the jan-june 2015 reports on ocii. small business enterprise and local hiring goal practices, discussion. madam director. >> thank you madam secretary. commissioners this is actually a 6 month report, the next item which is an action item really is the product of discussion with you and what we heard through area commission meetings you held previously. i think it is overall good news. as you know, this commission set the bar very high for participation for professional services, construction, subcontracting contracting, supply jz work force. it is 50 percent which is different from the city requirements but to the greatest extent through your direction we are seeking parody for ease, for contractors and always looking for ways to improve so with that, raimened lee who is the end of the

contract compliance division of ocii will walk you through this item and also see members of the aufs of economic and workforce development who we contract with for work force employment services for construction permit are here as well >> good afternoon. thank you. this as mentioned recallier this is 6 month review as a [inaudible] we took the opportunity since the meeting is held in july to incapsulate figures from jan to june. the purpose thof report is review the performance of participation work force and highlight areas that we could improve upon. quite hewnestly in looking at the statistics and trends. very briefly i'll walk through the sbe performances. talk about the

workforce performance and some of the recent update tooz the citys lbe program. first, i like to maybe just step back a little bit and talk about the sbe program in termoffs the overall policy of enforcing a 50 percent small business goal through the redevelopment commissioners. they saw fit to instill on aggressive 507 percent goal that requires developers and contractors to exercise really sincere good faith efforts to meet that goal and what those good faith effortss mean. it called for contractors and developers to engage more business 3 with a number of means. when there are solicitations they go out publicly. granted some of the projects are private in some sense but through the sbe

policy solicitations that go out are publicly advertised and competitively competed for. we work with the gep developers to insure attempts to outreach to small business is conducted through both the city of san francisco contract mantering division, lb database and other databases they may retain. we look at the insureing efforts on [inaudible] give sufficient time for the solicitation process to take place as part of good faiths so we ask a minimum of 30 days is grant frd solicitations to be advertised and made aware to the public, for the public to make a opportunity to [inaudible] meeting of which ocii staff is in attendance and sufficient time for the prime cracktder, general contract, who ever it

may be to solicit subcontracts as well and sufficient time for subcontractors troorespond. at the submittal meetings we encourage contractor tooz aurf opportunity for networks so prime contractors have a opportunity to inengage with subcontractors. and then we also work with the developers in their solicitation process. what is unique about the program under the ocii is what is gone as a first consideration for project area sbe and san francisco sbe's. the small business program through the agency evolved from a minority business program into a small business program in 2004, but it has always been not restricted to san francisco but looking at san francisco as first consideration. under that prims what does first consideration mean in terms of enforcement? staff auch

participates on a professional service basis as a example in the rfg process being the request for qual fiications and we encourage developers to go through a rfq process oppose today a rfp so it makeatize a little ease wrr for small business tooz respond. as you can imagine it is eastier to submit a statement of qual fiications opposed to a full blown proposal in terms of request for proposal so we encourage rfq's to go out so it is easier for firms to respond and work with the gep developers in terms of short listing firm frz rfq and interview purposes. staff is engaged in that particular process for professional services. we look at who actually subimate, work with

the developers and participate in interviews. the proseals often involve not just the methodology delivering a service but the fee proposals and thinks of that nature and we work with the developers in short listing and interviews. we also ask the developers run by the final selection before contractors are awarded so the process is carried forward as we think is necessary to engage small businesses and san francisco business in particular. in the construction field, staff is involved in the solicitation process as well mpt we review the draft either invitation for bids or request for posal and insure there is appropriate language. participate in the

presubmittal meetings, but more importantly we look at the bid tabulations as well when bids do come in and again, the intent here is to look at whether full consideration has been given in terms of who submitted bids, whether they are san francisco based businesses with the fees that are submitted or the bid prices and again, we ask that the contractors meet with us, run through the bid summaries. intended selection before actual contractors are awarded and subcontracts. that is in a nut shul some of the process of what good faith effort means and what i would like to do is step back one step further to talk at defines a small business. it is a topic that will come up in the next agenda item. this past 6 month jz

prior to that, the existing pract is recognize small businesses based on common in the industry or terminology of ownership have control and i brink this up in the sense the owner of a small business shoulden be affiliated with another firm, a larger firm as a example. that is often the case in terms of minority women business programs where ownership may not be bonifyed or true. same with this business in termoffs small business. we are not looking at ath nisty or gender we look at the principle thofz firm to insure they are small in 2459 respect and not affiliated with another firm. we look at licensing requirements to insure the owner does control the firm and when i say we look at, these are principles in the sbe policy as you are fully

aware. ocii no longer performs certification but look at other certification programs that adopt similar projects and cmd which we rely upon with the san francisco database look at these same principles. what the term is the small business in terms of size, i think it is important. for professional services we look at a 3 year avrng gross receipt of 2 million dollars, suppliers for 7 million and construction 14 million. it means a small business must have 3 year average gross receipts no greater than these thresholds and this is topic of discussion for the next ajebda idem in terms of harmonizing with the city. these are the [inaudible] what were looked upon during the last 6 months. in terms of performance for sbe

engagement, for the past 6 months ocii oversaw the award of 12 contractors valued at over 283 million dollars. what is shown on the slides are the type of project, the number of projects awarded and when i say awarded it is awarded by various entities either developers or general contractors not ocii of course with the exception of one in this case i don't think we awarded any contracts directly. never the less, 12 contracts shown are the number of project the dollar asknlount sbe credit tooz the roit of that on the slide. the pertage of credits, par tisitation and percentage after that. why are there 2 separate columns? i want to make a distinction and draw your attention to the fact that

ocii through the former redevelopment agency has had a long practice of recognizing joint ventures and associations. it which intended to create opportunity for small benefit to participate on aspectoffs a project that some of the smaller firms are not able to participate in either because of the size of the project, the complexity or bonding requirements in the past. ocii does recognize joint ventures and associations. what we have done is recognize associations here in verchers as though they were small businesses and afforded them sbe credits as long as the small business partner performed in a meaningful manner in the sense of at least 35 percent of the particular scope of work. we

grant the sbe credits as if it is sbe we have broken out those venture squz listed the actual sbe participation of the firms and that is why there are 2 separate columns. for the past 6 months broken down b 3 and professional design service and construction supplies and construction contracting. you can see that roughly 42 million in professional design services were awardsed during the past 6 months and approximately 241 million in construction and supplies. sbe [inaudible] totaled 54.8 percent exceeding the 50 percent goal and that has been a happy acurns based

on what i sl seen in the past year professional services has often met or exceeded the agency 50 percent goal and there is good reason for that. intr for professional service isn't as significant thrrks is a abundance of small business so the ease of which firms with developers have been able to meet the 50 percent goal i think is expected. on a construction services and supplies, that is a slightly different story of course. the overall sbe participation in the past 6 months and 47 percent and in the areas of construction it has been a challenge and continues to be a challenge. what we are happy to report is that the construction figures have improved over the past 6 month squz we'll get into that a

little more. on the historical basis, sbe participation and construction averaged around 35 percent so the past 6 months was a improvement. at the request of the commission, there has been a request for look at ethnic and genda data. what is provided is the ethnic and gender bakedown of professional contracts awarded in the past 6 months. asian americans were awarded 5.8 percent of sbe dollars. the percentage here is reflective of the total contract word and not a percentage. that is a totem of the 40 million that was awarded. along that basis, african americans were awarded roughly 9 percent, latinos.6 percent others being undefined

that we couldn't determine maybe arab americans is undefined at 1 percent. [inaudible] at 2 percent kw non minorities at 36 percent and that includes females. the ethnicity data i want to straess informational. we have looked through databased to obtain the nrfgz where we can. in some cases there may not be available nrfgz and which case it is lumped into non mimoorety or if we have a idea it is [inaudible] in the other category so that is why there is a bit of vagueness in that respect. what we do not do is ask the developer to go back and ask for ethnicity data necessarily. what we maintain is that if we can obtain the information publicly through

other public databases that is the route that we have been taking. for construction and supplies, this is a breakdown for the past 6 months for ethnicity and asian americans just [inaudible] and that is a total of all contract awards. not the 114 million. african americans at 15 percent and [inaudible] others.1 percent and non minorities at 26 and a half percent. overall minorities and women were awarded 16 percent of all contracts if you look at a aggregation of the ethnicity data. finally in terms of agigate basis this slide shows the combined total of professional services and

construction and just running down very briefly, asian americans were awarded 3.5 percent, african americans at 15 percent, latinos at 1.5 percent, other 0.2 percent [inaudible] asians those within india, pakistan at 0.3 percent and non minority at 28.1. i do want to say that if we were to look at the totality of lee datadace and look at the rough ethnic breakdown of firms certified by the city of san francisco, there are areas that need improvement and as i mentioned earlier in my presentation, one of the importance of the report is look at areas we may want to focus on in terms of

improvements. i was not able to provide a slide in terms of the breakdown of cmd data base but i'll run off percentage so you have a idea. in totality and roughly mid-june of this year certified 1325 businesses in the database. 220 or 16.6 percent are asian pacific. there is about 111 african american home business constituting 8.4 percent. latinos consist of 103 firms at roughly 7.8 percent. native americans, 2 firms at 0.2 percent. subcontinent asians at 30 firms constituteing 2.3 percent. for those of you familiar with available and

utilization, if we look at a disparity analysis of the able firms and the utilization firms of ocii projects we see asian and percific americans and african americans [inaudible] the area of latino is a area that could use additional concentration or emphasis. one of the important aspects is insure that notices are going out to the community and not necessarily going out but firms submitting bids and proposals and that is a area that we'll be looking at with staff. so, on the overall basis in terms of an aggregation of all projects from inception to current and that is after projects again

from inception to june 30, there is roughly about 1.3 billion dollars that are currently being overseen. of that amount 139 million are in the professional service category and about 1.17 or 1.2 billion in construction and supplies. for professional services on a agigate basis we are sitting at about 58.2 percent of active projects of sbe participation and that is above the 50 percent but shows a slight net decrease over december 31. it is not a cause for alarm because these are natural fluctuations in termoffs contract awards and circumstances. it is to be expected that these percentage will be roughly studied plus or minus 1 or 2 percent based on

contract awards. for construction and supplies, roughly 441 million are awarded to small businesses, contituteing roughly 38 percent and that does fall below the 50 percent. however, this is a net increase over december 31 of 2.5 percent and if you recall 47 percent sbe participation dollars were awarded to construction firms raising the pertage by 2.5 percent and this is a aggregation. overall we saw a net improvement during the past 6 months of roughly 2.4 percent. what is provided here is a overall summary of those percentages that i recited earlier and showing of trends

lines. you see the running trend line for professional services is roughly studied at about 58 percent. that slight becrease of 1.5 percent staff isn't concerned because of the nature of the contract awards. in terms of the construction and spline supplies, we showed a marked improvement. overall average was about 35 percent. looking adding the contracts and total aggregation it is about 37 or 38 percent. this attributed to i believe hard work on the part of staff, not myself in particular, but staff in terms of concentrateing on construction and construction activities. we heard the commission loud and clear in terms of particular areas and hopeful the trend line will

continue to improve, however that is yet to be determined. of course, there are areas that are of particular concern. we had conversations with trade groups, with contractors, the percentage of san francisco based businesses getting contracts are not necessarily reflective of the improvement that you see here. on the overall agigate basis, san francisco businesses received about 36 percent of all contracts on a prfessional service category and again that is to be expected because of the abundance of firms and low cost of entry into that field. in construction san francisco base business on a overall basis received about 12 percent, 12 and a half percent of contract awards. while the sbe percentages improved, there is still work to be done in terms of insureing that firms

are submitting bids and competing on thaes particular contracts giving or allowing staff a opportunity to review those particular bids with the general contracts to insure small business firms in particular san francisco small business firms are participating on ocii projects. taking a different step now, that concludes my sbe part of it, but we'll talk about workforce and this is in particular construction workforce. we have a 50 percent local hiring requirement that calls for contractors and developers to use good faith teerfts employ san francisco residence. what those good faith effort means? it means engaging our partner, city bill with any job

opportunity that come up-let me also say even before job opportunities come up while they are mobilizing we want the contractor tooz look at their workforce to insure right off the bat they start off on a 50 percent basis. it does mean in termoffs good faith work wg city build in submitting required projective figures for jobs offering city build the opportunity to place job referral tooz the contractor and have the workers ultimately employed. we do look at first consideration of offering residence in the project areas of ocii, first consideration and principally that is within the hunters point ship yard. we have 3 major projects which is hunters ship yard, mission

bay transbay and oewd the office of economic workforce development through city build does administer or workforce program through a agreement. for the past 6 months for local resident work hours there is utilization of roughly 25.1 percent, so it is below the 50 percent thresh hold. we provided break downs by each project area. hunters point is ruchly at 35 percent. hunter point ship yard is 40 percent. mission bay at 20 percent, transpay 22 percent and others roughly 14 percent. one thing of note for bay view hunters point and hunters point shipyard there are priority considerations and those being

bay view hunters point residence, those residing within the gyp code of 9412 [inaudible] district 10 of san francisco, the residence there have performed at the level of 26 percent of the total hours. on a overall agigate basis meaning from the project inception to june 30, 2015, total of 3.7 million hourerize logged on the particular projects of close to a million performed by san francisco residence constituteing 27 percent. this is a decrease of 1.5 percent from the december 31 period and as i mentioned construction workforce remains we believe a challenge. what

is also broken out are the project area percentages oen a agigate basis. bay view hunters point sits at 41 percent. hunters point ship yard, 22 percent, transbay 23 percent and others noted on the foot note at 24 percent. what i have provided here are the area trend line frz each of the project areas so you can see tracking from may 31, 2015-sept30, 2014 to december march and june. these are the trend lines for bay view hunters point going from 56 to

41 percent. [inaudible] ship yard, [inaudible] mission bay 28. transbay [inaudible] others 26 to 24 with a total from 29 to 27 percent. rough lae 2.3 or 4 percent change. it has been a challenge. the improvement in san francisco economy has impacted the local workforce. the high level of construction activity taking place in the city of san francisco has effected our ability to draw on those workers as well and that is reflected within thcharts. one thing of note for bay view hunters point, the drop there

should improve. the reason for that is that the hunters view project began and the hours put in for that particular project consists primarily of piling work where local operating engineer hours are minimal but we should see an improvement in local workforce in the bay view hunters point area. as i mentioned, workforce remains a challenge. the high level of construction actirfbties placed a tremendous demand on local construction labor. as a example the board of supervisors back in june 2015 approved the expansion of the mandstory local hiring ordinance where local hiring requirements are required on prifent projects on public land. i believe