PORT OF SEATTLE 
MEMORANDUM 
COMMISSION AGENDA               Item No.      7a 
STAFF BRIEFING 
Date of Meeting    December 2, 2014 
DATE:    November 26, 2014 
TO:     Ted Fick, Chief Executive Officer 
FROM:    Luis Navarro, Director of Social Responsibility 
Mian Rice, Small Business Program and Policy Manager 
SUBJECT:  Port of Seattle Disparity Study Results 
SYNOPSIS 
Disparity studies are analysis of contracts during a given period of time. They are
typically utilized to support government agencies  efforts related to the Federal
Disadvantaged Business Enterprise (DBE) program requirements for federally assisted
contracts. Uses include the justification or modification of the agencies' race-conscious
or race-neutral small business goals in federally assisted projects. For the Port of Seattle
(Port), the main purpose to conduct a disparity study was to inform and/or modify, if
appropriate, the Port's overall Small Business Program (Program) to better address
underrepresentation of women and minority businesses in Port contracts as prime
contractors or subcontractors. Agencies in the Ninth Circuit Court of Appeals such as the
Port of Seattle that consider using race-and-gender conscious measures have a legal
requirement to conduct a disparity study before applying such measures. 
In September 2013, the Port hired BBC Consulting, a firm with significant expertise in
conducting disparity studies to conduct a Port of Seattle specific disparity study, which
was completed in October 2014. BBC analyzed over one thousand Port construction
contracts, and construction related professional services contracts covering the period of
January 1, 2010 through September 30, 2013. The results show evidence of disparity or
under-representation of minority and women owned businesses in Port contracting during
the study period. 
BACKGROUND 
On July 9, 2013, the Port of Seattle Commission approved the funding necessary to hire
expert consultants to conduct a disparity study. The study analyzed Port contracting of
construction and construction related professional consulting services from 2010  2013.
This is to determine if disparity existed between availability of able and willing minority
and women owned firms, and the historic levels of participation by such firms in Port
contracts, either as prime contractors or subcontractors. 

Template revised May 30, 2013.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
November 26, 2014 
Page 2 of 6 
The Port of Seattle periodically receives federal financial assistance from the U.S.
Department of Transportation, and as a condition of receiving this assistance, the Port is
required to comply with federal regulation 49 CFR Part 26. Part 26 requires the Port to: 
A. ensure nondiscrimination in the award and administration of DOT-assisted contracts
in the Department's highway, transit, and airport financial assistance programs; 
B. create a level playing field on which DBEs can compete fairly for DOT-assisted
contracts; 
C. ensure that the Department's DBE program is narrowly tailored in accordance with
applicable law; 
D. ensure that only firms that fully meet this part's eligibility standards are permitted to
participate as DBEs; 
E.  help remove barriers to the participation of DBEs in DOT-assisted contracts; 
F.  assist the development of firms that can compete successfully in the marketplace
outside the DBE program; and 
G. provide appropriate flexibility to recipients of Federal financial assistance in
establishing and providing opportunities for DBEs. 
In a decision commonly referred to as Western States Paving, the Ninth Circuit Court of
Appeals clarified common law requirements and restrictions around the use of raceconscious
goals in public contracts. The Court held that, to be constitutional, race
conscious elements of the federal DBE program must be (1) limited to those parts of the
country where its race-based measures are demonstrably needed because of
discrimination or its effects; and (2) even when discrimination is present in a state, the
DBE program must be applied only to those specific groups within the broader category
of women and minority-owned businesses that have actually suffered discrimination or
its effects. 
Specifically, this 2005 decision concluded that the Washington State Department of
Transportation (WSDOT) had failed to present sufficient evidence of discrimination
adequate to allow the application of race-conscious remedies. WSDOT and other local
Washington governments that receive federal funding realized that absent the strong basis
in evidence of discrimination required by federal courts, they lacked legal authority to
impose contract-specific race-conscious goals. 
Currently, the Port does not impose contract-specific race-conscious goals because it does
not have such evidence of discrimination adequate to justify race-conscious remedies. 
Therefore, the Port is currently a 'Race-Neutral' government entity, which means all
activities or programs will benefit and assist all small businesses equally, including
DBEs. However, USDOT still requires government entities that receive federal grant
funds, especially within the Ninth Circuit, to establish an overall DBE goal. In
accordance with those regulations, the Port of Seattle established a three year (2013 

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
November 26, 2014 
Page 3 of 6 
2015) overall goal of 5.44% for the participation of DBE firms. This goal was set using
the Port's current knowledge of potential federally assisted projects versus the DBE
availability within the State of Washington. The FAA approved the Port's Disadvantaged
Business Enterprises Program and its overall goal in July 2012. If the disparity study
yields evidence of discrimination, the Port would then be able to legally access the option
to set race-conscious goals on contracts that obtain federal funding through the USDOT. 
On contracts that are not federally funded, the Washington State Initiative 200 (RCW
49.60.400) prohibition against the use of race- and gender-based preferences applies.
The majority of contracts awarded by the Port are not federally funded. However,
Initiative 200 does not preclude the systematic development of strategies for small
business programs that support proactive outreach efforts that leverage the disparity study
results. 
The disparity study provided the Port with valuable information on whether there were
any historical disparities between the utilization and availability of minority- and womenowned
businesses on Port contracts during the study period. The study also helped 
determine what measures might be most appropriate to include as part of the
implementation of the Small Business Program efforts, the federal DBE program, and the
setting of an overall DBE goal. 
It is the policy of the Port of Seattle to engage in a meaningful outreach program to assist,
counsel, and advise all DBE and Small Business Enterprise (SBE) firms on procedures
for doing business with the Port on all contracts. Part of the Office of Social
Responsibility's (OSR) mission is to assist small businesses of all types (including those
owned by minorities, women, and socially disadvantaged groups) to develop, grow, and
ensure their long-term success by (a) continually fostering an environment where they
can compete successfully on their own merits for a fair share of the Port's contracts and
procurement and (b) assisting large businesses to increase subcontracting opportunities
for disadvantaged and small businesses. 
KEY TERMS 
Disadvantaged Business Enterprise (DBE): A small business that is owned and
operated by one or more individuals who are socially and economically
disadvantaged and received this specific classification through a federal certification
process. 
Minority Business Enterprise (MBE): A business which is at least 51 percent
owned, operated and controlled by an ethnic minority.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
November 26, 2014 
Page 4 of 6 
Small Business Enterprise (SBE): A business of small size (based on number of
employees) or with small revenue relative to other businesses in the industry, as
certified by the Washington State Office of Minority and Women Business
Enterprises (OMWBE). 
Small Contractor and Suppliers (SCS): A joint partnership with King County to
encourage prime contractors to use SCS-certified subcontractors. 
Woman Business Enterprise (WBE): A business which is at least 51 percent
owned, operated and controlled by women. 
STUDY RESULTS 
To complete a meaningful disparity study, BBC Consulting analyzed 344 prime contracts
and 704 subcontractors during the study period of January 1, 2010 through September 30,
2014. Their findings show 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. The following table shows results by each of the groups analyzed.
It is important to indicate that 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 be 24. 





OPPORTUNITIES 
Disparity studies provide public agencies with the opportunity to consider adjusting their
DBE "race-neutral" program to a DBE "race-conscious" program. This type of
adjustment to the DBE program is limited to Federally assisted projects. The Port
conducted a disparity study that included a review of both Federally assisted and locally
funded projects, and with the results of the study, the Port now has the option to review
and/or modify its DBE and small business programs to better address disparities or
under-representation of minority and women owned businesses in Port contracts.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
November 26, 2014 
Page 5 of 6 
Approximately 9.5% of the Port's contracts are federally assisted, meaning that the
remaining contracts are locally funded, and are subject to State contracting laws such as
Initiative 200 (RCW 49.60.400), which prohibits the use of race and gender-based
preferences. However, this does not preclude the Port from pursuing proactive and
systematic refinements of the Port's Program in response to the results of the disparity
study. However, the option of implementing race-conscious remedies can be limited only
to those federally assisted contracts. 
RECOMMENDATIONS 
Staff from the Office of Social Responsibility (OSR) provides the following initial
recommendations to begin the process of providing remedies to the historical underrepresentation
of minority and women owned firms in Port contracts. OSR will fully
analyze the results of the disparity study and will develop an action plan for review by 
Port executives and Commissioners. Staff will present the plan elements to the
Commission in April 2015, and begin implementation thereafter. The following are the
initial recommendations and the expected implementation timeline: 
January 2015: Rebrand and refresh the Port's current Small Business program to
Small Business & Inclusion Program. 
January 2015: Port division leaders set annual small business and MBE/WBE goals
for their divisions. 
July 2015: Recommend modifications to the Small Business Resolution 3618. 
September 2015: Consider the option of going Race and Gender conscious within
our DBE program. 
September 2015: Develop and implement a training and capacity building program 
(Accelerator program). 
Ongoing: Continue collaborative work with other public agencies, and the Small
Business Group, which includes community representatives, and staff from Capital
Development Division, Central Procurement Office, Commission Office and OSR. 
2018-2020: Conduct another disparity study.

COMMISSION AGENDA 
Ted Fick, Chief Executive Officer 
November 26, 2014 
Page 6 of 6 
ATTACHMENTS TO THIS BRIEFING 
Slide presentation. 
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS 
December 4, 2012 Commission adoption of the Century Agenda establishing a goal
of 40% small business participation. 
July 9, 2013  Approved request to hire BBC Research and Consulting to conduct a
disparity study of Port contracting for an amount not to exceed $300,000.