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Montgomery Council Approves Bill to Increase Minority Business Participation In County Procurement Process Bill 48-14 Will Help Minorities, Females and Disabled Firms to Overcome Discrimination in Obtaining County Contracts

For Immediate Release: Wednesday, April 15, 2015

The Montgomery County Council on April 14 unanimously approved Bill 48-14 that will assist firms owned by minorities, females and disabled persons to become a prime contractor with the County for certain types of contracts. The bill allows creation of an evaluation factor that gives additional points to those firms when the County is evaluating certain proposals for contracts.

The lead sponsor of the bill was Councilmember Craig Rice. The bill was co-sponsored by Councilmembers Marc Elrich, George Leventhal, Nancy Navarro, Hans Riemer and former Councilmember Cherri Branson.

The bill was proposed after the release of a 2014 Disparity Study analyzing County contracting between 2007 and 2012. The study found a statistically significant underutilization of companies owned by some minority, female and disabled (MFD) groups in each procurement category that can be attributed to discrimination in the marketplace.

Although the County's current MFD subcontracting requirement has increased the utilization of MFD firms, the study showed new ideas and remedies were needed. The bill authorizes an additional tool to remedy the significant underutilization of some MFD groups in County procurement.
“Although there had been estimates for a long time that perhaps minority, female and disabled-owned firms were not being treated fairly in the County procurement process, it was not until we had the evidence from the Disparity Study that we had this confirmed,” said Councilmember Rice. “From there, we needed a process that would enable us to correct this, and in Bill 48-14, we have established a process that is fair for everyone.”

The bill authorizes the director of the County’s Office of Procurement to establish an evaluation factor in a request for proposals that would award additional points for a proposal from a contractor for whom a goal has been set under the MFD program or for a contractor for whom a goal has not been set, but who proposes to exceed the minority-owned business procurement subcontracting goal for the contract.

In May 2013, the County hired Giffin & Strong, PC (GSPC) to conduct a comprehensive disparity study of the County contracting process. The goal of the study was to determine if a statistically significant disparity existed between the number of available MFD firms in the relevant market and the number of MFD firms that received work on County contracts. GSPC conducted a quantitative analysis of the County's contracting history between July 1, 2007 and June 30, 2012.

GSPC found a statistically significant underutilization of some MFD groups in each procurement category that could be attributed to discrimination in the marketplace. Although GSPC did not find a statistically significant underutilization for all MFD groups in each category, it did find that African American owned firms were underutilized in each procurement category each year of the study. GSPC concluded that the "evidence suggests that absent affirmative measures, the County would be a passive participant in a pattern of exclusion of MFD firms."

The bill does not require the new tool to be used on every RFP contract. The director of Procurement will have discretion to use it in appropriate circumstances. The Procurement regulations could identify the circumstances where it would be used. The new tool would only assist a MFD firm that is a member of a group that has a statistically significant underutilization for that category of contract in the prior year.

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Release ID: 15-119
Media Contact: Neil Greenberger 240-777-7939