Open Letter To Governor Scott And CFO Jeff Atwater

April 24, 2013 by Raul Espinosa No Comments

Both Florida Governor Scott and CFO, Jeff Atwater, have received this letter requesting the suspension and review of the process that would issue up to 3 awards on FDOT solicitations to register, certify and train DBE and to begin negotiations to incorporate
a sustainable public private initiative (PPI) into the State Procurement System

Bringing Fairness and Transparency to the Florida Procurement System

During the Cabinet Meeting in Saint Augustine, on April 2nd, I was privileged to have discussed the accomplishments of the Fairness in Procurement Alliance (FPA) Think Tank and its flagship, the Umbrella Initiative in my conversations with you and your staff. I addressed the Florida procurement dilemma and the opportunities that a sustainable public-private initiative (PPI) could bring to the State. You both were enthused by the information and requested further details including the expected benefits. This communication is the follow-up to said request.
During the 2013 Legislative Session, the State of Florida has a great opportunity to take the national lead in procurement transparency, accountability and diversity by ordering the deployment of a sustainable unified procurement solution (UPS) that would bring added transparency and allow the tracking of procurement results especially diversity and inclusion. To this end, we request that you consider the shifting of existing budgets and projected expenditures, and issue a state-wide directive requesting cooperation with our effort.

Under the authority of CF 49 CFR Part 26, the Florida Department of Transportation (FDOT) has been spending $1.4M each year, in federal funds, to register, certify and train disadvantaged businesses (DBE), including minorities (MBE) in the State. Additionally, under the authority of sec.287.09451(6), Florida Statutes, the Department of Management Services Office of Supplier Diversity (OSD) has been spending $385,070 each year as well to increase the number of DBE and MBE doing business with the State and to make sure they are allowed to compete for public contracts. Although the FPA Think Tank applauds those efforts, as they are absolutely necessary, these bureaucratic efforts have proven duplicative, inefficient and wasteful with limited results.

The Umbrella Initiative, whose mission is “to double the number of disadvantaged businesses (DBE) contracting with the federal, state and local government by 2020,” has identified a universe of 680,069 minority firms (MBE) – without counting women, veterans and disabled veterans which qualify as DBE – and 1,586 public entities issuing public contracts in the State and… they are not keeping track of results, specially diversity and inclusion. The State registration, certification and training efforts of DBE firms involved in construction, for example, has been dismal, at best, and their methods are not the way to build DBE capacity. The officially recognized training resources and providers in the state, for instance, (i.e., the Small Business Development Centers) nor regional chambers and community groups have been involved on these efforts and there is duplication, inefficiency and waste of taxpayers’ money:

Small businesses (SBE) in Florida 2.1 Billion
Minority businesses (MBE) in Florida 680,069
MBDE record of Florida MBE involved in construction and transportation 70,518
OSD success at certifying Florida MBE 1,778
FDOT success at certifying Florida DBE 2,921

The FPA Think Tank wishes, herewith, to make its case for incorporating a sustainable unified procurement solution (UPS) into the State procurement system which would provide – under one umbrella – access to all procurement opportunities not to mention all the essential procurement services in one place, including diversity and inclusion results.

With support, not necessarily new legislation (although it would be welcomed), from the Florida Legislative Branch, the Governor can re-arrange and consolidate budgets to permit the creation of this sustainable solution to make better use of taxpayers’ money, prevent duplicative efforts and properly give DBE and MBE an opportunity at creating jobs. Here are the immediate steps which would be necessary to accomplish the desired results:

  1. Suspend the renewal of two (possibly three) FDOT contracts designed to register, certify and train DBE. This will allow the State to put to better use $1.4 Million in federal funds annually for the next four years (a total of $5.6 Million.) The objective of this action is to eliminate duplication, improve efficiency and create a sustainable solution which will really help Florida accomplish its objectives.
  2. Negotiate for the deployment of the Umbrella Initiative, a public-privative initiative (PPI) to overhaul the plan that implemented Executive Order 99-281. Even a better solution would be for the Governor to consider writing a new Executive Order of his own for this purpose. The objective of this action is to help the State increase government transparency as proposed by the Five for Florida, already supported by Jeff Atwater.

By implementing the recommendations above, immediate results, such as the elimination of the barriers and abusive procurement practices that are expected to be identified by the City of Jacksonville Disparity Report can be achieved. Please note that the possible suppression of the results of this report have galvanized support for our efforts and have united the business organizations representing DBE and MBE in Northeast Florida. The DBE businesses in Northeast Florida stand to benefit from the allocation of $698.7 Million in construction and transportation projects on the Governor’s record $74.4 Budget. Larger amounts are expected for South and West Florida as well.

Attached is a copy of the Umbrella Initiative Executive Summary providing recommendations to the Governor and the Legislature for moving forward. We trust both the Governor and the Legislature will support these actions before they recess. Please advise us how the Governor and the CFO intend to proceed.

TEXT OF COMMUNICATION TO FLORIDA CHIEF PROCUREMENT OFFICER

Please kindly consider suspending the proceedings required to issue awards – using $1.4 Million in federal funds ($5.6 Million over four years) pursuant to 49 CFR Part 26.87 – on the Florida Department of Transportation RFP-DOT-12/13-9027-JP; RFP-DOT-12/13-9028-RC, including soliciting for a renewal or an extension of the contract resulting from RFP-DOT-11/12-9015-JP pending a review of a request submitted to the Governor and to CFO, Jeff Atwater.

The City Disparity Study Results Are Needed For Progress To Be Made

April 24, 2013 by Raul Espinosa No Comments

The results of the City of Jacksonville Disparity Study (http://www.coj.net/departments/office-of-economic-development/jacksonville-small—emerging-business/jseb-general-information.aspx, overdue since January, are expected to confirm – unless the results are suppressed, as many minority leaders predict it might happen – that barriers and abusive practices are continuing to be used to restrict disadvantaged business (DBE) participation in City procurements.

The Governor is about to unveil a record $74.4 Billion budget which contains $698 Million in construction and transportation projects for Northeast Florida. If the City’s established commitment to its DBE is to make sure they are allowed to perform on at least 15% of the City contracts, that would translate into $104.7 Million of public contracts! Folks, the time has come to pressure City Leaders into keeping their commitment!

Given the City’s long established practice not to track participation or diversity, local DBE – with support from their respective Chambers of Commerce – believe that such task can only take place with the commitment and support from the State, which is also facing the exact same dilemma. The State has never tracked participation and diversity results; its practices of registration, certification and training are duplicative and wasteful and the public access to contracting opportunities is, frankly, archaic! Management guru, Peter Druker, had put my views into perspective when he said, “If you cannot measure it, you cannot manage it.”

Tracking participation and results from all the 1,586 public entities issuing public contracts in the State of Florida is one of the objectives of the Umbrella Initiative, which conceived a unified procurement solution (UPS) for the State in the form of a sustainable procurement portal that would help the state and private industry solve its contracting shortcomings. Conceived by an academic Think Tank now comprised of university and law professors from four universities in the State, the Umbrella Initiative mission is “to double the number of small and disadvantaged businesses (DBE) contracting with the federal, state and local government (including the private sector as well) by the year 2020.”

I had the opportunity to brief Governor Scott Cabinet at their recent meeting in St. Augustine and found them to be very receptive to the efforts of the FPA Think Tank to help them solve the State procurement dilemma. A letter outlining the potential state-wide deployment has been sent to the Governor and CFO Jeff Atwater and briefings with senior staff members are being planned. The deployment of a sustainable a public-private initiative (PPI) will not only help the State, but the City of Jacksonville create meaningful jobs.

If you believe, as I do, that everything is possible in America, help us by supporting our efforts with your elected officials. Yes you can make a difference!

Raul Espinosa has been recognized as ‘one of the nation top authorities in ‘diversity and inclusion’ in public procurement, a $3 Trillion marketplace. He was recently elected, by his peers in Northeast Florida as ‘Diversity Champion for 2013’ and will be honored at the 9th Annual Jacksonville Business Journal Diversity Luncheon on May 2nd. Raul can be reached through http://www.umbrellainitiative.org or through Twitter @umbrellaiorg

Small Business Contracting Goal Increased 23-25%

February 11, 2012 by Raul Espinosa No Comments

Small businesses could see themselves benefiting from new legislation being passed. To enforce that small busiensses contracring rules are followed, on Jan. 31 the Governemtn Efficiency Through Small Business Contracting Act was passed. This bill raises the annual government wide small busiensses contracting goal from 23% to 25%. This will benefit small buisnesses by  an addtional potential $11 billion being set aside for small business contracts. The problem is how will the increased 2% be enforeced when the current 23%  is rarely reached?

Legislatures are taking a stand to make sure contracts are set aside for small businesses. Rep Sam Grave’s, Government Efficiency thorough Small Business Contracting Act, is not only increasing the small businesses contracting goal by 2% but is also enforcing that the goal will be reached. To ensure the rules are followed new punishments will be placed on government officials not following the new small business contracting goals. The executives which don’t ad hear to the new goal could face losing their bonus pay or sabbatical. Other government officials such as Rep. Bill Owens have also took action to make sure contracting goals are reached, by creating a bill that will cut agencies by 10% for missing small businesses contracting goals.

 

 

Leveling the Playing Field for Minorities in Government Contracting

September 30, 2011 by Raul Espinosa No Comments

Article by Raul Espinosa -  At the request of the Senate Small Business Committee, the Umbrella Initiative and its Think Tank offered Congress five recommendations with which to bring accuracy and integrity to the tracking of contracts awarded to small and minority businesses. The letter said, ” the combination of misinformation, barriers plus a lack of academic procurement trainings has created mistrust in the government and has discouraged the participation of small and disadvantaged businesses in government contracting”.

The Umbrella Initiative is an out-of-the-box entrepreneurial initiative that involves private sector entrepreneurs, University professors and students in sustainable government contracting  projects that bring transparency to government contracting and create jobs. Its mission is “to double the number of small businesses contracting with the government by the year 2010″. Below are the Umbrella Initiative recommendations to Congress:

OMB – through the Data Quality Act (DQA) – must become responsible for bringing accuracy to the reporting of the contracting results with small and minority businesses. The ‘certification ‘ of the Agency procurement data, which OMB has put in place, by itself, will not prevent future blunders involving the Agencies data.

Private industry must be used to effectively interpret the government ‘s results in contracting with small and minority businesses. This belief, is shared by the Government Community of Technology Officers.

The SBA Size Standards must be simplified – as small businesses contractors have demanded through NaFCA – and all of its elements (i.e., size determination, size protests, penalties and enforcement) overhauled. Fixing one element without the other three is equivalent to fixing a flat tire on a car without an engine.

Academic procurement training – as opposed to government procurement training – is essential in the elimination of abusive procurement practices. Let’s face it, Procurement Officials will never admit their own barriers are a large part of the problem.

The participation level of small and minority businesses in government contracting is the only measurable tool that can validate the success or failure of the outreach efforts that are being undertaking. Funding and supporting such validation efforts, along with those which bring transparency, are badly needed.

The comments emphasized the fact that the procurement data Federal Agencies have been turning over to SBA to be made public through the SBA Report Card have been wrong ever since the SBA report Card was conceived. The Umbrella Initiative was conceived to bring transparency to public contracting, increase the participation of minority businesses and to create jobs that benefit underserved communities.

The SBA Report Card Inaccurate Data

The Umbrella Initiative provided the Senate Committee with an evaluation by the Florida Atlantic University Public Procurement Center confirming the methodologies used by the private sector to verify anomalies on the list of the Top 100 Contractors Receiving Small Business Contracts . Watchdog groups such as American Small Business League (ASBL) had claimed that 61 businesses which made the FY 2010 list were not small businesses, yet they were listed as having been awarded $8.8 B in small businesses contacts.

Daniel Gordon, the Administrator of the Office of Federal Procurement Policy (OFPP) at OMB on a May 31st, 2011 Directive to Agency Procurement Officials, admitted that, “Federal procurement data that is gathered by, reported, and entered by procurement agencies into information systems . . . is often incomplete, inaccurate, and untimely”.

The SBA Inspector General has also acknowledged the fact that the Federal Agencies known practice to take credit for small business contracts awarded to ineligible large firms is one of the SBA two biggest challenges. The second one is stopping large businesses from misrepresenting their size of status.

The Umbrella Initiative staff interviewed data intelligence service providers which admitted that only a few of the Agencies subscribe to private data providers and many in the contracting workforce have cautiously admitted to them their fear that the loss of  their jobs outweigh the advantages provided by those intelligence providers.

Roger Campos, President of the Minority Business Round Table (MBRT) on the recent OP-ED on the Federal Times, suggested for OMB to switch its attention from outreach to pressuring Federal Agencies to accelerate contracting with minority business so they can create jobs.

Given the public’s skeptical eye towards most claims the government makes on having achieved its annual small business contracting goals, it would be very wise for Agencies to embrace private sector providers to corroborate their achievements before they submit their data to SBA for Report Card.

A new OMB directive, put the place on March 31st, 2011, but not implemented on the data reported on the 2010 SBA Report Card, now requires that Agencies certify the accuracy of the procurement information they release, including the data for the SBA Report Card – on a POGO Guest Editorial in 2010 – to eliminate the misrepresentation of contracting results by Federal Agencies.

Contracting with Small Businesses at the Federal Level

Although the statutory share of Federal contracts to small businesses is 23% and SBA has admitted that Federal Agencies have failed at reaching that goal by averaging 21.5 – 22.6% over the past four years. The Umbrella Initiative Think Tank had estimated that the truth is more like 18.1 – 20.4% and those are huge differences when the totals involved have averaged $83.2B – $96.8B. Each percentage point represents $4 Billion dollars!

SBA Report Card  Data FY 2007 FY 2008 FY 2009 FY 2010
Federal Agencies Share Claimed $83.2B $ 93.3 B $96.8 B $97.9 B
Official Percentage of Total Claimed 21.5% $21.3% 21.8%

 

22.6%
Umbrella Initiative Unofficial Totals 18.3   -

19.4

18.1-

19.2%

 

18.5-

19.6%

19.3%-

20.4%

Transparency has demonstrated a 10-15% inaccuracy in the reporting of the data

Discouraging the Participation of Small and Minority Business

Dr. Carlton Lamar Robinson, Director of Research for the Umbrella Initiative and past President of the First Coast Black Chamber of Commerce said, “To further demonstrate the Federal Agencies, through their own barriers and misrepresentation of results, have been discouraging the participation of small and minority businesses in government contracting, the Umbrella Initiative released a chart of eligible small businesses are actually registered to do business with the Federal government’.

Small and Minority Business Participate in Government Contracting at the Federal Level

Latest U.S. Census Data Business Registered as of 03-2011 to contract with the Federal Government Umbrella Initiative Mission by 2010
Total Small Businesses 27.2M 482,262 (1.7%) 964, 524
Minority Businesses 5.8M 117,636 (2%) 235,272
Disadvantaged Businesses 21.1 M 260,860 (1.2%) 521,720

 

The State of Florida Example

The Umbrella Initiative intends to demonstrate how its solutions – developed through a procurement Think Tank – can effectively level the playing field and solve the disparities that currently exist, at the State and local levels, including increasing the level of participation.

Small Business Participation in Government Contracting in Florida

Latest Census and State Data Umbrella Initiative Mission by 2020
Total Florida Small Businesses 2.4M
Registered to Contract with the State 95,004 190,008
Registered as ‘Disadvantaged’ Business 7,280 14,560
Certified as ‘Minority’ Businesses 3,583 (<1%) 7,166

The State of Florida, according to our research, has 1,586 public entities issuing contracts, but only 32 of those entities publish their opportunities in one place and track the results. The tracking of the results, however, is such that it does not allow transparency to detect if disparities are involved. Many countries and municipalities, as a result, must spend millions on disparity studies to ascertain fair participation.

Ryan Reid, Director of Technology Services for the Umbrella Initiative and developer of Bidspeed an existing procurement portal built with the suppliers needs in mind. “The Umbrella Initiative selected our model to incorporate spokes that will bring transparency, accountability, and essential procurement services to small and minority businesses at the state and national level”.

In summary, the Umbrella Initiative is focused on bringing transparency and encouraging participation to prevent disparities and abusive procurement practices.

Read The Article »

Slides from “Let’s Do Business Florida”

June 17, 2011 by Raul Espinosa No Comments

Raul Espinosa, Ryan Reid, Dr. Thomas, and Fernando Galaviz presented the Umbrella Initiative at the “Let’s do Business Florida” event on June 16. The slides from the presentation can be downloaded here.

»Download Slides

Solutions to Public Contracting Disparities Unveiled

June 15, 2011 by Raul Espinosa No Comments

FORT LAUDERDALE, FL. – JUNE 16TH, 2011 – During an Economic Development Presentation at the Let’s Do Business Florida event , attended by over 500 minority leaders from across the State including State and Federal officials, Raul Espinosa, Founder of The Fairness in Procurement Alliance (FPA) and Managing Partner of The Umbrella Initiative acknowledged the Obama Administration for implementing a FPA recommendation made on an OP-ED , published by The Project on Government Oversight (POGO) on May 6th, 2010. The OP-ED detailed how OMB could assure accuracy in the reporting of the procurement data supplied by Federal Agencies for the SBA Report Card.

The presentation also detailed plans for a new Florida Procurement Portal which would bring transparency in the tracking of public contracts and create a unified procurement solution for the state’s 1,586 public entities that issue public contracts. The State of Delaware has just unveiled a similar solution, but with less than 2/3 of the proposed features Florida would benefit by. Lieutenant Governor, Jennifer Carroll, has said, “The Umbrella Initiative offers actual solutions with measurable results to a State dilemma the Governor intends to solve.”

The Umbrella Initiative is a public-private initiative conceived by the FPA Think Tank with a mission “to double the number of small and minority businesses contracting with the federal, state and local government by 2020.” Plans were also detailed, during the presentation, for the creation of a whole new industry in the state refurbishing containers into Distance Learning Classrooms and Global Disaster Units for deployment during international disasters. The industry will create 300 jobs every sixty days.

Transparency in Contracting

The Federal Agencies procurement data made public, thanks to Congressional Transparency, has shown to be off 10-15% each year since the SBA announced its Report Card to account for the share Federal Agencies spent in contracting with small and disadvantaged businesses.

“Although the statutory share in contracts to small businesses is 23% and Federal Agencies have admitted they have failed by averaging 21.5 – 21.8% over the past three years, the truth is more like 18.1 – 19.6% and those are huge differences when the totals have averaged $83.2B – $96.8B,” said Dr. Henry Thomas, co-founder of the Umbrella Initiative and former director of the Florida Center for Public and International Policy at UNF.

REPORT CARD DATA FY 2007 FY 2008 FY 2009
Federal Agencies Share Claimed $83.2B $93.3B $96.8B
Official Percentage of Total 21.5% $21.3% 21.8%
Umbrella Initiative Unofficial Totals 18.3 -19.4% 18.1-19.2% 18.5-19.6%

Daniel Gordon, the Administrator of the Office of Federal Procurement Policy (OFPP) at OMB on a Memo to Agency Procurement Officials, has admitted that, “Federal procurement data that is gathered by, reported, and entered by procurement agencies into information systems…is often incomplete, inaccurate, and untimely.”

Increasing Contracting Opportunities

“The procurement features The Umbrella Initiative has conceived represent a virtual mechanism for reaching out to multiple communities, including underserved markets, with contracting opportunities, trainings and access to credit,” said Dr. Carlton Lamar Robinson, Director of Research for the Umbrella Initiative and former President of the First Coast Black Chamber of Commerce in Jacksonville, FL. He added, “Access to information and education leads to teaming opportunities.”

Ryan Reid, Director of Technology Services for the Umbrella Initiative and developer of the Bidspeed Federal Portal said, “the features conceived by The Umbrella Initiative will bring transparency, education and a host of essential procurement services all under one umbrella.”

A distance learning center, an accurate database for tracking contracting results and one for reporting abusive procurement practices are but a few of new features that will become available. Small and disadvantaged businesses will no longer be kept in the dark and offered misinformation.”

Transparency and job creation in sight through state procurement

June 8, 2011 by Raul Espinosa No Comments

The following was published in the Jacksonville The Business Journal

The Fairness in Procurement Alliance Think Tank at the University of North Florida claims the last legislative action of the Florida Legislature’s 2011 session, giving the governor the authority to consolidate economic development efforts, reduce state bureaucracy, eliminate duplicate services and abolish burdensome regulations, will strengthen the infrastructure that supports the 2.4 million small and minority businesses in the state.

The think tank will now ask the governor for tools to achieve the full cooperation of all 1,586 Florida public agencies — including the city of Jacksonville — that issue public contracts with taxpayers’ dollars at the state, county and municipal levels. The Umbrella Initiative, a program conceived by the FPA Think Tank, would establish a Procurement Portal to bring transparency and accountability to the state’s contracting functions, including the One Florida Initiative, introduced by former Gov. Jeb Bush.

One Florida was supposed to improve minority contracting in the state through a “race-neutral” scheme. Unfortunately, “race-neutral” schemes have never worked because, among other things, they do not address tracking of contracts.

The Umbrella Initiative would change all of that through a Procurement Portal that would consolidate all public procurements and essential contracting services, including registration, certification and tracking of contracts, thus saving the state, including the city of Jacksonville, millions in duplicate services.

The city of Jacksonville, by law, must undertake a disparity study, because the city’s efforts to contract with small businesses owned by disadvantaged groups, including women and veterans as well as minorities, are not tracked and there have been alleged disparities in its procurement process. The Umbrella Initiative was crafted to prevent disparities from taking place.

Most importantly, the initiative will permit the involvement of university professors and students in the promotion and support of innovation, entrepreneurship and teaming of small businesses in the community to help create jobs.

Another Umbrella Initiative project, the C.E.L. Project, is about retrofitting useless containers into computer labs for developing countries and shelters for the homeless and victims of natural disasters, as in Haiti.

I just returned from taking a think tank delegation to the Dominican Republic, where we received preliminary approval to establish a pilot project based on the C.E.L. model to bring multidisciplinary distance-learning education and trades to all rural schools in the country. The think tank must now negotiate for a Jacksonville site, such as the abandoned Ford plant, to stage the retrofitting of the containers, a whole new industry for Jacksonville.

The C.E.L. project stands to create a minimum of 300 jobs for Jacksonville inner-city youth. We are grateful to Lt. Gov. Jennifer Carroll, who said, “The Umbrella Initiative offers actual solutions with measurable results to a state dilemma the governor intends to solve.”

Umbrella Initiative – Small Business Spotlight

May 13, 2011 by Raul Espinosa No Comments

The Umbrella Initiative was the Small Business Spotlight of the week on crowdSPRING:

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Umbrella Initiative OpEd in Jacksonville Times Union

May 12, 2011 by Raul Espinosa No Comments

The Jacksonville Times Union has published one of the Umbrella Initiative’s founders, Raul Espinoza, OP-ED, in support of Governor Scott’s proposed consolidation of economic development activities in the State. Read more »

FPA Think Tank Challenges Editorial

April 26, 2011 by Raul Espinosa No Comments

The FPA Think Tank at UNF has challenged a Miami Herald editorial which opposed the Governor’s efforts to consolidate the State’s economic development activities. The State’s current procurement policies, the Think Tank claimed, have done very little to encourage the participation of small and minority firms in state and local contracting in 1,586 agencies throughout the State. The proposed consolidation of economic development functions will make it easier to achieve the needed cooperation to implement The Umbrella Initiative with its mission “to double the number of small and minority firms contracting with the federal, state and local governments by the year 2020.”