DPH Implementation of the Locally-owned Business Enterprise (LBE) - - PowerPoint PPT Presentation

DPH Implementation

• f the

Locally-owned Business Enterprise (LBE) Ordinance

LBE Ordinance Purposes:

• 1. Assistance to Small Local Businesses

to Compete for City Contracts

• Mayor sets Citywide LBE contract participation goals
• LBE Ordinance provides tools to reach goals

– Bid Discounts – Subcontracting Goals – Set Asides – Information and Training – Other Assistance (bonding, mentorships)

• Contract Monitoring Division (CMD) of the City

Administrator’s General Services Administration (GSA) assists City departments in meeting goals

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LBE Ordinance Purposes:

• 2. Ensuring Non-discrimination
• For purposes of ensuring non-discrimination in City

contracting and subcontracting , Small and Micro- LBEs (excluding non-profits) are certified as: – MBEs (Minority-owned Business Enterprises)

• “Minority” defined as: African, Arab, Asian, Iranian,

Latino or Native American

– WBEs (Woman-owned Business Enterprises) – OBEs (Other Business Enterprises; which are not MBEs or WBEs)

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Administration of LBE Ordinance

• The LBE Ordinance is administered and monitored by the

City’s Contract Monitoring Division (CMD) (formerly at the Human Rights Commission/HRC). CMD performs the following:

– Certifies qualified entities to become LBE’s – Sets LBE contracting participation goals and monitors solicitation and selection processes – Conducts workshops and provides technical assistance to bidders, prime contractors, subcontractors, and City staff – Facilitates the Bonding and Financial Assistance Program – Determines pre- and post-award compliance – Tracks and reports City departments’ LBE participation – Investigates, mediates and resolves certification and compliance complaints, including prompt payment issues

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Who Qualifies to be an LBE?

• For-profit or non-profit enterprises which:

– Provided all services in San Francisco (for at least the past 6 months) – Perform a commercially useful function, independent and continuously in operation

• Suppliers must maintain a warehouse in the City stocked

with inventory consistent with their certification

• Non-profits must demonstrate that the majority of their

paid and volunteer staff are based in a San Francisco

• ffice.

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Maximum Annual Economic Thresholds for LBE, PUC-LBE, NPE & SBA Certification Qualification

“Micro” Bid Discount: 10% “Small” Bid Discount: 10% “SBA” Bid Discount: 2%* Class A and B General Contractors $7,000,000 $14,000,000 $33,500,000 Specialty Construction $3,500,000 $7,000,000 $17,000,000 Trucking and Hauling $1,750,000 $3,500,000 $8,500,000 Goods, Materials and Equipment Suppliers $3,500,000 $7,000,000 $17,000,000 General Services $3,500,000 $7,000,000 $17,000,000 Architects and Engineers $1,250,000 $2,500,000 $7,000,000 Professional Services $1,250,000 $2,500,000 $7,000,000

Note: LBE size thresholds based on average annual gross revenues for the past 3 years.

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LBE Availability

• LBE Ordinance historically has focused on City contracts for

Construction and for Architecture and Engineering, with the majority of LBEs certified into these categories.

• DPH Contracts often have additional specific requirements

within an LBE service category (HIPAA, healthcare environment experience, IT knowledge specific to existing programs, etc.).

• As a result, not all registered “available” LBEs within a

designated service category will be ready, willing and able to deliver the required service, and not all LBE service categories will have a sufficient number of available LBEs.

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How Does DPH implement the LBE Ordinance?

• LBE language included in all:

–RFPs/RFQs –Contracts

• LBE Subcontracting goals set in Facilities

Maintenance contracts

• Good faith efforts (outreach)

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Waivers of the Ordinance

• Waivers are available when:

– Contract is Federally or State funded – Contract awarded as the sole source of services – Contracts over $5 million:

• Qualified LBEs are not available, or
• Bid discount results in additional costs

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Project Overview

LBE Utilization - DPH Construction – SFGH Rebuild

• Local Hiring: 845 San Franciscans

employed to date

• Represents 25 % field labor

hours

• Exceeds 20% goal.
• 151 Local Business Enterprises

Utilized

• $62.1 million in contracts

awarded

• Represents 9% of trade

packages awarded to LBE’s

• Exceeds 5% goal

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LBE Goal Local Hiring Minimum

LBE % Local Hiring %

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

LBEs Utilization - DPH Construction Facilities Maintenance Awards

Service Area % LBE/SBA participation Concrete 100% Plumbing 100% Fire Curtains 100% Fire Doors 100% Glass Repair 100% Modulator Furnishing Systems 100% Motorized Doors and Gates 100% Carpentry 80% Electrical 75% Landscaping 67% Roofing 50% Pigeon Abatement 50% Steam Cleaning 50% Painting 40% Flooring 33% Air Ducts, Mechanical 0% 11

LBEs and Professional Services – Operating Contracts

• While DPH has a significant operating budget for professional services, the

bulk of these expenditures fall into categories where the City has a limited number of certified LBEs

• The table on the following page lists major categories of services by
• perating expenditure, and LBE availability

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LBE Utilization: DPH Professional Services FY 13-14 (Excludes Capital and Facilities Maintenance Projects) Services Actual Expenditures # of DPH LBE's # of Available LBE's Transportation Services 370,627 1 2 Special Inspection & Testing Services 1,800 Auditing & Accounting 244,150 12 Management Consulting Services 1,213,041 Systems Consulting Services 13,849,855 7 Stipends 52,520 UC Medical Services 1,275,872 CHN Services 2,500 Other Medical and Professional Services Community Based Organizations 250,574,553 5 10 PPN - Mental Health Provider 3,815,857 Housing 4,919,725 Fiscal Intermediary 7,805,685 Medical 5,391,370 4 Translation 17,960 Environmental Health 473,439 7 Facilities 396,387 1 16 IT Consulting 748,160 1 7 Public Health Consulting 760,399 San Francisco Health Plan 24,417,606 N/A N/A State 1,380,702 N/A N/A Other Professional 132,159 Subtotal 300,834,002 Total 317,844,368 13

Reforms proposed by Mayor Lee and Board President Chiu

• Citywide goal of 40% or more of total available contract dollars

(“aspirational”) (may be met with combination of prime and subcontracts)

• Subcontracting goals must be 20% (unless CMD justifies a lower goal)
• Contracts $10 million-$20 million: Additional 2% bid discount for LBEs
• Contracts <$10 million: SBA “graduates” get new 5% bid discount
• To allow continuing participation for “graduates,” thresholds for

certification increased in certain industries

• Development agreements to included LBE utilization plan

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Reforms proposed by Mayor Lee and Board President Chiu

(cont.)

• SF First program: Departments to make Good Faith Efforts to at least

3 LBEs before opening competition (bid/RFP/RFQ) for: – Construction contracts <$400,000 – Professional service contracts <$100,000

• Mentor-protégé program to foster partnerships between established

contractors and local businesses

• Subcontractor Advance Program (City departments enabled to make loans

to subcontractors against invoices for work already performed, when prime contractor has not paid subcontractor)

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Increasing LBE availability for DPH contracting needs

• Identify any service categories where there are more
• pportunities to meet goals
• Examine DPH use of small contracts
• Work with CMD to identify more LBEs
• Focus outreach to increase LBE participation

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