Item Description:
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JPA PR00006262 with the State of MN for a Joint Disparity Study to examine whether there is evidence of discrimination against BIPOC- and women-owned firms in Hennepin County’s market area and to assess potential measures to address any such discrimination, 02/01/24-01/31/26, NTE $32,660
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Resolution:
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BE IT RESOLVED, that Joint Powers Agreement PR00006262 between Hennepin County and the State of Minnesota, Department of Administration, during the period February 1, 2024 through January 31, 2026, in the not to exceed amount of $32,660, for a Joint Disparity Study to be conducted by Keen Independent Research LLC (Keen) for a consortium of Minnesota public entities, led by the State of Minnesota and including other governmental units, be approved; that following review and approval by the County Attorney's Office, the Chair of the Board be authorized to sign the Joint Powers Agreement on behalf of the County; and that the Controller be authorized to disburse funds as directed.
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Background:
The 1989 U.S. Supreme Court in City of Richmond v. J.A. Croson Company held there are only certain limited permissible reasons for a local government to have a race-conscious procurement program, and set specific conditions for such programs:
1. A government agency must establish and thoroughly examine evidence to determine whether there is a compelling governmental interest in remedying specific past identified discrimination or its present effects; and
2. A jurisdiction must also ensure that any program adopted is narrowly tailored to achieve the goal of remedying the identified discrimination.
These two requirements must both be satisfied to meet the U.S. Supreme Court’s strict scrutiny standard of review for race-conscious programs.
Disparity studies examine whether there is a disparity between the utilization and availability of BIPOC- and women-owned firms in a governmental entity’s contracting. If an underutilization is documented, the study identifies the extent to which it may be the result of the entity being a passive participant in a system of racial exclusion practiced by elements of the local industry and/or other factors that exist within the relevant market area. Studies recommend options governmental entities may adopt to redress any documented discrimination.
Based on an analysis of common marketplace availability data as well as Hennepin County-specific utilization data, Keen will produce a report for Hennepin County that includes specific quantitative and qualitative information from which the County Board can determine whether to continue supplementing the county’s race- and gender-neutral Small Business Enterprise (SBE) Program with narrowly-tailored race- and gender-conscious measures that are applied to procurements within specific industry categories in the county’s market area.
Participating Jurisdictions
In addition to Hennepin County, the following governmental entities comprise the consortium that will participate in the 2025 Joint Disparity Study:
• the Minnesota Department of Administration
• the Minnesota Department of Transportation.
• the Metropolitan Council
• the Metropolitan Airport Commission
• the Metropolitan Mosquito Control District
• the University of Minnesota
• Minnesota State Colleges and Universities
• the City of Saint Paul
• the City of Minneapolis
• the City of Rochester
• the City of Bloomington
• Ramsey County
• Saint Paul Public Schools
• Hennepin Healthcare System
Study Focus
Keen Independent Research LLC (Keen) was selected by the State and representatives of the participating governmental entities pursuant to a competitive selection process for a study author. Keen was the author of the 2017 Minnesota Join Disparity Study, the last study in which the county participated.
Geographic Market Area/Industry Categories
The study will determine the county’s relevant geographic market area and within that defined area will analyze county utilization, firm availability, and disparities, relative to four industry categories:
• Construction;
• Professional and technical services;
• Commodities; and
• Miscellaneous services.
The study will also examine entry and advancement, business formation and business success within these four industry categories. Keen will also analyze subindustries within each category. Examples of subindustries:
• under Construction - (20 or more) from highway work to electrical work to plumbing
• under Professional Services - architecture, engineering, accounting, business consulting
• under Commodities - chemicals, office equipment, construction materials
• under Miscellaneous - janitorial, rubbish services, landscape maintenance, building operation
Utilization Analysis
Keen will use a five-year study period (July 1, 2016 through June 30, 2021) from which county contract data will be analyzed. This time period dovetails with the study period from the county’s last disparity study (July 1, 2011 through June 30, 2016). The county’s utilization of BIPOC- and women-owned firms will be measured on the basis of contract dollars rather than the number of firms that received work or the number of contracts awarded. The report produced specifically for the county will analyze the effectiveness of the narrowly-tailored race- and gender-conscious measures the county uses to supplement its SBE Program, as a method to promote the utilization of available BIPOC- and women-owned firms within the county’s market area.
Availability Analysis
Keen’s approach to determining the availability of BIPOC-, women- and majority-owned firms within a designated market area has been reviewed and approved by courts and federal agencies. The study will quantify the availability of BIPOC-, women- and majority-owned firms that are qualified, willing and able to perform specific public sector prime contracts and subcontracts within the county’s market area.
Overall counts of qualified MBEs, WBEs and majority-owned firms within the county’s geographic market area will be provided for each of the study’s industry categories, as well as for subindustries within each category. The study will also report availability for firms owned by African Americans, Asian Americans (divided into Asian-Pacific Americans and Subcontinent Asian Americans, as possible), Hispanic Americans and Native Americans (or “Indigenous Americans”).
Timeline for Key Deliverables
The county will receive a draft study in 2025, which will be presented by staff to the County Board.
Joint Powers Agreement
The State of Minnesota, through its Commissioner of Administration, and Hennepin County would enter into a Joint Powers Agreement for a 2025 Joint Disparity Study to be produced on behalf of the State and the other participating governmental units. Each participating governmental unit will be responsible for a prorated share of the study’s cost. Hennepin County’s cost is $32,660. The State will assume responsibility for project and contract management of the contract with Keen.
recommendation
Recommendation from County Administrator: Recommend Approval