SEP 30, 2021
Aldermen press for ways to grow diversity in city’s contracts, improve ‘deficient’ procurement website
Chief Procurement Officer Aileen Velazquez (second from left) answers questions during a budget hearing on Wednesday
The share of dollars being awarded to minority- and women-owned companies for city contracts has grown nearly across the board since 2020, but some aldermen continued pushing city leaders Wednesday on ways to grow the work it awards to minority contractors.
The City Council Committee on Budget and Government Operations grilled newly appointed Chief Procurement Officer Aileen Velazquez on how the department awards city contracts to diverse companies and whether officials plan to update the department’s website.
Under Mayor Lori Lightfoot’s proposed 2022 spending plan, the procurement department’s budget would grow from about $8.4 million allocated in 2021 to $10.3 million next year. The department is also set to add 12 new full-time employee positions and a new 26-member Office of Contracting Equity, set to replace the 19-member Certification and Compliance division.
From January to July of this year, the city has made $590.3 million in payments to “prime contractors” with 42 percent of those dollars going to minority- and women-owned firms (M/WBEs), Velazquez told aldermen on Wednesday.
Further broken down, Black-owned firms received 13 percent of the total payments the city made to contractors during the first seven months of the year, Hispanic-owned firms received 14 percent, Asian American firms received 9 percent and non-minority women-owned firms received 6 percent of the total awarded dollars.
Most of those numbers are higher than they were between January and September 2020, when 32 percent of contracts awarded by the city went to minority- and women-owned businesses, according to procurement officials. Last year, African American and Hispanic-owned firms each received 10 percent of the city’s spending on contracts, Asian American companies received 9 percent and non-minority women-owned businesses received 4 percent of the total awarded dollar.
Velazquez, who has only been in her position for about one week and has yet to be confirmed by City Council, told aldermen on Wednesday that while the numbers are "trending in the right direction...they're not where they need to be, and that is one of my objectives."
Prior to her appointment, Velazquez spent nine years as director of procurement for CNA Insurance.
Aldermen push to expand minority contracting
Ald. Jason Ervin (28), who continually pushes the city to increase its selection of minority-owned firms, probed Velazquez’s thoughts on awarding bids to minority businesses even if they are not the lowest bidders.
“We of course want to create the best value for our residents, but at the same time we also have some values that we want to uphold,” Ervin said.
Ervin asked if “when we’re going through a procurement process and see something that...may be a good fit for our city, that expresses the values that we want to see,” could the city “make a decision to say ‘no we want to do this,’ even though this individual may not be the lowest responsive bidder, but this fits our values more than what the lowest bidder may have.”
“Is that something we can look into?” Ervin said.
Velazquez told Ervin his suggestion “definitely is something that we could absolutely look into.”
Members of the City Council Latino Caucus have suggested in recent weeks that they could withhold votes for Lightfoot’s budget proposal if the city does not improve its record on Latino hiring and workforce programs.
Additionally, Velazquez unveiled more details about the department’s new Office of Contracting Equity.
"The intent here is to improve the tracking of M/WBE compliance and enforce commitments made by our prime contractors and conduct detailed audits,” she said.
Ald. Sophia King (4) suggested convening a “working group” including aldermen to “make the best out of that [office], because what we truly want is more equity.”
The City Council earlier this month voted (O2021-2865) to widen the reach of the city’s Minority- and Women-Owned Enterprise program and extend it through 2027.
Velazquez told aldermen on Wednesday that she "firmly support[s] modernizing our M/WBE program, which will better align our operations with developments seen in other major cities, and give us additional tools in our constant drive towards improvement."
Technology is another priority Velazquez listed for aldermen on Wednesday in response to questions from Ald. Scott Waguespack (32) about an "ongoing issue" with the procurement department’s website not being user-friendly and operating under a "deficient” system.
"I could go on right now...and pick one of several contracts where I can't find the payment details,” Waguespack said, adding there “has been an ongoing issue” with records not being found.
Procurement websites operated by other large cities have enhanced search capabilities, allow users to easily find vendors’ legal names and other entities or LLCs they use and contact information for principals, he said.
“It doesn't require me to go into the [Economic Disclosure Statement] and go down about 150 pages and figure out what the handwriting is for the principal that puts their name in there,” Waguespack said, referring to the city’s current system.
Velazquez told Waguespack that it is "critical" the public has access to the procurement website. "We should be an open book" with all information "readily available, easy to understand and easy to search,” she said.
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