Oakland Black Board of Trade
and Commerce agreed that the City’s procurement process is not contractor -friendly, and businesses typically do not learn about contracts until shortly before the bid is due.
C. Judicial Complaints
Judicial complaints provided by the City were reviewed to identify patterns and practices alleged by the complainants against the City of Oakland. Each of the complaints alleged failure to pay for work performed on behalf of the City:
1. Bay
Construction,
et al.
v.
City of
Oakland
Bay Construction alleged that the City failed to compensate them for the extra work it performed despite submitted change order requests.
Relief sought:
Monetary damages
Complaint filed:
July 21, 2016
Black contractors getting few if any more
City contracts since new law
Frustration comes after the City Council passed the Local Business Empowerment Through Contracting ordinance in
February, and after the City's seemingly reluctant decision to release a study showing racial disparities in contracting in Oakland.
San Franciso Bay View National Black Newspaper,
May 7, 2021
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2. Horizon
Project
Consulting
v.
City of
Oakland
Horizon Project Consulting alleged that the City failed to pay for work performed under the contract. The complaint also alleged that the City violated the prompt payment statute and the implied covenant of good faith and fair dealing, which prohibits doing anything that would deprive a party of the contract.
Relief:
Monetary damages
Complaint Filed:
December 27, 2018
3. Flatiron
West, Inc.,
v.
City of
Oakland
Flatiron West Inc. alleged that the City breached the contract for failing to fully pay for the work performed on the project and also refused to pay for changes to the contract that impacted and delayed work.
Relief:
Monetary Damages
Complaint Filed:
October 29, 2019
4. AEKO
Consulting,
v.
City of
Oakland, et.
al.
AEKO Consulting alleged that the City violated the prompt payment ordinance and participated in trade libel by claiming the plaintiff refused and failed to complete the subcontracted work.
Relief:
Monetary damages
Complaint Filed:
December 14, 2018, amended
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D. One-on-One Interviews
1. Preferential Treatment
Interviewees reported being excluded from certain City contracts due to preferential treatment being given to some contractors. The Study’s size analysis demonstrated that most of the City’s contracts were small, with 70.87% of all the prime contracts valued at less than $100,000.
Additionally, 85.13% were valued at less than $250,000; 91.62% were less than $500,000; 95.50% were less than $1,000,000; and 99.12% were less than $3,000,000. Only 0.88% of the awarded prime contracts were valued at $3,000,000 and greater. Therefore, the available firms only required minimal capacity to perform on most City contracts, even competitively bid construction projects.
Interviewees reported that they experienced barriers to obtaining work from the City because of preferential treatment of certain contractors.
A minority female owner of a professional services company has not secured work from the City despite her exceptional reputation and years of experience:
We are recognized as a topnotch competitive [industry withheld] on a national basis. We have won every award. I'm in the Hall of Fame. There is absolutely no company in Oakland that compares to who we are. But I have never gotten a piece of business from the City of Oakland. Never. [Local agency name withheld] hired me to do a large project, and we worked with Southwest Airlines. It was very successful. We have worked with the United States Army, United States Census, Disney, Michael Kors, General Motors, and nobody in Oakland has ever awarded us a contract. And I don't mind if they know I say that. In my opinion, they give their friends contracts. It doesn't matter the expertise of their friends or the knowledge.
A minority female owner of a construction company explained that being an African American female is a barrier to achieving success in her field:
It hurts when a certification program does not serve
its certified firms. The program equates to being
non-certified, since it does not serve its purpose. I
want to be clear, if the certification program is not
serving the needs of the certified firms, it's almost
the same as not being certified. I am certified and I
live in the City of Oakland, and I make under a
certain amount to meet the threshold. So, I am
qualified to be a small local business. But what
challenges me is that I am a Black, African
African American females represent
5.57% of the available professional
services businesses and received
0.31% of the dollars on professional
services subcontracts during the study
period.
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American woman running this company. And the equity is not there for us. We are underrepresented. We also have small business challenges such as cash flow. It is not a matter of manpower; we have enough men, but the opportunities are not there. We are overlooked and passed over. Not sometimes, a lot of times we are passed over and overlooked. And those are challenges that I think a lot of African American firms face in the City of Oakland, in the State of California, and in the nation. But for me, what really sets me back is that I am a Black woman in this field. I know a general contractor that does not look like me, who gets a lot of business from the City.
I am not going to name them, but they have told me, "We do not like working with small local business enterprises. They always have issues, meaning cash flow problems and different things like that.” But they do not mind coming here cleaning up and getting the contracts.
A minority male owner of a construction company believes his inability to secure contracts with the City is due to systemic discrimination:
Ofte ntimes , the RFP process is used to justify a decision that has already been made. There are very few African American development companies. It seems like they are always held to a different and higher standard. Or they are cast in a different light, meaning that they have to prove they have the capacity, whereas the White organizations do not have to do that. The White firms are given a much longer leash, in terms of extensions, etc. Black firms are not given that same courtesy. As far as Black developers, winning an opportunity with the City of Oakland is not good. One of the most prolific Oakland developers, a White guy, told me, “You are not going to get the project. The other guy is going to get it because the system was set up for them to win for a number of reasons.”
A minority male owner of a construction company described a tactic used by prime contractors to exclude minority contractors from receiving subcontracting opportunities:
Prime contractors are now making it even
harder to get subcontracts because we have
to be pre-qualified in order to bid with them.
Now, we have to give them our tax forms and
everything that we had to submit to the City
of Oakland in order to submit a quote to the
contractor. This practice has got to stop. This
is the reason why the City of Oakland, BART,
Port of Oakland are not meeting their goals.
African American males represented
15.78% of the available construction
businesses and received 2.45% of the
dollars on construction prime contracts
valued at $50,000 and under during the
study period.
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These prime contractors know how we can prevent minority contractors from participating. We will tell them to give us the same information that the City of Oakland or the Port of Oakland or BART wants to be qualified. Some of them ask for this for every job. This is why prime contractors, like Turner Construction, Swinerton, all these big boys, come to Oakland and get all these prime contracts.
A minority male owner of a construction company reported that he is unable to secure trucking contracts from the City despite the local trucking requirements:
I am aw are that the C ity has a 50% small
local trucking requirement on their
construction projects. But from the truckers
that I know, we haven't seen many
minorities working on too many projects.
The big firms have firms that they use as
fronts, which in turn cuts us out. We are a
small company, and I don't want to name
any large companies, but the reality is they
have more buying power and labor than we do. When we bid on projects, our labor is slim to none. It doesn't matter where we go or who we bid against.
Even if we sharpen our numbers, we continuously get beat out because of the price of materials. I should not have to compete against a $200 million company as an L/SLBE on small local projects. It doesn't make sense. They are going to win every time. The program has no competitive advantage. If I am an L/SLBE, I should be competing against companies within my revenue, which would make more sense. We continue to get recertified in hopes that we get our share of whatever piece of the pie that is left.
A minority female owner of a construction company believes that the City’s contracting opportunities are not disseminated fairly:
We h
ave not received anything from the
City of Oakland. We sought work from the
City to get construction contracts. We
recently attended a City of Oakland
meeting where they mentioned available
contracting opportunities. We tried to find
out where they are. We know that they
exist. The number one challenge is we have
difficulties finding out about the City’s
African Americans represent 15% of
the available construction businesses
and received 2.11% of the dollars on
construction subcontracts during the
study period.
Non-minority males represent 58.87%
of the available construction
businesses and received 74.13% of the
dollars on construction prime contracts
valued at $50,000 and under during the
study period.
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projects. Since we don't know about their projects, we cannot show up for them. When we do find out about them, we have two or three days to put together a proposal. Then, we reach out to our suppliers, but of course the larger companies get preferential pricing. We also have encountered workforce issues. If the prime contractors don't pay or abide by the local ordinance regarding payments, we don't have the funds to float an entire project or wait for payments like they can do. Additionally, the prime contractors will pretend like they don't have to pay mobilization. We had to use our own resources. In reality, we have to fight them to pay us on time. We went to the City and complained. Those are dollars lost as a small company.
This same business owner also believe that City’s master agreements favor majority-owned firms:
The reality is if a contractor is awarded a master contract over and over again, it is preventing participation. If you are going to be fair, make it fair.
They could award those contracts from a rotational pool. But to award contracts solely to a contractor over and over again is not fair to the community or local businesses.
A minority female owner of a construction company explained why she believes the lowest bidder requirement is detrimental to small minority firms:
I understand there are certain credits that the general contractor receives for using local business enterprises. I am not sure how that works or what are the prime contractor’s responsibilities. But, I believe the system is designed to make it hard for small minority businesses to win contracts because of the lowest bid requirement. Minority businesses typically do not have the capacity, relationships with suppliers, etc. to be the lowest bidder.
A minority male owner of a goods and services company reported that despite the City’s L/SLBE Program, he still competes against large national companies:
I submitted a proposal for an RFP that the City of Oakland issued. I'm a local company, and we made it to the first interview and the second interview. My company and a national company were invited for a final interview. The national company is a $20+ billion company. I am unable to compete at that level, but if am invited to a final interview, that means I can do the job. From the conversation during the interview, we thought that we got it. We are a very 8-20
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solid and responsive company. I thought I was going to receive this great opportunity. But we did not.
2. Difficulty Navigating the City’s Bid Process
Several interviewees described barriers they encountered trying to understand the City’s solicitation process or gathering information for bids.
A minority male owner of a construction company described how the subcontractor pre-qualification requirements by prime contractors act as a barrier for small minority contractors:
Prime contractors know how to weed us out as subcontractors. They know that we do not have the time and money to get pre-qualified by them. The prime contractors require us to provide the same financial information to them that we had to send to the City of Oakland, BART, or Alameda County. This is why I don't see Blacks doing work on certain public work jobs. I am letting it be known that these big contractors are asking for something else other than a quote. They put another hurdle in front of us in order to win a bid. The City should let these prime contractors know that is not allowed. They should be told to look on the City’s website to search hundreds of local certified businesses and leave it at that. They need to let those people know that. Now we have to go through another qualification process with the prime contractors. But to ask for tax records, profit and loss statements, and all my business data is not right.
A minority male owner of a construction contract described the volume of information they have to submit to meet the prime contractor’s pre-qualification requirements:
Prime c ontractors generally ask us to pre-qualify
with them. Recently, they have asked us to pre-
qualify with a third party. Their pre-qualification
process requires us to submit a lot of information
about our company including the kind of projects
we have worked on, our safety records. We have
to provide our last three years of OSHA reports.
They also ask for financial information, the
volume completed in the last three years, and
references.
A minority male owner of a professional services company explained that many small businesses do not have the resources to respond to the City’s complex proposals.
African American males represent
10.02% of the available construction
businesses and received 2.10% of the
dollars on construction subcontracts
during the study period.
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A big company that has 100+ employees can manage bids that are very complicated. They have staff dedicated to working a couple of weeks to respond to bids.
A minority female owner of a construction company reported that her firm has received some subcontracting opportunities on the City’s projects, but not as a prime contractor:
Since being certified six years ago, we
have worked on City of Oakland-funded
projects. But we have not been able to
participate as a prime contractor. We had
issues finding information for flooring
contracts. When we contact them, they say,
"Oh, we haven't done flooring in so long.”
Really, the City does not do any flooring?
Yes, they do. But we cannot find
information on when the projects coming out, and who are they going to.
Nobody knows. So, over the last four years, we reached out to general constructors. We have not sought work directly from the City of Oakland.
A Caucasian male owner of a professional services company reported that many of the opportunities he receives from the City is based on relationships:
We have a sales staff who looks on the City’s
website for opportunities. Occasionally, I get a
direct request from the City to do work. But
most of our opportunities are now based on
relationships, and we continue to get work.
A representative of a Caucasian female-owned
professional services company reported on how their firm identify subcontractors for City projects:
I don't want to say exclusively, but we mostly find subcontractors based on our existing relationships and people that we have worked with. I personally don't recall going to the City's directory to search for a subcontractor.
African American females represent
3.37% of the available construction
businesses and received none of the
construction subcontracts during the
study period.
Caucasian females represent 12.30%
of the available professional services
businesses and received 24.95% of the
dollars on construction subcontracts
during the study period.
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A minority male owner of a construction company described the various methods his firm utilizes to identify subcontractors:
We post subcontracting opportunities in the Daily Pacific Builder, which is a trade publication that public entities advertise in. So that's the major outlet that we use. There are a couple more that we use including our own program called Procore where we send out invitations. During our decades in business, we have built a big database of businesses that we send invitation to. When our projects are local, we try to advertise locally. Subcontractors tend to focus on those projects a little bit more. So, we get better results from local companies.
A minority female owner of a construction company believes the City’s mentor-protégé programs are not structured to benefit the protégé:
As far as the City’s mentor-protégé program, we had to develop our own mentor agreement. As a small company, we did not know what to do. There should be at least a starting platform describing how to assess or determine what is beneficial to the protégé. General contractors or prime contractors negotiate the most lenient mentor-protégé agreements, because the protégé is not educated on what they need. So, we are exploited.
A minority male owner of a goods and services company believes the mentor -protégé program should be better structured to advance the protégé to become a prime contractor:
The process to become a protégé should be more transparent. It should be designed for small companies to get prime contracting opportunities. If we cannot receive that type of mentorship, it is not beneficial.
3. Late Payments
Many business owners reported that they are not paid in accordance with the City’s prompt payment policy.
A minority female owner of a construction company reported that the City’s payment process is burdensome for small businesses:
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After we go through the competitive bidding process, we have to wait on late payments. Most of the time their payments are paid late. They are supposed to pay on 30-day net terms, but we would normally get paid within 40 days or later. It is a burden on our business because we never really knew when we were going to get paid. They also pay via check, never direct deposit. Other cities pay by direct deposit, no one else pay by checks. So, we have to wait for the check to come. So, in terms of working with the City, payments are a challenge.
A minority male owner of a goods and services company discusses the impact of late payments on small businesses:
Bigger guys are able to carry on with late payments. But for smaller guys, it is not easy. For one, we cannot operate with late payments. It's not something smaller companies can handle, so our growth is limited. And, banks do not provide credit if we are unable to show a history of growth.
4. Effectiveness of the City’s Local/Small Local Business Enterprise Program
Respondents commented on t he City ’s Local and Small Local Business Enterprise Program (L/SLBE Program) which was enacted in 1993 to stimulate the local business community’s growth. The key components of the L/SLBE Program, approved by the City Council’s Ordinance No. 13647 C.M.S on May 4, 2021, are shown in Chart 8.2.
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Chart 8.2: The L/SLBE Program’s Key Components
The 50% L/SLBE participation requirement may be waived prior to the solicitation being advertised, depending on the availability of L/SLBEs to perform the items in the contract scope of work. Waivers may be issued if the City’s Department of Workplace and Employment Standards (DWES) determines that there is no certified business that offers the specific goods or services or there are no certified L/SLBEs in the industry.
The following business owners commented on the City’s L/SLBE Program.
A minority female owner of a construction company believes the L/SLBE Program is needed to help address systemic racism:
If it was not for the program, we would not get any
contracts. There is a history of small and especially
minority Black-owned firms not getting contract
opportunities from the City. We were always pushed
out by larger or Caucasian-owned firms.
Historically, that is how the game went, which is still the case today. I have tried to get contracts for years that we were qualified for and never got them.
50% L/SLBE participation
requirement on construction
contracts of $100,000 and
greater, and professional
services and commodities
contracts of $50,000 and
greater
The 50% participation
requires 25% toward local
businesses and 25% toward
small local businesses
A 50% local trucking
participation requirement that
counted toward the 50%
L/SLBE participation
requirement
Non-minority males received 128,
or 68.82% of all construction
prime contracts awarded during
the study period, representing
$180,023,480, or 84.31% of all
construction prime contract
dollars.
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A representative of a Caucasian male -owned professional services company explained why the modified L/SLBE Program requirements prevent them from pursuing work from the City as a local small business:
They changed the certification criteria for L/SLBEs where now businesses have to be headquartered in Oakland. A lot of small consultants have multiple offices. Some of them have an office in Oakland but are headquartered in a nearby city. But they are disqualified from participating in the City’s program.
We stopped submitting proposals to Oakland because we did not want to waste that effort. We employ five local residents, and we live in the City of Oakland.
Now, we cannot pursue contracts as a local, small business.
A minority female owner of a construction company also expressed uncertainty regarding the advantages of the City’s Program:
I am still trying to figure out what are the benefits of the City’s program. I am on a selected list along with other contractors bidding for projects. One would think that would help level the playing field for Oakland-based businesses. But I am not sure of that. It is supposed to give us opportunities, but I cannot determine if it's truly a program that benefits minority construction contractors. So, I could not say it has 100% benefited me.
A minority male owner of a construction company described why he believes the L/SLBE goal process does not create capacity building opportunities for small businesses:
I do not believe the program is advantageous for minority contractors. It just means that we are competing for the small portion of any project amongst each other. We are competing for a small percentage instead of a large percentage of the overall project. That's just reality. We may get part of a 10% or 15% goal, but the percentage is split over three firms. So, it is not an advantage to be a small business unless it's only one firm and not three or four small businesses with a majority firm. Something is wrong with that scenario.
Even though smaller firms like mine will get some work, it's a very small amount.
A minority male owner of a construction firm explained the important link between thriving local businesses and a healthy economy:
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In order to have a healthy economy, we must have a healthy small business pool that is constantly growing and thriving. And those that survive go to the next level. Then, those that survive at that level go to the next level. And those that survive the next level become multi-billion-dollar companies. So, there should be any argument as to why we should promote small businesses because they are a tenant of capitalism. The best at employing our local labor are local small businesses. And local businesses in urban environments are overwhelmingly people of color. My point is that local leaders are not using one of the best tools to promote local hires, which is the promotion of local businesses. So, I think it's foolish for local leaders not to recognize one of the most powerful tools and resources they have available to them. They are not pushing more aggressively for Oakland-based businesses.
A minority male owner of a goods and services company reported he has not received any work as a certified L/SLBE:
It took a long time to get certified with the
City of Oakland. After going through that
process, it has not generated one nickel from
the City of Oakland. I had to submit a lot of
documentation, and then there were hoops
that I had to jump through. It wasn't horrible,
but I remember it was arduous.
A Caucasian male owner of a professional services company reported that the lowered revenue requirements for L/SLBEs exclude his business from being certified, but he has been able to obtain a waiver:
We are no longer a small business because the City of Oakland uses crazy low limits instead of the federal limits like every other jurisdiction. I would suggest they use the federal limits to define a small business. Now, to get an L/SLBE certification, you must be headquartered in Oakland. They will waive the requirements for professional services because there are not enough engineers that meet the requirements.
A representative of a Caucasian female- owned professional services firm believes the credits provided to L/SLBEs have benefited her company:
Non-minority males received 1,229, or
80.54% of all goods and services prime
contracts awarded during the study
period, representing $155,673,057, or
81.51% of the goods and services
prime contract dollars during the study
period.
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Most of the City’s recent proposals allow for extra points if you are a local business. We love being able to work in the City where we are located. It's been incredibly helpful and important for us to maintain our certification so that we can continue working with the City. When we worked as a subconsultant with a non-local prime consultant, they were able to receive credit for us being local.
A Caucasian female owner of a professional services company reported that her firm has received several subcontracting opportunities as a certified SLBE:
The City’s program has definitely be nefited our business. We have worked as a subcontractor on three of the City’s as-needed contracts for prime consultants that needed a local Oakland business. The prime contractor that we currently work with has the capability to do all of the work, so they are only working with us to get the local participation points. We probably would not have gotten the work if it was not for that.
A minority female owner of a construction company expressed mixed feelings regarding the City’s L/SLBE Program:
I am having a hard time trying to
determine the benefits of the City’s
program. It seems like the benefits only
come into play when a contractor is in a
crunch to meet the goals. If they are not
trying to meet a goal, they are not
interested in utilizing us. I guess the
program has a benefit because prime
contractors are not able to just bypass us
since they have goals to meet. But it definitely needs some improvement when it comes to the incentives for smaller contractors to participate. There is a learning component that should accompany the certification, such as education about being a certified L/SLBE versus just getting certified. Small business owners could learn how to grow their business because there is a lot of red tape and cost in order to participate.
African American females represent
3.37% of the available construction
businesses and received 0.27% of the
construction prime contract dollars
valued between $50,000 and
$4,080,000 during the study period.
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5. Recommendations
Many interviewees offered recommendations to improve access for L/SLBEs and M/WBEs on the City’s contracts.
A minority female owner of a construction company explained why the City’s small business directory could be discriminatory toward minority and woman-owned businesses:
I am an African American woman who owns a [industry type withheld] in the City of Oakland. When I search the City’s website for firms to fulfill my participation requirement on a project, there are codes that can be used to find a company. The website also provides the owner’s ethnicity. So, what aggravates me is that the certifications have no African American, minority, or gender requirements. This unneeded information allows general contractors to discriminate based on race or gender. Because a general contractor could say, "I don't want to use a Black company. Thank you for letting me know that they are a Black company."
This same business owner further elaborated:
African American women are underrepresented on the City’s contracts. We need to be separated from the small local business enterprises. We should not be in a pot with everyone else. I would like to be recognized as a minority woman. And I think that would really help. I am always fighting and seeking equity. It is disappointing that my business is based in Oakland, and there is no equity in the City. It dampens things, but I still keep going. I hope the City does something to close the gaps. I do not want to fight for equity for women forever.
A Caucasian female owner of a professional services company recommends a more streamlined proposal process that requires less paperwork:
The excess paperwork to respond to proposals should be reduced to help small businesses. Bigger companies have an advantage because they have an expert dedicated to filling out paperwork, and they know all the tricks of the trade.
A minority female owner of a professional services company recommends a directory of businesses that operate in the City of Oakland:
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I think a directory, or some sort of public dashboard, is needed to search for different types of businesses in Oakland. Especially professional services companies like mine. Also, there are a ton of companies in Oakland that people do not know about. So, some sort of directory of local businesses would be awesome.
A minority female owner of a professional services company explains why the City should consider reducing its insurance requirements:
My biggest beef working for the City is their insurance requirements. They require prime contractors and subcontractors to have more insurance than any of our other clients. The requirements cause a significant increase in our premium. They also require that the insurance be maintained for three years after the work is completed. So, it ends up being quite a burden. To the point where I am not sure the contract is worth it. I suppose theoretically, we could try to pass on the extra costs in our billing rates, but that does not work in a competitive bid environment, so there is pressure to keep the billing rates reasonable. Also, since it may be an as-needed contract, we do not know when or even if we will get any work. For example, we had a contract stretch out to five years. There is less work per year. And yet, we have to maintain this elevated insurance throughout the whole term. I wonder if the City could require prime contractors to carry the subcontractor under their insurance, especially for very small contractors.
A minority female owner of a construction company offered several recommendations to support small struggling businesses:
There needs to be an educational component to make sure the company has the resources that they need in order to carry the L/SLBE to the next level. Next, there needs to be more oversight over prime contractors to make sure that they are in compliance with the programs’ requirements. All too often, we deal with issues on a regular basis with prime contractors who do not follow the rules. There needs to be a component of compliance. Finally, we do not know where the projects are. So, we can't bid on work that is not equitably shared.
They need to hold quarterly meetings, forecast what projects are coming out, and engage more with the local community. They also should host events with their prime contractors so smaller contractors can formulate relationships and learn about opportunities to be taken advantage of.
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A minority male owner of a goods and service company recommends listening sessions with small business owners:
I think they should host town hall meetings with small businesses where they can be informed on the issues that matter to them. It can be financial issues, bonding, etc. They can hear from smaller minority guys.
A minority female owner of a professional services company described the unique challenges that African American women encounter as a small business:
We are definitely underfunded. African American women business owners always have to work lean. We have to make a dollar stretch. I feel like as a Black woman, the City benefits from underfunding us. We are underfunded every step of the way. There was never a time where we paid enough for what we are being asked and accountable to do. We continued to do the work, having to respond to an RFP, not get the work, wait for another RFP, then reapply. If we are awarded a contract, then there is months of not knowing when we will be paid. The rules should be designed to level the playing field for businesses like us. They break the rules because I know of two firms that were not certified but were used to meet the goal.
This same business owner suggests that they City pay vendors through direct deposit and display more adherence to the prompt payment ordinance:
Also, they should pay vendors through direct deposit. They have a prompt payment ordinance, and it means nothing to them. They should stick to the prompt payment ordinance and update their payment system and move into the 21st century. There is no complaint form, only a form for invoice disputes. But there is no dispute process if your contract was wrongly terminated or if there are other issues.
A minority male owner of a professional services company recommends more community engagement when negotiating with developers regarding community benefits agreements:
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There needs to be more transparency between the staff, councilmembers, and the mayor to include community involvement. If you look at the developments happening in Oakland, the community benefit agreements are typically negotiated between the developer and whoever shows up representing the community. The City typically abdicates its responsibility in that process. The only items discussed are project labor agreements but not permanent jobs. The community is most concerned about permanent jobs. Project labor agreements serve the unions but not necessarily the local minority populations.
A minority male owner of a construction firm suggests more events so small, local business owners can meet the City’s prime contractors:
I think the City needs more outreach meetings
that reveal upcoming projects. This would give
us insight into what opportunities are
available. Since the prime consultants get the
bigger portion of the projects, a “Meet the
Prime” event would allow them to meet us as
small local business owners. They can learn
what services we provide.
A representative of a Caucasian male-owned professional services company recommends a small business program that is not focused on minority participation:
If they really want to spread the workaround, they should do more outreach to find new, up-and-coming quality small businesses. Not just a racial composition of small businesses. That seemed to be the main criteria, starting about 15 years ago. So, they should figure out their talents and assign them work using those criteria.
African Americans received 7, or
3.76% of all construction prime
contracts awarded during the study
period, representing $313,985, or
0.15% of the construction prime
contract dollars during the study
period.
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III. Summary
The anecdotal data included an engaging focus group discussion which helped gain a deeper understanding of the barriers impacting L/SLBEs. The participants were afforded an opportunity to collaboratively discuss solutions towards creating a more equitable and transparent procurement process that benefits all local businesses headquartered in the City. Many of the business owners were frustrated by the City’s failure to enforce policies that are meant to support L/SLBEs. They reported that the prompt payment policy was not being effectively enforced to lessen the hardship on L/SLBEs based on the receipt of late payments by the City and prime contractors . The CWA Taskforce Report was referenced as a great resource to increase the participation of minority and woman-owned businesses on the City’s contracts.
A summary of the news articles provided by the City reported on the significant barriers minority and woman-owned businesses have continually faced navigating the City’s procurement process.
The same barriers were reported in the City’s previous disparity studies , as well as the current Study. The news articles can be used as sources to identify barriers and thereby promote accountability by encouraging the City’s leadership to reevaluate their procurement practices and implement measures to reduce the underutilization of minority and woman-owned businesses. The judicial complaints focused on allegations by business owners asserting that the City has engaged in a pattern of failing to pay for work that was completed pursuant to contractual obligations and change orders. If the allegations are confirmed by the courts, the City should take appropriate remedial actions to ensure L/SLBEs are compensated for all work satisfactorily completed.
During the one -on-one interviews, an overwhelming majority of the interviewees reported a preference by the City to utiliz e the same few contractors , especially on construction and professional services projects. There were mixed responses regarding the efficacy of the City’s L/SLBE Program. Some reported that they have not received any contracts despite being certified as an L/SLBE. Finally, the failure by the City to adhere to the prompt payment policy was an issue raised by several business owners.
The recommendations primarily focused on improving access to L/SLBEs, addressing the underutilization of minority and wom an-owned businesses, and assisting small businesses with developing effective mentor-protégé agreements. The barriers reported by the interviewees are listed in Table 8.3.
Table 8.3: Barriers Reported by the Interviewees
Barriers Reported by the Interviewees
Preferential treatment given to certain contractors
Difficulty navigating the bid process
Late payments
Ineffective L/SLBE Program
City of Oakland
Disparity Study
Final Report
Part II
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Table of Contents
Table of Contents
CHAPTER 1: LOCAL AND SMALL LOCAL BUSINESS ENTERPRISE PROGRAM ANALYSIS .......... 1-1 I. INTRODUCTION ............................................................................................................. 1-1 II. METHODOLOGY............................................................................................................ 1-1 A. LEGISLATIVE HISTORY OF THE LOCAL AND SMALL LOCAL BUSINESS ENTERPRISE PROGRAM ...................................................................................................................... 1-1 B. CURRENT LOCAL AND SMALL LOCAL BUSINESS ENTERPRISE PROGRAM ................... 1-3 III. PROCUREMENT AND CONTRACTING STANDARDS ....................................................... 1-9 A. OAKLAND MUNICIPAL CODE .................................................................................. 1-9 B. ADMINISTRATIVE INSTRUCTIONS ......................................................................... 1-10 C. STANDARD OPERATIONS PROCEDURES ................................................................. 1-10 IV. PROCUREMENT PROCESS ........................................................................................... 1-10 A. CONSTRUCTION ................................................................................................... 1-10 B. PROFESSIONAL SERVICES .................................................................................... 1-13 C. ARCHITECTURE AND ENGINEERING ..................................................................... 1-14 D. EMERGENCY CONTRACTS ..................................................................................... 1-16 V. BUSINESS COMMUNITY’S ASSESSMENT OF THE L/SLBE PROGRAM ....................... 1-16 A. IMPEDIMENTS TO L/SLBE PROGRAM IMPLEMENTATION ....................................... 1-17 B. BARRIERS TO CONTRACTING OPPORTUNITIES ....................................................... 1-24 VI. CITY STAFF’S PERCEPTIONS OF THE L/SLBE PROGRAM ........................................ 1-30 A. WAIVER OF L/SLBE REQUIREMENTS .................................................................. 1-31 B. COOPERATIVE AGREEMENTS CIRCUMVENT THE COMPETITIVE PROCESS ................ 1-36 VII. EFFICACY OF THE LOCAL AND SMALL LOCAL BUSINESS ENTERPRISE PROGRAM ................................................................................................................... 1-37 A. ATTAINMENT OF L/SLBE PARTICIPATION GOALS ................................................. 1-37 B. L/SLBE PARTICIPATION BY ETHNICITY AND GENDER .......................................... 1-40 C. COMPARISON OF THE 2017 L/SLBE DISPARITY STUDY FINDINGS TO THE CURRENT STUDY ................................................................................................. 1-43 ii
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D. DISCRETIONARY PROCUREMENT METHODS.......................................................... 1-44 VIII. CONCLUSION .............................................................................................................. 1-53 A. MEASURES TO REVAMP THE L/SLBE PROGRAM................................................... 1-54 CHAPTER 2: FEDERALLY FUNDED CONTRACTS ANALYSIS ....................................................... 2-1 I. INTRODUCTION ............................................................................................................. 2-1 II. FEDERALLY ASSISTED PRIME CONTRACTS ................................................................. 2-1 III. BUSINESS AFFIRMATIVE ACTION REQUIREMENTS FOR FEDERAL ASSISTANCE GRANTS ......................................................................................................................... 2-3 A. TITLE VI OF THE CIVIL RIGHTS ACT OF 1964 .......................................................... 2-3 B. USDOT DBE PROGRAM ...................................................................................... 2-4 IV. AFFIRMATIVE ACTION PROGRAM COMPLIANCE ........................................................ 2-6 A. COMPLIANCE WITH TITLE VI OF THE CIVIL RIGHTS ACT ........................................ 2-6 B. COMPLIANCE WITH THE CALTRANS DBE PROGRAM REQUIREMENTS ....................... 2-7 C. STATISTICAL FINDINGS OF DBE GOAL ATTAINMENT.............................................. 2-8 D. UTILIZATION OF PRIME CONTRACTORS ON CONTRACTS WITH USDOT FINANCIAL ASSISTANCE ........................................................................................ 2-9 E. DISPARITY ANALYSIS OF PRIME CONTRACTS WITH USDOT FINANCIAL ASSISTANCE ........................................................................................................ 2-19 V. STATISTICAL FINDINGS OF FEDERALLY ASSISTED PRIME CONTRACTS .................. 2-23 A. M/WBE UTILIZATION ON ALL FEDERALLY ASSISTED PRIME CONTRACTS ............ 2-23 B. DISPARITY ANALYSIS OF FEDERALLY ASSISTED PRIME CONTRACTS ...................... 2-33 VI. SUMMARY ................................................................................................................... 2-43 CHAPTER 3: COVID-19 M/WBE IMPACT ANALYSIS .................................................................. 3-1 I. INTRODUCTION ............................................................................................................. 3-1 II. STUDY METHODOLOGY................................................................................................ 3-2 A. CITY OF OAKLAND GRANTS FUNDED WITH CARES ACT FINANCIAL ASSISTANCE ..... 3-2 B. CITY OF OAKLAND CONTRACTS FUNDED WITH CARES ACT FINANCIAL ASSISTANCE .......................................................................................................... 3-3 i
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C. UNITED STATES SMALL BUSINESS ADMINISTRATION PAYCHECK PROTECTION PROGRAM LOANS AND GRANTS .............................................................................. 3-3 D. AMERICAN RESCUE PLAN ACT FINANCIAL ASSISTANCE ........................................... 3-3 E. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION ASSISTANCE .........................3-4 F. CITY OF OAKLAND BUSINESS LICENSE RECORDS.....................................................3-4 III. STUDY FINDINGS........................................................................................................... 3-4 A. CITY OF OAKLAND ADMINISTERED CARES ACT FINANCIAL ASSISTANCE GRANTS ....3-4 B. CITY OF OAKLAND ADMINISTERED CARES ACT FINANCIALLY ASSISTED CONTRACTS .......................................................................................................... 3-5 C. UNITED STATES SMALL BUSINESS ADMINISTRATION PAYCHECK PROTECTION PROGRAM LOANS AND GRANTS .............................................................................. 3-7 D. THE AMERICAN RESCUE PLAN ACT FINANCIAL ASSISTANCE ....................................3-9 E. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION ASSISTANCE .........................3-9 F. CITY OF OAKLAND BUSINESS LICENSE CHANGE RATE ........................................... 3-10 IV. CONCLUSION .............................................................................................................. 3-11
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List of Tables
List of Tables
TABLE 1.1: L/SLBE PROGRAM DOCUMENTS.................................................................................. 1-2
TABLE 1.2: L/SLBE PROGRAM CERTIFICATION CATEGORIES AND CRITERIA ................................... 1-5
TABLE 1.3: ARCHITECTURAL AND ENGINEERING PRIME CONTRACTS VALUED AT LESS THAN $250,000 BY CERTIFICATION CATEGORY .................................................................... 1-22
TABLE 1.4: PRIME CONTRACTS AWARDED TO L/SLBES AND NON-L/SLBES ............................ 1-38
TABLE 1.5: SUBCONTRACTS AWARDED TO L/SLBES AND NON-L/SLBES ................................. 1-38
TABLE 1.6: PRIME CONTRACTS AWARDED BY CERTIFICATION CATEGORY ................................ 1-39
TABLE 1.7: SUBCONTRACTS AWARDED BY CERTIFICATION CATEGORY ..................................... 1-39
TABLE 1.8: L/SLBE WAIVER REQUESTS .................................................................................... 1-40
TABLE 1.9: STATISTICAL OUTCOME DESCRIPTIONS .................................................................... 1-40
TABLE 1.10: DISPARITY ANALYSIS: ALL PRIME CONTRACTS AWARDED TO L/SLBES JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 1-42
TABLE 1.11: COMPARISON OF THE 2017 L/SLBE DISPARITY STUDY FINDINGS TO THE CURRENT STUDY ................................................................................................... 1-43
TABLE 1.12: ON-CALL, EMERGENCY, AND COOPERATIVE AGREEMENTS BY ETHNICITY AND GENDER ................................................................................................................. 1-46
TABLE 1.13: ON-CALL, EMERGENCY, AND COOPERATIVE AGREEMENTS BY CERTIFICATION CATEGORY ............................................................................................................. 1-47
TABLE 1.14: ON-CALL, EMERGENCY, AND COOPERATIVE AGREEMENTS AWARDED TO L/SLBES BY ETHNICITY AND GENDER ................................................................... 1-49
TABLE 1.15: DISPARITY ANALYSIS: ON-CALL, EMERGENCY, AND COOPERATIVE AGREEMENTS JULY 1, 2016 TO JUNE 30, 2021 ....................................................... 1-51
TABLE 1.16: PRIME CONTRACTS AWARDED BY PUBLIC WORKS DEPARTMENT WITHOUT COMPETITIVE BIDDING, JULY 1, 2016 TO JUNE 30, 2021 ........................................ 1-52
TABLE 1.17: PRIME CONTRACTS AWARDED USING COMPETITIVE BID WAIVER BY ETHNICITY JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 1-53 v
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List of Tables
TABLE 2.1: FEDERAL ASSISTANCE FUNDING SOURCES ................................................................. 2-2 TABLE 2.2: FEDERAL ASSISTANCE FUNDED PRIME CONTRACTS ................................................... 2-2 TABLE 2.3: CALTRANS FEDERALLY ASSISTED PRIME CONTRACTS BY DBE STATUS .................... 2-6 TABLE 2.4: CALTRANS FEDERALLY ASSISTED PRIME CONTRACTS AWARDED BY DBE STATUS ....................................................................................................................... 2-8 TABLE 2.5: ALL PRIME CONTRACTS WITH USDOT FINANCIAL ASSISTANCE AWARDED BY ETHNICITY AND GENDER, JULY 1, 2016 TO JUNE 30, 2021 ...................................... 2-10 TABLE 2.6: CONSTRUCTION PRIME CONTRACTS WITH USDOT FINANCIAL ASSISTANCE AWARDED BY ETHNICITY AND GENDER, JULY 1, 2016 TO JUNE 30, 2021 ................ 2-12 TABLE 2.7: ARCHITECTURAL AND ENGINEERING PRIME CONTRACTS WITH USDOT
FINANCIAL ASSISTANCE AWARDED BY ETHNICITY AND GENDER,
JULY 1, 2016 TO JUNE 30, 2021 ................................................................................ 2-14 TABLE 2.8: PROFESSIONAL SERVICES PRIME CONTRACTS WITH USDOT FINANCIAL
ASSISTANCE AWARDED BY ETHNICITY AND GENDER,
JULY 1, 2016 TO JUNE 30, 2021 ................................................................................ 2-16 TABLE 2.9: GOODS AND SERVICES PRIME CONTRACTS WITH USDOT FINANCIAL
ASSISTANCE AWARDED BY ETHNICITY AND GENDER,
JULY 1, 2016 TO JUNE 30, 2021 ................................................................................ 2-18 TABLE 2.10: DISPARITY ANALYSIS: ALL PRIME CONTRACTS WITH USDOT FINANCIAL ASSISTANCE JULY 1, 2016 TO JUNE 30, 2021 ........................................................ 2-20 TABLE 2.11: DISPARITY ANALYSIS: CONSTRUCTION PRIME CONTRACTS WITH USDOT FINANCIAL ASSISTANCE JULY 1, 2016 TO JUNE 30, 2021 ....................................... 2-22 TABLE 2.12: ALL FEDERALLY ASSISTED PRIME CONTRACTS AWARDED BY ETHNICITY AND GENDER JULY 1, 2016 TO JUNE 30, 2021 ................................................................ 2-24 TABLE 2.13: FEDERALLY ASSISTED CONSTRUCTION PRIME CONTRACTS AWARDED BY ETHNICITY AND GENDER, JULY 1, 2016 TO JUNE 30, 2021 .................................... 2-26 TABLE 2.14: FEDERALLY ASSISTED ARCHITECTURAL AND ENGINEERING PRIME CONTRACTS AWARDED BY ETHNICITY AND GENDER, JULY 1, 2016 TO JUNE 30, 2021 .............. 2-28 TABLE 2.15: FEDERALLY ASSISTED PROFESSIONAL SERVICES PRIME CONTRACTS AWARDED B Y ETHNICITY AND GENDER, JULY 1, 2016 TO JUNE 30, 2021 ................................ 2-30 vi
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List of Tables
TABLE 2.16: FEDERALLY ASSISTED GOODS AND SERVICES PRIME CONTRACTS AWARDED B Y ETHNICITY AND GENDER, JULY 1, 2016 TO JUNE 30, 2021 ................................ 2-32 TABLE 2.17: DISPARITY ANALYSIS: ALL FEDERALLY ASSISTED PRIME CONTRACTS JULY 1, 2016 TO JUNE 30, 2021 .............................................................................. 2-34 TABLE 2.18: DISPARITY ANALYSIS: FEDERALLY ASSISTED CONSTRUCTION PRIME CONTRACTS JULY 1, 2016 TO JUNE 30, 2021 .......................................................... 2-36 TABLE 2.19: DISPARITY ANALYSIS: FEDERALLY ASSISTED ARCHITECTURAL AND ENGINEERING PRIME CONTRACTS JULY 1, 2016 TO JUNE 30, 2021 ........................ 2-38 TABLE 2.20: DISPARITY ANALYSIS: FEDERALLY ASSISTED PROFESSIONAL SERVICES PRIME CONTRACTS JULY 1, 2016 TO JUNE 30, 2021 .......................................................... 2-40 TABLE 2.21: DISPARITY ANALYSIS: FEDERALLY ASSISTED GOODS AND SERVICES PRIME CONTRACTS JULY 1, 2016 TO JUNE 30, 2021 .......................................................... 2-42 TABLE 3.1: CARES ACT FINANCIALLY ASSISTED CONTRACTS AWARDED BY ETHNICITY AND GENDER ...................................................................................................................... 3-6 TABLE 3.2: CARES ACT FINANCIALLY ASSISTED CONTRACTS AWARDED BY GEOGRAPHIC AREA .......................................................................................................................... 3-7 TABLE 3.3: BUSINESS LICENSE RATE OF CHANGE BY OAKLAND ZIP CODE ................................ 3-11
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Chapter 1: Local and Small Local Business Enterprise Program Analysis CHAPTER 1: Local and Small Local Business
Enterprise Program Analysis
I. Introduction
In 1993, the Oakland City Council adopted Resolution No. 69687 C.M.S., establishing the Local and Small Local Business Enterprise Program (L/SLBE Program) to stimulate the local business community’s growth. Over the last 30 years, the policy has been modified on several occasions to maximize the utilization of small local businesses on the City of Oakland’s construction, professional services, and goods and services prime contracts. The most recent modification was made in 2021.
However, this modification was not a substantive change to the policy in place during the July 1, 2016 to June 30, 2021 study period.
This chapter assesses, from the perspectives of City staff and the L/SLBE community, the L/SLBE policy and its impact on minority and women-owned business enterprise (M/WBE) utilization on the City’s prime contracts and subcontracts during the study period. The perspectives of City staff and L/SLBEs were gathered through a series of one-on-one interviews. The scope of work also required the presentation of recommendations to maximize the benefits from the policy.
II. Methodology
The chapter includes eight sections: (1) Introduction, (2) Methodology, (3) Procurement and Contracting Standards, (4) Procurement Process, (5) Business Community’s Assessment of the L/SLBE Program, (6) City Staff’s Perceptions of the L/SLBE Program, (7) Efficacy of the L/SLBE Program, and (8) Conclusion. The legislative history covers the period from 1993, when the L/SLBE policy was initially enacted, to the 2021 amendment. Managers from eight departments participated in the interviews. Managers of departments that were awarded the most contract dollars during the study period volunteered to be interviewed. The local businesses provided their accounts as part of the anecdotal interview phase of the disparity study.
The staff interviews focused on the departments’ application of the L/SLBE procurement policy and procedures. The local businesses were queried about their perceptions of L/SLBE policy and program implementation.
A. Legislative History of the Local and Small Local Business Enterprise Program
The legislative history of the L/SLBE Program dates back to 1993 when the City Council approved the City’s first L/SLBE policy. Over the 30 years since that time, the ordinance has been amended at least four times. The City Council approved the most recent amendment in May 2021.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis The legislative record reviewed is published on the City of Oakland website in the City of Oakland Legistar portal at https://oakland.legistar.com/Legislation.aspx. T able 1 .1 lists each document reviewed.
Table 1.1: L/SLBE Program Documents
Document
Number
City Council
Approval
Date
The Legislative History of L/SLBE Program
Resolution No.
69687
February 2,
1993
• Adopted a Local Employment Program and Small Local
Business Enterprise Program and applied them to public
works contracts.
Ordinance No.
12389 C.M.S.
December
18, 2001
• Added prevailing wage requirements and apprenticeship program for construction contracts.
• Required all construction contracts, regardless of tier, to pay prevailing wages.
• Utilization of the City of Oakland apprentices count toward the 50% new hire goals and the 50% workforce hour goals.
Ordinance No.
13101 C.M.S.
December
20, 2011
• Added new size categories of Very Small Local Business Enterprise (VSLBE) and Local Produced Goods Local Business Enterprise (LPG-LBE).
• Established Small Local Business Enterprise (SLBE) 5% bid discounts and 5% preference points.
• Waived SLBE subcontracting requirements for Oakland-
certified local businesses that apply for professional
services contracts.1
Ordinance No.
13640 C.M.S.
February 24,
2021
• Modified local and small local trucking 50% participation requirements, limiting participation goal to trucking companies certified through the L/SLBE trucking program and removing the requirement that companies house or store trucks within the City’s geographic region.
• Added new local business category of Small Business
Administration- Local Oakland Business Enterprise (SBA- LBE) with certification criteria.
• C hanged the definition of residence requirement to (a) business conducted in a residence complies with Oakland zoning
regulations relating to home occupations, and (b) the residence is the primary location of the business and contributes not less than 51% of its gross receipts.
• Modified the application of bid discounts to 5% for a VSLBE prime contractor during construction bid evaluation and a bid discount of 5% for professional services contract bids where the VSLBE meets a 50% subcontractor goal.
• A pplied the L/SLBE Program requirements to
disposition and development agreements.
Document
Number
City Council
Approval
Date
The Legislative History of L/SLBE Program
1 The policy is silent on the construction contracts.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Document
Number
City Council
Approval
Date
The Legislative History of L/SLBE Program
Ordinance No.
13647 C.M.S.
May 4, 2021 • Removed the provision regarding waiver of SLBE subcontracting requirements for certified local businesses that apply for professional services contracts as the prime contractor. • C larified the application of bid discounts and preference points for VSLBE participation.
• Clarified program certification criteria for added categories. • Removed the definition of sheltered market program.
B. Current Local and Small Local Business Enterprise Program
The current ordinance , No. 13647 C.M.S ., which the City Council approved on May 4, 2021, modified the waiver provisions, certification requirements, and program incentives. The new provisions in the L/SLBE Program under the current ordinance include the following changes to the code:
1. Participation Requirements
a. L/SLBE Participation Requirements
The 50% participation requirement of local and small local businesses applies to construction contracts of $100,000 and greater and professional services and commodities contracts of $50,000 and greater. All contracts below these thresholds must include outreach to certified local firms, if available, to request responses to the solicitation from a minimum of three local firms.
The 50% local business participation requirement must be met with a minimum participation of 25% for Local Business Enterprises (LBE s)/Local Not -for-Profit Business Enterprise s (L/NFPBEs) and 25% for SLBEs/Small Local Not-for-Profit Business Enterprises (S/LNFPBEs).
SLBEs and SLNFPBEs may meet the full 50% requirement. Where Very Small Local Business Enterprise (VSLBE) participation is evident, the level of participation will be double -counted towards meeting the requirement.
b. L/SLBE Trucking Requirements
The local trucking requirement is 50% of the total trucking dollars. The total L/SLBE trucking dollars can count toward the overall 50% L/SLBE participation requirement, and the participation of each trucker certified as a VSLBE is double-counted.
2. SLBE Waiver Provisions and Availability Analyses
The 50% L/SLBE participation requirement may be reduced prior to the solicitation being advertised, depending on the availability of L/SLBEs to perform the work in the contract scope.
The awarding department must request an availability analysis from the Department of Workplace and Employment Standards (DWES) to determine if one or more L/SLBEs are available to perform the scope of work set forth in the solicitation. The request must be made prior to advertising the
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Chapter 1: Local and Small Local Business Enterprise Program Analysis solicitation. The requirement can be reduced from 50% to 0% if DWES finds that no business offering the specific goods or services is certified with the City. If there is at least one certified L/SLBE that performs the scope of work stipulated in the solic itation, the requirement cannot be reduced by more than 20%.
a. Availability Analysis Request
To request a waiver, the awarding department submits a form to DWES to perform an availability analysis. DWES performs the availability analysis based on the description of the scope of services stated on the form. The awarding department also may provide DWES with NAICS codes to search for available L/SLBEs.
3. Verification of Compliance with the L/SLBE Participation Goal
The prime contractor is required to report the level of L/SLBE participation at the time of bid opening on Schedule R for construction projects and Schedule E for professional services projects.
The appropriate schedule must be submitted with each bid and proposal. The subcontractor awards listed on Schedule R are calculated t o determine the bid’s compliance with the L /SLBE requirements. Compliance with the reporting requirement is considered a condition of a responsive and responsible bid. Schedule R cannot be modified after the bid opening without the City’s approval. The substitution of a subcontractor must be approved by DWES.
Failure to maintain the participation throughout the duration of a construction contract may result in a penalty of one-and-one-half times the amount that should have been paid to the L/SLBE and/or termination of the contract.
To ensure compliance with the participation levels listed on Schedule R , the City requires the prime contractor to provide a copy of subcontractor agreements . Verification of the total amount to be paid to each subcontractor, supplier, or trucker is also required prior to the commencement of work.
A subcontractor’s progress payment application must be submitted with each of the prime contractor’s requests for payment. Prime contractors must also report, with each progress payment application, payments made to L/SLBEs. In addition, an e xit report and a ffidavit form must be attached to the final progress payment application.
Schedule E must be submitted with the proposal, and some L/SLBE participation must be listed in order to satisfy the requirement. If zero participation is presented, the proposal will not be accepted.
If the proposal with minimum participation is selected, the proposer shall be able to adjust the participation level up in order to meet the 50% requirement.
4. Verification of Compliance with the Participation Requirements
Construction prime contractors and all subcontractors , including truckers, are required by California Labor Code Section 1776 to submit weekly certified payroll records five days after each
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Chapter 1: Local and Small Local Business Enterprise Program Analysis pay period. Failure to submit weekly certified payroll records can result in withholding the prime contractor’s progress payment.
A penalty of 1% of the contract amount or $1,000 per day, whichever is less, may be applied if the required payroll documents are not provided within the specified time. Failure to submit the required payroll records may be considered a material breach of contract, in which case the contract could be terminated or a stop-work order issued until compliance is met. In addition, the contractor or subcontractors may be debarred from participating in future City contracts for a period of six months to five years and may lose certification.
To ensure compliance with the L/SLBE requirements , the contractor is required to provide requested records within ten calendar days and allow the City to review pertinent records and documents. There is no other compliance provision to monitor the L/SLBE utilization on professional services or goods and services prime contracts.
5. Local Small Business Size Criteria
The program has Local Business Enterprise, Small Local Business Enterprise, Very Small Local Business Enterprise, and Locally Produced Goods certification categories. Table 1.2 lists the criteria for each of these certification categories. The certification criteria apply to both for-profit and not-for-profit organizations.
Table 1.2: L/SLBE Program Certification Categories and Criteria
Certification Category Certification Eligibility Criteria LBE
Local Business Enterprise
1. Must have a substantial presence in the City of Oakland as defined by:
a. Headquartered (primary office location) within the City of Oakland; or
b. Twenty percent of the total company workforce or a minimum of 50 employees work in the Oakland headquarters; or
c. Headquarters located in a commercial office with a lease agreement signed 12 months prior to the closing date of a competitive process; or
d. Home-based office is in place 12 months prior to the closing date of a competitive process, and the office is the owner(s) residence and the business’ sole headquarters.
2. Fully operational with a valid business tax certificate for at least 12 consecutive months.
3. Operations and employees in a fixed office space.
4. Current permits, fines, and fees.
5. Valid documents certifying business operations (i.e., contracts, bills, etc.).
6. Registration in the iSupplier system.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Certification Category Certification Eligibility Criteria SLBE
Small Local Business
Enterprise
1. Three-year average gross receipts in the most recent three federal tax returns must fall at or below 20% of the SBA’s size standard for the relevant industry sector.
2. Headquartered in Oakland commercial site or home-based office whereby a valid certification is in place 12 months prior to the closing date of a competitive process. (Additional minimum certification criteria: home-based office should be the owner(s)’ residence and the business’ sole headquarters.)
3. Fully operational with a valid business tax certificate for at least 12 consecutive months.
4. Operations and employees in a fixed office space.
5. Current permits, fines, and fees.
6. Valid documents certifying business operations (e.g., contracts, bills).
7. Registration in the iSupplier system.
VSLBE
Very Small Local Business
Enterprise
SLBE certification criteria, plus:
1. Fully operational for six consecutive months.
2. Average annual gross receipts at or below $375,000.
3. Oakland headquarters in a commercial or home-based office.
LPG2/LBE
Locally Produced
Goods/LBE
Same as LBE certification criteria, plus:
1. Business must manufacture goods within the City of Oakland.
2. Business must present proof of sales.
3. Business must possess the current permit and license(s) required to conduct a manufacturing operation in an area zoned as industrial.
NFP/LBE:
Not-for-Profit Local Business
Enterprise
Same as LBE certification criteria, and business must produce documentation of non-profit status.
NFP/SLBE3
Not-for-Profit Small Local
Business Enterprise
Same as SLBE certification criteria, and business must produce documentation of non-profit status.
SBA-LBE
Small Business
Administration- Local
Business Enterprise
Same as LBE certification criteria, plus:
1. Satisfies the size standard published by the Small Business Administration’s (SBA’s) definition of a “small business.”
2. Headquartered in Oakland.
2 Eligible for goods and services contracts.
3 Not-for-profit organizations can fulfill the requirements of L/SLBE Program.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis a. Certification Approval Process
i. Application
The certification application must be submitted online through B2Gnow. Prior to B2Gnow, applications were submitted through the City’s iSupplier portal, which was used until December 2022. An application for small business certification must also include the applicant’s three most recent business tax returns to verify the size, location, and other certification criteria.
ii. Application Review
Applications are reviewed by DWES. Site visits and desk audits are conducted for all first -time certification applications. The site visits are scheduled within ten working days of the receipt of the required documents. Pending no further questions or changes in status or conditions, a determination is rendered within ten working days of the site visit.
All applicants are asked to fully participate in the certification process. Failure or refusal to furnish requested information or to participate in the process will void the application. During the certification process, the City may review any documentation or information necessary to determine eligibility.
b. Certification Denial Appeal Standard
If an applicant does not agree with a certification determination, the applicant may file an appeal in writing within ten working days of the written determination.
c. Re-Certification
Certification is valid for a period of two years unless otherwise specified. At the end of the certification period, the business must apply for re -certification. Upon the expiration of certification, the business must repeat the certification process to recertify as an L/SLBE.
d. Third-Party Certification Challenges
A t hird part y with reason to believe that a business ha d been wrongfully denied or granted certification may advise the City in writing. When warranted, an investigation is conducted. Both the third party and the affected party are informed of the findings.
6. L/SLBE Program Incentives
The Program offers incentives for businesses to certify as L/SLBEs. The incentives include bid discounts and preference points for mentor -protégé and joint venture agreements, City -assisted private developments, and a Mandatory Preferred Small Local Business Program for certified small businesses.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis a. Bid Discounts for Construction Projects
Prime contractors can earn bid discounts based on L/SLBE participation. No more than a 5% bid discount can be earned for L/SLBE participation, and no more than a 10% bid discount can be earned for VSLBE participation.
b. Preference Points for Professional Services Projects
Prime contractors may earn up to five preference points for local business participation. No more than five preference points may be earned for L/SLBE participation , and no more than ten preference points may be earned for VSLBE participation.
c. Mentor-Protégé Agreements
On a case- by-case basis, the City will allow a 10% preference for m entor-protégé teams on construction and professional services contracts. If a prime contractor develops a mentor-protégé relationship with a certified LBE or SLBE, the mentor will enjoy the benefit of credits against City requirements, particularly under circumstances where availability is zero.
d. Joint Venture Agreements
Joint ventures receive bid discounts depending upon the LBE or SLBE percentage of participation as set forth in the program. On a case- by-case basis, the City will allow an additional 5% of preference points for joint ventures where the junior partner is a certified SLBE or VSLBE. To be eligible for a bid discount, each joint venture partner must possess the license appropriate for the project.
The LBE/ SLBE joint-venture partner must share in the ownership, control, management responsibilities, risks, and profits of the joint venture in proportion to the level of participation in the project. The LBE/SLBE partner must perform work that is commensurate with its experience.
The LBE/SLBE partner must also use its own employees and equipment to perform its portion of the project. For construction contracts only, the joint venture must perform bid item work that equals or exceeds 25% of the total value of the contract, excluding the cost of manufactured items, in order to be eligible for a joint venture discount.
e. City-Assisted Private Developments
For City-assisted private developments, the prime contractor is required to seek competitive bids from subcontractors and comply with L/SLBE P rogram goals and objectives, as set forth in the L/SLBE Program document. Prime contractors must give SLBE contractors a 5% bid discount and LBE contractors a 2% bid discount. Prime contractors are required to award to the lowest responsible bidder.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis f. Mandatory Preferred Small Local Business Program for Pre- Construction Professional and Construction Services
The Mandatory Preferred Small Local Business (MPSLB) Program established pre-qualification lists for Oakland -certified small businesses in the pre-construction professional services (architecture and engineering) and construction services industries for contracts valued at $250,000 and less.
L/SLBEs must be included in the pre -qualified list to participate. Responses to contracts under $250,000 will be solicited from at least three prequalified businesses. Pre -construction and other professional services awards shall be based on demonstrated competence and qualifications to perform the services set forth in the solicitation at a fair and reasonable price, in addition to preference points and compliance with the City’s purchasing programs. Construction contracts should be awarded to the lowest, responsible, and responsive bidder.
The City Administrator may solicit proposals on the open market without advertising if fewer than three proposals for pre-construction and other professional services are submitted by pre-qualified firms.
7. L/SLBE Program Compliance Analysis
Bids and proposals are evaluated by DWES to determine compliance with the L/SLBE Program.
The participation of L/SLBEs is calculated, and the results are sent to the awarding department.
The applicable bid discounts and preference points are applied during the compliance analysis.
III. Procurement and Contracting Standards
The Oakland Municipal Code and the Administrative Instructions define the standards that govern the procurement process from requisition to contract award. The standard operating procedures (SOPs) interpret the policy for the end user. The procurement and contracting process is reviewed to determine its intersections with the L/SLBE Program and to identify standards that support the program policy.
A. Oakland Municipal Code
Policies governing procurement are set forth in Chapter 2.04 – Purchasing System, Section 2.04 of the Municipal Code. The code authorized the City Administrator to establish administrative instructions to implement the procurement and contracting policy in Chapter 2.04.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis B. Administrative Instructions
Administrative instructions are the procurement procedures established by the City administrator, as authorized under Chapter 2.04 of the Municipal Code. The administrative instructions provided by the City Administrator’s Office for this analysis are listed below:
• Administrative Instruction, No. 4313, Contracts for Public Works, May 24, 1977. • Administrative Instruction No. 4315, Contracts for Procurement from State, County, or Cooperative Governmental Agencies, August 6, 1979.
• Administrative Instruction No. 4311, Contracts for Formal Purchases, June 22, 1983. • Administrative Instruction No. 150, Professional or Specialized Service Contracts, August 1, 2000.
• Administrative Instruction No. 24, Newspaper Advertisement/City Administrator’s Office, January 1, 2014.
C. Standard Operations Procedures
The standard operating procedures provide standards for implementing the Oakland Municipal Code and administrative instructions when procuring goods and services. The SOPs are written by the departments to implement the procurement and contracting policies. Only two departments provided their SOPs for review. The Capital Contracts Division (CCD) provided the SOPs used by both the Public Works Department (OPW) and the Department of Transportation.
IV. Procurement Process
The Municipal Code authorizes the procurement of supplies and services using both formal and informal solicitation processes.
4 The code authorized the City Administrator to establish formal and informal solicitation procedures as administrative instructions. The initial set of administrative instructions was published in June 1983 for formal purchases. There are no administrative instructions for informal purchases. Administrative Instruction 4311 for Contracts for Formal Purchases lists procedural steps after the steps leading up to the award of a contract are complete.5
A. Construction
1. Informal Procurement of Construction Contracts
The Municipal Code authorizes the procurement of construction services valued between $500 and $50,000 using informal procedures.
6 4 Chapter 2.04 - PURCHASING SYSTEM | Code of Ordinances | Oakland, CA | Municode Library.
5 Administrative Instruction 4311, Contracts for Formal Purchases, June 22, 1983.
6 Oakland Municipal Code, Chapter 2.04, Section 2.04.40. B.1.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis a. Advertising Requirements
Informal construction solicitations do not require advertisement in a legal publication or posting on iSupplier. Informal construction solicitations may be emailed to potential bidders.7 Quotes must be solicited from at least three local, certified businesses.8
b. Evaluation and Award
A contract is awarded to the lowest responsive and responsible bidder. The award of construction contracts shall be made to the contractor that submits the lowest bid and provides all the necessary information and documentation to meet the requirements of a responsible bidder in the manner requested.
9 In addition to price in determining the lowest responsible bidder, consideration is given to:
• The quality and performance of the supplies to be purchased or services to be provided by the seller.
• The ability, capacity, and skill of the bidder to perform the contract or provide the supplies or services required.
• The ability of the bidder to provide the supplies or services promptly or within the time specified without delay.
• The character, integrity, reputation, judgment, experience, and efficiency of the bidder. • The quality of the bidder’s performance on previous purchases or contracts with the City. • The ability of the bidder to provide future maintenance, repair parts , and services for the supplies purchased.
• As permitted by law, a certified bidder’s affirmative action hiring plan should be submitted with all sealed bids for supplies and commodities over $5,000.
o To be considered responsible and as permitted by law, the bidder shall submit certification that it is in compliance with all provisions of Executive Order No. 11246 (as amended by Executive Order No. 11375), and
o To be considered responsible and as permitted by law, the bidder must have a current workforce racially and ethnically proportionate to the population parity for the area from which the bidder’s workforce is drawn (national, s tate, or local), must comply with Subsection (G)(1) of Section 2.04.60, or must have an affirmative action plan to achieve population parity for the area in which the bidder does business. The plan should include all aspects of employment recruiting, hiring, promotions, and layoff.10
7 Bureau of Design & Construction, Capital Contracts Division, Standard Operation Procedure, January 2023.
8 Oakland Municipal Code, Chapter 2.04, Section 2.04.10.
9 Bureau of Design & Construction, Capital Contracts Division, Standard Operation Procedure, January 2023.
10 Oakland Municipal Code, Chapter 2.04, Section 2.04.60.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis c. Approval and Authorization of the Award
If the lowest responsive and responsible bid is $50,000 and below, then the requesting department may initiate the award process. The project manager from the requesting department submits a request to the Capital Contracts Division to award the contract.11 The City Administrator authorizes the contract award.12
2. Formal Procurement of Construction Contracts
Formal solicitation is required to procure construction services in excess of $50,000. 13 Formal
solicitations must be reviewed by DWES for compliance with the L/SLBE requirements prior to being published.14
a. Advertising Requirements
The solicitation must be advertised by the City Clerk at least once in the City’s official newspaper not less than ten calendar days before the bid opening date. The City Administrator may deem it advisable to require more than one posting of the solicitation.
15 The public notice should also be published on
iSupplier.16 The notice should describe the specifics of a product or service needed, the contract requirements, the estimated value of the service, and the terms, deadlines , and other pertinent information.17
b. Evaluation and Award
The award should be made to the lowest responsive and responsible bidder. The award of construction contracts shall be made to the bidder who submits the lowest bid and is “responsive,” meaning all the necessary information and documentation to meet all requirements in the manner requested are provided.
18 11 Bureau of Design & Construction, Capital Contracts Division, Standard Operation Procedure, January 2023.
12 Oakland Municipal Code, Chapter 2.04, Section 2.04.20.A.1.
13 Oakland Municipal Code, Chapter 2.04, Section 2.04.40.B.2.
14 Bureau of Design & Construction, Capital Contracts Division, Standard Operation Procedure, January 2023.
15 Oakland Municipal Code, Chapter 2.04, Section 2.04.50.A.
16 Oakland Municipal Code, Chapter 2.04, Section 2.04.10.
17 Oakland Municipal Code, Chapter 2.04, Section 2.04.10.
18 Bureau of Design & Construction, Capital Contracts Division, Standard Operation Procedure, January 2023.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis c. Approval and Authorization of the Award
The City Administrator has the authority to authorize the award of construction contracts valued up to $250,000.19 Construction contracts exceeding $250,000 must be awarded by the City Council.20
B. Professional Services
Professional services contracts are defined in Administrative Instruction 150. This instruction also describes the policy for the procurement of professional services. Procurement of both informal and formal professional services is made through either a request for qualifications or a request for proposals.
1. Informal Procurement of Professional Services Contracts
Informal advertising and solicitation of proposals/qualifications are required for professional services contracts involving expenditures of $50,000 or less.21
a. Advertising Requirements
Informal solicitation of professional services only requires seeking a minimum of three quotes, which should first be solicited from L/SLBEs.
22 b. Evaluation and Award
The quotes are evaluated by the requesting department by applying the following criteria:
• Proposer’s understanding of the project.
• Adequacy of the proposers’ organization, resources, and experience to perform the project. • Proposer’s experience performing similar projects.
• Proposer’s requisite professional qualifications to complete the project. • The written proposal’s demonstration of a cost-effective means to complete the project. • The written proposal’s demonstration of a reasonable and feasible means of completing the project.
Administrative Instruction 150 for Professional or Specialized Service Contracts does not provide information on the award of a contract.
19 Oakland Municipal Code, Chapter 2.04, Section 2.04.20.A.1.
20 Oakland Municipal Code, Chapter 2.04, Section 2.04.30.A.1.a.
21 Oakland Municipal Code, Chapter 2.04, Section 2.04.040.B.3.
22 Oakland Municipal Code, Chapter 2.04, Section 2.04.10.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis c. Approval and Authorization of the Award
The City Administrator may award contracts that have been procured through the information proposal/qualification process.23
2. Formal Professional Services Contracts
Formal solicitation of proposals/qualifications is required for professional services contracts valued at over $50,000.
24 a. Advertising Requirements
Formal solicitation of professional services contracts requires publication in the City’s official newspaper or on iSupplier.25
b. Evaluation and Award
The selection and award of contracts for professional services shall be based on demonstrated competence and qualifications for the types of services to be performed at a fair and reasonable price to the City.
26 c. Approval and Authorization of the Award
Professional services contracts valued at $250,000 and under are awarded by the City Administrator.
Professional services contracts exceeding $250,000 are awarded by the City Council. 27 C. Architecture and Engineering
The Capital Contracts Division (CCD) administers the procurement of architectur e and engineering services along with requesting departments. Architecture and engineering services are professional services associated with research, planning, development, and design for the construction, alteration, or repair of real property.
28 23 Oakland Municipal Code, Chapter 2.04, Section 2.04.20.A.2.
24 Oakland Municipal Code, Chapter 2.04, Section 2.04.10.
25 Oakland Municipal Code, Chapter 2.04, Section 2.04.10.
26 Oakland Municipal Code, Chapter 2.04, Section 2.04.51.A.1.
27 Oakland Municipal Code, Chapter 2.04, Section 2.04.30.A.1.a.
28 Bureau of Design & Construction, Capital Contracts Division, Standard Operation Procedure, January 2023.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis
1. Informal Architecture and Engineering Services Contracts
In accordance with Oakland Municipal Code Chapter 2.04, informal bidding is required for architecture and engineering services up to $50,000. The informal procurement policy for architecture and engineering services shall be governed by the California Mini -Brooks Act and California Public Contract Code, with additional guidance from the Oakland Municipal Code.
a. Advertising Requirements
Informal solicitation for architecture and engineering services does not require formal advertisement in legal publications ( e.g., newspapers) and posting on iSupplier. Solicitation of three quotes or responses required from local, certified businesses shall be the minimum number solicited.29
b. Evaluation and Award
The solicitation is subject to qualification -based selection of contractors/consultants performing architecture and engineering services, as qualification -based selection is required by both the Federal Brooks Act and the California Mini -Brooks Act. Price is not a criteri on for evaluation.
Proposed prices or billing rates are subject to negotiation after the evaluation of proposals and the ranking of proposers. The award shall be made to the most qualified firm at a price that is fair and reasonable and less than $50,000.
30 c. Approval and Authorization of the Award
The City Administrator is authorized to award the informal contract.
2. Formal Architecture and Engineering Services Contracts
Contracts exceeding $50,000 must follow the formal solicitation process.
a. Advertising Requirements
Solicitations for architecture and engineering services must be advertised at least once in the City’s official newspaper, not less than ten calendar days before the proposal due date. Solicitations shall allow for submission of proposals for a period of at least 30 calendar days starting from the advertisement date unless an exception is granted by the CCD.
b. Evaluation and Award
The CCD perform s a review of all proposals and prepares a preliminary determination of responsiveness to the RFP requirements. Copies of the proposals are forwarded to DWES for a
29 Oakland Municipal Code, Chapter 2.04, Section 2.04.010.
30 Bureau of Design & Construction, Capital Contracts Division, Standard Operation Procedure, January 2023.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis responsiveness review, and DWES makes a final determination of the responsiveness to the L/SLBE requirements.
All responsive proposals are forwarded to the selection committee for evaluation. The evaluation criteria are published in the solicitation. The selection committee scores and/or rates the proposals and establishes a final ranking. DWES’s finding is communicated to the requesting department. The requesting department conducts the proposal price/billing rate negotiations with the highest-ranked proposer. A written analysis of the negotiated price/billing rates is prepared and included with the request to award submitted to the City Council for approval.
c. Approval and Authorization of the Award
The City Administrator can award architecture and engineering contracts up to $250,000. The City Council must approve the award of architecture and engineering contracts exceeding $250,000.
D. Emergency Contracts
An emergency purchase is a procurement deemed by the City Administrator to be necessary for the immediate preservation of the public peace, health, or safety. 31 In a situation deemed by the City
Administrator to be an emergency, a contract or purchase order exceeding the City Administrator’s $250,000 authority may be awarded without advertising or previous City Council approval. All emergency contracts awarded by the City Administrator shall be presented for informational purposes to the City Council within a reasonable time of contract execution. 32 Under the L/SLBE Program, local businesses are the first priority in the performance of emergency work, as defined in Ordinance No. 7937 C.M.S, as amended.
The City’s goal is to spend 75% of emergency contract dollars with local businesses. At least two- thirds must be spent on small local businesses. User agencies are required to solicit from certified local firms for all informally bid emergency work whenever feasible.33
V. Business Community’s Assessment of the L/SLBE Program
Owners of large and small Oakland businesses assessed the L/SLBE Program and its impact on their access to City contracts through one-on-one interviews. The profile of these business owners is presented in Chapter 8: Anecdotal Analysis, Part I of this report. It was the general consensus of the business owners that the City’s L/SLBE policy was comprehensive, but its implementation failed to promote the utilization of L/SLBEs on City contracts as either prime contractors or subcontractors during the July 1, 2016 to June 30, 2021 study period.
31 Oakland Municipal Code, Chapter 2.04, Section 2.04.010.
32 Oakland Municipal Code, Chapter 2.04, Section 2.04.020.F.
33 L/SLBE Program Guidelines, revised as of May 4, 2021.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis A. Impediments to L/SLBE Program Implementation
1. Certification Process and Requirements
Business owners acknowledged that the certification process should include eligibility criteria to limit the benefits of the L/SLBE P rogram to local and small local businesses. Concern was expressed that the application process was complicated, time-consuming, cumbersome, and performed without a reliable timeframe.
To submit the certification application, a company must register in the iSupplier portal ,34 fill out an application form, and submit appropriate supporting documents. The registration allows access to a certification application. To submit the application, the required questions must be addressed, and the supporting documents must be attached. Navigating the platform was described as difficult.
Even seasoned contractors with years of experience working with the City of Oakland described iSupplier as not user-friendly.
The iSupplier interface is one of the most difficult that I've worked with in my 30-year career.… It's just not very intuitive, and it's really kind of difficult to figure out even if our certification is coming up for renewal … Eventually, I figured it out, but I find it very difficult and frustrating to work with.
Business owners also reported that the certification review process was slow and unpredictable.
According to the L/SLBE Program guidelines, the certification process should be completed within a 20-day timeframe. Within ten days of DWES’s receipt of the complete application , a site visit should be scheduled. Pending no further questions or changes in status or conditions, the determination should be rendered by day 20.
Business owners reported the process of reviewing the documents and determining qualifications takes more than 20 days. In fact , some reported that the certification process took months to complete, and the guidelines do not provide for expedited certification.
We have actually applied to be registered as a small business, but it's been several months. Haven't heard back. I know it's a process. We've applied with the City; we are awaiting a response.
Business owners also expressed concern that DWES does not have an expedited certification process or the staff to perform such certifications. Some complained that they have missed contract opportunities because there is no expedited certification process. It was noted that in the past, there was a process to expedite the certification if the business was pursuing a specific contract.
34 iSupplier Portal was in use until December 2022.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Initially, it was great. It was quick, and they even made caveats. So, if you had a job bidding in the near future, they'd help you get certified quicker, that type of thing, so you had the certification prior to the bid. But nowadays… something that used to take a month now takes six months. And sometimes it disappears, and I have to prod them to say, "Where's my certification?" That type of thing. It was a farce because I just went through a bid that we got the certification the day of the bid, and it was the wrong certification, and the second bidder protested because of it.
Several interviewees commented that the City is short- staffed, and inadequate staffing levels impact the certification turnaround time. Business owners also asserted that the City’s certification team has fewer staff members than other Bay Area certifying agencies.
The staffing levels in DWES have been identified as an impediment to timely L/SLBE certification.
As described by one interviewee:
The problem we have is very simple. We don't have enough enforcement of the rules and regulations. The City of Oakland has, in its possession, the rules and the regulations to move these certification processes and help small businesses take on larger contractors in the field, but the problem you have is a constant downsizing in the certification staff and the Small Business Program. So, when you have a small business program with about 150 applications in the pipeline, and you don't have staff to process the applications, you're already killing the program.
Lack of adequate s taffing was also cited as a factor in maintaining the integrity of the L/SLBE Program. The availability of certified businesses was identified as a consideration when DWES reviews a department’s request for a waiver of the L/SLBE goals.
If you can't go out to the project sites and do what I call oversight over your public policy, even though it's all been implemented, and the larger companies are utilizing it, but there's no enforcement.
The certification application process was also described as cumbersome. Business owners asserted that the application is complex, confusing, and burdensome for small and very small business applicants. This small business owner shared the following experience.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis So, it's always confusing as to exactly what they're doing and then why they need all this information. For small businesses, it's just a hassle keeping up with all this stuff and producing all this paperwork.
The availability of certified businesses was identified as the number one consideration when DWES reviews a department’s request for a waiver of the L/SLBE goals.
The program can’t deliver the small local businesses to perform the services in the advertised contracts.
2. Verification of L/SLBE Payments
According to the L/ SLBE Program, t he prime contractor must submit a subcontractor progress payment report with each invoice. The subcontractor progress payment report must stipulate the amount paid to each subcontractor listed on Schedule s R and E . The release of the prime contractor’s payment is contingent on the submission of the subcontractor progress payment report.
Business owners reported that the subcontractor progress payment reports are not being submitted by prime contractors. A certified business worked as a subcontractor for more than a year and was only aware of one progress payment report being submitted.
It was one report that we were able to review and weigh in, and I was able to make my edits…that was it. And we were on the project for over a year.… That's not good.
So, that's an affront to me. And it hurts. It hurts because that's something that is listed that we participated in, but we didn't really reap the benefits.… I think that it just wasn't enforced.
Business owners considered the failure to enforce the L/SLBE payment requirement as having an adverse impact on their business operations. Departments are required to review the pay application and invoice to verify that the subcontractor receives payment. One business owner under contract with the City for many years received payment as much as 12 months late.
The City owed us money for a year.… We resolved the issue because the City wanted to do more business with us, and we just said we can't until we get paid. 1-20
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Chapter 1: Local and Small Local Business Enterprise Program Analysis The City has a prompt paym ent policy that requires payment to its prime contractors within 20 business days of receiving an approved invoice and the prime contractor to pay its subcontractors within 20 business days of receiving an approved invoice. Th e City’s contract template presents the prime contractors’ prompt paym ent obligations but does not mention the City’s obligation to the prime contractor.
Prime contractors expr essed concern that the City requires them to submit progress payment reports verifying the payments made to L/SLBEs as a condition of receiving payment. Yet, the prime contractor’s payment is not made promptly. The City’s failure to pay invoices in a timely manner makes the requirement to pay the subcontractors unattainable.
Most of the time, the payments were paid late. They were on 30-day net terms, but we would normally get paid within maybe 25 to 40. So, sometimes, on time at the very end, or sometimes late.
The internal checks and balances associated with project management and compliance were described as multi-level and commonly managed sequentially without a definite time period for the review. The process, as described by one prime contractor, delays invoice payments and change order approval that is required to invoice for out-of-scope work.
Our monthly invoices have to be processed by a resident engineer. And on top of that, the resident engineer has to process change orders for extra work. The change order must be approved before we can even bill for the work performed. Payment is dependent on how fast the resident engineer processes all that paperwork. That's one thing that stalls payments.…
The appr oved invoice then has to go to DWES, where they review it to ensure the prime contractor is meeting the local business and employment requirements, which is fine. But, sometimes, the invoice can sit on a desk for a couple months.
3. Application of L/ SLBE Incentives
The L/ SLBE Program allows for bid discounts and preference points for a mentor-protégé relationship to ensure that L/SLBEs are awarded prime contracts. A mentor prime contractor with an L/SLBE protégé is eligible for a 10% preference for construction bids and professional services proposals. Preference points are assigned during the evaluation of bids and proposals when the proposer or bidder is an L/SLBE.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis For a mentor- protégé relationship to be eligible for the preference , there must be a written agreement at the time of award. The terms of the agreement must have provisions for a genuine opportunity to build the protégé’s capacity and include at least 30% participation of the protégé .
The agreement must also provide for a third- party review of its effectiveness. The term of the relationship must be the duration of the contract.
A certified business owner described a mentor-protégé relationship he had with a prime contractor.
He reports that it was not productive, and the City did not conduct a third-party review.
It was not productive. It was a waste of City money, if you ask me, because they didn't teach us anything we already knew or we didn't know.… It was a waste of time.
Business owners assert that mentor-protégé agreements have been used to secure preference points in the ev aluation but do not achieve the objectives set forth in the agreements. Despite the stipulations to adhere to the written mentor -protégé agreement, there were cases in which prime contractors did not fulfill the provisions of such agreements. A female owner of a company providing construction services reported about her experience working under a mentor -protégé agreement. She expressed her dissatisfaction with this relationship.
There was an agreement in place. And with that agreement, this general contractor never had time to meet those agreement terms. And this was brought up to the City of Oakland several times, and it was as if the City of Oakland was the father and they were the son, disciplining them, but nothing ever transpired after that. So, that made me give up. That was another part-time job trying to enforce the agreement. And so, we came away without the training. We told the mentor, "If you're not going to train us, can you at least purchase the program?" And that took a while to do that. So, I didn't gain much from them.
4. Failure to Implement the Mandatory Preferred Small Local Business Program
Departments that award pre-design and pre-construction services with budget estimates of less than $250,000 are required to have a Mandatory Preferred Small Local Business (MPSLB) Program. The department must establish a list of prequalified small business enterprises and limit competition for contracts valued at $250,000 and less to businesses in the MPSLB Program.
Businesses expressed concern that the departments either do not have an MPSLB Program or the manner in which it is operated adversely a ffects them. An architectur e firm prequalified to be included in the MPSLB Program was required to submit additional prequalification documents
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Chapter 1: Local and Small Local Business Enterprise Program Analysis when issued a solicitation to respond to a task order. The owner pointed out that the redundancy was both costly and a deterrent.
So, we're currently a part of that program. And it's a lot of work to respond to the request for proposal given the size of the projects that the city awards under the MPSLBP. So, for instance, we're about to get a notice to proceed on a project.
And that involved going on a site walk with the consultant, with our sub-co nsultant, preparing a qualifications package. Despite the fact I've proved already that I'm a qualified architect to participate on this pre-approved architect's list. Now, I have to prove that I'm qualified to do this…project.
One prequalified L/SLBE owner expressed concern that his firm is not issued task orders after being successfully prequalified.
I think there's been maybe a dozen task order requests, and we have submitted on most. There is one task order we now expect to receive, but only because we were the only bidder.
The architectural and engineering prime contracts valued at less than $250,000 were reviewed to determine the number of contracts awarded to SLBEs . The City awarded 85 architectural and engineering prime contracts valued at less than $250,000 during the study period. Table 1.3 shows that SLBEs received only 19, or 22.35% , of these contracts with a dollar value of $1,260,883,
21.52% of the total dollars awarded on architectural and engineering prime contracts valued at less than $250,000. LBEs received 32, or 37.65%, of these contracts with a total value of $2,488,597, or 42.47%. Non-c ertified contractors received 34, or 40% of the architectural and engineering prime contracts valued at less than $250,000 with the total value of $2,110,118, or 36.01%.
Table 1.3: Architectural and Engineering Prime Contracts Valued at Less than $250,000 by Certification Category
Number Percent A mount Percent
of Contracts of Contracts of Dollars of Dollars
LBE 32 37.65% $2,488,597 42.47%
SLBE 19 22.35% $1,260,883 21.52%
Non-certified 34 40.00% $2,110,118 36.01%
Total 85 100.00% $5,859,598 100.00%
Certication
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5. Contracts Awarded without Goal Attainment
The L/SLBE subcontract participation requirement applies to construction contracts valued at $100,000 and over and professional services and goods and services contracts valued at $50,000 and over. During most of the study period, the threshold was $50,000 and over for the three industries. To be recommended for an award, c ontracts at these thresholds must meet the 50% L/SLBE participation requirement unless DWES reduces or waives the goal before the solicitation is advertised in response to an availability analysis.
Business owners believe construction, professional services, and goods and services contracts have been awarded without compliance with the 50% participation requirement. The owner of a minority-owned professional services company describes how she was denied the opportunity to compete for a contract she held for several years before the City received significant grant funding.
When she was the prime contractor, and the contract was bid annually, there would be extensive lag time between the end of one contract and authorization for the next one. She was expected to continue working, anticipating being paid months later when the new contract was signed. Several years later, after fulfilling three low-budget contracts, the City received substantial grant funding.
The requirements for the new funding were modified so she could not bid, although the scope of work did not change. Moreover, the City awarded the contract without L/SLBE participation. The contract also went from annual renewals to a three-year term.
So, the white firm that never was certified now has the contracts, the technical assistance contracts. As of last year, that we had, only now it's a three-year contract.
It was never a three-year contract. It was always one year. Now, all of a sudden, it's a three-year contract, and they break the rules and let them have it. And now it's even more money. So, it was okay to underfund us. It was okay to make us repeat the bidding process. It was okay to make us go through all of the rules and check every “t” and dot every “i.” So, they gave it to them, and they followed none of the rules.
The owner of the company attempted to contact the compliance unit in the City, but the issue has not been resolved.
I contacted compliance, they were aware. I told the firms, "This isn't right." They said there was nothing that they could do. So, it was intentional. It was not an accident. It was intentional.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis B. Barriers to Contracting Opportunities
Businesses reported a number of procurement procedures that were barriers to their effort to contract with the City.
1. Lack of Notices of Intent to Award
Businesses complained that the City does not publicize the intent to award or the award of contracts even to the businesses that responded to the solicitation.
A business owner shared his experience when he lost a bid and learned about the selection at the time the City Council awarded the contract to a competitor.
It's just because I'm actively asking questions. But, if I am someone who just took the interview and sitting over here at my office waiting for the results, I might not be able to know it until these guys start the contract. They have to communicate whether I am successful or not.
Another interviewee from an architectur e and engineering company shared a concern that unsuccessful proposers receive no information about the award or the competition.
I've never really seen a scoresheet.… If we're not chosen, we don't see the final results.… It would be helpful if you could see where you stand amongst your peers in different excellent categories and things.
2. L/SLBEs Listed but Not Used
A business owner recounted her experience being included as a subcontractor in a bid that the City awarded and being told by the City’s project manager that her participation as a subcontractor would not be included in the contract.
So, they all signed an agreement to subcontract us. They submitted the RFP, we all got interviews. I was part of the interview process. And then they selected the firm, and then the project manager emailed me and said we are not going to include you on any of those contracts.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Another certified L/SLBE f irm owner recalled that her company was a subcontractor to a prime contractor who was awarded the contract , but she never received a subcontract or performed any work.
I submitted my qualifications in 2019, and the prime told me that we were selected and we're negotiating. And then I've been asked to submit paperwork to support the negotiations, but I never got a contract.... My team was selected, but then it was radio silence for three years. Then, I got a notice that the contract is being extended; you have to send the paperwork again. But I never got a contract. Nobody ever came to me and said, "Here we have work for you." Maybe the prime got a contract, but I didn't. And so, there's a lot of submitting things, but then that doesn't actually lead to business.… I was on a team that was selected, and the prime got a contract, but they never gave me a subcontract.
3. Failure to Investigate L/SLBE Complaints
Services or standards to address L/ SLBEs’ concerns and complaints regarding issues with the failure of prime contractors and the departmen ts to adhere to the L/SLBE policy may not exist .
Businesses described filing protests concerning contract awards, non -payment of invoices , unauthorized substitution, and being listed as an L /SLBE and not being utilized. Yet, their complaints were not addressed or even acknowledged.
A company listed as an L/SLBE -certified subcontractor was not included in the contract. The business owner attempted to protest the decision but could not secure assistance from DWES staff or any other department.
I did protest through Contracts and Compliance division. I spoke to the person who was responsible for putting that contract out. She was nonresponsive; I went over her head. I talked to her supervisor.… She was more responsive, but then it started to sound like she wasn't going to do anything about it because I was explaining to her, if you allow them to continue, then they're going to do it. If you don't step in and intervene. Then she said, "Well, it has to go through us." But I asked her if they have the contract, so if you don't say something, then what's to stop them? She couldn't give me an answer.
There were also expressed concerns that the City has no formal processes for businesses to file their complaints or standards for where, when, or how complaints should be addressed.
A business owner pointed out that the City has no complaint forms, procedures, or timeline for complaint management.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis There's only one form. There's not even a real complaint form. There's only one form available for a dispute. And that's like your invoice; there's an issue with your invoice or something. There's a dispute form for that. But there's no dispute form if your contract was wrongly terminated.
Another certified company was a subcontractor for a prime contractor who received preference points through a mentor -protégé agreement. However, according to the subcontractor, the prime contractor never met the terms of that agreement. The prime contracto r did not submit monthly reports to DWES, although it is a requirement according to the L/SLBE Program.
The general contractor is supposed to submit a report to the City of Oakland monthly on the progress. It was one report that we were able to review, weigh in, and I was able to make my edits, but that was it. And we were on the project for over a year.
So, one out of a year. That's not good.
Businesses expressed an urgency to have the City establish standard procedures to protect the integrity of the L/SLBE Program and the certification process.
There probably needs to be some advocacy. It's a shame that I had nobody else to turn to. I'm still being retaliated against…and there's nobody to help me.
4. Procurement and Contracting Process
Chapter 2.04 of the OMC (Purchasing Ordinance) 35 requires the City to formally advertise all contracts for supplies, construction services, and professional services involving expenditures over $50,000. For professional services contracts involving expenditures of $50,000 or less, informal advertising and solicitation of requests for proposals/qualifications (RFP/Q s) are required.
Similarly, informal advertising and bidding procedures are required for contracts for supplies and/or construction services involving expenditures between $500 and $50,000.
However, the Purchasing Ordinance also authorizes the City Administrator to waive RFP/Q requirements for professional services contracts up to $50,000 “[u]pon a finding by the City Administrator that it is in the best interests of the City.” Similarly, the City Council may waive RFP/Q requirements for contracts in any amount “[u]pon a finding by the City Council or its designee that it is in the best interests of the City.” Competitive bidding, as outlined in the Purchasing Ordinance, is not required upon certain findings by the City Council, including when
35 Oakland Municipal Code, Chapter 2.04 – Purchasing System.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis calling for bids on a competitive basis is impracticable, unavailing, or impossible, or after a finding and determination that it is in the best interests of the City.
The City Administrator is authorized to contract for supplies, services, and/or professional services up to $250,000 without City Council approval, subject to prior appropriation and allocation of the funds by the City Council. Additionally, in any situation “deemed by the City Administrator to be an emergency for the immediate preservation of the public peace, health or safety,” the City Administrator may authorize purchases exceeding non- emergency purchase authority wi thout advertising or prior specific action by the City Council. All emergency contracts must be presented for informational purposes to the City Council within a reasonable time of contract execution.
Some businesses characterize the award of contracts without Council approval as “ staff discretionary spending.” In the City staff interviews, managers referred to this practice as a “blank check.”
I think there's a recurring theme that the staff has an outsized influence on the contracting and the selection process. There was a particular panel member who is outspoken.... I had discussed the project with her before submitting it, long before.
And she said that she opposed the idea and that she was not going to support it under any circumstances.
Knowing that, the staffer then put that person on the selection committee and her influence on the selection committee, because she is so outspoken, then influenced that selection committee to pick the developer with no plan as opposed to the one with a complete plan.
When the determination was made, the developer was given a one-year exclusive negotiating agreement with a six-month extension. That's 18 months. And at the end of 18 months, there was no project.… He was allowed to then resubmit a totally new proposal outside of the 18 months without rebidding. And then he got another bite at the apple.
He submitted a whole new proposal. They didn't go back to us after his had been denied. They didn't go back to us. They didn't rebid the whole process. They just let him submit a brand new proposal, which they then finally approved, which nobody supported.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Staff expressed concern that contracts over the $250,000 threshold have been awarded by the City Council without a named contractor or specified contract term.36
An example of this practice was identified in a resolution approved by the City Council.
Resolution 87519 states:
Oakland Public Works to purchase master lease and non-master lease vehicles and related equipment, without returning to Council, through (a) agreements with one or more vendors selected through a competitive request for proposal/qualifications process.37
A trucking company owner expressed a concern that there is a practice of awarding contracts that allows non-certified companies to win City contracts.
They're not certified, but they win the contracts, and contracts are supposed to have a certain percentage that you utilize a certified company certified with Oakland. I'm saying they are not doing that, even though they're reaching out, they're saying, "We reached out to them, but we didn't accept... They didn't win the bid." So, it shows that they did their due diligence but that they're actually not working with anyone from Oakland; they're working with people that they normally work with.
36 Per the Office of City Attorney, when a resolution awards a contract without the vendor name, amount, term and/or nature of the services, it is usually for a reason—such as specific issues with the contracting process, or the nature of the project or funds. In practice, this contextual information is generally provided to Council in the resolution or report accompanying the resolution, and Council can determine whether to approve the award based on the information provided and whether to grant staff discretion to move forward.
Regardless, there is no requirement in the Charter or OMC that a Council resolution authorizing a contract must include specific or all contract terms. The OMC provides that Council authority is required to award purchases or contracts in excess of the City Administrator’s purchasing limits for amounts above $250,000 ( OMC Section 2.04.030.A.). Section 504 of the Charter gives the City Administrator broad authority to “prepare…contracts for work which the Council may order” and “to see that all City contracts under the City Administrator’s direction or that of the Council are faithfully performed.” The final, executed con tract will have all legally required terms, but the resolution itself is simply the Council authorization, the scope of which can be directed by Council.
37 Oakland City Council Resolution No. 87519 passed on February 5, 2019.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis A business owner stated the City Council does not ensure that the procurement policy is implemented accordingly.
The accountability is that the Council does not make sure staff carries out their wishes. Council does not make sure that what they say as far as policy goes. You have all these too many "This is so-and-so." They've been in the department for 40, 34 years. That's the blocker right there. They've been in the position so long. Now, they [staff] have this ability to direct financing and direct funding to organizations based on their ideas and wins and not on how policy goes.
5. Redundant Prequalification and Certification Requirements
The amount of paperwork required by prime contractors to be considered a subcontractor can be an obstacle for small local businesses. Some paperwork required by contractors for a business to be prequalified to work for their company is duplicative of the City’s certification paperwork requirement.
An owner of a plumbing company with 19 years of experience believes prime contractors bidding to the City should not be allowed to require SLBEs to prequalify with their company as a condition of accepting a subcontract bid.
So, what contractors have done now, I'm letting you know, this is how they weed us out because they know we don't have the money to sit down and send all this information to them just like we sent it to the City of Oakland.… They put another hurdle in front of us in order for us to put in a bid.… And now we have to go through another qualification with the primes.
Just give them a project list of jobs that we've completed, and t hat should be that qualification. But, to ask for tax records, profit-and-loss, and all my business information and other stuff, I don't think that's right.
A business owner explained that the prime contractor’s prequalification process deprives small businesses of contracting opportunities since L/SLBEs are reluctant to share confidential and sensitive financial information with private companies.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis I've gotten to the point where I'm not doing that anymore. I'm not bidding. So, if I don't bid it, that means I'm not getting those jobs. And this is the reason why SBE, DBEs, and all the other certified firms are not bidding on these jobs. It is because of this.
6. Late Payments
The City’s prime contractor prompt payment policy authorizes penalties for the City’s failure to pay its prime contractors and its prime contractors’ failure to pay its subcontractors.
Subcontractors expressed concern that they could not secure information about the status of their prime contractor’s payment from the City. Without a means of verifying the prime contractor’s receipt of payment, the subcontractor cannot exercise its right to apply for compensation under the prompt payment provision.
In addition, no requirement exists for the inclusion of the prompt payment provision in subcontract agreements. Nor is there a requirement to include in the prime contract agreement the provision requiring the City to pay a late fee when a prime contractor is not paid promptly.
The L/SLBE policy requires monthly reporting of construction subcontractor payments. There are no procedures for verifying prime contractors’ reporting of subcontractor payments.
Yes, the prime pays us, but the City of Oakland…they do not let the subs know when the contractor gets paid. So, if I don't know if the prime didn't get paid, then how do I know he's seven days late? It doesn't do any good if we don't know when the contractor gets paid.
So, the City of Oakland's not even helping us, making sure we getting paid on time.
Because if you got paid and the people who work for you don't know that you got paid, you can hold that check for another two months.
VI. City Staff’s Perceptions of the L/SLBE Program
Interviews conducted with managers in eight City departments provided another perspective on the L/SLBE Program’s implementation. Staff interviewed had responsibility for various phases of the procurement and contracting process , from drafting the solicitation to the execution of the contract. There were many similarities across the departments in the managers’ perceptions of the L/SLBE Program and its implementation.
There was a consensus that L/SLBE Program implementation was the responsibility of DWES , although most interviewees were unfamiliar with the program’s participation requirements and
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Chapter 1: Local and Small Local Business Enterprise Program Analysis compliance standards. The one exception was t he waiver provision. All departments reported routinely requesting an availability analysis to authorize advertising procurement s valued at $250,000 and greater without the L/SLBE requirements.
A. Waiver of L/SLBE Requirements
DWES is responsible for performing the availability analysis and making the determination if a full or partial waiver is warranted. The waiver may be granted for all or a percentage of the L/SLBE participation. The departments each reported routinely requesting an availability analysis before publishing their solicitations.
Mason Tillman reviewed 241 availability analysis request forms submitted to DWES during the study period of July 1, 2016 to June 30, 2021. The requested waivers were granted for all but 17 requests. Two additional waivers requested only received a partial reduction in participation.
The estimated values of the 222 contracts that received a waiver range d from $100,000 to $4,200,000. The scope of most of the 222 availability analysis applications reviewed included subcontracting opportunities. However, they were not listed in the form or referenced in the DWES decision to grant a waiver.
1. Insufficient Information in Availability Analysis Form
Departments acknowledged that the availability analysis form does not provide adequate information for DWES to conduct a meaningful examination of the certification database to determine the availability of certified L/SLBEs to perform prime contracts and no information to determine subcontract opportunities. One interviewee stated:
The form is extremely basic.… You're just conveying a few sentences here and there.… It's not a detailed document.
When department staff were asked about their assessment of the adequacy of the information provided to DWES in the availability analysis request form, one interviewee stated:
They don't have enough information.… You would have to send an email, give me a call, something of that nature…but they've never conveyed whether that they don't have enough information to be able to discern that.
Incomplete information about the scope of work and subcontracting opportunities in the availability analysis request form compromises the validity of DWES’ availability analysis and the legitimacy of the waiver.
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2. Full Participation Attainment is Required for Contract Award
A project manager explained she routinely seeks a waiver for the entire L/SLBE participation requirement before releasing a solicitation because, in her experience, the bidder who fails to meet the published participation requirement will be found to be non-responsive by DWES.
It happens periodically.… You have to waive the requirement. There's no "We want to partially waive it.” So, either you meet the ordinance, or you don't. And if you don't meet the ordinance, it's a hundred percent you didn't meet the ordinance.… You have to formally waive the requirement, even if you are meeting 99% of the requirement, in order for Council to award the contract to a bidder who has not met the requirement.… Staff cannot make a determination on how much to accept.
Most d epartment staff recognized that their application of the L/SLBE requirements is not governed by written standard operating procedures. There were only two departments that reported having written s tandard operating procedures to govern their application of the L /SLBE requirement. No department reported having training on program requirements . Yet, all interviewees were familiar with the program’s availability analysis request form and the waiver provision, and each reported routinely using the form to advertise solicitations without the L/SLBE requirements.
Department staff did report having requested training on procurement and contracting procedures.
None of the interviewees reported being offered training.
No. No, there's nothing in writing that has been provided as guidance.... I've requested formal training for the procurement process as outlined by the City. I believe there are some administrative instructions, but they are outdated and no longer valid. The City does not offer formalized contracting or procurement training at this time.
3. Discretionary Contracting Process
a. Incomplete Resolutions Presented to City Council for Award
To award a contract greater than $250,000, a department must submit an agenda report to the City Clerk to have the item placed on the City Council agenda. A resolution number is assigned to the item by the City Clerk if the resolution is approved by the City Council.
Some interviewees described resolutions presented to the City Council as “blank checks.” The blank check was described as an agenda item without a named vendor or duration of the contract.
Some blank checks may specify the name of the contractor but not the amount. As described by
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Chapter 1: Local and Small Local Business Enterprise Program Analysis one interviewee, the resolution may simply request authorization to award one or more unnamed vendors for an unspecified term or unspecified dollar amount.
A review of resolutions in Legistar, the City’s legislation platform, identified resolutions illustrating the blank check process. One resolution to award a prime contract to a named prime contractor authorized the prime to select at some unspecified date additional vendors to be paid under the not-to-exceed prime contract amount. Another example was a resolution that approved an amount to several additional unnamed prime contractors and an amount to a single contractor without a specified term.
One staff member expressed concern that the blank check method was not a procurement best practice. The interviewee stated:
So, this practice is very problematic. This type of resolution is very problematic.
When the project managers bring the approved resolution to the fiscal manager, they are not wrong that they can issue a contract as long as they follow the resolution.
But, the problem is there is no way to tell if the Council actually approved the contract the project manager wants to award.... Sometimes, the agenda report will give you more detail… but if it is still very vague, it's impossible to know if the requested contract is valid or no good. If you go by the Council resolution, it says that it is approved. But a valid resolution needs a vendor name, even if you don't have a vendor name, because a lot of times, we are up against a grant deadline. Somebody needs to provide a supplemental report to provide a vendor name, to close the loop and comply with best practices. But, there is no close the loop; it's a blank check because the resolution says, "Awarded direct service to deliver the 2019 three-year prioritization plan, for a total amount not to exceed $35 million." Is it one contract for $35 million, or is it ten contracts of $35 million? We don't know; we have no idea what this is… and there's no expiration date. This grant is approved in May, 2019, and says, after three years, whether or not you issue all $35 million or not, it will expire. Therefore, the resolution is no longer good.
Department staff reported that the blank check contracting practice is sometimes used because the department has not expeditiously procured the services authorized by the grant. Confronted with the pending expiration of the grant deadline, the department secures a resolution number by requesting Council authorization to award the value of the grant to an unnamed contractor at some undefined future date. The resolution number can thereafter be used to set up the contract in the financial system when the department makes the award. The department might request the Council to award a sole -source contract due to insufficient time to procure the services using the competitive process. When a vendor name, term, amount, or scope of services is not included in a resolution, a justification or rationale is generally provided in the agenda report presented to the Council for approval.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis No, no, there's no written policy and there are no guidelines to project managers what can or cannot be done.... This is an open checkbook. There is no boundary to it.
But this is not a contract issue. This is a project delivery issue. Now, where is it in the City guideline that says that the City can’t enter into a blanket agreement with no boundaries, and under what circumstances we can enter into a blanket agreement? If we do, what is the boundary? What is the expiration date? It cannot be like the one that you share with me; if a project manager came to me three years later, five years later, ten years later, I don't have any teeth to go back and say, "No, I'm not going to issue any contract because this Council resolution is no longer good." But there's nothing in the Council resolution that says this approval expired. There's nothing.
It is drafted by the project manager, reviewed by the director, and then it went to the Council. But there is no other review for compliance with procurement best practices.
The staff’s comments are a reference to Resolution No. 87704, passed on May 21, 2019. The resolution authorizes the City Administrator or designee to award an unspecified number of paving and concrete construction contracts for a total amount not to exceed $35 million. This City Administrator is granted the authority to make the awards without returning to the City Council for approval of the contractors or their award amounts. The Resolution No. 87704 states:
... the City Administrator or designee to award all paving and concrete curb construction contracts that follow all City advertising and competitive bidding requirements and are awarded in direct service of delivering the 2019 three-year prioritization plan in a total amount not to exceed thirty-five million dollars, without return to council38
b. Resolutions Authorize Prime Contractors to Award Contracts
According to Chapter 2.04, Purchasing System of the City of Oakland Municipal Code , the authority to award contracts belongs to the City Administrator and the City Council. The C ity Administrator is entitled to authorize contracts up to $250,000, whereas the City Council must approve the award of contracts that exceed the City Administrator’s authority.
The analysis of the City Council agenda authorizing contract awards revealed resolutions for which the prime contractor was awarded a contract and the authority to subsequently award subcontracts to unnamed businesses.
38 City Council Resolution No. 87704 passed on May 21, 2019.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Resolution No. 86785, passed on June 20, 2017, states:
The City Council hereby authorizes the City Administrator to award a contract(s) to Accela, inc. or Accela authorized vendors and to waive the competitive request for proposal requirements for these contracts.39
This resolution authorized Accela to award several contracts to their authorized vendors , thereby waiving the request for competitive proposal requirements. Oracle shows two vendors were awarded contracts against this resolution after June 20, 2017. The contracts were awarded to Truepoint Solutions, LLC and Gray Quarter, Inc.
c. Resolutions G rant Authority to D epartments to A ward Contracts to Unnamed Vendors
The administrative instructions governing the City’s procurement and contracting procedures require contracts valued at over $50,000 to be awarded through a competitive process. Several board letters in Legistar indicate that the vendor awarded the contract had not been specified in the resolutions. Departments have secured the City Council’s approval to award funds without naming a contractor or undertaking the solicitation process.
We did put together an agenda report and submit a resolution, and Council approved that we receive the funds, and then Council approved that we award the funds to contractors identified at the end of our procurement.
d. Resolutions Award Contracts to Vendors without a Competitive Process
Pursuant to Chapter 2.04, Purchasing System of the City of Oakland Municipal Code, all contracts must be awarded through a competitive process. The competitive process is defined by the Municipal Code as advertising and bidding or solicitation, depending on the type of contract and the dollar value.
The Municipal Code also provides exceptions to the competitive process. The exceptions include the pursuit of the best interests of the City. Depending on the value of the contracts, the City Administrator and the City Council can waive the competitive process upon finding that it is in the best interest of the City.
Staff noted there are no required procedures for informing the City Council about the award after the competitive process has been waived.
39 City Council Resolution No. 86785 passed on June 20, 2017.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis If the Council approves that resolution that avoided the competitive bidding process, we have no say to it.… What does that mean? As a Council, I'm giving you an approval to award contract, but I'm also giving you that every time you approve a contract, award a contract, you, as a project manager, have an obligation to submit a supplemental report to the Council to report back to the Council that it's indeed gone through a competitive bidding process. It met the 50% LSLBE compliance. It has everybody under the sun that's supposed to sign off on it. That it will come to this point where you have awarded the contract. It's after the fact, but it has accountability that you have to still report and provide transparency as a public document to everyone that what you have done and how you have selected the contractor. This is what is missing right now that there is...a blanket approval. There is no accountability after work.
B. Cooperative Agreements Circumvent the Competitive Process
A cooperative agreement allows the City to award a contract using a contract awarded by another public agency pursuant to a competitive process consistent with the procurement standards used by the City of Oakland. When using a cooperative agreement, there is no requirement for the City to use a competitive process; however, the agency that awards the contract used by the City must have used a competitive process.
The decision to use a cooperative agreement is at the discretion of the department. There is no standard requirement as to when to use such agreements , nor is there a provision in the L/SLBE policy to apply the L/SLBE requirements to cooperative agreements. There is a view among staff that cooperative agreements are or should be subject to L/SLBE Program requirements.
It's really up to the project manager if they want to pursue a co-op agreement. Co-op agreements, though, do not waive anything other than the solicitation process, as you probably know, because they are still subject to the LBE Program unless expressly waived.
There were 123 cooperative agreements with a total value of $26,519,591 awarded during the study period. The total value of all cooperative agreements represents 5.08% of the total dollars the City awarded in the four industries during the study period. The contracts awarded using a cooperative agreement were awarded to non -local contractors without a competitive bidding process.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis VII. Efficacy of the Local and Small Local Business Enterprise Program
The race-neutral Local and Small Local Business Enterprise Program (L/SLBE Program) has been a procurement standard for at least two decades. Several indicators have been used to assess the effectiveness of the L/SLBE Program in achieving equity in the awarding of City contracts to Oakland businesses. The measures include : 1) attainment of L/SLBE participation requirements , 2) ethnicity and gender parity in the contracts awarded to L/SLBE prime contractors and subcontractors, 3) the ethnicity and gender of the prime contractors selected to receive prime contracts awarded without competitive bid , 4) the ethnicity and gender of the prime contractors awarded federally assisted contracts, and 5) the utilization of Disadvantaged Business Enterprises (DBEs) on contracts with financial assistance from the United States Department of Transportation (USDOT).
The statistical findings of disparity were documented during a period when the City’s procurement policy included a comprehensive race -neutral L/SLBE Program and several discretionary procurement methods.
A. Attainment of L/SLBE Participation Goals
The effectiveness of the L/SLBE Program has been evaluated against the program’s requirements and provisions. Three criteria used for this evaluation were : 1) the minimum 50% L/SLBE participation, 2) the combination of 25% LBE and 25% SLBE participation, and 3) the L/SLBE requirement waiver provision.
1. Minimum 50% L/SLBE Participation
The minimum L/SLBE participation requirement is applied to all construction contracts valued at $100,000 or over and all professional services and goods and services contracts valued at $50,000 or over during the study period. The requirement could be fulfilled with either 25% of the contract dollars awarded to LBEs and 25% to SLBEs, or the total amount awarded to SLBEs.
The award of contracts to L/SLBE -certified prime contractors compared to non- certified prime contractors is presented in Table 1.4. As shown in the table, certified L/SLBEs received only
15.81% of all prime contracts awarded during the study period, with a total value of $227,255,496, or 46.69% of prime contract dollars . Non -certified companies received 84.19% of the prime contracts awarded, with a total value of $259,450,411, or 53.31% of prime contract dollars. Thus, the 50% L/SLBE participation goal was not met with SLBEs or a combination of L/SLBEs.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Table 1.4: Prime Contracts Awarded to L/SLBEs and Non-L/SLBEs July 1, 2016 to June 30, 2021
At the industry-specific level, the award of construction and architectural and engineering prime contracts to L/SLBEs exceeded the minimum 50% participation requirement. However, L/SLBE participation was not achieved on professional services and goods and services prime contracts.
L/SLBE-certified prime contractors received 101, or 22.10% of professional services contracts valued at $17,615,545, or 22.33% of all prime contract dollars. In contrast, non-certified businesses received 356, or 77.90% of professional services prime contracts with a total value of $61,267,800, or 77.67% of prime contract dollars.
While non-certified businesses can fulfill the 50% participation requirement by subcontracting with L/SLBEs, Table 1.5 shows that most subcontracts (64.21%) were awarded to non -certified firms located outside of Oakland. L/SLBEs received only 175, or 35.79% of the subcontracts valued at $16,695,231, or 38.88% of subcontract dollars.
Table 1.5: Subcontracts Awarded to L/SLBEs and Non-L/SLBEs July 1, 2016 to June 30, 2021
As shown in Table 1.6, 144, or 6.36% of prime contracts were awarded to LBEs; 214, or 9.45% of prime contracts were awarded to SLBEs; and 1,906, or 84.19% of prime contracts were awarded to non- certified contractors. The dollar values received on these prime contracts were $114,827,200, or 23.59% ; $112,428,296, or 23.10% ; and $259,450,411, or 53.31% of the total prime contract dollars, respectively.
Number
of Contracts
Percent
of Contracts
Amount
of Dollars
Percent
of Dollars
Number
of Contracts
Percent
of Contracts
Amount
of Dollars
Percent
of Dollars
Number
of Contracts
Amount
of Dollars
Construction 137 71.73% $183,447,504 85.47% 54 28.27% $31,189,344 14.53% 191 $214,636,848 Architectural and Engineering 68 60.71% $16,692,444 58.39% 44 39.29% $11,894,151 41.61% 112 $28,586,595 Professional Services 101 22.10% $17,615,545 22.33% 356 77.90% $61,267,800 77.67% 457 $78,883,345 Goods and Services 52 3.46% $9,500,002 5.77% 1,452 96.54% $155,099,116 94.23% 1,504 $164,599,118 TOTAL 358 15.81% $227,255,496 46.69% 1,906 84.19% $259,450,411 53.31% 2,264 $486,705,907 Industry
L/SLBE Certified Firms Non-certified Firms TOTAL
Number
of Contracts
Percent
of Contracts
Amount
of Dollars
Percent
of Dollars
Number
of Contracts
Percent
of Contracts
Amount
of Dollars
Percent
of Dollars
Number
of Contracts
Amount
of Dollars
Construction 120 32.88% $12,863,334 35.86% 245 67.12% $23,008,752 64.14% 365 $35,872,086 Architectural and Engineering 34 53.13% $2,948,671 58.67% 30 46.88% $2,077,058 41.33% 64 $5,025,729 Professional Services 21 35.00% $883,226 43.30% 39 65.00% $1,156,400 56.70% 60 $2,039,626 TOTAL 175 35.79% $16,695,231 38.88% 314 64.21% $26,242,210 61.12% 489 $42,937,441 Industry
L/SLBE Certified Firms Non-certified Firms TOTAL
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Table 1.6: Prime Contracts Awarded by Certification Category July 1, 2016 to June 30, 2021
The minimum 25% LBE and 25% SLBE participation requirement was not met on construction, professional services, and goods and services contracts at the prime contract or subcontract level.
While the objective of the program is to increase the circulation of the dollars within the City, this analysis reveals that less than 50% of the prime contract dollars awarded were spent in the City.
2. Combination of 25% LBE and 25% SLBE Participation
The 50% local business participation requirement must be met with a minimum participation of 25% for LBEs and 25% for SLBEs. SLBEs may meet the full 50% requirement.
Mason Tillman reviewed and analyzed prime contracts from the City and determined that the combination of 25% LBE and 25% SLBE participation requirements were not met by the majority of contracts. The L/SLBE requirement was determined as fulfilled only by participation of LBEs or with the SLBE participation of less than 25% on those contracts.
Table 1.7 presents the award of subcontracts during the study period by certification category.
LBEs received 87 subcontracts, which comprised 17.79% of all subcontracts with a total dollar value of $7,463,280, or 17.38% of subcontract dollars. SLBEs received 88, or 18.00% of the subcontracts with a dollar amount of $9,231,951, or 21.50% of subcontract dollars.
Table 1.7: Subcontracts Awarded by Certification Category July 1, 2016 to June 30, 2021
The award of prime contracts has not achieved the mandated L/SLBE participation for either LBEs or SLBEs. This finding highlights the failure of the race and gender -neutral L/SLBE Program to achieve its stated goal of increasing economic opportunities for Oakland businesses, which has been the procurement standard for three decades.
Number Percent A mount Percent
of Contracts of Contracts of Dollars of Dollars
LBE 144 6.36% $114,827,200 23.59%
SLBE 214 9.45% $112,428,296 23.10%
Non-certified 1,906 84.19% $259,450,411 53.31%
Total 2,264 100.00% $486,705,907 100.00%
Certification
Number Percent A mount Percent
of Contracts of Contracts of Dollars of Dollars
LBE 87 17.79% $7,463,280 17.38%
SLBE 88 18.00% $9,231,951 21.50%
Non-certified 314 64.21% $26,242,210 61.12%
Total 489 100.00% $42,937,441 100.00%
Certification
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Chapter 1: Local and Small Local Business Enterprise Program Analysis
3. L/SLBE Prime Contract Waivers
The L/SLBE Program has a waiver provision that can be applied when the absence of a certified business to perform the contract requirements is documented. A waiver authorizes a department to advertise a contract without the L/SLBE requirement.
As indicated in Table 1.8, the departments requested 128 waivers during the study period. A total of 24, or 18.75%, were denied, and the L/SLBE requirement was waived for 99, or 77.34%. For five, or 3.9%, of the waivers, the L/SLBE requirement was reduced.
Table 1.8: L/SLBE Waiver Requests
Waiver Actions Number of
Waivers
Percent of
Waivers
L/SLBE Waiver Request Denied 24 18.75%
L/SLBE Waiver Granted 99 77.34%
L/SLBE Requirement Reduced 5 3.9%
Total 128 100%*
*The percentages may not total 100 percent due to rounding
B. L/SLBE Participation by Ethnicity and Gender
Statistical disparity findings for prime contracts awarded to L/SLBEs are presented by ethnicity and gender below. A description of these statistical outcomes, as shown in the disparity tables, is presented in Table 1.9.
Table 1.9: Statistical Outcome Descriptions
P-Value Outcome Definition of P-Value Outcome
< 0.05 * This underutilization is statistically significant. not significant M/WBEs: This underutilization is not statistically significant.
Non-minority males: This overutilization is not statistically significant. < 0.05 † This overutilization is statistically significant. ----
While this group was underutilized, there were no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance.
** This study does not statistically test the overutilization of M/WBEs or the underutilization of non-minority males.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis The disparity analysis of all prime contracts awarded to Oakland businesses certified as either an LBE or SLBE is described below in Table 1.10.
African Americans represented 16.95% of the certified businesses and received 1.34% of the dollars on all prime contracts. This underutilization is statistically significant.
Asian Americans represented 11.22% of the certified businesses and received 2.91% of the dollars on all prime contracts. This underutilization is not statistically significant.
Hispanic Americans represented 8.35% of the certified businesses and received 13.31% of the dollars on all prime contracts. This study does not statistically test the overutilization of M/WBEs.
Native Americans represented 0.24% of the certified businesses and received no prime contracts.
This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 15.27% of the certified businesses and received 4.18% of the dollars on all prime contracts. This underutilization is statistically significant.
Non-minority Males represented 47.97% of the certified businesses and received 78.25% of the dollars on all prime contracts. This overutilization is statistically significant.
Minority Females represented 10.02% of the certified businesses and received 2.09% of the dollars on all prime contracts. This underutilization is not statistically significant.
Minority Business Enterprises represented 36.75% of the certified businesses and received
17.56% of the dollars on all prime contracts. This underutilization is statistically significant.
Women Business Enterprises represented 25.30% of the certified businesses and received 6.27% of the dollars on all prime contracts. This underutilization is statistically significant.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Table 1.10: Disparity Analysis: All Prime Contracts Awarded to L/SLBEs July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars U tilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $3,043,051 1.34% 16.95% $38,508,688 -$35,465,636 0.08 < .05 * Asian Americans $6,612,726 2.91% 11.22% $25,491,667 -$18,878,940 0.26 not significant Hispanic Americans $30,252,691 13.31% 8.35% $18,983,156 $11,269,535 1.59 ** Native Americans $0 0.00% 0.24% $542,376 -$542,376 0.00 ---- Caucasian Females $9,509,734 4.18% 15.27% $34,712,057 -$25,202,322 0.27 < .05 * Non-minority Males $177,837,293 78.25% 47.97% $109,017,553 $68,819,740 1.63 < .05 † TOTAL $227,255,496 100.00% 100.00% $227,255,496
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $2,373,575 1.04% 4.06% $9,220,390 -$6,846,816 0.26 not significant African American Males $669,477 0.29% 12.89% $29,288,298 -$28,618,821 0.02 < .05 * Asian American Females $1,874,851 0.82% 3.58% $8,135,638 -$6,260,787 0.23 not significant Asian American Males $4,737,875 2.08% 7.64% $17,356,028 -$12,618,153 0.27 not significant Hispanic American Females $498,669 0.22% 2.15% $4,881,383 -$4,382,714 0.10 not significant Hispanic American Males $29,754,022 13.09% 6.21% $14,101,773 $15,652,249 2.11 ** Native American Females $0 0.00% 0.24% $542,376 -$542,376 0.00 ---- Native American Males $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $9,509,734 4.18% 15.27% $34,712,057 -$25,202,322 0.27 < .05 * Non-minority Males $177,837,293 78.25% 47.97% $109,017,553 $68,819,740 1.63 < .05 † TOTAL $227,255,496 100.00% 100.00% $227,255,496
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $4,747,094 2.09% 10.02% $22,779,787 -$18,032,693 0.21 not significant Minority Males $35,161,374 15.47% 26.73% $60,746,099 -$25,584,725 0.58 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $39,908,469 17.56% 36.75% $83,525,886 -$43,617,418 0.48 < .05 * Woman Business Enterprises $14,256,829 6. 27% 25.30% $57,491,844 -$43,235,015 0.25 < .05 * ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis C. Comparison of the 2017 L/SLBE Disparity Study Findings to the Current Study
As shown in Table 1.11, a statistical disparity was found for L/SLBE- certified African American, Caucasian female, MBE, and WBE prime contractors in the 2011-2016 Disparity Study conducted in 2017 and this disparity study. Although a statistical disparity was found for L/SLBE-certified minority female prime contractors in the previous study, the current study does not show the statistical significance of their underutilization. Non- minority males were statistically overutilized in these studies. Over the last 13 years, the L/SLBE Program has not been able to eliminate the disparity in the participation of L/SLBEs in the awarding of City contracts.
Table 1.11: Comparison of the 2017 L/SLBE Disparity Study Findings to the Current Study
Ethnicity and Gender 2017 Study Current Study
African Americans Disparity Disparity
Asian Americans No Disparity No Disparity
Hispanic Americans No Disparity No Disparity
Native Americans Insufficient Data Insufficient Data
Caucasian Females Disparity Disparity
Minority Females Disparity Underutilization
Minority Business Enterprises Disparity Disparity
Women Business Enterprises Disparity Disparity
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Chapter 1: Local and Small Local Business Enterprise Program Analysis D. Discretionary Procurement Methods
Two procurement methods that allow the award of formal prime contracts without competitive bidding are emergency contracts and cooperative agreements. A third procurement method uses a competitive process to select on -call contractors while the award of task orders authorized by the contract is discretionary.
There is also a provision in the procurement code that allows the City Council to award formal contracts over $250,000 without competitive bidding when in the best interest of the City. Contracts awarded using these three procurement methods were disproportionately awarded to non-M/WBEs.
The City Administrator may authorize an emergency contract. Emergency contracts are awarded without advertising or authorization by the City Council. An emergency is a situation deemed by the City Administrator to require the immediate preservation of the public peace, health, or safety.
Cooperative agreements are used when it is advantageous for the City, with the City Administrator to purchase goods or services through legal contracts of other governmental jurisdictions or public agencies without further contracting, solicitation, or formal bidding. C ooperative agreements are subject to the City of Oakland purchasing and other applicable policies and requirements set forth in the City's standard contracts and insurance requirements.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis
1. On-Call, Emergency, and Cooperative Agreements
Table 1.12 lists the on- call contracts, emergency contracts, and cooperative agreements awarded by the City during the study period. MBEs received 11.68% , WBEs received 5.04% , and non- M/WBEs received 84.84% of the contract dollars.
African Americans received 12, or 1.32% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $870,706, or 0.44% of the contract dollars.
Asian Americans received 44, or 4.85% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $10,312,627, or 5.19% of the contract dollars.
Hispanic Americans received 48, or 5.29% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $12,040,389, or 6.06% of the contract dollars.
Native Americans received 1, or 0.11% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $8,622, or less than 1% of the contract dollars.
Caucasian Females received 66, or 7.27% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $6,901,883, or 3.47% of the contract dollars.
Minority Females received 21, or 2.31% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $3,120,425, or 1.57% of the contract dollars.
Non-minority Males received 737, or 81.17% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $168,692,490, or 84.84% of the contract dollars.
Minority Business Enterprises received 105, or 11.56% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $23,232,344, or
11.68% of the contract dollars.
Women Business Enterprises received 87, or 9.58% of the on-call contracts, emergency contracts, and cooperative agreements during the study period, representing $10,022,308, or 5.04% of the contract dollars.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Table 1.12: On-Call, Emergency, and Cooperative Agreements by Ethnicity and Gender
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 12 1.32% $870,706 0.44%
Asian Americans 44 4.85% $10,312,627 5.19%
Hispanic Americans 48 5.29% $12,040,389 6.06%
Native Americans 1 0.11% $8,622 0.00%
Caucasian Females 66 7.27% $6,901,883 3.47%
Non-minority Males 737 81.17% $168,692,490 84.84%
TOTAL 908 100.00% $198,826,717 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 12 1.32% $870,706 0.44%
Asian American Females 4 0.44% $451,888 0.23%
Asian American Males 40 4.41% $9,860,739 4.96%
Hispanic American Females 16 1.76% $2,659,915 1.34%
Hispanic American Males 32 3.52% $9,380,474 4.72%
Native American Females 1 0.11% $8,622 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 66 7.27% $6,901,883 3.47%
Non-minority Males 737 81.17% $168,692,490 84.84%
TOTAL 908 100.00% $198,826,717 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 21 2.31% $3,120,425 1.57%
Minority Males 84 9.25% $20,111,920 10.12%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 105 11.56% $23,232,344 11.68% Women Business Enterprises 87 9.58% $10,022,308 5.04%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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Chapter 1: Local and Small Local Business Enterprise Program Analysis
2. On-Call, Emergency, and Cooperative Agreements Awarded to L/SLBEs
Table 1.13 shows the on-call, emergency, and cooperative agreements awarded to L/SLBEs. The City awarded 908 prime contracts using these procurement methods and 767, or 84.47% of these contracts were awarded to non -certified businesses with a total value o f $139,356,751. LBEs received 73, or 8.04% of these contracts valued at $42,810,503, or 21.53% of the contract dollars.
SLBEs were awarded 68, or 7.49% of the contracts valued at $16,659,463, or 8.38% of the contract dollars.
Table 1.13: On-Call, Emergency, and Cooperative Agreements by Certification Category
Percent Amount P ercent
of Contracts of Dollars of Dollars
LBE 73 8.04% $42,810,503 21.53%
SLBE 68 7.49% $16,659,463 8.38%
Non-certified 767 84.47% $139,356,751 70.09%
Total 908 100.00% $198,826,717 100.00%
Certification Number of
Contracts
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Table 1.14 lists the on- call contracts, emergency contracts, and cooperative agreements awarded to L/SLBEs by the City during the study period. MBEs received 19.13%, WBEs received 6.08%, and non-M/WBEs received 75.57% of the contract dollars.
African Americans received 7, or 4.96% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $300,847, or 0.51% of the contract dollars.
Asian Americans received 17, or 12.06% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $2,434,289, or 4.09% of the contract dollars.
Hispanic Americans received 17, or 12.06% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $8,641,715, or 14.53% of the contract dollars.
Native Americans received none of the on- call contracts, emergency contracts, and cooperative agreements during the study period.
Caucasian Females received 17, or 12.06% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $3,150,777, or 5.30% of the contract dollars.
Minority Females received 5, or 3.55% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $466,888, or 0.79% of the contract dollars.
Non-minority Males received 83, or 58.87% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $44,942,339, or 75.57% of the contract dollars.
Minority Business Enterprises received 41, or 29.08% of the on- call contracts, emergency contracts, and cooperative agreements during the study period, representing $11,376,851, or
19.13% of the contract dollars.
Woman Business Enterprises received 22, or 15.6% of the on-call contracts, emergency contracts, and cooperative agreements during the study period, representing $3,617,664, or 6.08% of the contract dollars.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Table 1.14: On-Call, Emergency, and Cooperative Agreements Awarded to L/SLBEs by Ethnicity and Gender
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 7 4.96% $300,847 0.51%
Asian Americans 17 12.06% $2,434,289 4.09%
Hispanic Americans 17 12.06% $8,641,715 14.53%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 17 12.06% $3,150,777 5.30%
Non-minority Males 83 58.87% $44,942,339 75.57%
TOTAL 141 100.00% $59,469,966 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 7 4.96% $300,847 0.51%
Asian American Females 4 2.84% $451,888 0.76%
Asian American Males 13 9.22% $1,982,401 3.33%
Hispanic American Females 1 0.71% $15,000 0.03%
Hispanic American Males 16 11.35% $8,626,715 14.51%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 17 12.06% $3,150,777 5.30%
Non-minority Males 83 58.87% $44,942,339 75.57%
TOTAL 141 100.00% $59,469,966 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 5 3.55% $466,888 0.79%
Minority Males 36 25.53% $10,909,963 18.35%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 41 29.08% $11,376,851 19.13% Women Business Enterprises 22 15.60% $3,617,664 6.08%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
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Chapter 1: Local and Small Local Business Enterprise Program Analysis
3. Disparity Analysis: On-Call, Emergency, and Cooperative Agreements Awarded by Ethnicity and Gender
The award of the on-call, emergency, and cooperative agreements to the available contractors by ethnicity and gender are described below in Table 1.15.
African Americans represented 12.05% of the available businesses and received 0.44% of the dollars on on- call, emergency, and cooperative agreements. This underutilization is statistically significant.
Asian Americans represented 7.30% of the available businesses and received 5.19% of the dollars on on- call, emergency, and cooperative agreements. This underutilization is statistically significant.
Hispanic Americans represented 4.62% of the available businesses and received 6.06% of the dollars on on-call, emergency, and cooperative agreements. This study does not statistically test the overutilization of M/WBEs.
Native Americans represented 0.21% of the available businesses and received no on- call, emergency, and cooperative agreements. This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 8.64% of the available businesses and received 3.47% of the dollars on on- call, emergency, and cooperative agreements. This underutilization is statistically significant.
Non-minority Males represented 67.18% of the available businesses and received 84.84% of the dollars on on- call, emergency, and cooperative agreements. This overutilization is statistically significant.
Minority Females represented 8.14% of the available businesses and received 1.57% of the dollars on on- call, emergency, and cooperative agreements. This underutilization is statistically significant.
Minority Business Enterprises represented 24.18% of the available businesses and received
11.68% of the dollars on on-call, emergency, and cooperative agreements. This underutilization is statistically significant.
Women Business Enterprises represented 16.78% of the available businesses and received 5.04% of the dollars on on -call, emergency, and cooperative agreements. This underutilization is statistically significant.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis Table 1.15: Disparity Analysis: On-Call, Emergency, and Cooperative Agreements July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Ut ilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $870,706 0.44% 12.05% $23,968,536 -$23,097,830 0.04 < .05 * Asian Americans $10,312,627 5.19% 7.30% $14,507,272 -$4,194,645 0.71 < .05 * Hispanic Americans $12,040,389 6.06% 4.62% $9,180,931 $2,859,458 1.31 ** Native Americans $8,622 0.00% 0.21% $420,501 -$411,879 0.02 ---- Caucasian Females $6,901,883 3.47% 8.64% $17,170,443 -$10,268,560 0.40 < .05 * Non-minority Males $168,692,490 84.84% 67.18% $133,579,035 $35,113,455 1.26 < .05 † TOTAL $198,826,717 100.00% 100.00% $198,826,717
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $0 0.00% 4.19% $8,339,929 -$8,339,929 0.00 < .05 * African American Males $870,706 0.44% 7.86% $15,628,607 -$14,757,901 0.06 < .05 * Asian American Females $451,888 0.23% 2.40% $4,765,674 -$4,313,786 0.09 < .05 * Asian American Males $9,860,739 4.96% 4.90% $9,741,598 $119,141 1.01 ** Hispanic American Females $2,659,915 1.34% 1.41% $2,803,338 -$143,423 0.95 not significant Hispanic American Males $9,380,474 4.72% 3.21% $6,377,593 $3,002,881 1.47 ** Native American Females $8,622 0.00% 0.14% $280,334 -$271,712 0.03 ---- Native American Males $0 0.00% 0.07% $140,167 -$140,167 0.00 ---- Caucasian Females $6,901,883 3.47% 8.64% $17,170,443 -$10,268,560 0.40 < .05 * Non-minority Males $168,692,490 84.84% 67.18% $133,579,035 $35,113,455 1.26 < .05 † TOTAL $198,826,717 100.00% 100.00% $198,826,717
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $3,120,425 1.57% 8.14% $16,189,274 -$13,068,850 0.19 < .05 * Minority Males $20,111,920 10.12% 16.04% $31,887,965 -$11,776,045 0.63 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $23,232,344 11.68% 24.18% $48,077,239 -$24,844,895 0.48 < .05 * Woman Business Enterprises $10,022,308 5.04% 16. 78% $33,359,717 -$23,337,410 0.30 < .05 * ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
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Chapter 1: Local and Small Local Business Enterprise Program Analysis
4. Contracts Awarded without Competitive Bidding
Section 2.04.050.I.5 of the Municipal Code authorizes the City Council to award contracts over the $250,000 formal contract threshold without competitive bidding, when it is in the best interest of the City. There were 62 prime contracts over the $250,000 threshold among the contracts the City’s Public Works Department provided to Mason Tillman for the study. These contracts were not competitively bid.
Table 1.16 presents the formal prime contracts awarded by the Public Works Department without competitive bids by ethnicity and gender. Non- minority males were awarded 51, or 82.26% of these contracts with a total value of $29,526,470, or 83.78% of the dollars. MBEs received nine, or 14.52% of the contracts and $5,369,574, or 15.24% of the dollars. WBEs were awarded only six, or 9.68% of the contracts and $2,248,981, or 6.38% of the dollars awarded. It is noteworthy that African American business owners did not receive any contracts over $250,000 awarded without competitive bidding.