Business Market Availability and Disparity Study SHELBY COUNTY - PowerPoint PPT Presentation

Business Market Availability and Disparity Study SHELBY COUNTY SCHOOLS Report Presentation November 28, 2017

Agenda Introductions  What is a Disparity Study?  Background  Study Framework  Quantitative Results  Qualitative Results  Recommendations  Questions and Answers 

Key Disparity Study T eam DR. FRED SEAMON MR. REGGIE SMITH VERNETTA MITCHELL MS. JANICE BANKS MGT Executive MGT Executive-in- MGT Project Subconsultant, Vice President/ Charge Director Small Planet Technical Advisor Works • Responsible for • Provided the • Provided ensuring the day-to-day • Conducted technical and MGT teams have management of interviews with methodological the resources to the study, the business owners advice and fulfill all MGT teams, and and expertise to the contractual has regular stakeholders, MGT teams requirements, interface with managed the throughout the including the District public hearings engagement. delivering a final Project and conducted MS. report that is Manager. the custom accurate, valid, census surveys. and legally defensible.

Disparity Study Disparity Studies are the primary means by which government entities determine whether there is legal justification for the establishment, continuation, or modification of programs designed to promote the full and fair participation of disadvantaged, minority-, and women-owned businesses in government contracting

Background Shelby County School District (District) contracted with MGT to conduct its first Disparity Study. The study objectives included: Determine whether the District, either in the past or currently, Determine if a legally justified engages in discriminatory practices need exists for the establishment in the solicitation and award of of an M/WBE program in contracts in Construction, accordance with the guidelines set Architecture and Engineering, forth by the Supreme Court and Professional Services, relevant subsequent cases. Nonprofessional Services, and Goods & Commodities to M/WBEs.

Legal Framework • Must show a compelling interest with factual Strict Scrutiny predicate evidence. • Remedy must be narrowly-tailored. • Recommendations linked to findings. Narrow-Tailoring • Goals linked to availability. • Limit burden on 3 rd parties. Passive • Private sector disparities linked to public sector can provide a compelling interest. Participant

Report Sections Chapter 1. Introductions Chapter 2. Legal Framework Chapter 3. Review of Policies, Procedures, and Programs Chapter 4. Market Area and Utilization Analyses Chapter 5. Availability and Disparity Analyses Chapter 6. Private Sector and Non-Goal Analyses Chapter 7. Anecdotal Analysis Chapter 8. Findings and Recommendations

Study Outline  Expenditures analyzed for years between July 1, 2011 and June 30, 2016.  Business Categories included in the study: – Architecture & Engineering – Construction – Professional Services – Nonprofessional Services – Goods & Commodities  Study includes prime analyses only.

Relevant Market Area The Relevant Geographic Market Area identified for the District is Shelby County.

M/WBE Prime Utilization  Architecture & Engineering : Minority Firms earned 0.08% and Nonminority Women earned 7.52% of the total dollars  Construction : Minority Firms earned 0.55% and Nonminority Women earned 1.21% of the total dollars  Professional Services : Minority Firms earned 30.70% and Nonminority Women earned 0.78% of the total dollars  Nonprofessional Services : Minority Firms earned 12.41% and Nonminority Women earned 0.18% of the total dollars  Goods & Supplies : Minority Firms earned 12.97% and Nonminority Females earned 2.46% of the total dollars

Private Sector Analysis In a statistical analysis of survey data in the District area that controlled for the effects of certain variables (such as, company capacity, owner level of education, and experience), all M/WBE-owned firms earned less revenue in 2016 than did their non-M/WBE counterparts supporting the conclusion that M/WBE status is negatively related to earnings when compared with earnings for non-M/WBEs Econometric analysis using data from the 2011-2015 American Community Survey (ACS) data for the Memphis Public Use Microdata Area found statistically significant disparities for entry into self-employment for African Americans and Nonminority Women.

Anecdotal 3 Public Hearings QUALITATIVE Telephone Survey DATA COLLECTION ACTIVITIES 51 In- Depth Interview s 5 Stakeholder Interviews

Anecdotal With respect to disparate Barriers treatment, M/WBE anecdotal respondents reported  Competing with large  Experienced discrimination companies  47% in the private sector   Limited time to prepare bid 13.6% package or quote  26%  That an informal network  Selection process criteria  precluded their firms from 26% obtaining work in the private sector  15.8%

Disparity Business Ownership Architecture & Construction Classification Engineering African American Underutilization* Underutilization* Asian American Underutilization* Underutilization* Hispanic American Underutilization* Underutilization* Native American Underutilization* Underutilization* Nonminority Women Underutilization* Overutilization *Indicate a substantial level of disparity, which is a disparity index below 80.00. Not Applicable denotes the analyses cannot be applied in this case due to the mathematical constraint of division by zero.

Disparity Business Ownership Professional Nonprofessional Goods & Classification Services Services Commodities African American Underutilization* Underutilization* Underutilization* Asian American Overutilization Overutilization Overutilization Hispanic American Underutilization* Underutilization* Underutilization* Native American Underutilization* Underutilization* Underutilization* Nonminority Women Underutilization* Underutilization* Underutilization* *Indicate a substantial level of disparity, which is a disparity index below 80.00.

Commendation & Recommendations COMME NDAT I ON R E COMME NDAT I ONS  Establish subcontractor  The District should be project goals commended for their pursuance of a disparity  Collect subcontractor data study to determine if there for all contracting areas is evidence to support a  Establish a SLBE Program M/WBE program  Narrowly tailor future MWBE programs

Aspirational Goals M/WBE GOAL Architecture & Engineering 13.68% Construction 24.17% Professional Services 35.24% Nonprofessional Services 32.57% Goods & Commodities 24.02%

Conclusion The study provide factual predicate evidence to support the MWBE Program.

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