Anthony
Williams for Mayor

LOCAL SMALL MINORITY, AND DISADVANTAGED BUSINESS DEVELOPMENT PLAN

BACKGROUND

After several decades of effort, notwithstanding some intermittent success, D. C. Government has not yet achieved desired goals for minority and female owned business participation in City awarded contracts. Moreover, when these entity firms have been able to participate in public awards they have found it very difficult to translate such participation into sustained growth and capital accumulation. Public-sector policies and City agencies business practices often contribute to the difficulties that small business, minority and female firms routinely encounter.

A Williams administration will strive for greater participation of minority and women businesses in public contract awards. And while it cannot be the role of D. C. Government to ensure that every small business succeeds, my Administration will work diligently to ensure that no obstacles are created that interfere with growth of such businesses and that the government does not engage in practices that inadvertently contribute to the failure of these businesses.

The Williams Administration will change the policies and procedures that limit growth and opportunities for small and minority owned businesses. My plan for assisting small, disadvantaged businesses identifies a range of public agency policies and practices that limit the growth of opportunities available to small businesses and details how we can best serve the needs of small and minority owned businesses so that they can thrive and contribute to the economy of the District and the region.

The continued growth and development of minority and female owned businesses serves the public interest in several ways. First, these firms are an important source of jobs and business opportunity in Washington, D.C.'s low income communities. Secondly, correcting the conditions that impede the growth of the City's small business community will make our economy continue to grow and provide many firms with opportunities they may not have had. Finally, expanding the pool of experienced, capable small businesses will enable public agencies and private owners to get the most value for expenditures and will help propel the District of Columbia's economy well into the next century.

PARTICIPATION AND GROWTH

The single most important step toward achieving the goals of participation and growth that have so eluded the government is to treat the creation of opportunities for participation of small businesses as a primary objective in the management of public contract awards. From the earliest stages of project planning, a Williams administration will design, organize and manage projects to maximize the creation of new opportunities for small, disadvantaged businesses.

As Mayor, I will:

• Size contracts and subcontracts so as to provide more opportunity for small businesses to bid and/or compete successfully;
• Seek legal authority for City agencies to select small businesses by means other than publicly advertised, open bidding and make greater use of preferences in the selection of small and minority owned businesses;
• Mandate a reinvigorated, fully funded and staffed Office of Human Rights and Local Business Development to explore with members of the small business community how design choices can be used to expand opportunities;

BONDING REQUIREMENTS

The requirement that contractors and sometime subcontractors obtain bid performance and payment bonds in order to be eligible to work on publicly funded contracts and the inability and unwillingness of surety companies to provide such bonds, are among the obstacles that small businesses cite most frequently as obstacles to their growth and development. Surety companies and agents view the ability to obtain bonding as an important step in the development of small business capability and public agencies often use the bonding process as a proxy for their own detailed examination of small business qualifications. Maintenance of the legitimate uses of bonding, while reducing the extent to which it constitutes obstacles to the participation and growth of small businesses, will be the goal of a Williams administration.

As Mayor, I will:

• Seek commitments from surety companies to make bonds, on specified terms, available to small businesses;
• Propose legislation that will require surety companies to document their performance in serving the small business community as a function of providing other services to the city.
• Create a bonding assistance program that provides partial guarantees of surety bonds written for small businesses by encouraging more agents, brokers and surety companies to participate in the program.
• Provide training and technical assistance, for small businesses that may have difficulty meeting surety company requirements, directed toward helping small businesses to become "bond ready."
• Define and specify conditions under which City agencies may wave bonding requirements on small contracts. Bond wavers must be viewed as a developmental opportunity rather than simply as a "free pass."

QUALIFICATIONS:

One of the most important barriers to participation of small businesses on public contracts is that detailed information on the availability and capabilities of small businesses is not always available to managers who must rapidly respond to bid solicitations or request for proposals.

As Mayor, I will:

• Create city-wide database containing information on the experiences and qualifications of small businesses.
• Assure reciprocal recognition by all City agencies of small business qualifications.
• Provide small businesses the training they need to respond to RFP's.

ACCESS TO FINANCING:

Small businesses growth is often constrained by the difficulties encountered in obtaining funds to finance the early stages of work on new contracts. Without adequate working capital, they cannot bid on larger contracts and without more work they cannot earn revenues they need to strengthen finances.

As Mayor, I will provide leadership to establish a Working Capital Loan Fund capitalized and administered by Washington, D. C. banks and secured by a reserve fund to which public agencies would contribute. The fund would provide loans against contract proceeds to small firms that have shown they can perform satisfactorily but do not meet conventional lending criteria.

Second, I will recommend that the District provide tax incentives for community development banks that require a certain percentage of their loans be awarded to small, minority owned businesses. Additionally, I will expand the technical assistance offered to small businesses to help them meet the requirement set by banks and other lenders for credit. Moreover, I will direct city agencies to reduce small businesses borrowing needs by making greater use of mobilization payments, particularly to firms who have performed satisfactorily in the past.

PAYMENT PRACTICES:

Many of the problems that small businesses face can be traced to the delays in payments they experience all too often in public agency contracts. As Chief Financial Officer, I responded to vendor payment crises by speeding up payments to vendors, shortening the time for payment from 7 months to 30-45 days. I understand that quicker and more reliable payments of small businesses would do much to enhance their stability, profitability and competitiveness.

As Mayor, I will:

• Authorize City agencies to make progress payments, on two-week cycles, on all contracts for less than $500,000;
• Propose that contract language require prime contractors to pay subcontractors as soon as they receive payment for work that the subcontractor has performed.
• Establish several pilot projects aimed at testing the feasibility and effectiveness of having City agencies pay sub subcontractors directly;
• Review the feasibility of using electronic data interchange (EDI) systems to expedite billings, auditing and payment of contractors and subcontractors;
• Direct all city agencies to include in their contract provisions for mediation (or other dispute resolution procedures) of disputes concerning payment for extra work and change orders as well as for promptly paying any undisputed portions of payments.
• Provide training and technical assistance programs that give special attention to helping small, disadvantaged businesses develop the capacity to manage change orders more effectively.

CERTIFICATIONS:

Any program that aims to expand the opportunities available to minorities and women owned businesses must have a means of certifying those firms that belong to these categories. While the certification process is clearly necessary, small businesses and public agencies agree that existing procedures are often too time-consuming, involve too much paperwork and are not always consistent from one agency to another. While some progress has been made toward standardizing applications for certification and reciprocal recognition, there are urgent needs to streamline and simplify the process.

As Mayor, I will:

• Direct public agencies to provide additional training to ensure that personnel responsible for certification processes are appropriately familiar with the structures, functioning and business practices of contracting with small business.
• Require that certified small businesses report any changes in ownership that may effect certification status, rather than being required periodically to undergo formal recertification, notwithstanding no changes of status.
• Explore the question of whether prevailing definitions of minority and female owned enterprises unduly restrict the options available to growing firms with respect to equity financing, management structure and joint venturing.

PROGRAM MANAGEMENT:

The Department of Human Rights and Local Business Development has full time staff dedicated to the management of small business, programs. The resources and capabilities available to this staff are frequently limited, especially when measured against their formal responsibilities. In order to strengthen the ability of this staff to discharge their responsibilities more effectively, as Mayor, I will:

• Recruit staff experienced in public contracting for small and minority business programs,
• Make implementation of the Local Small, Minority, and Disadvantaged Business Development Plan a priority of my cabinet and an element of their job performance evaluations;
• Develop a formal training program aimed at increasing the familiarization of agencies staff with public contracting policies and practices;
• Assure that the goals of expanding opportunities is given due weight in discussions about public contracting; all contract awards will be subject to review by Human Rights and Local Business Development;