Leading the Way to Diversity Through Bond Measures

Dr. Constance M. Carroll Chancellor

Rich Grosch Board Executive Vice President

Mary Graham Board Member

Chris Manis Vice Chancellor,

Facilities Management

District Overview

Dr. Constance M. Carroll Chancellor

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American Community Colleges

Public: 982

Private: 90

Tribal: 36

Total: 1,108

Source: AACC 2016 Fact Sheet 3

California Community College Mission

• Open Access to Higher Education

• Transfer Education

• Career Technical Education

• Adult/Continuing Education

• Basic Skills/Remedial Education

• Support Services

• Economic Development

• Bachelor’s Degree Pilot Program

72 Districts

113 Colleges

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The San Diego Community College District

California’s second-largest community college district

Serves the City of San Diego and surrounding region

5 Member Elected Board of Trustees

Student Trustee (Rotating)

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SDCCD Mission & Functions

Instruction • Basic Skills to Honors • Transfer Programs • A.A. & A.S. Degrees • Career Technical Education Certificates • High School Diploma / G.E.D. • English Language Acquisition

& Citizenship Training • Skills Upgrading / Enrichment • Military Education • Bachelor’s Degree Pilot Program

Support Services • Counseling, Tutoring, Financial Aid

Co-Curricular • Performance Groups, Athletic Teams, Etc.

Understanding & Respect for Diversity

Community Partnerships

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San Diego County’s 20 Largest Employers

Source: San Diego Business Journal Book of Lists 2016

1. UC, San Diego

2. Sharp Health

3. Scripps Health

4. Qualcomm Inc.

5. Kaiser Permanente

6. UC San Diego Health System

7. YMCA of San Diego County

8. Rady Children’s Hospital-San Diego

9. General Atomics (and affiliated companies)

10. San Diego State University

11. Sempra Energy

12. San Diego Community College District 13. Palomar Health

14. Northrop Grumman Corp.

15. SeaWorld San Diego

16. Solar Turbines Inc.

17. General Dynamics NASSCO

18. University of San Diego

19. Veterans Affairs San Diego Healthcare System

20. CareFusion, a BD Co.

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60,000 Students Enroll in Credit Colleges

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45,000 Students Enroll in Continuing Education

• Educational Cultural Complex • North City Campus • At Mesa College • At Miramar College • West City Campus • César Chávez Campus • Mid-City Campus

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42,000 Service Personnel (3-Year Average) Enroll at Military Base Programs

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Ethnicity of College Students Fall 2015

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African American, 7%

American Indian, 0%

Asian, 11% Pacific

Islander, 1%

Filipino, 5%

Latino, 37%

White, 31%

Other, 6% Unreported, 2%

Ethnicity of Continuing Education Students Fall 2015

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African American, 7% American Indian,

0%

Asian, 15%

Pacific Islander, 0%

Filipino, 2%

Latino, 34%

White, 33%

Other, 2% Unreported, 7%

Gender of College & CE Students Fall 2015

Colleges Continuing Education

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Male 50% Female 50%

Male 33%

Female 66%

Funding restricted to construction and equipment. No funding allowed for maintenance, faculty, or administrator staffing. *Total with interest: $1.625 Billion

Proposition S (2002) $685 Million Proposition N (2006) $870 Million

Total $1.555 Billion*

Bond Measures (Authorized by California Proposition 39)

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Propositions S and N Overview

$1.555 billion construction bond program provides for 80+ projects at City, Mesa, and Miramar Colleges, and seven Continuing Education campuses: State-of-the-art teaching and learning facilities Major renovations and modernizations Campuswide infrastructure projects

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Spending Topped $1.4 Billion in 2015 – 2016.

• Proposition S – Fully Issued • Proposition N – Balance of $122 Million to be sold in November 2016

• Top Bond Ratings:

Standard & Poor’s AA+ Moody’s Aa1

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Propositions S and N Status

Outreach Strategies

Rich Grosch Executive Vice President

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The SDCCD Contractor Outreach Program was established in 2007 to promote the increased utilization, capacity-

building, and sustainability of small and historically underutilized businesses on Propositions S and N projects.

Contractor Outreach Program Objectives

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• The participation of small/historically underutilized business enterprise (S/HUBE) firms in individual project bid pools

• The number of contracts awarded to S/HUBE firms as a result of being the lowest responsive/responsible bidder

• The cumulative number of S/HUBE consultants and contractors awarded contracts from the outset of the program

• The cumulative contract volume for S/HUBE consultants and contractors from the outset of the program

• Planned vs. actual results for Design/Build Subcontracting Plans

Contractor Outreach Program Goals and Metrics

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• Options presented by varying project delivery methods

• Legal options for procurement

Strategies for Diversifying the Contracting Pool

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Strategies for Diversifying the Contracting Pool

Leverage Various Delivery Methods To Help Accomplish Outreach Goals

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SMALL BUSINESS CONTRACTING BENEFITS: Allows owners to size and bundle bid packages to appeal to smaller businesses. Bid packages sized under $15,000 do not require public notice and can be direct-sourced after obtaining competitive quotes from a limited-size S/HUBE subset, awarding to the lowest bidder.

Owner

PM/CM

Contractor Contractor Contractor

Architect

Construction Management Multiple-Prime (CMMP)

In CMMP contracting, the owner (District) holds separate contracts with contractors of various construction work disciplines, such as general construction, earthwork, structural, mechanical, and electrical. The owner, or its CM, manages the overall schedule and budget.

Leverage Various Delivery Methods to Help Accomplish Outreach Goals

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SMALL BUSINESS CONTRACTING BENEFITS: Owners can encourage GCs to pursue small business subcontracting goals. Since the GC holds the contracts, it is able to direct-source beyond a $15,000 threshold but should still obtain competitive quotes from a limited and/or targeted S/HUBE subset.

Owner

General Contractor

Subcontractor Subcontractor

Architect

Design-Bid-Build

In this method, the owner engages an architect to prepare the design of the project, including construction drawings, specifications and other documents. Once completed, the bid package is presented to interested general contractors (GC). The selected GC will then execute contracts with subcontractors.

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Leverage Various Delivery Methods to Help Accomplish Outreach Goals

SMALL BUSINESS CONTRACTING BENEFITS: SDCCD requires D/B teams to submit a S/HUBE subcontracting plan as part of their response to a D/B RFP. The plan (including goals) are included in the D/B contract. Plans are scored on a variety of criteria, including previous performance on projects with mandatory goals.

Owner

Design-Build Team

Architect General Contractor

Contractor Contractor Contractor

Design-Build (DB)

The owner contracts with a D/B team to develop a design based on a preliminary scope or design concept presented by the owner and manage construction of the project. Once a fixed price is established and the project underway, the D/B team is responsible for construction of the project, scheduling, budget, and all contracts.

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Leverage Various Delivery Methods to Help Accomplish Outreach Goals

Strategies for Diversifying the Contracting Pool

Leverage Various Procurement Options to Help Accomplish Outreach Goals

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Continuing Education Mesa College Campus

Miramar College Student Services Center City College Math and Social Sciences Building

SMALL BUSINESS CONTRACTING BENEFITS: Direct Sourcing allows SDCCD to steer smaller projects to firms as a method for building capacity, typically targeting a subset outside of SBEs, such as DVBE or DBE, since these are the groups with the more challenging representation. Design/Build teams may use Direct Source procurement as a means to meeting outreach goals.

Direct Source

For work up to a $15,000 threshold that does not require a public notice, SDCCD solicits quotes using a “sheltered market” approach. This allows the District to solicit a pool of 3-5 firms in targeted subsets without advertising. Contracts are awarded to the firm with the lowest quote.

Owner

Consultant Contractor

Leverage Various Procurement Options to Help Accomplish Outreach Goals

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Best Value (For Professional Services or Design/Build)

Owner

Consultant Contractor Best value procurement looks at factors other than only cost. Typically, values are assigned to numerous of factors, including price, past performance, technical expertise or qualifications, and other factors beyond cost. As scores are tabulated, a single contractor should emerge as the “best value.”

SMALL BUSINESS CONTRACTING BENEFITS: Best Value offers the ability to look at past performance or a firm’s experiences with public works. This allows owners to select a contractor who may not have the lowest price but offers something beneficial to the project (including meeting S/HUBE goals) and which is worth the additional cost – an overall “best value” contractor.

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Leverage Various Procurement Options to Help Accomplish Outreach Goals

Sealed Bidding Owner

Consultant Contractor Sealed bidding – or hard, low bidding - ensures a fair and open competition where bids are submitted in sealed envelopes by a specified deadline, and the results read aloud at a specific date/time in a public forum. Sealed bidding is considered less costly and faster than other procurement methods.

SMALL BUSINESS CONTRACTING BENEFITS: Despite the requirement to publicly advertise, sealed bidding allows for targeted and personalized outreach to appropriate S/HUBE firms. Should the project lend itself, outreach can be conducted to “just” HUBE firms since SBEs are readily available and may access bid information outside of a targeted outreach notification.

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Leverage Various Procurement Options to Help Accomplish Outreach Goals

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For five years, SDCCD hosted a Networking & Outreach Event designed to bring together S/HUBE contractors interested in working on bond projects together with the District’s prequalified contractors and large specialty trade firms. Events typically drew more than 300 participants, with large builders and trades serving as booth hosts. Post-event surveys indicated the overwhelming majority of attendees were satisfied or very satisfied with these events.

Contractor Networking & Outreach Event

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SDCCD hosts quarterly small business certification workshops and workshops on labor compliance/prevailing wage in public works.

SDCCD also co-hosts project-specific outreach events with CMMP or Design/Build teams in order to draw attention to opportunities at specific projects.

Small Business Workshops & Project-specific Outreach Events

Public Contracting Implications

Chris Manis Vice Chancellor,

Facilities Management

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Implications Of Proposition 209 On Public Contracting

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Proposition 209, passed in November 1996, amended the California Constitution to provide that the state…

“shall not discriminate against, or grant preferential treatment to, any individual or group on the basis or race, sex, color, ethnicity, or national origin in public employment, public education, or public contracting.”

What Is Proposition 209?

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• California law still permits careful consideration of race and gender, as long as the practice is not considered “preferential” under Proposition 209.*

• Some communities report a loss of millions of dollars in contracts to minority & women business enterprises**

• Loss of $820M per year in M/WBE contracts - State of CA

• Loss of $200M per year in M/WBE contracts - City/County of San Francisco

• The loss of $30M per year in M/WBE contracts - City of Oakland

* “Steps that Government Agencies Can Take to Ensure Equal Opportunity in Public Contracting, Education and Employment”

Munger Tolles & Olson LLP for Bar Association of San Francisco, Fall 2007

** “The Impact of Proposition 209 on California’s MWBEs” Tim Lohrentz for Equal Justice Society, February 2015

How Has Proposition 209 Impacted Public Procurement?

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How Has Proposition 209 Impacted Public Procurement?

“More than a decade after Los Angeles starting trying to sidestep California’s affirmative action ban, firms owned by white men won 92 percent of the $2.1 billion in contracts awarded by the city, though they’re just 14 percent of the population. A diversity program in place since 2001 has had little impact because it’s rarely enforced, according to critics and city officials. Mayor Antonio Villaraigosa, elected in 2005, has called it “absolutely insufficient.””

Bloomberg News, May 2013

“After the passage of Proposition 209 in 1996, MBEs experienced a greater than 50 percent reduction of total awards and contracts from Caltrans. In the nine years leading up to the passage of Proposition 209, MBEs received, on average, 16 percent of award revenue for Caltrans projects with federal funding. This amount was reduced to 7.9 percent of award revenue in the years following Proposition 209.”

Discrimination Research Center, 2006 35

• SDCCD does not have mandatory numeric goals for participation of S/HUBE firms on its construction bond program.

• By utilizing diverse outreach strategies, SDCCD is able to maintain or increase participation, despite a change in policy in 2014 to accept only verifiable certifications from approved agencies.

• Self-certifications are no longer accepted.

How Has Proposition 209 Impacted Public Procurement?

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• Certifications Tracked

• Certifying Agencies Accepted

• Certification Trends and Challenges

Certification Reporting, Monitoring, and Trends

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Targeted businesses include those firms certified as or eligible for certification as one or more of the following: • Small Business Enterprise (SBE) • Disadvantaged Business Enterprise (DBE) • Minority Business Enterprise (MBE) • Woman Business Enterprise (WBE) • Disabled Veteran Business Enterprise (DVBE)

Targeted and Tracked Certifications

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• California Department of General Services (DGS)

• California Public Utilities Commission (CPUC) Supplier Clearinghouse

• California Department of Transportation Unified Certification Program (CUCP)

• City of San Diego

• Los Angeles County Metropolitan Transportation Authority (METRO)

• Small Business Administration (SBA)

Approved Certifying Agencies

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Certification Trends and Challenges

• Fewer public agencies offer formal certification programs. Of those who do, it can be time-consuming to complete.

• More certification ‘programs’ are just registries where information and documentation is not verified.

• SDCCD does not accept self-certifications or certifications from for-fee agencies, requiring firms to take additional time to become certified by approved agencies.

40 City College Arts and Humanities and Business Technology Buildings

SDCCD Outreach Program Results to Date

• Cumulative Data from the Outset of the Program

• Contractor Participation

• Consultant Participation

• Adjusted Data with Self-Certifications Excluded

• Contractor Participation

• Consultant Participation

• Local Worker Utilization

41 Mesa College Math and Science Complex

Cumulative Participation - Consultants

There have been 900 consultant contracts for professional services awarded since the inception of the bond program through June 30, 2016. Of these, 59.34% were awarded to firms certified as small/historically underutilized (S/HUBE).

Targeted Consultant Group # Contracts Percentage

Small Business Enterprise 311 34.55%

Minority Business Enterprise 131 14.56%

Woman-owned Business Enterprise 44 4.89%

Disabled Veteran Business Enterprise 27 3.00%

Disadvantaged Business Enterprise 21 2.33%

Total Small/Underutilized Consultants 534 59.33%

Other Business Enterprise 366 40.67

Total Consultants 900 100%

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Cumulative Participation - Consultants

Contracts awarded to consultants on Propositions S and N projects totaled more than $119 million through June 30, 2016. Approximately 59% of the contract totals were awarded to S/HUBE firms.

Targeted Consultant Group Contract Volume Percentage

Small Business Enterprise $47,638,706.36 23.63%

Minority Business Enterprise $37,433,398.55 18.57%

Woman-owned Business Enterprise $29,115,170.19 14.44%

Disabled Veteran Business Enterprise $3,434,676.88 1.70%

Disadvantaged Business Enterprise $1,754,302.29 0.87%

Total Small/Underutilized Consultants $119,376,254.27 59.21%

Other Business Enterprise $82,256,890.74 40.79%

Total Consultants $201,633,145.01 100%

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Cumulative Participation - Contractors

There have been 1,123 contracts awarded to contractors on Propositions S and N projects from the outset of the program through June 30, 2016. Of these, 54.50% were awarded to S/HUBE firms.

Targeted Contractor Group # Contracts Percentage

Small Business Enterprise 362 32.23%

Disabled Veteran Business Enterprise 94 8.37%

Woman-owned Business Enterprise 64 5.70%

Disadvantaged Business Enterprise 47 4.19%

Minority Business Enterprise 45 4.01%

Total Small/Underutilized Contractors 612 54.50%

Other Business Enterprise 511 45.50%

Total Contractors 1,123 100%

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Cumulative Participation - Contractors

Targeted Contractor Group Contract Volume Percentage

Small Business Enterprise $145,722,542.03 14.51%

Woman-owned Business Enterprise $32,581,250.95 3.24%

Minority Business Enterprise $32,462,996.04 3.23%

Disadvantaged Business Enterprise $145,722,542.03 1.19%

Disabled Veteran Business Enterprise $3,614,936.68 0.36%

Total Small/Underutilized Contractors $226,340,430.10 22.53%

Other Business Enterprise $778,212,656.24 77.47%

Total Contractors $1,004,553,086.34 100%

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There have been more than $1 billion in construction contracts for Propositions S and N projects to date. Of these, more than $226 million has been awarded to S/HUBE firms.

Cumulative Participation - Contractors

Of the $1 billion in contracts for construction, nearly $373 million has been awarded to Design/Build entities where the builder holds contracts instead of the District.

The District tracks only the original contract for Design/Build entities. It does not track the individual contracts for lower-tier firms. Individual project data are reported in the Design/Build subcontracting plan audits.

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County/Zip Code List Name Total Hours Area Percent 2015 Average 2014 Average 2013 Average

San Diego County 24,272.98 84.29% 78.60% 84.13% 78.14%

Riverside County 3,123.00 10.85% 11.65% 8.44% 10.64%

Orange County 819.76 2.84% 2.02% 1.06% 1.96%

San Bernardino County 252.75 0.88% 2.42% 2.03% 3.65%

Los Angeles County 202.25 0.70% 4.43% 3.39% 4.74%

Imperial County 125.00 0.43% 0.26% 0.38% 0.25%

Other N/A N/A 0.62% 0.57% 0.62%

Total 28,795.74 100% 100% 100% 100%

Local Worker Utilization*

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* SDCCD does not utilize a Project Labor Agreement

Reporting and Acknowledgments

Mary Graham Vice President,

Institutional Effectiveness

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• Lessons Learned

• Reporting Frequency

• Contractor Recognition

Reporting and Acknowledgments

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Lessons Learned

Ongoing Process Improvement A successful small business outreach program must involve a proactive commitment to identifying, analyzing, and improving upon existing processes and strategies. Approaches that may have worked earlier in the program need to be adapted periodically to remain responsive to competing local programs, certification trends, and fluctuating workforce/trade pools.

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Lessons Learned

Dedicated Staff/Consultants

The availability of and access to staff dedicated to essential outreach functions will enhance program success the success of the program and accurately report its outcomes.

These functions include but are not limited to: • Outreach notifications to S/HUBEs • Training and capacity-building

opportunities • Monitoring, auditing, and reporting • Representing the District at community, outreach, and trade

functions to assure a positive presence and reliable point of contact

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Miramar College Library and Learning Resources Center

Lessons Learned

Design/Build Subcontracting Participation Plan

A Subcontracting Participation Plan for S/HUBEs was established as a requirement for all Design/Build proposals, and its score worth 10% of the overall score.

Some plans have had impractically ambitious goals, resulting in significant gaps between goals and actual participation, and revealing a lack of understanding by some GCs about certifications, standards for different certifying agencies, and the challenges faced by small business in general.

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Lessons Learned

Design/Build Subcontracting Participation Plan

Contractual enforcement has been challenging because there are few legal restraints. Negotiation of GMPs have been suspended in order to reach agreement on changed utilization of S/HUBE firms to maintain budget and schedule in the overall best interest of the project.

SDCCD’s program schedule has been an accelerated one to save costs. If projects were not sequenced as close together, it may have afforded an opportunity to evaluate the performance of Design/Build entities on sub plans and apply or subtract points for performance as appropriate in the scoring of future RFPs.

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Reporting

Regular reporting is provided to the Chancellor and Board of Trustees, initially on a quarterly basis, and now on a semi-annual basis, given the program scale-down.

Standard reporting items include:

• Program Enhancements/Lessons Learned • Cumulative Participation Reports to reflect

contract participation and contract volume for S/HUBEs

• Bid Participation Results • Bid Award Results • Local Worker Utilization • Performance Outcomes of

Design/Build Subcontracting Plan Audits 54

CE Cesar Chavez Parking Structure

Reporting

All contractor outreach program reports are also posted on the construction program website in the interest of transparency and accountability to the public.

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Contractor Recognition Program

In 2011, the District launched a Contractor Recognition Program to acknowledge and celebrate exemplary performance. S/HUBE firms are recognized for exemplary performance, nominated by campus or district project managers. Large firms are honored for their commitment to providing opportunities for S/HUBE firms as lower-tier subcontractors or project partners in either the design or construction phases.

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Contractor Recognition Program

To date, 30 firms have been recognized, representing a cross-section of architects, inspectors, engineers, contractors and specialty-trade firms, and certifications including small, disadvantaged, minority-owned, woman-owned and disabled veteran-owned firms.

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THANK YOU!

Q and A

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