On August 24, 2011, the City of Seattle (“City”) announced its new Inclusion Plan (the “Plan”) aimed at including more women and minority owned businesses in City projects. The Plan replaces the City’s previous Outreach Plan.
For all City projects exceeding $300,000, bidders must submit a completed Inclusion Form with their bids and is a condition to a bidder’s responsiveness requirements. The Inclusion Form can be obtained on the City of Seattle website: Click here. Women and Minority Business Enterprise (WMBE) do not have to be certified by the state’s Office of Minority and Women Owned Businesses (OMWBE). The City defines a WMBE “as at least 51% owned by women and/or minority (including, but not limited to, African Americans, Native Americans, Asians and Hispanics) group members.” The WMBE must simply register on the City’s Registration and Enrollment system on the City’s website.
The City’s enrollment system only applies to City projects, thus, to qualify as a WMBE for a state or federal project, the DBE must be certified by the OMWBE. On July 19, 2011, we posted the updated bid procedures for the Washington State Department of Transportation (WSDOT) and OMWBE: Click here– the Blog article gives an overview and recommendations of the significant changes made to the Disadvantage Business Enterprise Condition of Award Goal document and contract requirements, and should be reviewed before submitting your next WSDOT bid.
With the new Plan, the City has attempted to put more teeth into its WMBE bidding requirements. The Plan is a “discretionary” points based scoring system. A bidder must score a minimum of 10 points across all Plan sections-a completed Plan must “include all of the required information” and “achieve the award of a minimum 10 points . . . [b]ids that are not completed either because they lack required information [or] do not achieve the minimum of 10 points will be rejected.”
A bidder’s Plan points are wholly discretionary when the City is selecting the low, responsive bid. The City refers to this points based selection system as the “Market Availability” of WMBEs for a specific type of project. A bidder will never be able to forecast how many points it will receive because Marketplace Availability is calculated only after the bids have been opened by the City will compare each bid. Marketplace Availability is calculated by averaging “Past Performance” on similar type projects and “Bid Pool” availability:
- Past Performance is calculated by averaging “actual WMBE utilization rates for completed projects, by type of project over the immediate past three calendar years. A list of project types and WMBE utilization averages appears below. This list will be updated at the end of each calendar year.”
- Bid Pool data is calculated after the bids have been opened and the City has “determine[d] the average of the proposed WMBE goals of all bidders.”
A Guide to the New Inclusion Plan Form:
The first section of the form, “Proposed Subcontracting WMBE Goals,” requires the bidder to set a goal for the percentage of women and minority owned businesses that they plan to use over the duration of the project. The bidder can receive up to 6 points based on the “reasonable Marketplace Availability of WMBE contractors as determined by the city” after bids have been opened. The City also provides percentages of WMBEs used on past City projects. For example, over a 3 year average, City Roadway work is 10% WMBE and Park Development is 25% WMBE. While the percentages that a bidder provides is a project goal, the “contract performance shall require a continuous good faith effort to achieve the goals.”
For projects over $2,000,000, the bidder must list a WMBE Expert who is a part of the proposed project team, the number of hours spent for pre-bid outreach efforts, and the number of hours and specific services that are anticipated by the expert during the performance of the contract. “The WMBE Expert shall work with the City and Bidder to develop and implement the Plan and to provide recruitment and support throughout the contract.”
The second section, “Scopes of Work and Supply Opportunities,” requires the bidder to identify WMBE subcontract and supplier opportunities and list the estimated value. The bidder will receive 6 points for this section if the total subcontract and supplier estimated dollar values meet or exceed the Marketplace Availability, and only 3 points if the estimated dollar values total half of the Marketplace Availability.
The third and final section, “W/MBE Contract Log,” requires the bidder to name the specific WMBE businesses that the bidder will contract with and their specific bid amounts. Once again, the bidder will receive 6 points for this section if the total subcontract and supplier bid values meet or exceed the Marketplace Availability, and only 3 points if the estimated dollar values total half of the Marketplace Availability.
Summary
Each bidder on a City of Seattle project with a value of $300,000 or more must now include a completed Inclusion Plan with its bid. A completed plan requires the bidder to not only fill-in the required information, but to obtain 10 of the 18 points that are available under the scoring criterion. The points are based on Market Availability after the bids have been opened. For projects over $2,000,000, the bidder must also include a WMBE Expert and provide information about that expert’s WMBE outreach efforts before the bid and their plan to include more WMBE’s after the bid has been awarded.
The points based system is too discretionary, thus, the City’s projects will likely be fraught with bid protests. Bidding criteria that lacks specific and objective requirements, create issues as to whether a bid meets or fails to meet that criteria because there is no objective standard for which to compare. We saw similar disputes when the Washington legislature enacted RCW 39.04.350, the Washington Bidder Responsibility Statute, in 2007 (On August 9 and 11 of this year, we posted two Blog articles regarding proper drafting of Bidder Responsibility criteria: Bidder Responsibility Part 1 and Bidder Responsibility Part 2. When designers and drafters of Requests for Proposals included subjective requirements such as “similar project experience” in their Supplemental Bid criteria, disputes arose as to whether certain bidders actually met the experience requirements because it was too subjective and left too much room for interpretation. The same can be said for the City’s new Inclusion Plan point system.
Ahlers & Cressman PLLC’s lawyers have been assisting numerous general contractors, and small women and minority owned firms with their DBE questions over the last twenty-five years. We are conversant with the regulations and available to address any questions these new revisions may raise.