Purchasing & Procurement Oversight Committee Agendas & Minutes

PURCHASING & PROCUREMENT OVERSIGHT COMMITTEE (PPOC) IDA Conference Room – 6th Floor – Ruppert Sargent Building Meeting Minutes – September 21, 2011 Call to Order – Michael Graves, Chairman, called the meeting to order at 12:30 p.m. Committee Member Attendance: A roll call was taken by Jessica Spencer: Members Present – Michael Graves, Chairman; Martin Cross, Eddie Deerfield, Crystal Kleiber, Dave Pearson, Teresa Walker and George Wallace. Members Absent – Lauren Yee (with notification), William Brown, James Crocker and Eugene Johnson. Staff and Citizen Attendance: Legal Representation: Cynthia Hudson, City Attorney Staff Present: Jessica Spencer, Arnelia Hancock, Pete Peterson, Karl Daughtrey, Suzy Scott, Victor Hellman, Doris McRae, Denise Howard and Debbi Brightbill (recorder) Staff Absent: All staff were present. Citizens in Attendance – Edwin Boone Approval of Minutes: The minutes of the June 15, 2011 meeting were unanimously approved. Unfinished Business: There was no unfinished business to discuss. New Business Introduction of Contract Compliance Specialist: Ms. Spencer introduced Ms. Arnelia Hancock, the new Contract Compliance Specialist with the Minority Business Program. Ms. Hancock addressed the members and shared information regarding her family, previous experience as well as her goals in this position. Rules of Engagement: Ms. Spencer distributed “PROTOCOL FOR PUBLIC COMMENT PERIOD” and “PPOC PUBLIC COMMENT SHEET” to the committee members. In reviewing these documents, Ms. Spencer stated she adapted a similar model of guidelines as established by City Council. The sign-in sheet will be available to citizens as they enter the meeting. If they wish to make comments at the end of the meeting, they must provide their name and business affiliation. They will also be given a copy of the protocol rules to review if they wish to address the PPOC. The sign-in sheet will be given to the Chairman of the meeting who, during “Public Comments” time, will give each listed citizen three minutes to address the board with their comments on policy issues. PPOC members will not engage in dialogue with the citizens. Matters requiring a response will be directed to the Chairman for research and response. Mr. Graves asked for any questions before calling for a vote. A motion was made and seconded to adopt the “Protocol for Public Comments” and “PPOC Public Comment Sheet” and Mr. Graves called for a vote. Ayes: Graves, Cross, Deerfield, Kleiber, Pearson, Walker and Wallace Nays: None Hampton City Financial Reports - Ms. Howard distributed a revised copy of the City’s financial report for the fourth quarter ending June 30, 2011. These reports were revised from those emailed prior to the meeting to include 4 years of data from 2008-2011 in the charts at the end of the report (pages 14, 15, 16 and 17). In a brief overview of this report, Ms. Howard explained the reasons for significant decreases and increases of purchase order activity. Ms. Howard reviewed the following reports: Summary of PPOC Reports , Comparison of Purchase Order Activity, Total Purchase Order Activity by Purchasing Category, Average Transaction Amount by Purchase Category, WBE Purchase Order Comparison, MBE Purchase Order Comparison, Utilization Analysis for Credit Card Purchases, MBE/WBE Vendors Located in Hampton, Race & Gender Aspirational Goals by Business Category and M/WBE Classification Recommended vs. Actual for FYE June 30, 2011, Purchase Order Activity by Department as well as the four-year comparison charts. Mr. Graves commented on the report, “Average Transaction Amount by Purchasing Category” stating the PPOC still has work to do regarding the average number of transactions of M/WBE purchase orders compared to the total vendor amount. For example, with no M/WBE activity in the “Miscellaneous” category, Mr. Graves felt members should be aware of reasons for the lack of activity. Mr. Wallace asked if these figures could reflect an absence of capacity -- if the business is not there, the vendor can’t be awarded the bid. Mr. Graves requested vendors and contracts making significant differences to the numbers be included on the individual reports. Ms. Howard replied the information is listed in the back of the report but will include the details on the individual report pages next time. Mr. Daughtrey also agreed this could be done. In reviewing the Credit Card Purchases report, Ms. Howard stated this was the only category that decreased from FY10. Mr. Graves asked what the credit card purchasing limit was and Mr. Daughtrey replied it was less than $1,500 per transaction and for travel, it is approximately $2,000. The credit card can also be used for catering services. Regarding the chart (page 15) for Credit Card Minority Vendors 2008-2011, there was a tremendous decrease from 2008 to 2011 ($761,301 in 2008 compared to $51,999 in 2011). Ms. Howard stated she did not have details on these transactions, only a summary. Mr. Graves replied research needs to be done on this dramatic reduction over a three-year timeframe. Ms. Spencer asked for Ms. Howard to send her an electronic copy of the revised report and Ms. Howard agreed. 2 Ms. Kleiber commented on the year end statistics. She felt it might have been important to see these end-of-the-year numbers before ordering a second Disparity Study. The numbers have drastically increased since this program started indicating the positive nature of the program and the work the departments are doing to meet performance goals. She understands there is still work to be accomplished, but felt the PPOC should commend the Minority Business Office for increasing these numbers. Ms. Kleiber remarked the year end totals are more satisfying than the quarterly totals presented during last year’s meetings. Ms. Howard concluded her report by stating that FY10 was 3.10% of minority vendors and FY11 was 9.87% of minority vendors compared to total purchase orders. Mr. Pearson stated he would like to be able to speak more intelligently regarding the MBE category consistently having such low numbers. There have been previous discussions regarding the reasons for low numbers in the A&E category and it is also understood that a company can easily be designated as a WBE. Some reasons for low numbers in the MBE category have been the lack of business capacity not being available but he would like to have more information so he can speak on that issue. For example, does Hampton have enough MBE businesses in the Goods & Services category who are qualified to bid on contracts and win them? Sometimes we say they don’t submit bids or they say they can’t perform the work or they don’t have the necessary resources to do the work. Ms. Spencer responded regarding the lack of participation in the A&E category and stated she would provide a list at the next meeting of A&E vendors within, as well as outside, our region. Hampton has increased the representation of the A&E vendors in its Small Business Directory. There are several certified by the State but most are not located on the Peninsula. Mr. Pearson replied he’s not as concerned about the A&E category and compared his concerns with focusing on the areas where students have the lowest test scores. If Hampton is unable to make an impact on the A&E category at this time, then it should focus on other categories such as Goods & Services where it might be able to make a positive change. Ms. Spencer replied the focus has been on construction since that is where the most dollars are spent. Most SWaM certified firms work in construction and the directory reflects mostly construction contractors. However, categories such as Goods & Services, Miscellaneous and others need attention as well. Mr. Peterson stated the Disparity Study helps us determine availability versus utilization. Since Hampton’s study is now older, he suggested staff review the State’s recent study to see what areas of procurement are affected. Mr. Daughtrey replied information on bid responses by MBE firms can be provided. If companies don’t bid on a contract, they won’t have an opportunity to win. The committee needs to look at that data. Companies are notified in several ways of contract opportunities but they are not bidding. The bid response by M/BE firms is approximately 3%. 3 Mr. Wallace asked about the workshops sponsored by the Minority Business Office and if they have been targeted towards the areas of concern. Ms. Spencer replied workshops have been technically designed to assist in areas of construction. Although workshops last year were well attended, she had to cancel three workshops in April and May due to lack of participation. A workshop, “Partnering for Success”, designed to promote business partnerships, joint ventures, and teaming agreements, is planned for September 29th. There are 22 people registered so far. The workshop has been advertised at least three times and staff has also personally contacted business owners to encourage registration. Taxi Cab Companies: Mr. Wallace asked Ms. Spencer to document attempts made to assist citizens in the taxi cab industry. Ms. Spencer replied contact efforts including business incentives, training opportunities, and invitations to meet with staff for business growth recommendations, etc., were sent via mail. However, there has not been a response to contact for assistance. Ms. Spencer cited one citizen, Mrs. Artis, who scheduled a meeting with her. Ms. Spencer and other staff did meet with Mrs. Artis and her two assistants and spent time gathering information, reviewing her business plan and preparing recommendations for her. However, Mrs. Artis has not responded to the information. The Assistance City Manager and City Attorney staff followed up with Ms. Spencer to see if companies are responding to the opportunities but there has been no progress to report. Mr. Deerfield stated the City has put a burden on the taxi cab companies such as a $300,000 insurance requirement, owning a minimum of 5 vehicles and the requirement of offering 24-hour service. Ms. Spencer replied there have been several concerns outlined with smaller cab companies such as safety issues, lack of response for service, number of cabs available for service and the dispatching location of the cabs (i.e., someone’s home vs. a business location). She mentioned again that staff has had a difficult time soliciting input or involvement from the cab owners. There are ideas to be considered that might assist one-cab owners. For example, a one-cab owner can partner with other one-cab owners so the business partnership can qualify according to the City’s requirements. Mr. Wallace stated the consumer also needs to be represented. Safety and professionalism are very important with this type of service. He cited concerns by citizens regarding this issue such as drivers showing up for fares in tank tops and slide on shoes and the cab not appearing to be clean or safe. Mr. Deerfield agreed that Mr. Wallace was making a good point but shared that cab companies (i.e., North End) are required to dispatch cabs from an office location in Hampton. Yellow Cab Company dispatches from Norfolk. Mr. Wallace replied that Yellow Cab has an office located in Hampton. Mr. Deerfield replied they have the money to pay for an office and smaller companies do not. Mr. Wallace added that Hampton is willing to assist the small cab companies so they can have the same opportunity. Mr. Deerfield replied what bothers him the most is that most of the smaller cab companies are minorities and that’s how they make their living. Ms. Spencer reminded everyone again of her attempts to offer business assistance and companies have not responded. She personally contacted three small companies by phone but they did not respond to receive further information. 4 Parade of Homes: Mr. Graves asked if the City has been involved with the builders in utilizing minority sub-contractors. Mr. Peterson explained the builders were actually the Peninsula Home Builders Association and the City did not get involved in individual home construction projects. Each builder purchased a lot and built the home according to guidelines. Ms. Hudson said the POH included two homes built by minority contractors and the City, in its development agreement, included a provision to use minority contractors as much as possible. She said the builders were receptive to the recommendation. Ms. Hudson also said she would like to see this type of provision included in future land development agreements whenever possible. Mr. Peterson reminded the members that, originally, the Minority Business Office was placed within the Economic Development department because of its involvement with commercial development in the city. Although Ms. Spencer has spent the previous 3 years getting this program successfully started, there will be a future need to help minority businesses settle into the city. Ms. Hudson stated land development is not required to go through the procurement process so staff needs to be sure to include provisions for minority involvement when negotiating land development agreements. Hampton City School Reports – Ms. Scott reviewed the HCS fourth quarter report ending June 30, 2011. She reviewed the cumulative numbers for purchase order activity for FY11 (8.35%: 3.43% for WBE and 4.92% for MBE) and compared it to EOY numbers for FY10 (6.85%). She reviewed the following reports: Average Transaction Amount by Purchasing Category (4th quarter only), WBE Purchase Order Comparison of FY10 to FY11 (April-June) and MBE Purchase Order Comparison of FY10 to FY11 (April-June). She also presented a detailed report on W/MBE Purchase Order Transactions (April-June). Regarding the “Average Transaction Amount by Purchasing Category”, Ms. Scott shared that HCS has noticed there are a greater number of WBE purchases with smaller transactions and fewer MBE vendors but with much bigger transactions (see vendor details in the back of report.) WBE purchases are down but Ms. Scott stated she is seeing a greater variety of vendors being used. MBE purchases have increased 2.5% in total purchase orders. Announcements – September Workshop: Ms. Spencer announced a training workshop on September 29 from 5:30 to 7:00 in the Hampton Veterans Conference Room of the Ruppert Sargent Building. The presenter will be Terrence Garrett, CEO of Capitol Management and Information Engineering Services in Chantilly, VA. Disparity Study Update: Mr. Deerfield asked for an update on the new Disparity Study. Ms. Spencer replied staff contacted regional cities to see if they would have an interest in partnering with Hampton on this study. The only city indicating interest was Portsmouth. There were also efforts by MGT of America and Chesapeake to host a meeting for representatives from each municipality to discuss a regional study. As far as Ms. Spencer knew, the meeting has not taken place. Funds were appropriated by City Council for a new study but staff has not moved forward with the competitive bid process. Ms. Spencer was unsure when this would happen due to the search for a new Procurement manager. 5 Mr. Deerfield asked since funding has been approved, how long will we wait to order the new study? This study will also help Hampton align with new federal district procurement legislation. Mr. Peterson explained there is a 60-90 day process that must take place once the bid is submitted to Procurement. Mr. Daughtrey and Ms. McCrae replied the information can be pulled now for review and this does not have to wait until a new manager is hired. Ms. Spencer requested from Ms. McCrae a copy of the competitive bid used by the City as well as the State for the previous Disparity Study. Mr. Wallace stated we are not at a competitive disadvantage by not having this new study in place but we need to move ahead with the process. Procurement Manager – Mr. Daughtrey announced Lisa Cumming resigned as Procurement Manager. Candidates for the position will be interviewed on September 29 by Mr. Daughtrey and staff from the City as well as HCS. He’s hopeful to have a new manager in place by early October. Public Comments Edwin Boone – Mr. Boone first referred to procurement and suggested the department heads need a quarterly report indicating they are not meeting the needs of the PPOC and then need to be written up. For the past four quarters, they have not met the requirements so should be “gotten rid of”. This keeps dragging on and on. City Council also needs to require quarterly reports on the department heads, whoever is in charge of procurement and those who give out the contracts. As far as cab drivers not making contact, there is such a burden put on the minorities they give up hope. They can’t be sitting around waiting six weeks or six months – they need to feed their families. He is certain many of them just gave up and are doing what they used to do or are scrambling to do something new. So, the burden is put on them and, if they do something outside that burden, they get a ticket they cannot afford. With the City putting all these rules and regulations on them, it is stopping the minorities and women, especially the minorities, from advancing. If they get a foothold on something, the rug is snatched from under them. Mr. Wallace responded they are offered all types of opportunities so the rug will stay under their feet. If they don’t take advantage of those opportunities, it’s on them. Mr. Boone asked what the advantage was of requiring one person to own five cars. Mr. Wallace explained the advantage would be to get five individuals to form an LLC. They can still own one cab each but they can form a limited liability corporation with each other. The City can help them with that, but they are not taking advantage of the assistance offered. Mr. Boone questioned why they would have to go look for more people to receive help. Why can’t they establish a company for themselves? Mr. Graves stated, according to the Rules of Engagement, only comments from the public are allowed during this time and there should be no dialogue. Mr. Wallace apologized for engaging in dialogue with Mr. Boone. Mr. Graves asked Mr. Boone if he had any final comments. Mr. Boone said he wanted to comment on the security of the vehicles and asked if the vehicles are being inspected. 6 Ms. Hudson clarified under the Rules of Engagement the PPOC just adopted, the Chairman would take Mr. Boone’s questions under advisement and staff will provide him an answer following the meeting. Mr. Boone had no further comments. Adjournment – There being no further business, the meeting was adjourned at 1:35 p.m. Next Meeting – The next meeting will be held on Wednesday, October 19, 2011 in the IDA Conference Room, 6th floor, Ruppert Sargent Building, 1 Franklin Street, Hampton, VA 23669. Copies forwarded to: Mayor Molly Joseph Ward James A. Peterson, ACM Michael Graves, PPOC Chairman Vice-Mayor George E. Wallace Karl S. Daughtrey Lauren Yee, PPOC Vice-Chairman Councilman Christopher G. Stuart Jessica Spencer Crystal Kleiber Councilman Will Moffett Arnelia Hancock James Crocker Councilwoman Angela Lee Leary Doris McRae Eugene Johnson Councilman Ross A. Kearney, II Denise Howard Teresa Walker Councilman Donnie Tuck Victor Hellman Martin Cross School Board Member, Dave Pearson Suzanna Scott Eddie Deerfield City Manager, Mary Bunting William Brown 7