Purchasing & Procurement Oversight Committee Agendas & Minutes

PURCHASING & PROCUREMENT OVERSIGHT COMMITTEE (PPOC) IDA Conference Room – 6th Floor – Ruppert Sargent Building Meeting Minutes – November 16, 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; William Brown, James Crocker, Martin Cross, Eddie Deerfield, Eugene Johnson, Crystal Kleiber, Teresa Walker, George Wallace Members Absent – Lauren Yee (with notification); Dave Pearson (with notification) Staff and Citizen Attendance: Legal Representation: None Staff Present: Jessica Spencer, Arnelia Hancock, Karl Daughtrey, Denise Howard, Suzy Scott, Victor Hellman, Doris McRae and Debbi Brightbill (recorder) Staff Absent: Pete Peterson Citizens in Attendance – Edwin Boone (Sunshine Carpets) Approval of Minutes: The minutes of the October 19, 2011 meeting were unanimously approved after including the following revision: Ms. Walker requested the October 19, 2011 minutes be corrected to indicate she notified Ms. Spencer via email about her absence from the October PPOC meeting but the email server was down so her notification was not delivered. The October 19, 2011 minutes will be corrected to indicate Ms. Walker was absent with notification. Old Business Musical Instrument Procurement Activity – In response to Mr. Deerfield’s request last month for a report on band instrument purchases and repairs, Ms. McRae reported, since July 2011, HCS has paid Woodwinds Plus $4,018.24 through informal bids. HCS has not ordered large instrument purchases through the Procurement office’s bid process. Mr. Deerfield requested the total amount of instrument- related purchases instead of just Woodwinds Plus payments. Mr. Johnson asked about the difference between informal and formal bids. Ms. McRae explained that informal bids are up to $9,999.99 with anything over that amount being defined as a formal bid. If an order is placed with a W/MBE business, however, the threshold can be up to $5,000.00 without competition. Department Recognitions by City Council – Mr. Graves asked for an update on Council formally recognizing departments for their W/MBE utilization. Ms. Spencer reported she emailed a summary on FY11 small purchases to the City Manager indicating the PPOC recommends department recognition. She will forward a copy of her communication to all PPOC members. Mr. Daughtrey shared that, in the past, the PPOC has recognized departments and presented annual awards based on their utilization efforts throughout the year. This was a PPOC activity and not necessarily handled by City Council. The PPOC can establish the guidelines and plan this event. Mr. Brown replied that recognition by the City Manager might “carry more weight” indicating she was aware of departments’ efforts. After further discussion, Mr. Wallace suggested the PPOC could hold its own awards ceremony, then City Council could also endorse the PPOC’s efforts by recognizing the departments’ during Council’s monthly Spotlight on Citizens. Update to City Council – Mr. Graves inquired about Ms. Spencer’s annual update to City Council regarding the Minority Business Program. She replied she has not yet scheduled a presentation for Council. Disparity Study Solicitation Update – Mr. Graves asked about Ms. Spencer forwarding the Disparity Study review to Mr. Wallace and Mr. Peterson. Ms. Spencer reported she has completed a draft of the solicitation and forwarded it to Vice-Mayor George Wallace and Pete Peterson. The draft solicitation has now been submitted to the City Attorney’s office for review. New Business City Quarterly Reports – Ms. Howard reviewed Hampton’s Statistical Report for Quarter Ended September 30, 2011 including a brief overview and summary of this report. She presented the following reports: 1) Comparison of Minority Purchase Order Activity; 2) Minority Purchase Order Activity for FY 2011; 3) Average Transaction Amount; 4) WBE Purchase Order Comparison; 5) MBE Purchase Order Comparison; 6) Utilization Analysis for Credit Card Purchases; 7) Hampton Minority Vendors; 8) Disparity Report; 9) Departmental Information and then a review of the charts representing the financial data for the quarter. MBE/WBE purchase orders of $1,672,890 were issued in the first quarter of FY12, an increase of $130,551 or 8.46% over FY11. MBE/WBE purchase orders represented 6.75% of all purchase orders issued by Hampton. (Report attached to filed minutes.) Ms. Kleiber asked about page 7, “MBE Purchase Order Comparison of FY11 to FY12”, questioning if the A&E percentage of change should be 100% instead of 0% and if that would affect the report’s totals. Ms. Howard agreed it could be indicated as 100% but stated it would not affect the totals indicated on the report. Mr. Graves asked about Aggregate Hauling on page 1 questioning if they had won an annual contract in FY12 as well. Ms. Howard stated she believed they switched categories from “Other Services” but will research that information and provide an answer. 2 Mr. Deerfield asked if In & Out Productions (another staging and rigging company) has received work this year. Ms. Howard stated she would check on that information. Ms. McRae replied she would also check Procurement records. Several members commented how thorough this report has become and how it indicates progress. Mr. Wallace stated he doubted any other community in Hampton Roads could produce such a detailed report. Mr. Daughtrey replied most communities report on “small” business statistics as a whole, not isolating the minority- or woman-owned purchases. Schools Quarterly Report – Ms. Scott reviewed Hampton City Schools quarterly report including 1) Departmental Purchase Order Activity by Commodity Code Fiscal Year 2012 as of September 30, 2011; and, 2) Average Transaction Amount by Purchasing Category First Quarter Only (7/11 – 9/11). Ms. Scott explained that W/MBE spending appears to be considerably lower than last year but there was one $700,000 contract awarded to a woman-owned vendor last year that was part of the $1.1 million in SWaM vendors for the first quarter last year. That significantly impacted the number this year because there was not an award like that. However, there were still 128 PO’s issued to W/MBE vendors for just under $500,000. Ms. Scott reminded members the first quarter is identified as July, August and September and school does not start until September. There was still a lot of the new schools’ construction payments made last year during this same period in FY11 which impacted a lot of the summer purchase order activity. Normally, there is not a lot of activity during the summer other than construction projects. Schools and departments don’t typically become active with purchasing until the second quarter of the fiscal year. (Report attached to filed minutes) Compliance Quarterly Reports – Ms. Hancock reported on “Projects Estimated Under $100,000” as well as “Projects Estimated Over $100,000” for the first quarter of FY12. She shared information regarding the number of bids issued during the first quarter, number of notifications to M/WBE businesses, and subsequent awards including three to MBE businesses and four to WBE businesses. She also reported on two MBE and one WBE prime contract awards totaling 35.93% as well as those awarded subcontracts, one MBE and one WBE, totaling 2.37%. (Reports attached to filed minutes.) Mr. Brown stated the response to notifications is very low. Ms. Spencer agreed that response continues to be low although the notifications have increased as well as follow-up by staff as to why businesses aren’t responding. Small Purchase Quarterly Report – Ms. Spencer presented the PPOC 1st Quarter Report for Department Small Purchases for FY12. She called the members’ attention to corrected numbers on W/MBE purchases for the City Manager’s office. These numbers were not correct on the last report due to vendors not indicating they were minority or woman-owned. Three vendors’ information has been updated so future purchases will be correctly reported. This report may change as the goal is for this report to eventually match up with the City’s report presented by Ms. Howard. Procurement Report – Ms. McRae presented the report, “Minority and Women Bid Participation in Bid Process – First Quarter FY12”. These numbers include City as well as HCS procurement information. She also distributed charts indicating statistics for Goods & Services and Construction Solicitations for FY12. 3 Ms. McRae also provided a combined chart of “Minority & Women Participation” which tracked bids, notifications and responses based on small, woman and minority-owned businesses for 2010, 2011 and the first quarter of 2012. Ms. McRae shared that many solicitations go out but very few responses are received. (Reports attached to filed minutes) Mr. Brown asked if staff receives feedback as to why businesses are not responding. Ms. Spencer replied staff will follow-up with businesses and hear a variety of reasons including replies such as they are currently working on another project, they don’t do this type of work, they did not get around to responding to the bid, they did not receive the bid information, etc. Staff keeps a report on these responses. Mr. Graves asked Ms. McRae to revise the report by indicating quarterly totals for 2010 and 2011. He would like to be able to compare quarters for each year. Announcements: Ms. Spencer announced there would not be a PPOC meeting in December. The next meeting is scheduled for January 18, 2012. Ms. Kleiber asked to share a comment with the Committee. She suggested the PPOC should pursue more information regarding the City’s budget and planning efforts. The budget and spending is changing. It’s hard to expect W/MBE numbers to improve if the committee is unable to understand the City’s project plans. If the PPOC is expected to make solid decisions regarding utilization efforts, it needs to be aware of projects being planned and projects being cut (e.g., two new schools had a big impact on the numbers in FY11.) If work is not planned, or if a project is being postponed, that will have an obvious affect on bids and contracts. Mr. Daughtrey suggested the PPOC might be interested in the City’s Capital Improvement Plan (CIP) or information on significant budget changes that have occurred during the budget process. Ms. Kleiber agreed that type of information could be helpful and was not interested in department details. Mr. Wallace recommended a presentation on the Capital Improvement Plan could be scheduled. Mr. Daughtrey also suggested, once the budget has been adopted, the Budget Director could make a presentation regarding significant changes from FY12 to FY13. Public Comments: Edwin Boone – Mr. Boone asked to make a comment. Only so many people will apply for the big ticket items. What about awarding small jobs to companies like him? He cleans carpets and there are carpets in every building in the City of Hampton. He has been hired for two jobs this year totaling approximately $1,000. In almost three years seeking work, that would be about $1.00 per day. He pays taxes and spends his money in Hampton. He’s not going anywhere. He needs the City to give him some work. That would not shut him up but he could at least tell folks that things are changing. A lot of his friends who have college degrees have left Hampton and he’s telling them there is no reason to come back because there are no jobs or work for contractors. His friends are looking to him for a report; so, if he doesn’t get work, how can he tell his friends and family they should return to Hampton? It’s like coming through the tunnel and thinking you have smooth sailing but all you end up with are roadblocks and hardships. He thinks the City should concentrate on getting him some work so he can give a good report. He left Hampton and came back but there is nothing here for him so far. Adjournment: There being no further business, the meeting was adjourned at 1:25 p.m. 4 Next Meeting – The next meeting will be held on Wednesday, January 18, 2012 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 5