Procurement Improvements, Programs & Initiatives Implemented
The City of Chicago has created numerous programs to increase the pool of bidders on City contracts, incentivize the use of small minority and women-owned businesses, build capacity of local businesses, and encourage the employment of local residents.
The City is working to have a local impact at all levels of the procurement and contracting process, developing innovative programs that affect prime contractors, subcontractors and individual residents. These programs and incentives are a direct result of the City’s key priorities in procurement: creating opportunities for businesses of all sizes, and helping businesses grow so that they can participate in the business of Chicago.
Chicago will reach its full potential when its diverse population is represented at all levels – when every hardworking citizen with the drive to succeed has a path to employment or entrepreneurship, and our doors are open to the entire business community, whether they are just starting out, or already growing and succeeding.
ORDINANCES & PROGRAMS
- MID-SIZED BUSINESS PROGRAM ENHANCEMENT: The MBI Program was enhanced this year to significantly increase the number of opportunities available to small and mid-sized local businesses. Like the SBI Program, the MBI Program now has two tiers. MBI-1 projects are those with an estimated value of between $10 and $20 million. Bidding is limited to firms that are no greater than two times the SBA size standards. MBI-2 projects are $3-10 million in size and bidding is limited to contractors that are no greater than one and a half times the SBA size standards.
- EXPANSION OF PHASED GRADUATION PROGRAM: The Phased Graduation Program allows businesses who have graduated from the MBE/WBE programs to continue participation in the MBE/WBE programs for three years at a partial rate. The improved program now allows for construction firms to participate in the Phased Graduation Program if one or more of their qualifying owners exceeds the personal net worth limits.
- NEW NMBI PROGRAM: A new non-construction program was created for mid-sized businesses. The Non-Construction Mid-Sized Business Initiative (NMBI) program will create opportunities for mid-sized, local businesses that have exceeded small business size standards, yet are still developing, to have the exclusive right to bid on certain non-construction projects. The NMBI program allows small and mid-sized local firms to be exclusively eligible to bid on non-construction projects valued between $3 million and $10 million. Eligible participants cannot exceed one and a half times the size standards of minority-owned or women-owned businesses.
- GENDER PAY EQUALITY: Contractors are now prohibited from inquiring about an applicant’s prior wage or from requiring disclosure of such information as a condition of being interviewed or as a condition of employment.
- SEXUAL HARASSMENT POLICY REQUIREMENT: Contractors are required to attest that they have a written policy prohibiting sexual harassment.
- DIVERSE WORKFORCE & MANAGEMENT INCENTIVE: This new incentive provides bidders an incentive of up to 4% if the bidder has a diverse management and an incentive of up to 6% if the bidder has a diverse workforce.
- EXPANSION OF CITY-BASED BUSINESS INCENTIVE: The City-Based Business incentive was increased to a 4% incentive if the business was a city-based business, 6% if in addition, the majority of the business’s employees were City residents, or 8% incentive if in addition, the majority of city resident employees are residents of socio-economically disadvantaged areas.
- VETERAN-OWNED SMALL LOCAL BUSINESSES PARTICIPATION GOAL PILOT PROGRAM: This new program calls for the CPO to insert a contract-specific veteran-owned small local business (VBE) participation goal of not more than one percent of the contract’s value in all contracts with an estimated value in excess of $10,000 if there are at least three businesses certified as a veteran-owned small local business by the City in one or more areas of specialty that are germane to the contract.
- CERTIFICATION PROGRAM FOR VETERAN-OWNED BUSINESS ENTERPRISES (VBE): The establishment of the VBE certification will allow the City to conduct an analysis of the availability of small, local veteran-owned businesses and their areas of specialty. The VBE certification program would mirror the rigorous application process that is in place for minority and women-owned business enterprises (MBE/WBE). To become certified as a VBE, firms will have to demonstrate that they are at least 51 percent owned by an honorably discharged veteran, be located in the six-county region of Cook, DuPage, Lake, Kane, McHenry or Will and not exceed size standards as set by the federal government.
- RETAINAGE: Retainage is a portion of the contract price that may be withheld until work is substantially complete to assure that the contractor or subcontractor will satisfy their obligations. Previously, the City took retainage from prime contractors, who are permitted to take retainage from their subcontractors. However, many subcontractors are smaller firms, so this practice often causes a substantial financial burden. Going forward, the City will no longer take retainage from prime contractors on most City contracts, which will include a provision that prohibits prime contractors from taking retainage from taking retainage from subcontractors. Because damages are often taken out of retainage, the City would maintain vendor accountability by continuing to monitor and enforce EEO, CRO, and MBE/WBE obligations. Primes that are assessed damages in those areas or who fail to perform can be subject to a finding of non-responsibility, prohibiting them from bidding in the future. In addition to helping subcontractors, the elimination will also streamline City operations, as City employees will no longer need to track and manage retainage payments.
- BUSINESSES OWNED AND OPERATED BY PERSONS WITH DISABILITIES ENHANCEMENT: The new ordinance will enhance the BEPD program, which is a certification aimed at stimulating the use of small businesses owned and operated by persons with disabilities. This amendment will make the incentive applicable to a current bid, versus a future bid, and double the amount of the incentive from a maximum of two percent to a maximum of four percent. In addition, service-disabled veterans will be eligible to be certified as BEPDs. These changes are being proposed to make the incentive more attractive for prime contractors and more beneficial for the BEPDs.
- VISION ZERO: The City of Chicago has committed to reducing traffic accidents that cause death and serious injuries and to improve traffic safety for all road users, whether in vehicles, on bikes or on foot. Vision Zero is a data-driven, multi-agency approach to achieve the goal of eliminating traffic fatalities and serious injuries in Chicago by 2026. As part of its efforts to achieve these goals, the City has adopted new safety requirements for large vehicles used in the performance of services for the City. All contracts valued at $2,000,000 or more, which are funded by the City, and which are for construction services or whose performance requires the use of a large vehicle, will require the contractor and its subcontractors to retrofit large vehicles used in the performance of the contract with safety-enhancing equipment, including, but not limited to, lateral protective devices, crossover mirrors or convex mirrors.
- MENTOR PROTEGE EXPANSION: Expanded program so that prime contractors are allowed to earn an additional 0.5% credit towards their M/WBE utilization credit. Additionally, prime contractors can receive a 1% bid preference when bidding on contracts on which they will either mentor an M/WBE subcontractor or one of their subcontractors will mentor an M/WBE subcontractor.
- AMENDMENT REGARDING INDIRECT PARTICIPATION: Creates more opportunities for direct participation in City contracts for M/WBE firms removing indirect participation and updating the ordinance to make it consistent with the City's current practice of setting contract-specific goals and the directive from the Office of the Inspector General.
- CITY-BASED LOCAL BID PREFERENCE EXPANSION: Expanded local bid preference for City-based businesses by further rewarding those businesses that employ City residents, especially residents from socio-economically disadvantaged areas. Bid preference is awarded at 2%, 4%, and 6% depending on eligibility requirements.
- MID-SIZED BUSINESS INITIATIVE: Small and mid-sized local (six county) construction firms are exclusively eligible to bid on construction projects valued between $3 million and $10 million. Expands the Small Business Initiative (SBI) 1 & 2 construction programs.
- BID INCENTIVE TO ENCOURAGE M/WBE UTILIZATION: Up to 2% to encourage M/WBE utilization for contracts in which fewer than three M/WBEs are certified in the subcontracting areas.
- AUTOMATIC DEBARMENT AMENDMENT: Automatic debarment of individuals and business entities for indictments or convictions involving fraud, bribery, or dishonesty, regardless of if the debarment was issued by the City or another sister agency.
- MULTIPLE CONTRACT AWARDS IN A MUNICIPAL CODE AMENDMENT: Allows the City to enter into multiple contracts should performance under the low bidder’s contract be insufficient for the City’s needs.
- MAXIMUM NUMBER OF CONTACT AWARD ORDINANCE: Gives City the authority to limit the number of contracts awarded to a single contractor for specifications where the City is divided into multiple geographic locations.
- MBE/WBE CONSTRUCTION PROGRAM: Increases the goals to 26% MBE and 6% WBE and extended the program for five years.
- EX-OFFENDER APPRENTICE UTILIZATION FUTURE BID INCENTIVE ORDINANCE: Incentivizes prime contractors to sponsor ex-offenders into apprenticeship training programs and utilize their labor hours in the performance of a City contract.
- VETERAN-OWNED BID INCENTIVES: 5% bid incentive for small, local veteran-owned businesses as well as provides a bid incentive for primes to utilize veteran-owned subcontractors.
- APPRENTICE UTILIZATION BID INCENTIVE EXPANSION: Adds apprentices who are graduates of high schools operated by CPS to the bid incentive.
- EQUAL EMPLOYMENT OPPORTUNITY BID INCENTIVE: Raises the maximum commitment to utilize minority and female journeyworkers, apprentices, and laborers from 50% and 10% to 70% and 15%, respectively, and provides for 150% credit for hours worked by residents of socio-economically disadvantaged areas.
- PROJECT AREA SUBCONTRACTORS BID INCENTIVE: Provides a bid incentive for prime contractors who utilize subcontractors from the project area on the contract.
- DUTY TO REPORT CORRUPT ACTIVITY: Requires City contractors to report corrupt activity to the Office of the Inspector General (OIG)
- SWEATSHOP-FREE PROCUREMENT: Requires contractors to report information about, and certify that no sweatshop labor is used in their supply chain in the performance of a City contract.
- VETERANS-SBE JOINT VENTURE BID PREFERENCE: Provides a bid incentive for joint ventures of small, local businesses and veteran-owned businesses.
- CHICAGO RESIDENCY AND PROJECT AREA RESIDENTS: A minimum of 50% labor hours on construction projects be performed by City residents and 7.5% be performed by project area residents.
- ALTERNATIVELY POWERED VEHICLES ORDINANCE: 1/2% bid incentive on City contracts for companies in the 6 county region surrounding Chicago when at least 50% of their vehicles are alternative fuel vehicles.
- SMALL BUSINESS INITIATIVE: Designed to encourage small businesses to participate in City-funded construction projects, exclusive to small businesses and limited to construction projects that are under $3 million in total cost. Divided into two tiers: SBI I, projects that are $3 million or less and SBI II, projects that are $2 million in total cost or less.
- M/WBE MENTORSHIP PROGRAM: Established companies are encouraged to assist smaller businesses in their growth process. Contractors who are willing to enter into a mentor/protégé relationship will be awarded a maximum of 5% additional utilization credit.
- PHASED GRADUATION ORDINANCE: Established M/WBEs that have exceeded the program’s size standards can continue to participate for a period of 3 years to gradually exit the program, with 75% credit allowed in year one, 50% in year two, and 25% in year three.
- LOCAL MANUFACTURING ORDINANCE: For any non-federally funded contracts for the supply of goods, a bid incentive to those bidders providing goods made or assembled in the City of Chicago.
- LOCAL BUSINESS PREFERENCE ORDINANCE: City expanded the local business preference from only construction projects to also include any City-funded contract for goods and services over $100,000.
- RFP/RFQ MULTIPLE VENDOR NEGOTIATION: Provides for selecting and negotiating with multiple vendors and establishing pre-qualified pools of vendors when competitive sealed bidding is not practicable or advantageous to the City.
- TRANSFER FROM THE OFFICE OF COMPLIANCE: Transferred all rights, powers, and duties from the Office of Compliance relating to the MBE/WBE program to the Chief Procurement Officer and Department of Procurement Services
- CLEAN DIESEL CONTRACTING: Establishes a scheduled transition toward cleaner fleets of heavy-duty diesel vehicles and non-road equipment used in City contracts.
- JOINT PROCUREMENT: Establishes procuring goods and services for the City in conjunction with one or more governmental entities.
- DIVERSITY CREDIT PROGRAM: Private sector firms who also bid on public work to obtain up to 5% M/WBE utilization credit on a City contract for work performed by a certified firm on one or more of the prime’s private sector contracts. For every $3 spent with certified firms in the private sector, $1 of credit issued for a future bid with the City.
- GOVERNMENT PROCUREMENT COMPLIANCE FORUM (GPC FORUM): January 2014, a partnership of City, County, State and Federal government procurement and compliance officials, assist agencies, and appointed Affirmative Action Advisory board members, with the goal of implementing reforms to improve and standardize government procurement processes.
- PROCUREMENT REFORM TASK FORCE WITH CHICAGO INSPECTOR GENERAL: May 2015, established to develop recommendations to make procurement and contract management at the City and its six sister agencies more uniform, efficient and cost effective, while increasing accountability. The PRTF made 31 recommendations, the implementation of which will increase transparency for the public, reduce administrative burden, increase competition, lower barriers to entry for our small local businesses, and save taxpayer money. To date, the PRTF has implemented 23 of the recommendations, issued eight quarterly reports and 3 Annual Reports, the Office of the Inspector General has issued 3 independent progress reports, and there have been 2 hearings at City Council. All PRTF reports can be found here.
- PAPERLESS APPLICATIONS: Beginning January 2016, the City stopped accepting paper submission of certification applications and supporting documentation for our certification programs, making the process more efficient and effective.
- SBC PILOT PROGRAM: May 2016, established a pilot program with the Department of Business Affairs and Consumer Protection (BACP), full-time Certification Intake Consultant provides information about the certification program to interested businesses, assists small business owners with completing online applications and scanning/uploading supporting documents.
- FAST TRACK NO CHANGE AFFIDAVIT: July of 2016, DPS implemented a fast-track processing for No Change Affidavits which involves expedited review.
- SITE VISIT COORDINATION REPORT: Developed report to coordinate site visits for DPS Certification that are conducted by the Compliance Division’s Field Analysts which tracks pending and completed site visits.
- ONLINE PAYMENT OPTIONS FOR CERTIFICATION: Currently working with software vendor to implement online payment option for certification application fees (In development)
- FIELD ANALYSTS: Conduct approx. 400 field site visits annually of construction sites, both federally and non-federally funded. Verify, and monitor compliance with MBE/WBE/DBE, City residency, local hiring, and EEO requirements.
- COMPLIANCE MANUALS: Series of manuals published in order for DPS Contract Compliance, User Departments and vendor community to make sure that they are meeting their contractual responsibilities.
- AWARDS VS. PAYMENTS: In 2013, DPS moved to report M/WBE participation based on actual payments that were made and confirmed by the M/WBE firm. Allows DPS to report on actuals versus the intent to utilize.
- COMPLIANCE SYSTEM ENHANCEMENTS – ADDRESS VALIDATION: New function will require that valid addresses are entered when a Contractor sets up their employee record. Once the address is validated, function will automatically assign the applicable Ward and Community Area to that Chicago resident employee.
- NEWLY REVISED SCHEDULE C’s: Schedule Cs (Letter of Intent to Perform as a Subcontractor/Supplier or Trucking Firm) updated is to ensure our Certified Firms are being utilized within their area of specialty as outlined in their Certification letter.
- GOOD FAITH EFFORTS: DPS, in collaboration with the Department of Law, established rules and regulations for determining if a contractor made good faith efforts to meet the goals set forth in its compliance plan.
- MBE/WBE/DBE MODIFICATION/AMENDMENT COMPLIANCE REVIEW: New procedure to review Compliance Plan with each modification that is made to a contract to determine if prime contractors are meeting contractual commitments.
- INTERIM AUDITS: Audit process wherein Compliance Officers are responsible for monitoring a prime contractor’s progress as it relates to M/W/DBE, EEO commitments and CRO, Local Residency requirements.
TRAINING & OUTREACH
- VIDEO TRAINING MODULES: Series of online videos dedicated to informing the public about various topics related to doing business with the City of Chicago and the certification and compliance of minority and women-owned businesses. Available on the DPS YouTube Channel (www.youtube.com/ChicagoDPS).
- CONSTRUCTION SUMMIT: DPS hosts the annual Construction Summit. This construction-focused event features participation from City, County, and Sister Agencies.
- VENDOR FAIR: DPS hosts the annual Vendor Fair. This event features government agency departments, financial institutions, veteran organizations, employment resources, and nonprofit assist agencies to learn about upcoming government contracting opportunities.
- DPS INTERNAL TRAINING: 59 trainings. 2,153 City-wide staff trained.
- 2ND FINANCIAL SYMPOSIUM: DPS hosted 2 Financial Symposium events that included over 30 exhibitors providing financial and technical assistance to Small Businesses.
- DPS FREE WORKSHOPS: Over 23 different classes taught monthly or quarterly on procurement and certification programs, free to the public on a wide variety of topics. Visit the DPS Events & Outreach page for more information.
- DPS BUYING PLAN: 15-month forecast updated quarterly of upcoming opportunities for City of Chicago user departments as well as 13 government agencies.
- CONTRACT AWARD NOTIFICATION LETTERS: Contract award notification letters to the subcontractors to alert them that the prime vendor committing to their utilization was the winner of the contract.
- FEEDBACK EMAIL ADDRESS: firstname.lastname@example.org email address to allow the vendor community to send improvement suggestions.
- MBE/WBE DIRECTORY: Online directory of the City's 3000 certified firms. Searchable by vendor name, certification, or area of expertise.
- DPS ALERTS: Over 12,110 subscribers learn about bid opportunities, news, and new programs in a weekly email newsletter.
- VENDOR COMMUNICATION: For any program, policy or process change, email notification alert to nearly 10,000 vendors in the Certification & Compliance (C2) system.
- SOCIAL MEDIA: Daily postings about all bid opportunities and addenda, details for upcoming classes and events, and information on how to do business with the City of Chicago on four social media platforms. Facebook at www.facebook.com/ChicagoDPS, Twitter at www.twitter.com/ChicagoDPS, YouTube at www.youtube.com/ChicagoDPS, LinkedIn at www.linkedin.com/company/chicagodps
- LIVE STREAMING CAPABILITY: DPS broadcasts and post all City of Chicago bid openings and workshops on procurement and certification related issues. Between these two activities, there are an estimated 350 broadcast events annually.
- ALDERMANIC NEWSLETTERS: Quarterly updates about news and events related to certification and procurement processes.
- POSTING OF JOINT-VENTURE RESPONDENTS: To increase transparency, DPS is making available online the breakdown of any joint venture respondents to RFPs and RFQs when proposals are received, and will also list subcontractors, if available. This will allow the City to display each participating company name and their percentage of the joint venture.
- POSTING OF SUBCONTRACTORS: April 2013, DPS provides an online list of all subcontractors bidding with primes on low-bid contracts.
- POSTING OF BIDS ONLINE: All competitive low bids submitted by vendors are posted online. June 2014, DPS launched the posting of RFP/RFQ submittals online.
- DPS BID TRACKER: A graphic display on the DPS Website that shows the point at which each bid is in the contracting process, from advertisement to award.
- NON-COMPETITIVE REVIEW BOARD (NCRB) PROCUREMENT PROCESS: DPS revised procedures to be more stringent and transparent, included the posting of all applications for public viewing prior to NCRB meetings.
- REVERSE AUCTIONS: Launched process which allows for more open and competitive bidding online. Vendors compete in a dynamic, real-time environment to drive price downward and save taxpayer dollars.
- RFQ/RFP PROCUREMENT PROCESS IMPROVEMENTS: Vendor selection/declination notification letters are sent at the time of short listing to all respondents prior to the evaluation process being completed.
- ONLINE ECONOMIC DISCLOSURE STATEMENT (EDS): Updated several times to include the following: Questions regarding ex-City employees employed by the disclosing party and gifts to City employees by the disclosing party, checking of applicants, officers, directors, owners, and subcontractors against the City’s debarment list, and inclusion of the Building Scofflaw/Problem Landlord Certification.
- ePROCUREMENT: eProcurement offers expanded services to our vendors and user departments that modernizes Chicago procurement and becomes an efficient resource. The portal for vendors, iSupplier, is a full-service resource for vendors and those interested in doing business with the City of Chicago. This tool allows users to respond to Bids, RFPs, and RFQs online, view & track payments and invoices online, and electronic submission of invoices. For more information, visit www.chicago.gov/eprocurement
- DEBARMENT VS. DECERTIFICATION: Decertification or debarment by any government agency is now grounds for decertification of MBE/WBE firms.
- BID PROTESTS: Updated bid protest procedures to allow a protested party an opportunity to respond to the bid protest and provides the protested party with additional due process.
- SPECIAL CONDITIONS FOR MBE AND WBE PROGRAM: Revised to include the definition of commercially useful function, certification reciprocity with Cook County, the Mentor Protégé Program, and clarify how MBE/WBE compliance is counted.
- SUBCONTRACTOR PAYMENT IMPROVEMENTS: Requirement shortening the length of time for prime contractors to pay subcontractors from 14 days to 7 days.
- TASK ORDER SHAKMAN LANGUAGE: Shakman language is included in all requests for task order proposals.
- CPO VENDOR LETTER INCLUDED IN EACH SOLICITATION: A letter from the CPO is now included in all solicitations, reminding bidders of various programs, incentives, and legal requirements and includes optional survey about the bidder’s workforce and green policies.
- DIRECTED & SUPPLEMENTAL TASK ORDERS TO DPS IN ADVANCE: All directed and supplemental task orders must now be pre-approved by DPS based on a detailed justification from the user department.
- UPDATED EVALUATION GUIDELINES: Guidelines have been updated to provide enhanced confidentiality provisions as well as setting forth standards of conduct for committee members.