Disparity study for the Louisville and Jefferson County Metropolitan Sewer District released

KY News - Published Jul 27, 2018

A report recently published by the Lousville and Jefferson County (of Kentucky) Metropolitan Sewer District (MSD) found that minority- and women-owned business enterprises (MWBEs) were underutilized when it came to MSD procurements between July 1, 2010 and June 30, 2015.

A variety of recommendations were made by Mason Tillman Associates, the consultants hired to conduct the disparity study, for the purpose of remedying this underutilization in the future.

Foremost among the recommendations was that MSD institute a 10 percent bid discount (not to exceed $50,000) for MWBEs in the process of awarding prime contracts on construction services. The groups specified as being eligible, under the recommendation, would be African Americans, Hispanic Americans, Asian Pacific Americans, Asian Indian Americans, and Caucasian Females. Further recommendations were made for construction-related services and engineering and professional services and materials, commodities, and services within the recommendations of the study, with specific groups being eligible for the 10 percent bid discount in those fields.

Furthermore, the study recommend that MWBE subcontractor goals should be set on all prime purchase orders for construction. Recommendations for strengthening the MWBE certification process, in terms of clarifying eligibility, documentation required, making proof of good-faith efforts to meet goals, and various forms of tracking and monitoring. It was also recommended that MSD form a MWBE Advisory Council.

The disparity study also recommended that MSD "leverage its banking relationships" in order to mitigate MWBEs' lack of access to capital, and for MSD to provide various loan programs and other forms of financing assistance. The formation of a Small Local Business Enterprise (SLBE) Program which would be race- and gender-neutral in its implementation was also recommended, in order to ensure a greater amount of contracting dollars go to businesses within the area served by MSD.

The disparity study is expected to be used as the basis for a new supplier diversity program instituted by MSD. The current program exists on an interim basis, after the prior program was shut down following a 2015 finding that an MBE was being used on a "pass-through" basis by a larger firm in order to win contracts from MSD. MSD plans on presenting its final recommendations for a new supplier diversity program to its board in early 2019.

To read the full MSD disparity study, visit http://louisvillemsd.org/sites/default/files/file_repository/Supplier%20Diversity/MSD%20Disparity%20Study%20Final%20Report%207-23-18.pdf