Purchasing & Procurement Oversight Committee Agendas & Minutes

PURCHASING & PROCUREMENT OVERSIGHT COMMITTEE (PPOC) IDA Conference Room – 6th Floor – Ruppert Sargent Building Meeting Minutes – February 15, 2012 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, Teresa Walker and George Wallace. Members Absent – Ms. Spencer announced that Willie Brown, Eugene Johnson and Lauren Yee had notified her prior to the meeting of their absence. Also absent were James Crocker and Dave Pearson. Staff and Citizen Attendance: Legal Representation: Karen James, Deputy City Attorney Staff Present: Jessica Spencer, Arnelia Hancock, Pete Peterson, Karl Daughtrey, Denise Howard, Suzy Scott, Doris McRae and Debbi Brightbill (recorder) Staff Absent: Victor Hellman Citizens in Attendance – Edwin Boone (Sunshine Carpet & Upholstery Cleaning) Call for Agenda Changes – Mr. Graves asked if there any changes or additions to the agenda. There were no requests for changes or additions. Approval of Minutes: The minutes of the January 18, 2012 meeting were unanimously approved as submitted. Old Business Committee Membership – Ms. Spencer referred to the list of current PPOC committee members. She stated Mr. Cross’s name would be corrected from “Michael” to “Martin” Cross. Ms. Spencer referred to Resolution No. 10-0220 (approved May 19, 2010) that expanded the Committee to eleven (11) members, each with four-year terms, and each member being limited to two (2) consecutive terms. Ms. Spencer noted that all members’ terms are now consistent and correct. Mr. Graves asked if the School Board and Council representatives’ terms should have an ending date since these assignments will always have a position on the committee. Ms. Spencer replied the position itself would always be available but the person serving can be reappointed, or a new representative appointed, at the expiration date of the person now serving. Ms. Spencer stated she wanted everyone to be aware of the terms of the current eleven (11) positions before considering a request for an additional position to be added. This is a result of last month’s discussion to consider an additional (12th) position be added to the Committee to possibly be filled by a Hampton Redevelopment and Housing Authority (HRHA) board member. Mr. Wallace asked if a formal invitation had been made to HRHA’s board. Ms. Spencer replied she planned to contact the City Manager to see if her meeting with HRHA Board representatives resulted in their desire to participate on the PPOC. Mr. Wallace made a motion to recommend that Council appoint a 12th position to the PPOC for an HRHA Board member to serve if the HRHA Board would like to participate. Mr. Deerfield seconded the motion. The motion passed unanimously. Small Purchases – Since her presentation to Council, Ms. Spencer has received information from two departments informing her that the utilization numbers were inaccurate. She will forward the quarterly small purchase report to the Departments to determine if there are discrepancies. It was also recommended at the presentation to develop a department utilization report for all AMEX transactions. Mr. Daughtrey reported there is no standard report currently available but staff is working with AMEX to hopefully develop a report by department. He hopes to have this by the next quarterly report presentation. Mr. Graves commended Ms. Spencer for her presentation to Council and referred to questions asked by Council members after the presentation. Based on some of those questions, Mr. Graves recommended an Executive Summary be developed on all PPOC reports sent to Council for review. This type of summary, along with attached reports, would assist Council in their initial review of PPOC reports and information. Mr. Peterson remarked condensing information and reports to assist Council members’ understanding would be good. They will still want the details because they can refer to those if a question arises from the summary. Mr. Wallace agreed that offering Council members an easy-to-read and easy-to- understand monthly or quarterly summary would be beneficial. He recommended staff decide what format to use and what information is essential for Council to review. Ms. Spencer replied she will develop a quarterly summary for City Council. Mr. Graves replied he would assist Ms. Spencer with the format of this report. Mr. Daughtrey recommended Ms. Spencer include the summary in the City Manager’s weekly package to Council. Ms. Kleiber suggested comparison charts might be helpful for Council as they review the information. Ms. Spencer shared news of a story on the front page of the Daily Press this week regarding Rock Solid, a minority-owned Hampton business. She was pleased it shared positive information regarding Hampton’s Minority Business Program. Several members agreed it was a very good article. Disparity Study Update – Mr. Graves asked for an update on the RFP for a new Disparity Study. Ms. Spencer replied the solicitation went out on January 24th. Procurement has received questions regarding the study and staff has responded to those questions. Staff will review all proposals once the bid closes on February 21. 2 New Business City Quarterly Report – Ms. Howard distributed revisions to the 2nd Quarter Statistical Report that had been distributed earlier to the PPOC members. She shared an overview and comparison of total purchase orders for the 2nd quarters of FY11 and FY12 including details of M/WBE purchase orders. The summary of the M/WBE reports included FY11 and FY12 comparison information on purchase orders, credit cards, M/WBE Hampton vendors, and disparity report on construction, A&E, professional services, other services and goods & supplies. Ms. Howard reviewed each report with the members. Total purchase orders decreased $6.3 million (38.56%) from FY11 to FY12 with the M/WBE purchase orders decreasing $1.02 million (51.63%) from FY11. Included in this overview were details on the significant increases or decreases indicated in these two quarters. Mr. Graves requested that previous quarterly results be compared in the various reports (e.g., 1st quarter FY10 compared to 1st quarter FY11, etc.) Ms. Howard agreed she could revise the charts and present them at the next meeting. In conclusion, last year’s M/WBE totals were at 12.06% and this year they are at 9.50%, a decrease of 2.56%. However, last year had significant special projects compared to this year so far. Ms. Howard gave examples of the Buckroe Comfort Station and the Coliseum Cooling Towers. Mr. Wallace shared if the opportunities continue to be consistent we can’t be alarmed by the difference in the volume of contracts or minority utilization because we may not have the same opportunities as in previous years. Ms. Spencer agreed the number of contracts so far for FY12 has been small. Compliance Report – Ms. Hancock shared she would only be reporting on the contracts under $100,000. She shared statistics regarding notifications to M/WBE businesses during the 1st and 2nd quarters of FY12 and awards made to M/WBE businesses. Based on 27 bids, staff notified 230 vendors from the Hampton Small Business Directory and 231 from the State DMBE Directory. M/WBE responses included only 6 from Hampton’s directory and 1 from the DMBE directory. MBE firms were awarded 4 jobs (15%) and WBE firms were awarded 6 jobs (22%) of the contracts. Ms. Spencer commented the original contracts were advertised with an estimate of being over $100,000 so contracting goals were assigned. When the bids came in, they were under $100,000 indicating that companies are bidding very low to get the work. There was a question regarding the company in New York who was awarded the HVAC duct cleaning contract. It was determined the New York address was a corporate address and that a local branch would be performing the work. Ms. Kleiber asked about a local roofing company being in the directory and being notified to bid on the roof replacement contract. Ms. Spencer stated she would check to see if they have been added to the directory and were notified but the contract award is based upon the lowest bid. Mr. Deerfield asked about the next lowest M/WBE bidder being able to bid again if they were within 10% of the lowest Small business bidder. Ms. Spencer replied the PPOC has not yet recommended to Council to approve revised contract language indicating an award can be made to the next lowest bidder within 10% of the lowest bid if both goals have been met. This was discussed but not carried forward as additional monies would be needed to 3 implement. Mr. Deerfield asked if this item could be discussed again in the near future. Mr. Wallace replied that even a marginal increase in the contract amount would be difficult to justify in this economy. Procurement Report – Ms. McCrae presented the Procurement report as of the 2nd quarter of FY12. Her report compared information from FY10, FY11 and through the 2nd quarter of FY12. Each year indicated the number of advertised bids, the number of MBE, WBE and SBE businesses notified locally and throughout the state (via newspaper advertisement, Procurement web site, Hampton Small Business Directory, EVA, etc.) and the number of responses actually received by the Procurement Department after the advertisement. A discussion was held regarding the percentage of responses based on the number and types of businesses notified. Responses from EVA (typically about 5%) will be higher than responses from Hampton’s directory but the ratio of responders compared to the type of contract appears to be consistent. The number of businesses notified has also decreased over the past two years. Ms. McCrae stated she was not sure of the reasons for the decrease other than companies going out of business, removing their business from EVA or not renewing their certifications. She would not be able to determine the reasons without contacting the State for further information. Mr. Peterson replied it is quite expensive for smaller businesses to commit to a bid process since requirements include documentation, certifications, permits, possible designs, etc. He also explained the process of bids being advertised and how they are advertised. He stated it would be interesting to track the responses of those businesses we directly invite to bid (e.g., from Hampton’s Small Business Directory). Ms. Spencer replied the response rate is still low. Mr. Daughtrey shared there was a good indication of those responses on the previous report, “Projects Estimated Under $100,000”. Ms. Spencer also added that staff does follow-up with these businesses seeking reasons why they did not respond to a bid invitation. She said their replies to that inquiry are decreasing as well. Mr. Peterson replied we need to communicate the importance of Hampton understanding their reasons for not responding so the issues can be addressed and fixed. Mr. Daughtrey responded most of these business owners are “wearing all the hats” in their company and typically don’t have the time to do the work associated with preparing a bid response and operate their day-to-day business. Announcements: Procurement Week – Ms. McCrae announced the month of March is “Procurement Month” and her department plans to hold in-house training for various city departments as well as HCS staff. Along with staff from the Minority Business office, there will be a refresher and additional in- depth training regarding Hampton’s procurement process and the utilization of SWaM vendors. There will be a Procurement Day established for just the Consolidated Procurement department for anyone to visit and ask questions. Ms. McCrae invited PPOC members to attend and sit in on discussions on March 14-15 at 3:30 in the Hampton Veteran’s Conference Room on the first floor. On March 20-21, they will be meeting in Council chambers at 2:00. Mr. Wallace asked if inviting HRHA representatives to participate would be feasible in the event an HRHA board member agrees to serve on the PPOC. 4 Public Comments: Edwin Boone, Sunshine Carpet & Upholstery Cleaning– Mr. Boone stated coming to this meeting once a month is a big challenge but he is sticking with it. There seems to be only 1 or 2 companies who get the contracts but there are about 7,000 business licenses in Hampton and he is one of them. He would like to be included on the list to win a contract instead of getting small “nickel and dime” jobs. Mr. Wallace asked if he had suggestions on how we could do things differently. Mr. Boone said he continues to talk about his capabilities and talents and would like to see his business win a major contract with the City so he can hire someone. If he was hired, he would spend and recycle that money in Hampton or Newport News and nowhere else. The Department heads and people with credit cards keep doing the same thing with small purchases as they did a year ago but he will continue talking about it each month at the meeting. Adjournment: There being no further business, the meeting was adjourned at 1:30 p.m. Copies forwarded to: Mayor Molly Joseph Ward James A. Peterson, ACM Michael Graves, PPOC Chairman Vice-Mayor George E. Wallace Karen S. James, Deputy City Attorney Lauren Yee, PPOC Vice-Chairman Councilman Christopher G. Stuart Karl S. Daughtrey William Brown Councilman Will Moffett Jessica Spencer James Crocker Councilman Ross A. Kearney, II Arnelia Hancock Martin Cross Councilman Donnie Tuck Doris McRae Eddie Deerfield School Board Member, Dave Pearson Denise Howard Eugene Johnson City Manager, Mary Bunting Victor Hellman Crystal Kleiber Suzanna Scott Teresa Walker 5