Twenty percent of Frederick’s 2022 procurement spending went to women- or minority-owned small businesses, as the city continues to develop a program to ensure more equitable spending across city businesses.
More than $8.8 million of the $44 million the city spent on acquisitions last year went to small businesses owned by women or minorities, according to data city staff members presented to the mayor and council members at a workshop Wednesday.
The tally did not include things like debt payments, taxes, support for nonprofit organizations, intergovernmental spending, benefits, insurance or land purchases.
The city has certified 154 small businesses and has collected vendor information forms for more than 400 businesses, including 223 minority- and women-owned and small businesses that have done or will do business with the city, as of January 2022, Rebecca DeSantis-Randall , the city’s equity and inclusion manager, said Wednesday.
The information gathering is part of an effort to create a “really comprehensive list” of companies for all types of acquisitions, DeSantis-Randall said.
The city commissioned a study in February 2020 to see if there was a statistically significant disparity between the percentage of available and qualified minority- and women-owned businesses in relevant areas and the percentage of money the city spent on purchases.
A new policy passed in December 2021 included many of the recommendations, including creating a small business set-aside program, creating a minority- and women-owned business enterprise program, and requiring annual reviews of the effectiveness of the Program.
The Small Business Reserve Program applies to construction projects under $250,000 and all other acquisitions over $10,000.
For construction projects over $250,000, goals will be included in the contract based on scope of work and availability of minority- or women-owned subcontractors.
Bidders must meet contract objectives or provide evidence of significant good faith efforts to meet the objective. The use of subcontractors will be a key part of the contract overseen by the city.
For the design of the city’s new police headquarters, the target of 40% use of MWBE subcontractors has been met, and the construction target of 41% is still to come, said director of budget and administration, Katie Barkdoll.
The city exempted 60 purchases from the policy in 2022. That included 23 due to sole source supply issues, 16 due to inability to obtain at least three small business quotes, eight due to inability to find small or owner-owned businesses. minorities. to provide the product or service, and 13 for various other reasons, DeSantis-Randall said.
Many of the sole-source exemptions were for purchases of equipment or software whose repairs by someone other than the vendor would void the warranty, he said.
Barkdoll said many of the exemptions for which at least three offers could not be found were products such as items for the city’s water or wastewater treatment plants that require specific equipment.
Among the suggested changes for councilors to consider was allowing a waiver to allow the city to participate in so-called “accompaniment,” or joining with other municipalities or jurisdictions for contracts to purchase large quantities of items like road salt or gun ammunition. fire. Used by the police department.
Councilman Derek Shackelford said he thinks the city has come a long way in the last year and asked what the city has done to coordinate with other municipalities to find suitable vendors and companies.
The city has spoken with several other municipalities about how they run their programs, and some have provided contractor directories, DeSantis-Randall said.
Staff members asked for guidance on finding a balance between when it’s okay to go over budget for an item using a small company and when to use the cheaper alternative from a larger company.
The city knows it will pay more for some items because of the program, Barkdoll said.
Councilmember Kelly Russell said it’s important to broaden the use of small businesses, but they also need to be responsible stewards of public money.
Councilor Ben MacShane said he also thinks it’s appropriate to spend a bit more to work with small businesses, but there has to be a threshold.
Mayor Michael O’Connor recommended council members let city staff work on the numbers and come back with a recommendation.
“I think we certainly understand that it’s not carte blanche,” O’Connor said.
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