Nightmare on Negotiation Street

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Nightmare on Negotiation Street

• NEGOTIATING FAIR SHARE OBJECTIVES

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Fair Share Objectives

• A fair share objective is an objective based on
  the capacity and availability of qualified,
  certified MBEs and WBEs in the relevant
  geographic market for the procurement categories
  of
• construction, -equipment
• services -supplies
• compared to the number of all qualified entities
  in the same market for the same procurement
  categories, adjusted, as appropriate, to reflect
  the level of MBE and WBE participation expected
  absent the effects of discrimination.

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Fair Share Objectives

• A fair share objective is not a quota.
• A fair share goal is a numerical aspirational
  goal.
• A recipient cannot be penalized for not meeting
  its fair share objectives

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ESTABLISHING A RELEVANT GEOGRAPHICAL AREA

• This area may be a geographical portion of a
  state, an entire state, or a multi-state area.
• Simply ask yourself, Where do I normally
  purchase my construction, equipment, service, and
  supply needs?

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DETERMINING THE BASE FIGURE USING AN
AVAILABILITY ANALYSIS

• Analyze the availability of qualified, certified
  MBEs and WBEs by utilizing directories, or
  bidders lists. SBA directories of certified
  firms, or DOT directories of certified firms are
  good sources.
• Separately divide the number of qualified,
  certified MBEs or WBEs by the number of all
  businesses to derive a base figure for the
  relative availability of MBEs or WBEs in the
  market. Census Bureau data can be used to
  determine the number of all businesses within the
  relevant geographic buying market.

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2002 Survey of Business Owners for Georgia-
Construction
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How to calculate the Fair Share Objectives
FORMULA Target Business/ All Business Base
Figure EXAMPLE WBEs 7079/ 101,718 0.0695 or
approximately 7 MBEs 13,946/101,718 0.137 or
approximately 13.7 sum of highlighted figures
(all minority firms)
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OTHER METHODS FOR DETERMINING THE BASE FIGURE

• Utilize data derived from a valid, applicable
  disparity study, no more than 10 years old.
• Use the approved fair share objective of another
  recipient, with the same or similar relevant
  geographic buying market, purchasing the same or
  similar items.

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OTHER METHODS FOR DETERMINING THE BASE FIGURE

• When using the Fair Share Objective of another
  EPA recipient, there must be adjustments made for
  differences in the markets, and in the
  recipients procurement program.
• Alternative methods may be used to determine a
  base figure for the overall objective. Any
  methodology chosen must be based on demonstrable
  evidence of local market conditions and be
  designed to ultimately attain an objective that
  is rationally related to the relative
  availability of MBEs and WBEs in the relevant
  geographic market.
• Prior to submission, the base figure should be
  further scrutinized for verifiable accuracy.

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ADJUSTING THE BASE FIGURE

• A recipient must examine the evidence available
  in its jurisdiction to determine required
  adjustments, if any, are needed to the base
  figure in order to arrive at the fair share
  objectives.
• The following are the different types of evidence
  that should be considered
• The current capacity of MBEs and WBEs to perform
  work under EPA financial assistance agreements
• Evidence from disparity studies conducted in
  relevant geographical areas.

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ADJUSTING THE BASE FIGURE

• The following are the different types of evidence
  that should be considered (continued)
• adjusted for differences in the local market and
  the recipients procurement program.
• A recipient may also consider available evidence
  from related fields that affect the opportunities
  for MBEs and WBEs to form, grow and compete.
  These include
• Statistical disparities in the ability of MBEs
  and WBEs to get the financing, bonding and
  insurance required to participate.
• Data on employment, self-employment, education,
  training and union apprenticeship programs as
  related to MBE/WBEs in the program.

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TIMING FOR FAIR SHARE OBJECTIVE SUBMISSION AND
EFFECTIVE DURATION

• A recipient must submit its proposed MBE and WBE
  fair share objectives and supporting
  documentation to EPA within 90 days after its
  acceptance of its financial assistance award.
• EPA must respond in writing to the recipients
  submission within 30 days of receipt, either
  agreeing with the submission or providing initial
  comments for further negotiation. Failure to
  respond within this time frame may be considered
  as agreement by EPA with the fair share
  objectives submitted by the recipient.
• MBE and WBE fair share objectives must be agreed
  upon by the recipient and EPA before funds may be
  expended for procurement under the recipients
  financial assistance agreement.
• FSO will remain in effect for three fiscal years
  unless there are significant changes to the data
  supporting the fair share objectives.

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EXEMPTIONS FROM FAIR SHARE NEGOTIATIONS

• Grant and loan recipients receiving a total of
  250K or less in EPA financial assistance in a
  given fiscal year.
• Tribal recipients of Performance Partnership
  Eligible grants under 40 CFR Part 35, Subpart B.
• There is a 3-year phase in period for the
  requirement to negotiate fair share goals for
  Tribal and Insular Area recipients.
• Technical Assistance Grants

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Negotiation Street is Now at a Close