COMMISSION 
AGENDA MEMORANDUM                Item No.       7e 
BRIEFING ITEM                   Date of Meeting    October 24, 2017 
DATE:    September 25, 2017 
TO:     Dave Soike, Interim Executive Director 
FROM:   Aaron Pritchard, Commission Issue and Policy Manager 
Teresa Delicino, Director, Small Business Development 
Nora Huey, Director, Central Procurement Office 
SUBJECT: Port of Seattle Women and Minority Business Enterprise Policy 
EXECUTIVE SUMMARY 
The Port of Seattle Commission is currently reviewing a proposed Women and Minority
Business Enterprise (WMBE) policy to promote equity in Port contracting. The policy is designed 
to increase the Port's utilization of Woman and Minority Owned Business Enterprises.
Increased utilization means increasing both the amount of contracting dollars paid to WMBE
firms as well as to increase the number of WMBE firms under contract to the Port. The
Commission is currently scheduled for first reading on the proposed policy on November 14,
2017. 
The Port of Seattle has sought to increase women and minority business enterprise (WMBE)
participation in Port contracting since 2003, with two race-neutral Resolutions, 3506 and 3618, 
and one disparity study (completed in 2014), with very limited success. While the Port's data
collection has not been consistent, it appears as though the Port is currently around a 5% level
of women and minority business utilization. The Port's 2014 disparity study of over 1000
construction and construction related service contracts validated a substantial disparity in Port
WMBE contracting. 
The March 20, 2017 Attorney General opinion on use of race based preferences on state
contracting stated that I-200 allows the use of measures that take race or gender into account,
without elevating a less qualified contractor. The opinion also identified the narrow
circumstances when narrowly tailored race and gender based preference could be available to 
remedy demonstrated discrimination or when it was necessary to avoid losing federal funds. 
The Port must improve its WMBE contracting numbers. Port staff recommends creating a new
small business policy focused on women and minorities to include a Port-wide Annual WMBE
plan, division level goals, contract specific WMBE inclusion plans with enhanced compliance,
and prompt payment measures. The proposed policy requires affirmative efforts to increase
WMBE utilization by the Port and businesses that contract with the Port.

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. 7e                       Page 2 of 6 
Meeting Date: October 24, 2017 
Commission staff proposes that policy sunset in four years to place a premium on the
importance of results. The four year time-frame would create a sense of urgency and
accountability, with internal audit available to review the results. The four year time-frame 
would also bookend the passage of the policy by 2018 and 2021 disparity studies. While a
disparity study alone is not necessarily sufficient to justify a race or gender based preference,
the study could be used to build a case for race and gender preferences if the Port is unable to
attain its WMBE contracting goals after four years. 
At the sunset review date, the Commission would have the opportunity to scrutinize the data
over time, review the goals, and make a well-reasoned decision as to whether to extend the
program or whether race and gender based preferences were appropriate. While the Attorney
General calls the circumstances that would allow for preferences "strikingly rare," the proposed
policy could at least satisfy the element of "exhausting all race and gender neutral avenues 
towards parity." Staff, however, believes that the policy proposed today will help the Port close
the disparity in Port contracting. 
Background 
In 1999, the state codified I-200 under RCW 49.60.400. In brief, the RCW says that the state
shall not discriminate against, or grant preferential treatment to, any individual or group on
the basis of race, sex, color, ethnicity, or national origin in the operation of public employment,
public education, or public contracting. 
In 2003, in response to I-200, the Port passed Resolution 3506, its first small business resolution
that included a race neutral approach to increasing small business, women and minority
business participation: "establishing a program to develop mutually advantageous business
relationships with small businesses, and firms owned and operated by minorities, women and
disabled." 
The resolution set a goal of $20 million or 10% of all goods and services from qualified small
businesses  a definition that included small, minority, women and emerging small businesses,
with future targets set by the CEO and approved by the Commission. Quarterly reports were
required to document expenditures. Data was to be collected "as deemed reasonable." In
practice, the tracking of small business participation was done by staff as an "add-on" or
"extra" task. Information was extracted from either (a) the Port payment system in which case
only direct payments were tracked; or (b) contract data system (CDS) which tracked payments
to prime contracts and subcontracts for construction contracts.. The Port operated under this 
policy for seven years. Very little of this data is readily available today. 
In 2010, the Port of Seattle passed Resolution 3618, "a program to develop mutually
advantageous business relationships with small businesses including those owned and operated
by people of color, women, people with disabilities, veterans, and the socio-economically
disadvantaged." The resolution focused on the Small Contractor and Supplier (SCS) Program

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COMMISSION AGENDA  Briefing Item No. 7e                       Page 3 of 6 
Meeting Date: October 24, 2017 
with attendant efforts around outreach and programs to support SCS firm's capacity to work
with the Port. It also instructed the Port to develop, implement, and operate a system of data
collection. 
The SCS program included a mandatory 5% pricing incentive for SCS firms, mandatory utilization
requirements, proposal evaluations versus low-bid, and set a smaller size for "small business"
than the national standard. Implementation included annual Port-wide participation goals,
division level goals and mandatory education and training. The Office of Social Responsibility
was tasked with goal setting, monitoring and reporting on the program, as well as tracking
ethnic groups, and data for professional services and purchased goods. Voluntary WMBE goals
for major construction projects were authorized but not required. 
In 2014, the Port released the results of its disparity study. The Port's disparity study analyzed
construction  and construction services contracts including 344 prime contracts and 704
subcontractors during the study period of January 1, 2010 through September 30, 2014. The 
findings showed a combined utilization of Minority and Women Business Enterprises (MBE and
WBE) disparity index of 56. An index of 100 signifies parity with the availability of businesses in
the marketplace. A disparity index less than 80 is considered substantial. A single black-owned
business received the majority of the construction dollars in that ethnic category. If that
business is not included, the disparity index for Black American owned business would have
been 24. 
The Attorney General recently offered an opinion on I-200 that is relevant to the Port's minority
business participation and disparity study results. The question was posed by the Department
of Enterprise Services Director Chris Liu to the Attorney General: 
Does I-200 prohibit the state from implementing race or sex- conscious measures to address
significant disparities in the public contracting sector that are documented in a disparity study
if it is first determined that race and sex-neutral measures will be insufficient to address those
disparities? 
"Initiative 200 does not categorically prohibit all uses of race- or sex-conscious measures in
state contracting. The measure allows the use of measures that take race or gender into
account in state contracting without elevating a less qualified contractor over a more qualified
contractor." 
Under this standard the Port could use race as a tie-breaker for equally qualified firms, or
conduct outreach, training and set aspirational goals targeted to women- and minority-owned
firms, or other measures designed to increase participation in public contracting by
underrepresented groups. 
"In narrow circumstances, an agency may be allowed to use a narrowly tailored preference
based on race or sex when no other means is available to remedy demonstrated discrimination

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. 7e                       Page 4 of 6 
Meeting Date: October 24, 2017 
in state contracting. State agencies may also employ race- or sex-based preferences when
necessary to do so in order to avoid losing eligibility for programs providing federal funds." 
The Port of Seattle must "exhaust available alternatives to the use of preferences." Currently
the Port race-neutral policies including training and outreach have not remedied a disparate
impact over 14 years, a result that was validated by our 2014 disparity study. However, the
current proposal has shown results for the City of Seattle and could, if properly and vigorously
implemented, and bookended by Port-wide disparity studies, change the trajectory of the Ports
WMBE contracting. If not, the Port may be  able to build the "strong basis in evidence"
necessary to illuminate the exceedingly narrow circumstances where preferences may be
applicable. 
Current Efforts to Improve WMBE and Small Business Contracting 
In an effort to promote equity in Port contracting, staff is making a significant effort to identify
best practices in the utilization of WMBE's. Increased utilization means increasing both the
amount of contracting dollars paid to WMBE firms as well as to increase the number of WMBE
firms under contract to the Port. 
Commissioners Bowman and Albro held a stakeholder meeting on May 22nd titled "Advancing
Small Business opportunities at the Port. The attendees offered insight into barriers and current
opportunities at the Port. Those recommendations were incorporated into how the Port does
business including changing the size of IDIQ contracts and insurance requirements. 
The follow up small business roundtable focused on what policies are needed at the Port to
improve minority contracting. The attendees largely focused on the data that was presented
and the need for better accounting of how the Port is currently performing for minority
businesses. 
As part of this initiative staff has already implemented several steps to improve overall
outreach and contracting processes for small business: 
The Port has expanded and continues to offer "PortGen" training sessions for small
businesses. Over the past nine months the Port has held 11 PortGen sessions with 343
participants. Classes are typically focused on specific bid opportunities but the Port has
also offered training on WMBE/ACDBE/DBE certification and Airport Dining and Retail
opportunities 
A list of WMBE firms has been developed and distributed to internal Port staff with
purchasing authority (P-Card holders) 
Small works project contracts have been reduced from 130+ pages to 67 
Adjusted payment terms for small businesses on Category 1 contracts to an automatic
"Pay upon receipt" vs. the standard 30 days 
Unbundled IDIQ consulting contracts (i.e. architectural services) to create small business
carve outs 

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. 7e                       Page 5 of 6 
Meeting Date: October 24, 2017 
Eliminated insurance endorsements on IDIQ contracts until first work order/service
directive is issued. For major construction the Port will get insurance endorsements as
well as performance and payment bonds after contract execution and before physical
work begins. 
Efforts are also unfolding to improve the Port's Disadvantaged Business Enterprise (DBE)
program. A grant writer will soon be hired to aid in securing funds for DBE projects (FAA
funding) and a consultant will complete a peer review of our airport program to identify how
the Port can increase DBE utilization.
Small business staff is also exploring a construction/contracting "incubator" concept in
cooperation with six public sector agencies (City of Seattle, King County, Sound Transit,
Washington State Department of Transportation, and University of Washington). This center
would provide information, access, education and assistance, and other resources to small
WMBE and DBE firms. This effort will be jointly supported and co-branded. 
New WMBE Policy Directive 
Commission staff has drafted a new Policy Directive on Equity in Port Contracting to increase
utilization of Women and Minority Business Enterprise. This proposed policy provides the
maximum practicable opportunity for increased participation by minority and women- owned
and controlled businesses in Port contracts.
Based on comprehensive review of WMBE contracting best practice, staff is recommending that
the Port institute a new WMBE policy. The policy will repeal existing Small Business Resolution
3618 and pertain to all businesses that contract with the Port of Seattle. The proposed policy will
provide Commission authorization for a new WMBE program and authorize the Executive to
pursue progressively bold and challenging goals to increase WMBE utilization in all business 
transactions. The policy requires the Port to:
Develop of an Annual WMBE Plan within 180 days of passage of the new
resolution that includes: 
o  Develop specific Division goals that encourage utilization of WMBE firms; 
o  Responsibilities, policies, practices and processes that can change the culture of
Port contracting and provide a more responsive environment for WMBE firms,
businesses and contractors of all tiers working on Port contracts; 
Annual reporting to the Commission on performance and attainment of the
utilization goals in Annual WMBE Plans 
Bidders to use specifically developed tools (such as an Inclusion Plan) appropriate 
to the contracting method and scope of work requiring contractors to actively
solicit the employment of women and minority group members, in order to
sustain and improve participation of WMBE in Port contracts 
Enhanced compliance, prompt payment and other provisions needed to

Template revised September 22, 2016.

COMMISSION AGENDA  Briefing Item No. 7e                       Page 6 of 6 
Meeting Date: October 24, 2017 
implement Port WMBE program 
The WMBE program would be phased over the course of 2018. Resolution 3618,
the current small business policy, would be phased out by the end of 2018. 
Key Information: 
ATTACHMENTS TO THIS BRIEFING 
(1) Presentation slides 
(2) March 20, 2017 Attorney General Opinion in response to Chris Liu, Department of
Enterprise Services on race or sex conscious preferences 
(3) WSDOT Diversity Roadmap 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
March 28, 2017  Small Business Development Update 
March 22, 2016  Small Business Utilization briefing 
December 14, 2014  Disparity Study briefing 
August 19, 2014  Small Business Utilization briefing 
January 26, 2010  Adoption of Resolution No. 3618 concerning small business utilization 











Template revised September 22, 2016.