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MBE/WBE Committee continues debate over ‘good faith’ efforts

Friday, December 11, 2009 by Charles Boisseau

Members of the city’s minority- and women-owned business advisory committee continue to debate proposed language to spell out “good faith efforts” that general contractors must make to include minority businesses in work for the City of Austin.


Members of the advisory group – already bogged down with a 15-word name, officially the “Minority-Owned and Women-Owned Business Enterprise (MBE/WBE) & Small Business Enterprise Procurement Program Advisory Committee” – back-tracked last week on how to the city should update its rules concerning “good faith efforts” that committee members agreed on a month ago.


At their Dec. 1 meeting, member Ed Lowenberg said he had second thoughts about its recommendation that the city insert three sentences to the Good Faith Efforts rule (9.1.1 in the city’s Minority-Owned and Women-Owned Business Enterprise Procurement Program Rules).


“On larger projects, I don’t know the way this is written, how to comply with this,” said Lowenberg, who co-owns Solis Constructors, a general contracting firm. He said the more he thought about it, the more concerned he became. He researched his company’s records and found that it received 32 bids from subcontractors on the final day of the city’s bid deadline for the Mexican American Cultural Arts Center, which his company is building.


The proposed new rule would require prime contractors to open “a dialogue” with subcontractors to give them “information needed to submit a conforming and timely bid.” (The new language also states: “bid shopping is prohibited,” though what constitutes “bid shopping” is not defined.)


Lowenberg said opening a dialogue with subcontractors could pose a great hardship just at a time a prime contractor is on deadline to submit a final bid to the city. “A lot of manpower would be required to do that. And I am still not convinced what I need to say,” he argued, noting that he would be prohibited from telling subcontractors prices of other bids.


Committee Chair Adrian Lopez Neely and other members discussed with staff attorney Lino Mendiola why they had dropped earlier proposed language that may have provided more time for such a dialogue. No one seemed to know why. At a special meeting on June 30, committee members had agreed to language that specified “subcontractors shall be required to submit bids to prime contractors 24, 48, or 72 hours prior to the City’s bid submission deadline depending on the size of the city’s solicitation.”


Staff members of the city’s Small and Minority Business Resources (SMBR) Department advised the committee members that they could continue to rework the language, and they noted that nothing was final until the department’s staff agreed to post the proposed change, at which point the city code requires a 30-day time period for the public to respond with written comments and then 90 days after that for the department to finalize any new rule. 


In the end, the committee members agreed to recommend that the SMBR post the proposed language to see what responses the public might provide so committee members could take any suggestions into account. This suggestion actually originated from someone in the audience, Carol Hadnot, a member of the Austin Black Contractors Association and a frequent attendee of the committee’s meetings. Neely overheard Hadnot’s suggestion and agreed with it. “Let’s go ahead and post it and let’s look at the comments you might or might not get,” he said.


Asked about the vague language, Neely told In Fact Daily after the meeting: “We need to look at those time lines and get them back in there.”


The seven-member committee advises the SMBR department on improving the participation of small and minority-owned businesses in the city’s contracting business. Like many major cities, Austin has set affirmative action goals to ensure that a portion of the millions of dollars the city spends each year goes to participating minority- and women-owned businesses.


The issue of good faith effort comes up all the time in projects. For example, early in the meeting, committee members heard a presentation from Catellus Development Corp. about how minority and small businesses have participated in the redevelopment of the city’s Robert Mueller Municipal Airport project. Catellus is the master developer of the more than 700-acre mixed-use project, which under its Master Development Agreement with the city requires Catellus to “make a good faith effort” to encourage participation by small and minority-owned businesses in design and construction, retail/commercial/residential tenants and investors, and new employment opportunities.


In his presentation, Catellus President Greg Weaver said the project has made strides in each of the areas. For example, of the $60.8 million in construction contracts, 21.25 percent ($12.9 million) has gone to 42 M/WBEs. He also noted that Catellus strongly encourages third-party contractors and employers at Mueller to utilize M/WBE contractors if possible. He said the percentage of third-party construction contracts to M/WBE businesses for Mueller buildings Catellus has developed was 17.6 percent. He said Catellus also spent $1.5 million so far with nonconstruction M/WBE professional services firms.


Finally, the development has attracted some M/WBE small business retailers, including a woman-owned jewelry store and an upcoming Mr. Bones Barbeque restaurant.


The BBQ eatery, expected to open early in 2010, is owned by African Americans John Goode and former City Council Member Willie Lewis. The business marks a comeback for Goode, who in 1998 filed a civil rights lawsuit against the city and Fine Host Corp. after he was dropped as a subcontractor in city facilities because he declined to certify himself as a minority-owned business. Goode was replaced by another business owned by a black person. Goode said he didn’t want special treatment on account of his race. U.S. District Judge Sam Sparks eventually dismissed Goode’s racial discrimination suit and the U.S. Fifth Circuit Court turned down his appeal.


Accompanying Weaver during his presentation was State Rep. Dawnna Dukes, who noted that Goode has had “some ups and downs” but now was ready to bring the Mueller area some “phenomenal barbeque.”


Committee members expressed kudos about Catellus’ minority-business participation – as did Hadnot.


“They did a good job. I love that shopping center,” she said. “There is diversity all over the place. … They’re the model” of how a development can bring in participation from minority-owned businesses.

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