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Home My Public Portal AboutMSD Disparity Study Executive SummaryMETROPOLITAN SEWER DISTRICT DISPARITY STUDY UPDATE EXECUTIVE SUMMARY (MARCH 2022) PREPARED BY Mason Tillman Associates, Ltd i Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary Table of Contents DISPARITY STUDY OVERVIEW......................................................................................1 STUDY TEAM .....................................................................................................1 PURPOSE ............................................................................................................1 STUDY METHODOLOGY ......................................................................................1 INDUSTRIES STUDIED .........................................................................................3 ETHNIC AND GENDER GROUPS STUDIED .............................................................3 PRIME CONTRACT DATA SOURCES .....................................................................3 SUBCONTRACT DATA SOURCES ..........................................................................4 CONTRACT THRESHOLDS ...................................................................................4 NOTABLE FINDINGS .....................................................................................................5 UTILIZATION ANALYSIS .....................................................................................5 MARKET AREA ANALYSIS ..................................................................................7 PRIME CONTRACT AND SUBCONTRACT AVAILABILITY ANALYSIS ........................8 DISPARITY ANALYSIS .........................................................................................9 REGRESSION ANALYSIS .................................................................................... 15 ANECDOTAL ANALYSIS .................................................................................... 15 RECOMMENDATIONS ........................................................................................ 16 1 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary Executive Summary Disparity Study Overview Study Team This Metropolitan St. Louis Sewer District (MSD) Minority and Woman Business Enterprise (MWBE) Update Disparity Study is MSD’s second-generation disparity study. The first disparity study, which measured the utilization of available MWBEs on MSD’s building construction, non- building construction, engineering professional services, non-engineering professional services, and goods and contractual services, was completed in 2012. The study documented a disparity in the award of prime contracts and subcontracts to available MWBEs. To address the documented disparity, the MSD Board of Trustees adopted an MWBE program with race and gender -based remedies and in 2019 authorized an update disparity study. This Update Disparity Study was commissioned to determine whether there is still evidence of disparity in the utilization of available MWBEs on MSD’s building construction, non-building construction, engineering professional services, and purchases and other services contracts. Local subconsultants Project Control Group and ADE Consulting Services assisted Mason Tillman in the performance of the update study. The subconsultants provided data collection and anecdotal interview services. MSD’s Manager of Diversity Programs, Shonnah Paredes, managed the study. Ms. Paredes was instrumental in facilitating Mason Tillman’s access to the procurement and contract data needed to perform the study. Under Ms. Paredes’ leadership, Mason Tillman was able to complete the study in a timely manner. Purpose The purpose of the study was to determine if minority and women-owned business enterprises (MWBEs) were underutilized in the award of MSD’s prime contracts and subcontracts during the January 1, 2013 to December 31, 2017 study period. Under a fair and equitable system of awarding contracts, the proportion of contract dollars awarded to MWBEs should be relatively close to the proportion of available MWBEs in the relevant market area. If either the available MWBE prime contractors or the available MWBE subcontractors are underutilized, a statistical test is conducted to calculate the probability of observing the empirical disparity ratio or any event that is less probable. Thus, the test performed determines if a finding of underutilization is statistically significant. Study Methodology Mason Tillman’s disparity study methodology is grounded in a thorough legal review. Its constitutionality has been upheld in two federal circuit courts.1 1 Kossman Contr. Co. v. City of Houston , 128 Fed. Appx. 376 (2005), Midwest Fence Corp. v. United States Dep’t of Transp., 84 F. Supp. 3d 705 (2015). 2 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary 1. Legal Framework The United States Supreme Court ruling in City of Richmond v. J.A. Croson Co.2 (Croson) and related case law provide the legal framework for conducting the disparity study. Specifically, Croson set the standard by which federal courts review both local and state government minority business enterprise programs. The Court affirmed the longstanding legal precedent that programs employing racial classification would be subject to “strict scrutiny,” which is the highest legal standard. Under Croson, government agencies, such as MSD, may adopt race-conscious programs only as a remedy for discrimination identified as statistically significant, and the remedy must impose a minimal burden upon unprotected classes. The Court held that an inference of discrimination can be made prima facie if the disparity is statistically significant.3 For this Disparity Study, this analysis was applied to MWBEs by ethnicity and gender within the four industries. 2. Critical Components Eight critical components were performed for MSD’s Update Disparity Study: • Legal review to define the evidentiary standard. • Collection of prime contract records to determine the extent to which MSD procured building construction, non-building construction, engineering professional services, and purchases and other services contracts from MWBEs and non-MWBEs. • Compilation of subcontract records to determine the extent to which MSD’s prime contractors procured building construction, non-building construction, and engineering professional services contracts from MWBEs and non-MWBEs. • Identification of the market area in which MSD spent its dollars. • Availability analysis to identify businesses in the market area that were willing and able to provide building construction, non-building construction, engineering professional services, and purchases and other services procured by MSD and its prime contractors. • Disparity analysis to determine if a statistically significant underutilization of MWBEs existed within each of the industries. • Regression analysis to examine three outcome variables—business ownership rates, business earnings, and business loan approval. • Anecdotal analysis to describe the contemporary experiences of business owners in the market area. • Recommendations to enhance current business practices and strategies to remedy any identified disparity. 2 City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989). 3 Id. 3 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary Industries Studied The analyzed contracts were classified into four industries: • Building Construction • Non-building Construction • Engineering Professional Services • Purchases and Other Services Ethnic and Gender Groups Studied The data in the study are disaggregated into eight ethnic and gender groups, which are listed in Table 1. Table 1: Business Ethnic and Gender Groups Ethnicity and Gender Category Definition African Americans Businesses owned by male and female African Americans Asian Americans Businesses owned by male and female Asian Americans Hispanic Americans Businesses owned by male and female Hispanic Americans Native Americans Businesses owned by male and female Native Americans Caucasian Females Businesses owned by Caucasian females Non-minority Male-owned Businesses Businesses owned by Caucasian males, and businesses that could not be identified as minority or female-owned Minority-owned Businesses Businesses owned by male and female African Americans, Asian Americans, Hispanic Americans, and Native Americans Woman-owned Businesses Businesses owned by females Prime Contract Data Sources The prime contract data consist of contract records extracted from MSD’s Oracle financial management system. The purchase orders were issued during the January 1, 2013 to December 31, 2017 study period. MSD’s prime contract data were normalized to conform into a consistent standard and combined to create a single prime contract dataset. Each unique record was defined by either a project number, contract number, or purchase order number. 4 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary The normalized prime dataset was scrubbed to remove duplicates, contracts awarded outside the study period, claims/reimbursements, payments to government, and non-profit entities. Purchases of proprietary commodities, as well as the maintenance and service of the proprietary commodities, were also excluded. The assignment of industry classifications was reviewed and approved by MSD. Each prime contract was classified into one of the four industries—building construction, non-building construction, engineering professional services, and purchases and other services. Subcontract Data Sources MSD’s online Diversity Reporting (MDR) system was the primary repository of subcontract records for the study period. The system, implemented in response to recommendations made in the 2012 Disparity Study, tracks award and payment data for the Capital Improvement and Replacement Project’s (CIRP) construction and engineering professional services contracts. Additional sources, such as Form C and contract administrator records, were used to compile subcontract data. Since some records were found in more than one source, the sources were ranked, and the data analyzed was retrieved from the highest ranked source. It is clear from the reconstructed data that the MDR system effectively captured most of the subcontracts awarded during the study period. Contract Thresholds MSD’s prime contracts awarded in each industry are analyzed at three size thresholds: 1) all prime contracts; 2) informal prime contracts, defined by MSD Purchasing Policy 3-2018 as those under $25,000; and 3) formal prime contracts valued from $25,000 to $8,270,000 for building construction and from $25,000 to $500,000 for non-building construction, engineering professional services, and purchases and other services. The threshold for the analysis of MSD’s informal prime contracts is defined by industry, pursuant to MSD’s Purchasing Policy 3-2018. The informal thresholds apply to non-building construction, engineering professional services, and purchases and other services contracts. The formal contract threshold, as defined in MSD’s purchasing policy, is $25,000 and greater. However, to ensure that the disparity analysis was not distorted by the presence of prime contracts that required significant capacity to perform, the formal contract size threshold was set at $8,270,000 for building construction and at $500,000 for non-building construction, engineering professional services, and purchases and other services, and the large prime contracts were removed. 5 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary Tables 2 and 3 present the informal and formal contract thresholds by industry. Table 2: Informal Contract Threshold by Industry Industry Informal Contract Threshold Building Construction Under $25,000 Non-Building Construction Under $25,000 Engineering Professional Services Under $25,000 Purchases and Other Services Under $25,000 Table 3: Formal Contract Threshold by Industry Industry Formal Contract Threshold Building Construction From $25,000 to $8,270,000 Non-Building Construction From $25,000 to $500,000 Engineering Professional Services From $25,000 to $500,000 Purchases and Other Services From $25,000 to $500,000 Notable Findings Utilization Analysis Mason Tillman documented MSD’s utilization of minority and women-owned business enterprise (MWBE) and non-minority, male-owned business enterprise (non-MWBE) prime contractors by ethnicity, gender, and industry during the January 1, 2013 to December 31, 2017 study period. MSD’s contracts examined were classified into four industries—building construction, non- building construction, engineering professional services, and purchases and other services. 1. Prime Contractor Utilization Analysis The prime contract utilization analysis examined prime contracts valued at $1,238,982,577 awarded by MSD during the January 1, 2013 to December 31, 2017 study period. The $1,238,982,577 expended included $30,684,903 for building construction, $917,808,132 for non- building construction, $279,103,076 for engineering professional services, and $11,386,466 for purchases and other services. A total of 2,749 prime contracts were analyzed, which included seven for building construction, 890 for non-building construction, 299 for engineering professional services, and 1,553 for purchases and other services. 6 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary The utilization analysis was performed for prime contracts in the four industries at three dollar thresholds: 1) all prime contracts regardless of award amount; 2) all informal prime contracts valued under $25,000 for non-building construction, engineering professional services, and purchases and other services as defined by MSD’s purchasing policy; and 3) formal prime contracts valued from $25,000 to $8,270,000 for building construction and from $25,000 to $500,000 for non-building construction, engineering professional services, and purchases and other services. Table 4 presents a summary of prime contractor utilization by industry and percent of d ollars awarded by ethnicity and gender. Table 4: Prime Contractor Utilization Summary by Industry Ethnicity Building Construction Non-Building Construction Engineering Professional Services Purchases and Other Services African Americans 1.68% 1.61% 9.10% 18.40% Asian Americans 0.00% 0.00% 0.00% 1.84% Hispanic Americans 0.00% 1.20% 0.04% 0.00% Native Americans 0.00% 0.07% 0.00% 0.00% Caucasian Females 0.00% 3.37% 1.11% 29.16% Non-minority Males 98.32% 93.75% 89.75% 50.59% 2. Subcontractor Utilization Analysis The subcontract records were compiled using a process involving three sources. The primary source from which the majority of the subcontracts were secured was the MDR system. Subcontract records were also extracted from Form C and project files. A total of 2,527 subcontracts were identified, including 101 for building construction, 2,173 for non-building construction, and 253 for engineering professional services. The building construction, non- building construction, and engineering professional services subcontract records compiled and analyzed were valued at $388,761,711. The $388,761,711 included $16,587,434 for building construction, $279,266,674 for non-building construction, and $92,907,603 for engineering professional services. 7 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary Table 5 presents a summary of subcontractor utilization by industry and percent of dollars awarded by ethnicity and gender. Table 5: Subcontractor Utilization Summary by Industry Ethnicity Building Construction Non-Building Construction Engineering Professional Services African Americans 20.66% 52.41% 22.68% Asian Americans 0.00% 0.01% 5.69% Hispanic Americans 0.51% 0.82% 9.01% Native Americans 1.41% 0.09% 0.02% Caucasian Females 6.49% 7.92% 22.08% Non-minority Males 70.94% 38.75% 40.52% Market Area Analysis Although Croson and its progeny do not provide a bright line rule for the delineation of the local market area, taken collectively, the case law supports a definition of the market area as the geographical boundaries of the government entity. Given MSD’s jurisdiction, the study’s market area is determined to be the geographical boundaries of the City of St. Louis and St. Louis County. During the study period, MSD awarded 2,749 building construction, non-building construction, engineering professional services, and purchases and other services prime contracts valued at $1,238,982,577. Businesses domiciled within the market area were awarded 2,147 of the prime contracts and $631,836,206. Following is a breakdown of these contracts according to industry: Building Construction Prime Contracts: 4 or 57.14% of building construction prime contracts were awarded to market area businesses. Building construction prime contracts in the market area accounted for $4,088,353 or 13.32% of the total building construction prime contract dollars. Non-Building Construction Prime Contracts: 571 or 64.16% of non-building construction prime contracts were awarded to market area businesses. Non-building construction prime contracts in the market area accounted for $342,247,599 or 37.29% of the total non-building construction prime contract dollars. Engineering Professional Services Prime Contracts: 298 or 99.67% of engineering professional services prime contracts were awarded to market area businesses. Engineering professional services prime contracts in the market area accounted for $279,003,076 or 99.96% of the total engineering professional services prime contract dollars. Purchases and Other Services Prime Contracts: 1,274 or 82.03% of purchases and other services prime contracts were awarded to market area businesses. Purchases and other services prime contracts in the market area accounted for $6,497,178 or 57.06% of the total purchases and other services prime contract dollars. 8 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary Prime Contract and Subcontract Availability Analysis The prime contract and subcontract availability analysis presents the enumeration of willing and able market area businesses by ethnicity, gender, and industry. The capacity of the enumerated businesses was assessed using four methods: 1) A review of MSD’s contract size distribution, to identify the capacity needed to perform most MSD contracts; 2) A determination of the largest contracts MSD awarded to MWBEs to illustrate the capacity within the dataset of available businesses; 3) A threshold analysis that defined the formal contracts with a dollar value from $25,000 to $8,270,000 for building construction and from $25,000 to $500,000 for non -building construction, engineering professional services, and purchases and other services to ensure that the disparity analysis was not distorted by the presence of prime contracts that required significant capacity to perform; and 4) A business capacity analysis that assessed relevant socioeconomic factors that defined the socioeconomic profile of MWBEs and similarly situated non-minority males. The findings from these analyses illustrate that most of MSD’s prime contracts were relatively small. Furthermore, the findings demonstrate the available MWBEs have a socioeconomic profile comparable to similarly situated non-minority, male-owned businesses and demonstrated capacity to perform large MSD contracts. In the availability dataset, minority-owned businesses account for 39.37% of building construction, non-building construction, engineering professional services, and purchases and other services prime contractors. Caucasian female-owned businesses account for 21.25%, and non-minority male-owned business account for 39.37%. Table 6 presents prime contractor availability according to ethnicity, gender, and industry. The prime contractor availability analysis is based on willing market area businesses enumerated from availability sources: MSD utilization, government certification lists, and business and trade association membership lists. Table 6: Prime Contractor Availability Analysis Ethnicity Building Construction Non-Building Construction Engineering Professional Services Purchases and Other Services African Americans 28.98% 27.01% 20.92% 31.82% Asian Americans 1.59% 0.73% 6.69% 3.57% Hispanic Americans 4.78% 2.92% 5.86% 4.22% Native Americans 1.27% 0.73% 2.09% 1.95% Caucasian Females 16.24% 15.33% 23.43% 24.68% Non-minority Males 47.13% 53.28% 41.00% 33.77% 9 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary Table 7 presents subcontractor availability according to ethnicity, gender, and industry. Subcontractor availability was not calculated for purchases and other services, as the subcontracting activity in that industry was limited. Table 7: Subcontractor Availability Analysis Ethnicity Building Construction Non-Building Construction Engineering Professional Services African Americans 35.77% 31.20% 36.39% Asian Americans 3.16% 3.11% 4.99% Hispanic Americans 4.62% 3.91% 5.31% Native Americans 1.09% 0.98% 1.45% Caucasian Females 19.22% 17.69% 26.73% Non-minority Males 36.13% 43.11% 25.12% Disparity Analysis A disparity analysis was performed on all prime contracts and subcontracts awarded during the study period. Disparity was found at both the prime contract and subcontract levels for several ethnic and gender groups. 10 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary 1. Prime Contracts a) Building Construction Prime Contracts As indicated in Table 8, there were too few contracts awarded to determine the statistical significance for prime contractors on building construction contracts valued $25,000 to $8,270,000. Table 8: Disparity Summary: Building Construction Prime Contract Dollars, January 1, 2013, to December 31, 2017 Ethnicity/Gender Building Construction Contracts Valued from $25,000 to $8,270,000 African Americans No Disparity Asian Americans No Disparity Hispanic Americans No Disparity Native Americans No Disparity Caucasian Females Underutilized Minority-owned Businesses No Disparity Woman-owned Businesses Underutilized 11 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary b) Non-Building Construction Prime Contracts As indicated in Table 9, disparity was found for African American, Hispanic American, Caucasian female, minority-owned business, and woman-owned business prime contractors on non-building construction contracts valued under $25,000. Disparity was also found for African American, Caucasian female, minority-owned business, and woman-owned business prime contractors on non-building construction contracts valued from $25,000 to $500,000. Table 9: Disparity Summary: Non-Building Construction Prime Contract Dollars, January 1, 2013, to December 31, 2017 Ethnicity/Gender Non-Building Construction Contracts Valued under $25,000 Contracts Valued from $25,000 to $500,000 African Americans Disparity Disparity Asian Americans No Disparity No Disparity Hispanic Americans Disparity No Disparity Native Americans No Disparity No Disparity Caucasian Females Disparity Disparity Minority-owned Businesses Disparity Disparity Woman-owned Businesses Disparity Disparity 12 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary c) Engineering Professional Services Prime Contracts As indicated in Table 10, disparity was found for Asian American, Hispanic American, Native American, and Caucasian female prime contractors on engineering professional services contracts valued under $25,000. Disparity was also found for Asian American, Caucasian female, minority- owned business, and woman-owned business prime contractors on engineering professional services contracts valued from $25,000 to $500,000. Table 10: Disparity Summary: Engineering Professional Services Prime Contract Dollars, January 1, 2013, to December 31, 2017 Ethnicity/Gender Engineering Professional Services Contracts Valued under $25,000 Contracts Valued from $25,000 to $500,000 African Americans No Disparity No Disparity Asian Americans Disparity Disparity Hispanic Americans Disparity No Disparity Native Americans Disparity No Disparity Caucasian Females Disparity Disparity Minority-owned Businesses No Disparity Disparity Woman-owned Businesses No Disparity Disparity 13 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary d) Purchases and Other Services Prime Contracts As indicated in Table 11, disparity was found for African American, Asian American, Hispanic American, Native American, and minority-owned business prime contractors on purchases and other services contracts valued under $25,000. Disparity was found for woman-owned business prime contractors on purchases and other services contracts valued from $25,000 to $500,000. Table 11: Disparity Summary: Purchases and Other Services Prime Contract Dollars, January 1, 2013, to December 31, 2017 Ethnicity/Gender Purchases and Other Services Contracts Valued under $25,000 Contracts Valued from $25,000 to $500,000 African Americans Disparity No Disparity Asian Americans Disparity No Disparity Hispanic Americans Disparity No Disparity Native Americans Disparity No Disparity Caucasian Females No Disparity Underutilized Minority-owned Businesses Disparity No Disparity Woman-owned Businesses No Disparity Disparity 14 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary 2. Subcontracts As indicated in Table 12, disparity was found for African American, Asian American, Hispanic American, Caucasian female, minority-owned business, and woman-owned business building construction subcontractors. Disparity was also found for Asian American, Hispanic American, Caucasian female, and woman-owned business non-building construction subcontractors. For engineering professional services disparity was found for African American, Native American, and minority-owned business subcontractors. Caucasian females and woman-owned businesses were substantially underutilized, albeit not at a statistically significant level. Table 12: Subcontract Disparity Summary, January 1, 2013 to December 31, 2017 Ethnicity/Gender Building Construction Non-building Construction Engineering Professional Services African Americans Disparity No Disparity Disparity Asian Americans Disparity Disparity No Disparity Hispanic Americans Disparity Disparity No Disparity Native Americans No Disparity No Disparity Disparity Caucasian Females Disparity Disparity Underutilized Minority-owned Businesses Disparity No Disparity Disparity Woman-owned Businesses Disparity Disparity Underutilized 15 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary Regression Analysis Regression analysis is the methodology employed to ascertain whether there are private sector economic indicators of discrimination in MSD’s market area that could impact the formation and development of MWBEs. The industries of focus for the three regression analyses are construction, professional services, and goods and other services. Due to sample size issues, the professional services industry includes architecture and engineering businesses. Three regression analyses were conducted to determine whether there were factors in the private sector which might help explain any statistical disparities between MWBE availability and utilization identified in the disparity study. The three analyses examined the following outcome variables—business ownership, business earnings, and business loan approval. All analyses take into consideration race and gender-neutral factors such as age, education, and creditworthiness in assessing whether the explanatory factors examined are disproportionately affecting minorities and females when compared to similarly situated Caucasian males. The Business Ownership Analysis and the Earnings Disparity Analysis used data from the 2007 through 2010 PUMS datasets for the City of St. Louis and St. Louis County, and compared business ownership rates and earnings for MWBEs to those of similarly situated Caucasian males. The Business Loan Approval Analysis used the 2003 NSSBF dataset and compared business loan approval rates for MWBEs to those of similarly situated Caucasian males. Anecdotal Analysis The importance of anecdotal evidence in assessing the presence of discrimination in a geographic market area was identified in the landmark Croson case. The Court held that a pattern of individual discriminatory acts can explain the statistical disparity findings. However, such acts cannot be used to determine the presence of discrimination in a government’s contracting process. The anecdotal testimonies collected from business owners describing their perceptions of barriers in the market area were used to define best management practices to improve MWBEs’ access to MSD contracts. The results of the anecdotal analysis from this Update Disparity Study were compared to anecdotal findings from MSD’s 2012 Disparity Study in Tables 13 and 14 below. The business owners who participated in the anecdotal analysis for the 2012 study described the barriers they encountered working on or attempting to work on an MSD project. The barriers identified are listed in Table 13 below. Table 13: Barriers Reported in 2012 MSD Disparity Study Barriers Reported in MSD 2012 Disparity Study Racial barriers Harassment Subjected to higher standards of review Difficulty breaking into the contracting community Difficulty meeting pre-qualification requirements Bid shopping Inadequate lead time to respond to solicitations Difficulty negotiating supplier agreements Knowledge of MWBE fronts Certification process challenges Late payments Barriers to financial resources 16 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary Table 14: Barriers Reported in 2021 MSD Disparity Study Barriers Reported in MSD 2021 Disparity Study Racial barriers and sexism Difficulty breaking into the contracting network Good old boy network Difficulty navigating the bid process Excessive certification procedures Barriers to financing Late payments Both the 2012 and 2021 MSD disparity studies presented a qualitative analysis of the barriers and exemplary practices business owners experienced while working with or seeking work from MSD. The interviewees were identified from business community meetings, certification directories, and outreach efforts. The anecdotes were solicited through one-on-one interviews and the public comment period at the business community meetings. The interviewees that participated in the 2021 anecdotal analysis referenced fewer barriers to accessing MSD contracts. The 2021 participants did not report issues with pre-qualification requirements, bid shopping, inadequate lead time, or issues with supplier agreements. Business owners from both studies provided commendations to the mission and services of MSD’s Supplier Diversity Program. Recommendations were offered to further enhance the program’s effectiveness in fulfilling its mission. This anecdotal information, together with the statistical findings informed the remedies presented in Chapter 10: Recommendations. Recommendations 1. Race and Gender-Conscious Recommendations The proposed race and gender-conscious remedies are based on the disparity findings and only apply to the ethnic and gender groups in the industries in which they were statistically significantly underutilized. a) Prime Contract Remedies MSD should implement prime contract remedies for ethnic and gender groups that have statistically significant disparity. The following remedies were offered to address the disparity in the award of prime contracts: • Establish incentive credits for engineering professional services and non-engineering professional services prime contracts. 17 Mason Tillman Associates, Ltd. March 2022 Metropolitan St. Louis Sewer District Update Disparity Study Executive Summary b) Subcontract Remedies MSD should implement subcontract remedies for ethnic and gender groups that have statistically significant disparity. The following remedies were offered to address the disparity in the award of subcontracts: • Set subcontract MWBE goals. • Revise certified MWBE participation requirements for truckers. 2. Race and Gender-Neutral Recommendations Race and gender-neutral recommendations are offered to enhance the procurement process and remove program barriers that minority, women, and small businesses encountered when attempting to do business with MSD. As proposed, these recommendations do not require findings of statistically significant disparity to be implemented. However, they would increase the capacity of MWBEs and other small businesses to do business with MSD and its prime contractors. • Implement a Mentor-Protégé Program. • Implement a Sheltered Market Program. • Enhance the contract solicitation process. • Modify the electronic subcontract tracking system. Appendix A: Structure of the Report The Disparity Study findings are presented in 10 chapters as briefly described below. • Chapter 1: Legal Review presents the case law applicable to business affirmative action programs and the required methodology based on the relevant law. • Chapter 2: Prime Contractor Utilization Analysis presents the distribution of prime contractor purchase orders by industry, ethnicity, and gender. • Chapter 3: Subcontractor Utilization Analysis presents the distribution of subcontracts by industry, ethnicity, and gender. • Chapter 4: Market Area Analysis presents the legal basis for determining the geographic market area and defines MSD’s market area. • Chapter 5: Prime Contractor and Subcontractor Availability Analysis presents the distribution of available businesses in MSD’s market area. • Chapter 6: Prime Contract Disparity Analysis presents prime contractor utilization as compared to prime contractor availability by industry, ethnicity, and gender, and evaluates the statistical significance of any underutilization. • Chapter 7: Subcontract Disparity Analysis presents subcontractor utilization compared to subcontractor availability by industry, ethnicity, and gender, and evaluates the statistical significance of any underutilization. • Chapter 8: Regression Analysis examined three outcome variables to determine whether MSD is passively participating in ethnic and gender discrimination. • Chapter 9: Anecdotal Analysis presents the business community’s perceptions of barriers and exemplary practices encountered in contracting or attempting to contract with MSD. • Chapter 10: Recommendations presents race and gender-conscious and race and gender- neutral remedies to enhance MSD’s procurement policies and procedures, as well as its contracting with MWBEs and other small businesses. www.mtaltd.com