Title
Proposed GLWA Procurement Policy Amendment
Body
Agenda of: June 28, 2023
Item No.: 2023-233
Amount: N/A
TO: The Honorable
Board of Directors
Great Lakes Water Authority
FROM: Suzanne R. Coffey, P.E.
Chief Executive Officer
Great Lakes Water Authority
DATE: June 28, 2023
RE: Proposed GLWA Procurement Policy Amendment
MOTION
Upon recommendation of Nicolette Bateson, Chief Financial Officer/Treasurer, Financial Services, the Board of Directors (Board) of the Great Lakes Water Authority (GLWA), approves the Proposed Amendment to the Procurement Policy with an immediate effective date and authorizes the Chief Executive Officer (CEO) to take such other action as may be necessary to accomplish the intent of this vote.
BACKGROUND
In the Board adopted Procurement Policy <https://glwa.wpenginepowered.com/wp-content/uploads/2018/06/GLWA-Procurement-Policy-10.26.22.pdf>, GLWA’s Business Inclusion and Diversity (B.I.D.) Program provides for both a "Business Inclusion & Diversity Plan” (Section 4.6) (scored as pass or fail) and a “Economic Equity and Development” (Section 4.7) (scored according to a three point criteria). These provisions are included below.
4.6 Business Inclusion and Diversity Plan
GLWA is committed to providing business opportunities to vendors who honor the values of inclusion and diversity in selecting their business partners. To foster these values, the solicitation selection will require vendors to submit, for all solicitations budgeted at $1 million or more, a Business Inclusion & Diversity Plan that addresses their efforts to include Minority-owned Business Enterprise (MBE), Woman-owned Business Enterprise (WBE), Small Business Enterprise (SBE), and Socially and Economically Disadvantaged Business Enterprise (DBE) subcontractors.
a. In support of this commitment, the vendor agrees to ensure that, with regard to any contract entered into pursuant to this procurement policy, inclusion and diversity business enterprises will be afforded full opportunity and will not be discriminated against on the basis of race, color, gender, age, disability, religion, ancestry, marital status, sexual orientation, national origin or place of birth. In recognition of this, the vendor will take steps to ensure maximum participation by qualified diversity businesses in a manner and to the degree that it equals or exceeds standards for its other customers and/or clients.
b. The vendor shall provide methods to maximize opportunity for diversity participation and reporting methods that indicate firms invited, firms recommended for award and other pertinent information.
4.7 Economic Equity and Development
As a regional water authority, GLWA is committed to providing economic development opportunities to the state of Michigan and Territory Area and in both services provided and as a partner to the business community.
a. To foster economic development, for all solicitations, solicitation scoring scales will include the following for a business presence:
i. State of Michigan 1%
ii. Territory Area 1%, with a cumulative total of 2% for Territory Area and state business presence
iii. Disadvantaged GLWA Territory business enterprise 1%, with a cumulative total of 3% for Territory Area, state, and disadvantaged business presence within Territory area.
b. State business presence is defined as those businesses that would be eligible as a Certified Michigan Based Business as defined by the State of Michigan law as administered by the Department of Technology, Management, & Budget.
c. This section does not prohibit action that must be taken to establish or maintain eligibility for any federal program if ineligibility would result in a loss of federal funds to the state.
JUSTIFICATION
Due to a peak in potential federal grant funding opportunities, the Procurement Team has conducted a proactive assessment of all current policies, procedures, and programs to identify those that may conflict with federal grant requirements. The purpose of this review is to reduce risk of forfeiting rare federal funding dollars as a result of business process or other related compliance matters.
Provision 4.7(a) and (b) conflicts with federal guideline requirements which prohibit the use of location-based preference policies in the award of a contract. Under provision 4.7(a), percentage points are awarded to the vendor’s overall score based on their geographical presence in the state of Michigan, GLWA’s service area, and in certain designated economically disadvantaged areas within GLWA’s service area.
As noted in GLWA’s Procurement Policy, provision 4.7(c) “does not prohibit action that must be taken to establish or maintain eligibility for any federal program if ineligibility would result in a loss of federal funds to the state.” The challenge is that the source of a project’s funding is not always clear at the time of a solicitation’s formal advertisement. We have come across this type of issue in the past year, and were able to successfully navigate through the matter, but likely would not prevail in the future. For this reason, we are recommending the removal of this provision 4.7 for geographic presence in its entirety at this time. We would continue to track this information and report it in the monthly B.I.D. report that is presented to the Audit Committee (a copy of the June 2023 Business Inclusion & Diversity report is attached). It should also be noted that provision 4.7 has made a difference in the vendor awarded on one occasion out of 66 solicitations since scored geographic location requirements were established.
Provision 4.6 of GLWA’s B.I.D. Program, which requires vendors to submit a written document detailing efforts to include small, disadvantaged, and minority-owned businesses as subcontractors for all solicitations budgeted at $1 million or more, does not conflict with federal guideline requirements and will remain an active component of the B.I.D requirements as it is not scored criteria that impacts vendor selection by awarding points.
Therefore, if the Board adopts this proposed amendment to the Procurement Policy, beginning July 1, 2023, provision 4.6 will continue to be applied to all formal GLWA solicitations and provision 4.7 will no longer be applied during the evaluation and scoring of B.I.D. Program qualifying solicitations.
A marked-up version of the GLWA Procurement Policy with proposed changes follows this Board Letter.
FINANCIAL PLAN IMPACT
None.
COMMITTEE REVIEW
This item was presented to the Audit Committee at its meeting on June 26, 2023. The Audit Committee unanimously recommended that the Board of Directors for the Great Lakes Water Authority adopt the proposed amendment to the Procurement Policy with an immediate effective date.
SHARED SERVICES IMPACT
This item does not impact the shared services agreement between GLWA and DWSD.