Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 i 1 1 EPA 2 OFFICE OF SMALL & DISADVANTAGED BUSINESS 3 UTILIZATION 4 5 6 7 8 PUBLIC HEARING ON EPA'S PROPOSED DBE RULE 9 10 11 12 13 TRANSCRIPT OF PROCEEDINGS had at the 14 Metcalf Federal Building, 77 West Jackson Street,

15 Room 331, Chicago, Illinois, in the above entitled 16 cause on the 13th day of January, A. D. 2004, at 17 9: 25 a. m.

18 Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 ii 19 20 21 22 23 24 Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 iii 2 1 PRESENT:

2 3 MS. JEANETTE BROWN, Director, Office of Small and 4 Disadvantaged Business Utilization;

5 MS. CYNDY COLANTONI, Associate Director, Resources 6 Management Division;

7 MS. KIMBERLY PATRICK, Attorney, Office of Small and 8 Disadvantaged Business Utilization;

9 MS. LYNN DONLEY, Region V Outreach;

10 MS. SHARON GREEN, Revion V Hearing Organizer.

11 12 REPORTED BY: JACQUELINE M. TIMMONS,

13 C. S. R., R. M. R., R. D. R.

14 Certificate No. 84 2949.

15 16 17 18 Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 iv 19 20 21 22 23 24 Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 v 3 1 ASSOCIATE DIRECTOR COLANTONI: Good morning.

2 ( Chorus of good mornings.)

3 ASSOCIATE DIRECTOR COLANTONI: I would like to 4 get us started so we are kind of on schedule.

5 My name is Cyndy Colantoni. I'm the 6 Associate Director for the Resources Management 7 Division within Region V, Chicago. I would like to 8 welcome you today to Region V and hope that all of 9 your concerns and issues will be addressed through 10 this public hearing. And issues to be heard.

11 I would like to introduce Jeanette 12 Brown, who is the Director of the Office of Small 13 Disadvantaged Business Utilization. She and her 14 staff have had courses throughout EPA, do provide 15 the service and the voice to the small business 16 owners throughout the community. I know that 17 you're interested in getting into the hearing,

18 getting your points voiced and hearing all the Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 vi 19 information. So I am going to turn it right over 20 to Jeanette.

21 DIRECTOR BROWN: Thank you.

22 Good morning.

23 ( Chorus of good mornings.)

24 DIRECTOR BROWN: It is good to be in Chicago. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 vii 4 1 With our schedule, I know that I should be home 2 very soon. Last week we were in Montana. This 3 week Chicago. Next week San Francisco and two 4 weeks from there, Alaska. And so, then, the 5 hearing period is over, and I can remember, then,

6 what my house, my home looks like, my family looks 7 like, and get some rest, hopefully. We would like 8 to welcome you, as just was stated, to the MBE/ WBE 9 hearing here at EPA.

10 Before we get into the hearing process,

11 there are a couple things I would like to do.

12 First, let me introduce you to Ms. Sharon Green.

13 For all of you new in this region, you need to know 14 her. That's the lady you need to know. She is 15 your MBE/ WBE coordinator. She works to carry out 16 the program here in Region V, and so if you don't 17 know her, you need to make sure you do know her.

18 For all of the businesses that are in the house, Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 viii 19 let me see your hand.

20 ( There was a show of hands.)

21 DIRECTOR BROWN: Good. You all need to know 22 her. She needs to have your capability statement,

23 she needs to know what you do, because she is 24 working internally with the contracts and the Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 ix 5 1 program people and the grants people and the 2 management team that's here to work to ensure that 3 you all receive an ample opportunity to go after 4 the contracting opportunities here.

5 To do business with EPA, there are two 6 ways to do that; directly or indirectly. Today,

7 for the purpose of this meeting, we are going to 8 talk about the program and indirect portion of the 9 program as it relates to our grants, co op grants 10 to the states' nonprofits, trusts, territories, et 11 cetera.

12 Tomorrow we will be meeting with the 13 tribes. But this meeting is open to anybody who 14 wants to come. Tomorrow if you want to come, you 15 can come to that one, too, but in particular we are 16 meeting with the tribes because there are some 17 things that we're proposing in the rule that will 18 impact them quite drastically, probably more than Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 x 19 the other businesses, things that are going to be 20 in place for the first time. And so we need to 21 meet and talk with them.

22 In addition to that, traveling with me 23 is my attorney advisor, Ms. Kimberly Patrick. She 24 will speak shortly. She's been working on this Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xi 6 1 program for at least two years or a year and a 2 half.

3 MS. PATRICK: Two and a half.

4 DIRECTOR BROWN: Two and a half. Time flies 5 when you're having fun.

6 So she is going to be the attorney, lead 7 attorney closing out and working on getting the 8 rule final in coordination with a lot of other 9 people from around the country, in the legal staff 10 as well as in the program areas, as we come to 11 finalize the rule.

12 Let me just tell you how we got here.

13 We have been working on this. We have been trying 14 to get a handle of how many years it's been. It 15 think it has been about six years in total. That's 16 a long time. We have a draft Proposed Rule that 17 was out. We got comments. We had hearings all 18 around the country. We had this  we had a draft Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xii 19 of the Draft Proposed Rule, and that was out for 20 quite awhile. We went all around the country with 21 hearings, and I need to say, this is a time for you 22 to participate in public policy. Your comments do 23 make a difference, but if we don't hear from you,

24 we can't factor that in. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xiii 7 1 As a result of what we did the first 2 time with the draft Draft Proposed Rule, we have 3 what you have seen or what you should see  can I 4 use this?

5 Hopefully everybody got this. This is 6 the Proposed Rule that's in the federal regs. And 7 as a result of the meetings that we have had early 8 on in the process, three to four years ago, we came 9 up with this. But it was because we had meetings 10 like this and people gave us comments, and they 11 questioned us and they challenged us because a lot 12 of what we thought, we had not  we thought we had 13 covered everything, and we hadn't.

14 And so with the comments that people 15 gave to us, we were able to make some adjustments 16 to our thinking, and so just in case we didn't 17 think of everything this time, I need you to read 18 this material, because I need you to give us Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xiv 19 feedback and we will tell you how to go about that 20 and how to do that, but your comments are important 21 to us.

22 Kimberly will go through much later what 23 the process is, but today we are having a hearing.

24 So with that, what I need you all to do is, when Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xv 8 1 you have a question and as you speak, come to the 2 mic. We have one of our contractors working with 3 us, Mason Tillman & Associates. Lori is going to 4 be our banner for today. She is going to run 5 around with the mic to make sure you all speak into 6 the mic, because this is being recorded so that we 7 can take your comments back.

8 I can't  I am good, but I can't 9 remember everything. I'm at the point now where 10 some of my senior moments kick in. ( Laughter) And 11 from one state to the next and one hearing to the 12 next, I can't remember everything that has been 13 suggested or recommended. And so we are having 14 this recorded and she needs to be able to hear from 15 you. As you speak into the mic, I need you to say 16 who you are and the company and/ or organization 17 that you represent. And I need you to say that 18 every time you speak into the mic, every time you Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xvi 19 ask a question. Is that okay?

20 MR. LANCE STOKES ( ECI Unlimited, Inc.): Fine.

21 DIRECTOR BROWN: All right. Sharon, we need 22 to take care of some housekeeping, where the 23 restrooms are, et cetera. If you could help me 24 with that, because I don't know myself. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xvii 9 1 SHARON: The ladies restroom and mens 2 restroom, when you exit where you registered at,

3 the ladies restroom is immediately to your right.

4 You go through the double glass doors for the men 5 and it is also immediately to the right. If you 6 need to get bottled water or, like, soda later on,

7 you can go down the escalators and there is a store 8 where you can get additional snacks.

9 If you get hungry throughout, though, we 10 still have muffins, danishes and some very strong 11 coffee and water for tea.

12 DIRECTOR BROWN: Thank you, Sharon.

13 Did everybody get an agenda? We are 14 going to try to stay as close to this as possible.

15 We recognize you all may have a lot of questions,

16 and we want to make sure we give you ample 17 opportunity to voice your opinions.

18 We also have with us quite a few people Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xviii 19 from within the Region who works in the program,

20 either in grants, some of the program offices. We 21 also have the head of grants here, Pat Thompson,

22 and we also have Lynn Donley, who is the Region V 23 attorney who has also worked with us on the 24 program, right up front. So we  Darlene Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xix 10 1 Hughes Hainer was the MBE/ WBE program coordinator 2 for a couple of years.

3 MS. HAINER: Yes, a couple of years.

4 DIRECTOR BROWN: So she is down in the 5 contracts shops. We have quite a few other people.

6 Before we get started, one of the things 7 that I would like to do is to give you a two second 8 whole thing. I'd like to know who is in the 9 audience. I know you have name tags, but I can't 10 see all of those. I would like to get a feel for 11 who I have and what the audience is, so if you 12 could, just line up, not everybody at one time.

13 Come to the mic and tell me who you are and what it 14 is that you do.

15 The reason why I do this, and I do this 16 almost every time we are in public and have a 17 meeting, especially with a large gathering, you 18 never known, as a minority business, where an Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xx 19 opportunity is. Take advantage of it. Okay.

20 I don't want a long dissertation about 21 what your company does, but give me enough bites so 22 that, and give me enough so other people will want 23 to come and seek you out. The other thing that I 24 am going to ask that you do is, meet three other Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxi 11 1 people at a minimum before you leave here today.

2 And you take their business cards, and when you 3 listen and hear, we have some state reps here, you 4 all need to know who they are because they are 5 looking for you.

6 I am going to sit down and listen to you 7 now.

8 Yes, sir.

9 MR. SYL SAFFOLD ( Jacob Business Resources):

10 My name is Syl Saffold, and my company is Jacob 11 Business Resources. We do business consulting. We 12 actually help entrepreneurs start businesses. We 13 do business plans. We do management consulting for 14 existing businesses. We also create websites and 15 different networking solutions.

16 DIRECTOR BROWN: Small, 8A, woman owned, what?

17 MR. SAFFOLD: Small minority owned business.

18 DIRECTOR BROWN: Thank you. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxii 19 MS. KAY SAUNDERS ( Bellewether, Ltd.): Good 20 morning. I'm Kay Saunders with Bellewether, Ltd.,

21 based in Kansas City, Missouri. We're an 8A SDB 22 firm. We provide our clients with organizational 23 development, technical writing documentation 24 support and anything that supports the structure of Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxiii 12 1 an organization.

2 MR. LESTER LEWIS ( Paradigm 2000): Lester 3 Lewis, Paradigm 2000. We do telecommunication, Web 4 design and development, video production, where we 5 should be videotaping this session here and 6 streaming it live all the way around the world. We 7 can do it secure. We are 8A, we're disadvantaged 8 and we're small A  I mean small business.

9 DIRECTOR BROWN: Small.

10 MR. WALTER PEARSON ( Missouri Department of 11 Natural Resources): My name is Walter Pearson.

12 I'm with the Missouri Department of National 13 Resources. We're WBE with the EPA and Region VII,

14 and also the Environmental Justice Program.

15 MR. R. LEE FIELDS ( Robco Industrial Waste 16 Management, Inc.): My name is R. Lee Fields,

17 President of Robco Industrial Waste Management. We 18 are an SDB firm. We have been around for 20 years, Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxiv 19 over 22 percent of the country. And my main client 20 is federal government. Our firm is environmental 21 engineers.

22 MR. JESSE ANZALDUA ( Anzaldua Mechanical,

23 Inc.): I'm Jesse Anzaldua with Anzaldua Mechanical 24 from Kalamazoo, Michigan. I'm an 8A firm. I'm a Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxv 13 1 full licensed mechanical contractor, union 2 contractor, and we are also a general contractor 3 doing two big projects for EPA right now.

4 MR. JOHNNY JOHNSON ( Johnson Marketing &

5 Management Company): My name is Johnny Johnson,

6 Johnson Marketing & Management Company. We are an 7 8A certified SDB. We market bar codes, scanning 8 equipment, mobile computers. In addition to 9 information technology, we also provide information 10 technology services, as well. So we have the 11 software services and the hardware.

12 MR. TIMOTHY SLATER ( Dynamic Process Solutions,

13 Inc.): My name is Timothy Slater with Dynamic 14 Process Solutions, Incorporated, out of O'Fallon,

15 Illinois. We are an information technology company 16 that provides total support. We are small 17 business, 8A, minority veteran owned.

18 MS. LUDELLA LEWIS ( Ludella Lewis & Company): Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxvi 19 My name is Ludella Lewis, and I'm the owner of 20 Ludella Lewis & Company. I provide accounting,

21 taxes and consulting services. I am WBE, MBE and 22 DBE.

23 MR. GREGORY ARHEGHAN ( Hunsi Group, Inc.): My 24 name is Gregory Arheghan. My company is Hunsi Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxvii 14 1 Group, Inc., out of Cleveland, Ohio, where it is a 2 certified construction, construction manager and 3 engineers. Thank you.

4 MS. JAN TURNER ( Cotter Consulting, Inc.): My 5 name is Jan Turner. I am Director of Project 6 Management for Cotter Consulting. We do 7 construction management and programming and project 8 management and owner ref services. We are a DBE 9 and WBE here in Chicago.

10 MS. CHARLENE TURCZYN ( CMW & Associates):

11 Charlene Turczyn. I'm with CMW & Associates.

12 We're an 8A certified firm and we're located in 13 Springfield, Illinois. We supply computer 14 engineers, accountants and administrative 15 assistants under the GSA contract.

16 MR. EDWARD J. MICHNA ( Industrial &

17 Environmental Services, LLC): My name is Ed 18 Michna, business development manage for Industrial Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxviii 19 & Environmental Services out of Gary, Indiana. We 20 are a small MBE, DBE firm with 8A certification 21 venue.

22 MS. CLAIRE WILLIAMS ( Environmental Design 23 International, Inc.): My name is Claire Williams.

24 I'm with Environmental Design International, a Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxix 15 1 local Chicago firm, 8A, woman owned, hub zone. We 2 provide environmental engineering, civil 3 engineering, topographic surveys, geotechnical 4 engineering, 13 year old company and we currently 5 have a Region V staff contract.

6 MS. SCOTTIE KERSTA WILSON ( Environmental 7 Health Consulting): My name is Scottie 8 Kersta Wilson with Environmental Health Consulting,

9 a woman owned, small business out of Oak Park,

10 Illinois.

11 We do risk assessment, specifically in 12 the area of children and other vulnerable 13 subpopulations and currently have an EPA Region V 14 OCHB contract.

15 MR. LANCE STOKES ( ECI Unlimited, Inc.): Good 16 morning. I'm Lance Stokes. I'm President of ECI 17 Unlimited, Inc. We are an environmental 18 engineering and environmental consulting firm. We Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxx 19 have been doing business 12 years. This past July 20 we became 8A certified. We're based out of 21 Detroit, Michigan, and we're looking to hopefully 22 do some in situ chemical oxidation to get all of 23 the tetrachloroethylene, the dry cleaning fluid,

24 from the munitions sites. And we're ready. We're Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxxi 16 1 ready to do it right now. Thank you. ( Laughter 2 and applause)

3 DIRECTOR BROWN: All right.

4 MS. SARAY RODRIGUEZ ( Bravo Solutions, LLC): I 5 am Saray Rodriguez. I'm with Bravo Solutions. We 6 do ERP, oracle, namely. In general, we do IT 7 solutions. I am an MBE, WBE and working on 8A.

8 MS. JESSE LUTTENTON ( Keweenaw Bay Indian 9 Community): My name is Jesse Luttenton. I am the 10 community economic developer and director of 11 community development for the Keweenaw Bay Indian 12 Community in upper Michigan, and I was unaware of a 13 meeting tomorrow, which is why I'm here today.

14 DIRECTOR BROWN: Very good.

15 MR. MORRIS J. WILLIAMSON ( Q LED Systems):

16 Good morning. My name is Morris Williamson. I'm 17 president of Q LED Systems, a minority owned 18 business out of Chicago, Illinois, and we do Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxxii 19 organizational development systems, change 20 processes, quality management, basic system process 21 controls.

22 MR. DAVID OLCHAWA ( DuPage County Department of 23 Development and Environmental Concerns): My name 24 is Dave Olchawa representing DuPage County Storm Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxxiii 17 1 Water Division and basically do a lot of 2 investigating of federal, state and local funding 3 for grant applications.

4 MS. YULANDA McCARTY HARRIS ( City of Toledo):

5 Good morning. My name is Yulanda McCarty Harris.

6 I am the Executive Director of the Affirmative 7 Action Compliance in the City of Toledo. I'm here 8 with my program director, Bob Williams, who works 9 with our WPCLF loans on our EPA Sitz Creek project 10 that we are working on right now.

11 MR. JOSHUA BUNKER ( State of Minnesota): Good 12 morning. I'm Joshua Bunker with State of 13 Minnesota's Pollution Control Agency, and I 14 coordinate the management of our federal systems 15 group.

16 MR. JOHN FRENCH ( SynergyOne LLC): Good 17 morning. I'm John French with SynergyOne. We are 18 an 8A firm. We are involved in environmental Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxxiv 19 engineering, public outreach. We do regulatory 20 compliance management in the transportation, OSHA 21 and agricultural area.

22 MS. HEDY M. RATNER ( Women's Business 23 Development Center and Federation of Women 24 Contractors): I'm Hedy Ratner, and I'm Director of Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxxv 18 1 the Women's Business Development Center, an 2 organization which certifies women business center 3 projects and supports development of women owned 4 businesses, and I represent the Federation of Women 5 Contractors today.

6 DIRECTOR BROWN: Are you out of Chicago?

7 MS. RATNER: Yes.

8 MS. BETH DORIA ( Federation of Women 9 Contractors): My name is Beth Doria. I'm 10 Executive Director of the Federation of Women 11 Contractors. We are a Chicago based organization,

12 membership organization made up of over a hundred 13 women owned and controlled contracting and 14 contracting related firms.

15 DIRECTOR BROWN: Everybody didn't come up and 16 greet us. ( Laughter) That's all right. Almost 17 everybody. You may wonder why I take the time to 18 do that. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxxvi 19 As I said earlier, you never know who's 20 in the audience. Hopefully, also, that will give 21 you an opportunity to network with other small 22 businesses like yourselves so that possibly you can 23 team up to go after some of the larger work. And I 24 know, as we talk and as we are meeting today, we Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxxvii 19 1 are not meeting on 8A, hub zone, service disabled;

2 but it's always good to know, and I like to give 3 you that opportunity.

4 The purpose for this meeting today, is 5 to go over the proposed rule changes to our MBE/ WBE 6 program. As I mentioned earlier this morning as we 7 got started, there's primarily two ways to do 8 business with EPA, directly through contracts, what 9 we use the contract vehicle and we look for 8A,

10 woman owned, hub zone, service disabled, or 11 indirectly, which is why we're here today, through 12 our grants.

13 At EPA, our contract budget is 14 $ 1.2 billion annually. My grant budget is four 15 times that. At EPA, our grants budget is 16 approximately $ 4.2 billion annually. You all make 17 the connection. As small businesses, I always say 18 money is green. You just need to know where to go Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxxviii 19 to find it. And I'm telling you that there are 20 other ways to get to us, if not directly,

21 indirectly, through the grants vehicle mechanism,

22 as we give moneys out to states, nonprofits, trust 23 territories, colleges and universities. They 24 may  they don't have to  make sure you Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xxxix 20 1 understand what I'm saying. They don't have to go 2 out and contract, but if they do, and if they go 3 out and buy anything in one of four categories

4 equipment, construction, services or supplies

5 this program kicks in. What are those four 6 categories again? Help me out.

7 ( Chorus of equipment, services,

8 construction and supplies.)

9 DIRECTOR BROWN: Okay. I think we got it.

10 Equipment, construction, services or supplies.

11 Should they choose to go out and contract, and that 12 is any of our grantees, should they choose to go 13 out and contract, this program kicks in. There is 14 a fair share clause that is in their grant where 15 they will have negotiated with Sharon and this 16 region here, and this is happening all over the 17 country. EPA has ten regions, and I have ten 18 MBE/ WBE coordinators, and then I have some other Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xl 19 folks in some other areas that are helping us out,

20 as well, to ensure that minorities and women are 21 included in the federal assistance process. And 22 they work with the local grantees or the grantees 23 from their regions

24 ( WHEREUPON, Mr. Rodney Cotillier Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xli 21 1 entered the proceedings.)

2 DIRECTOR BROWN:  to identify who minority 3 and women owned businesses are. They negotiate 4 goals with them, and then they try to work with 5 them to identify who you are.

6 So it is important. Again, money is 7 green. You need to follow the dollars. And as we 8 have seen with this administration, as well as the 9 prior administration, more and more of our dollars 10 are going out of the agency in the vehicle of a 11 grant rather than a contract. Not to say you can't 12 do contracts with us, but you need to know where 13 the money is being spent. And so for the purpose 14 of the meeting today, we want to go over the 15 proposed changes that we are proposing to our 16 program. I will give you a brief history on how we 17 got to this point.

18 I talked earlier about the proposed  Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xlii 19 the Draft Proposed Rule and the comment period that 20 we had three, four years ago. And what that 21 process has led to, it led us up to this, but the 22 catalyst for all of this was the Supreme Court 23 decision that came as a result of the Atarand 24 decision out of the state of Denver, Colorado, Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xliii 22 1 where there was a challenge by a nonminority to how 2 the state of Colorado was spending their money and 3 the price credits. And I'm not an attorney.

4 That's why I don't leave home without her.

5 ( Laughter) She can go into more details and give 6 you all the legalistic stuff, but as a result of 7 that, in layman's terms, as I can understand it, it 8 changed how the fabric of the federal government 9 procurement process works. And now we have to base 10  remember, I said that we had or we negotiate 11 goals with our grantees and that's in their grants?

12 In the past, what we had done was, we just 13 automatically put an 8 percent, which was what was 14 identified very early on by Congress, and we used 15 that 8 percent in all of our grants. And 8 percent 16 was identified as the amount or the percentage that 17 our grantees should use in utilization of 18 minorities and women, but it wasn't based on Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xliv 19 anything that we could readily identify.

20 With the Atarand decision, it says that 21 we have to do more than that, and it has to be 22 based on the availability of minorities and women 23 in a geographic location. And so we have to do 24 something. We can't just plug in a number, because Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xlv 23 1 what our grantees need to understand is, if there 2 is a challenge to the program, if there is a 3 challenge to what we are doing with these federal 4 funds, we will have to defend what we are doing and 5 the grantees will have to defend what they are 6 doing. We can't do that if we don't know what they 7 are doing. And so, as grantees  how many grant 8 recipients do we have this morning?

9 ( There was a show of hands.)

10 DIRECTOR BROWN: You all need to see their 11 hands, because everybody didn't get up. Hold them 12 up high. These are the grant recipients. Thank 13 you. These are the grant recipients. And they are 14 accountable for what they do with the funding that 15 they get from EPA. And so as we have seen 16 throughout the country, there are many  there 17 have been many challenges to programs similar to 18 this. While this program has not been challenged Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xlvi 19 to the extent that we have been in court on the

20 what is it, the legal term that I am looking for,

21 legal term? They didn't challenge our

22 MS. LYNN DONLEY: Standing?

23 DIRECTOR BROWN: Standing. Thank you, Lynn.

24 MS. DONLEY: You were supposed to be Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xlvii 24 1 listening.

2 DIRECTOR BROWN: The programs all over the 3 country, because you look at race, minority and 4 gender. We talk about women. Some people consider 5 this an affirmative action program. We do not. We 6 consider this an outreach program. We are saying 7 that everybody should be afforded an opportunity to 8 participate in the process, but a lot of the DBEs 9 can't do that if they don't know what the local 10 practices are, or the processes are that are being 11 used and utilized by our grantees.

12 So, here again, if our grantees go out 13 and procure anything in one of four categories, any 14 one of those four categories, this program kicks 15 in. And then the goals that have been identified 16 that they have negotiated with the region are the 17 ones that we hold them to. We use availability 18 analysis or disparity studies, something that we Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xlviii 19 have never used before, but we are looking at those 20 kinds of things now to justify or help us 21 substantiate how we come up with the goal that we 22 have in each one of those grants. And so if you 23 need to know more information about that, you can 24 talk to Sharon Green, because she is the negotiator Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xlix 25 1 for those for the region.

2 Today we just want to go over some of 3 the key elements of the proposed rule. We have 4 changed our definition of DBE. We are looking at 5 certification requirements, personal net worth. We 6 debate efforts. There is some contract 7 requirements. We are also going to talk about fair 8 share of goal setting. We have a provision for 9 race and gender conscious efforts. Then we have 10 some exemptions that we have identified.

11 Let me just say this on the record now.

12 When we start talking about exemptions, we are 13 looking at exempting some of the grantees from 14 negotiations  negotiations only  if they fall 15 into certain categories. No one is exempted from 16 reporting. Let me say that again. No one is 17 exempted from reporting, and then no one is 18 exempted from adhering to the good faith efforts. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 l 19 Okay.

20 Now, I am going to stop and allow my 21 attorney to begin the process of going over what we 22 have identified in the summary of the proposed 23 element in our EPA DBE rule.

24 Now, if you have any questions before we Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 li 26 1 go any further, now is the time to speak up.

2 Yes, sir. I need you to go to the mic 3 and tell us who you are and your company.

4 MR. LANCE STOKES ( ECI Unlimited, Inc.): I'm 5 Lance Stokes. I'm President and 100 percent 6 shareholder of ECI Unlimited, Inc., an 7 environmental engineering consulting firm based out 8 Detroit, Michigan. We have 15 employees.

9 My question is, who polices? I hear you 10 say you negotiate, and we are talking about good 11 faith with the recipients, the states. And I'm out 12 of Michigan, so I have a lot to say today, and my 13 question is, who polices the states?

14 I mean, they tell you that they are 15 making a good faith effort, and they breeze right 16 by, and I will tell you right now, African 17 Americans, because they don't think we think. And 18 I have been saying this for ten years. And nobody Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lii 19 has done anything. And Michigan probably leads the 20 pack in getting grants for brownfields work, and 21 unless, and here's the clicker, in Michigan

22 DIRECTOR BROWN: Uh huh.

23 MR. STOKES:  you have to be a certified 24 professional and your firm has to be a qualified Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 liii 27 1 consulting firm.

2 My firm was a qualified consulting firm 3 and I was a certified professional until 1998 when 4 they had this big meeting of over a thousand of us.

5 And we went to this meeting, and the black CPs look 6 like spots on a white sheet. That sheet got 7 bleached. I was thrown out, all of a sudden. Why?

8 Not for anything I had done. All my certified 9 closures of underground storage tanks, all of my 10 closures of remediation stand firm, solid based on 11 good analytical science. Why was I put out? " Oh,

12 Dr. Stokes, we are sorry, but we can't confirm that 13 you really did this work ten years ago because your 14 client is dead." Hello? The head of the 15 department, we were under A. The head of the 16 department of this program was a Michigan State 17 trooper, who had no scientific background. So

18 and right now if you do not  and there are no Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 liv 19 black certified professionals in the state of 20 Michigan, none, zero, zip who are black employees 21 for the state.

22 DIRECTOR BROWN: Okay.

23 MR. STOKES: And they will tell you, there are 24 no black certified professionals. There is one Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lv 28 1 black qualified consulting company, and that  and 2 they have a white certified professional, and they 3 aren't qualified, because their choice of GM and GM 4 got them there, period, end of story. So how does 5 this get policed? Because I'd like to know.

6 I'd like to take you back to Michigan 7 and start  let's start taking a look at Michigan.

8 Maybe Governor Jennifer Granholm won't like making 9 this, but the polling better be good. But after 10 all these years with England, blacks have been 11 ( indicating) out of the environmental business 12 unless we're hauling dirt.

13 DIRECTOR BROWN: Okay. Thank you, sir.

14 Let me try to respond to that lengthy 15 question. We monitor our grants and we have a 16 process in place by which we are to do that. One 17 way, in particular, is through the reporting that 18 we get back. And I think what you need to hear, Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lvi 19 because we have heard and we have been all over the 20 country, we do hear things like that. We think we 21 put some opportunities in place to have a better 22 way to get a handle on some of the things that are 23 happening.

24 Later on as Kimberly goes through this, Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lvii 29 1 you will hear about the reports that our grantees 2 are going to have to be required to give back to 3 us, and as subcontractors, the reporting mechanism 4 that we are putting in place so that you can report 5 back to us what it is that you actually got. I 6 think that is one way we can do that.

7 And so I hear what you're saying. I'm 8 not a policeman, but we are asking people to honor 9 the terms and conditions of our grants. We are 10 asking people to carry out the six good faith 11 efforts of the affirmative steps, and in instances 12 where  and I don't know, have you ever been in 13 contact with this region here to let them know some 14 of the things that have happened to you?

15 MR. LANCE STOKES ( ECI Unlimited, Inc.): I 16 went to the civil rights board in Michigan, and I 17 did not contact anyone

18 DIRECTOR BROWN: But this is  Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lviii 19 MR. STOKES:  here in Chicago.

20 DIRECTOR BROWN: But what you need to do is,

21 you need to see who our grantees are to make sure 22 we got the right people. We are not going to go on 23 a hunt to find people where it is not related to 24 what it is that we do. And so from that Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lix 30 1 perspective, and we can talk to you  I can talk 2 to you later on about some other things that you 3 might need to consider. But, again, we think that 4 the process, as we are proposing, will be better,

5 but I need to hear from you. But I need to get 6 through that so you can hear what those proposed 7 changes are, okay?

8 Sir.

9 MR. R. LEE FIELDS ( Robco Industrial Waste 10 Management, Inc.): My name is Lee Fields. I'm 11 with Robco Industrial Waste Management. We are 12 environmental engineers. We have been around 20 13 years, so I am not new to the method of getting 14 work for federal EPA.

15 I have two issues. One of the issues is 16 not just here with EPA but across the board.

17 Contractors bundle contracts. They take smaller 18 contracts that maybe my company or other firms here Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lx 19 can bid as prime and they bundle them all together 20 in larger contracts. And I don't feel, and I 21 talked with other people here in your organization,

22 there is no teeth in your language to enforce these 23 minority set aside programs or goals. A company 24 can come in and say we made a good faith effort and Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxi 31 1 that's the end of it. They don't have to document 2 or show who they talked to or dealt with.

3 DIRECTOR BROWN: That's not true.

4 MR. FIELDS: And so I think if you look at 5 your language and see whether or not you can put 6 teeth in your language to enforce, because you got 7 a lot of qualified firms who just stood up here 8 this morning. I went out of town. I work 42 9 percent of the country because I could not find 10 major work here in the state of Illinois, in my own 11 backyard. And that's a sad commentary. So that's 12 the only way I could survive. I think we need to 13 open up the contract bidding process a little bit 14 more.

15 DIRECTOR BROWN: Well, I invite you to give 16 us some suggestions on how to do that.

17 Ma'am.

18 MS. McCARTY HARRIS: Yulanda McCarty Harris Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxii 19 with the City of Toledo. First to address his 20 question, I think he said he could get certified in 21 Michigan. I think in your proposed changes, you 22 could be certified through EPA.

23 DIRECTOR BROWN: If you can't get certified 24 someplace else. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxiii 32 1 MS. YULANDA McCARTY HARRIS ( City of Toledo):

2 The other thing is, my question is, if we receive a 3 loan, meaning the city of Toledo, through our Ohio 4 state EPA, revolving loan fund through that, are we 5 under the proposed changes that are taking place 6 right now general?

7 MS. PATRICK: Yes.

8 MS. McCARTY HARRIS: Because of the grant the 9 state receives?

10 MS. PATRICK: Yes, you are.

11 MS. McCARTY HARRIS: Thank you.

12 MS. PATRICK: Yes, sir.

13 MR. RODNEY COTILLIER ( Absolute Fortunate 14 Finds): Yes, I am Rodney Cotillier. I am the 15 project executive, Absolute Fortunate Finds, out of 16 Green Bay, Wisconsin. Our company is a data 17 processing minority outreach firm.

18 We presently have a contract with Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxiv 19 Lambeau Field through the Packers and we have a 20 prime with the Metropolitan Sewer District of Green 21 Bay. They have hired us to meet these goal 22 requirements.

23 The fear is that the contractors come 24 in, they do the six step on the contract, have Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxv 33 1 listed down what minorities they are going to use,

2 they don't meet the goal. And the problem is, they 3 will come up with all kind of excuses, but if you 4 don't have sanctions. At least the Green Bay 5 Packers' football stadium, for contractors, we 6 don't need to pull, a percentage of their contract 7 are removed from the dollars.

8 We need to have something that is going 9 to hold the contractor down. He meets all the 10 paperwork for the bids, he gets the bids, but 11 toward the end of the project he doesn't meet the 12 goals. That's where we come in. We help you to 13 find, he doesn't want to hire anybody. There's 14 nothing that I can do, and there is no way that the 15 EPA is going to go back on the contractor. And so 16 the owner of the Sewer District is stuck, so we 17 need to have some type of sanctions to hold the 18 contractors accountable to meeting those goals, or Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxvi 19 at least approve without question they went through 20 the six fair share step deal.

21 DIRECTOR BROWN: Thank you, sir.

22 MR. JESSE ANZALDUA ( Anzaldua Mechanical,

23 Inc.): Jesse Anzaldua with Anzaldua Mechanical. I 24 have a couple  just one question and the other Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxvii 34 1 one is kind of a comment.

2 If we contact some of these grant 3 providers from these colleges, they would be the 4 ones that would able to help us on some of these 5 contract things; is that correct? Or help them 6 structure a grant?

7 DIRECTOR BROWN: We give  that $ 4.2 billion 8 annually we give out all across the country;

9 colleges, states, nonprofits, local municipalities,

10 tribes, trust territories, et cetera. What I said 11 initially is, they don't have to go out and 12 contract. They can go choose to do their grant 13 with resources internally using those funds to pay 14 salaries of their employees.

15 If they don't go out and buy anything 16 and they get it all done internally, that's their 17 choice. But the minute they do go out and buy 18 anything in one of those four categories, our Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxviii 19 program kicks in. Now  and we will talk to you 20 of how you can identify or get a listing of who all 21 of our grantees are, but I can't guarantee you 22 everybody that's on that list is going to contract 23 out. That, I don't know.

24 They have choices that they have to make Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxix 35 1 in terms of how they are going to spend that money.

2 MR. ANZALDUA: The second part is talking to 3  listening to what is being said up in Michigan.

4 I am from the Kalamazoo area. A lot of the grants 5 for brownfields are being given to the City.

6 DIRECTOR BROWN: Uh huh.

7 MR. ANZALDUA: The City is sort of taking over 8 a lot of property. They go in and inspect these 9 properties, and then what they do is, they declare 10 eminent domain. And then they take over the 11 property and then they go and apply for a grant and 12 get the money. All I'm saying, does the EPA or any 13 government agency check to see what's happening 14 before they  before they provide this grant.

15 Obviously, the City has had ownership of 16 that property at that particular time. But what 17 has transpired before, I am in a building right now 18 that that's what happening, eminent domain. The Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxx 19 City of Kalamazoo is trying to take it over.

20 They came and checked the property 21 before, so they know it's a brownfield. So that's 22 one of the biggest problems we have with 23 brownfields in the Kalamazoo area.

24 DIRECTOR BROWN: I'm not a brownfields Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxi 36 1 expert. I'm familiar with some of the program 2 managers and we would have to talk to them. But 3 even with the brownfield program, this program does 4 apply. And so they would have to  and I would 5 assume  to meet their goals in cleaning up that 6 property, they would have to look for  try to 7 find, go through those six steps affirmative steps 8 to find minority DBEs to clean up the area.

9 Sir.

10 MR. JOHN FRENCH ( SynergyOne LLC): Good 11 morning. John French with SynergyOne. We are from 12 Indianapolis, Indiana.

13 I, too, would like to express my concern 14 for the need for sanctions to be put into the 15 language of this rule. It is necessary for the 16 accomplishment of any program effectiveness.

17 Without it, we can accomplish very little, if 18 nothing, in my opinion. And also I would like to Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxii 19 say to the attendees, is that when the notes are 20 transcribed from this meeting, and if there are 50 21 people attending and only three have said there's a 22 need for sanctions, the record will only show that 23 three thought that there need to be sanctions.

24 So if you feel that way, it is not Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxiii 37 1 enough for you to feel like we have made comments 2 and you don't need to say anything. You need to 3 get up and come behind me and make a statement to 4 that regard. If you don't feel this is important,

5 then proceed.

6 DIRECTOR BROWN: Thank you, sir.

7 MS. PATRICK: We are going to take your 8 comment.

9 MS. KAY SAUNDERS ( Bellewether, Ltd.): Thank 10 you.

11 DIRECTOR BROWN: Your name again.

12 MS. SAUNDERS: I'm sorry. Kay Saunders with 13 Bellewether. One piece of it has to do with 14 sanctions. I think the other piece has to do with 15 policing, but my question was, how is a good faith 16 effort measured? I think that it is in the 17 measurement and the incentives that follow the 18 measurements that people voluntarily comply. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxiv 19 DIRECTOR BROWN: Thank you. We will get into 20 that.

21 MS. PATRICK: Before I get started going 22 through the actual rule, there are a couple things 23 I want to make you very, very clear we have a good 24 basis to start off with. First is making sure you Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxv 38 1 understand the nature of our program. As Jeanette 2 said, our program only kicks in on the grant side 3 of the house. So when you make a comment about set 4 asides and things like that

5 DIRECTOR BROWN: It does not

6 MS. PATRICK:  it does not apply in this 7 world, in this side of the world. This is indirect 8 grants type of

9 MR. R. LEE FIELDS ( Robco Industrial Waste 10 Management, Inc.): That is not what the e mail 11 said, though. The e mail was not saying this was 12 directed toward a certain section or certain 13 agenda. That's not what the e mail that I received 14 said. If it did, I would not be here this morning,

15 because my clients are not grant people.

16 MS. PATRICK: I know that your clients are not 17 grant recipients, however, some of the work you do 18 occurs under people who have received the grant and Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxvi 19 go out and contract. You have to understand when 20 we set up this, this program happens when EPA goes 21 out and makes a grant list in the state of Wyoming.

22 I am just using a state here. Wyoming goes out and 23 says, " Okay, I want to build a waste water 24 treatment plant." Wyoming does not have people Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxvii 39 1 doing that. Wyoming uses EPA grant money and goes 2 out and contracts.

3 That's where you come in, your companies 4 come in and getting opportunities using EPA money,

5 but it is going through the state. And so that's 6 where the whole  that is where it becomes 7 relevant to you. That is where things, such as 8 being certified as a minority owned business in a 9 particular area, kicks in because that way that 10 recipient can count you towards their goal. Things 11 such as 8A, set asides, things like that, do not 12 apply in the indirect type of thing. There is no 13 such thing on the indirect side of the house as a 14 set aside.

15 This is  we walk a very fine line 16 between having a goal and a quota. Goals are 17 great. The minute you say quota, we have a 18 problem. Then you become a program that is Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxviii 19 completely defenseless. Once we start having 20 quotas, we don't have a program anymore because the 21 lawyers come, the ones that are not friendly 22 towards us, the ones who want affirmative action to 23 go away completely. And so what we have in this 24 rule is constructed something that walks that fine Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxix 40 1 line, as best we can, with keeping the program also 2 legally defensible. Because if you go away, you 3 have nothing on the grant side of the house if you 4 tell people to use minority, women owned 5 businesses.

6 MR. LESTER LEWIS ( Paradigm 2000, Inc.): Are 7 you going to supply us a list of grantees?

8 DIRECTOR BROWN: We will tell you how to get 9 to who our grantees are.

10 MS. PATRICK: EPA's list of grantees is public 11 knowledge.

12 DIRECTOR BROWN: We will tell you how to get 13 that.

14 MR. LEWIS: It's on the website?

15 MS. PATRICK: It's on the website. You can go 16 in and search and find out how much they got, what 17 the projects are for. All of that is completely 18 public knowledge. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxx 19 MS. DONLEY: Pam, would you specifically 20 address the concerns that have been mentioned 21 regarding policing and sanctions.

22 MS. PATRICK: That comes in with the entire 23 fine line we walk between a quota and goal, pretty 24 much where the program works. You have to look at Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxxi 41 1 the nature of the grant in and of itself and how 2 it's distinct from the contract. With a contract,

3 EPA is getting services that directly benefit the 4 agency, benefits us a hundred percent.

5 With a grant, EPA is sort of extending 6 its arm, whereas we give out money. It doesn't 7 necessarily directly impact or affect or benefit 8 EPA, but it benefits the person that we're giving 9 the monies to. And because we are doing that, once 10 we give that money out to these recipients, whether 11 it be a state, municipality, a tribe, what have 12 you, their individual procurement practices step 13 in. Because once we give that money to them, we 14 lose a certain amount of control that we would have 15 if we're dealing with a contract.

16 We don't have that with a grant. And so 17 to the extent that we can compel them or require 18 them to do good faith efforts, we can require them Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxxii 19 to report, but when it comes to going beyond that 20 availability with their individual state 21 procurement practices, we are limited in the things 22 we can do and say in terms of policing. What we 23 can do is enforce the things that are required and 24 the terms and conditions of that grant agreement. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxxiii 42 1 Beyond that, to be honest, we do lose some teeth.

2 And what we've constructed with this new rule are 3 things that give us more teeth than we had before 4 so we're not gumming it. But at the same time, we 5 don't have the vice grip of a rottweiler, either.

6 There is a very delicate thing that we do with it.

7 Our terms of policing it, when we go out 8 and do grant reviews, we want to see in that grant 9 file the documentation showing the steps you took.

10 We talk about lists. One of the things that is in 11 the new rules, it requires a bidders list so we can 12 see who you've gone out and talked to. When we 13 find deficiencies, then we can come back to the 14 grantee, the recipient, and apply pressure.

15 Because the recipient level's where their 16 procurement practices kick in. So do we

17 DIRECTOR BROWN: Can you use the mic if you 18 have a question. We really do need you to do that. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxxiv 19 MS. PATRICK: In terms of a starting point.

20 MR. LESTER LEWIS: Okay. Lester

21 DIRECTOR BROWN: Before you do that, you have 22 to say who you are.

23 MR. LEWIS: Lester Lewis, Paradigm 2000 out of 24 Detroit. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxxv 43 1 Now, let's go to the other side, how to 2 deal directly with you and beside the grant. I'm 3 going to come directly to you

4 MS. PATRICK: Direct contract.

5 MR. LEWIS:  and present you with a proposal 6 that you need to serve you.

7 MS. PATRICK: Okay. That opens  that's 8 another entire session all on to itself. Trust me,

9 when we're talking about different worlds, I mean 10 they're different worlds. Another whole set of 11 rules come into play. You get into set aside 12 agreements, you get into different things that are,

13 more directly EPA can do within its control to 14 monitor its contract. It is a completely different 15 world.

16 What we're talking about here today has 17 to do with this proposed rule that deals with this 18 EPA procurement under grants. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxxvi 19 MR. LEWIS: Okay.

20 DIRECTOR BROWN: Okay? For those of you who 21 may have wanted to find out how to do business 22 directly with EPA, bear with us.

23 MR. LEWIS: Okay.

24 DIRECTOR BROWN: Let us get through this Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxxvii 44 1 process and go through this portion of the hearing,

2 and what I will do is, after we complete that, I 3 can talk to you about how to do business with EPA 4 directly on the contract side. Is that fair 5 enough?

6 ( Chorus of " that's fair.")

7 DIRECTOR BROWN: Now, I don't know what I've 8 done to our schedule for today, Sharon, but because 9 they are here, I want to do that. Okay? So we 10 will have to make some adjustments. Okay?

11 MS. PATRICK: A lot of these things we are 12 about to go over are quick things.

13 DIRECTOR BROWN: We may have to  right, we 14 can move. So we want to give everybody an 15 opportunity to ask questions to make sure they 16 understand, but I'll also tell you how to do 17 business with us directly. Is that fair enough?

18 ( Chorus of yeses.) Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxxviii 19 MS. PATRICK: We are going to make sure we 20 have time to do that, so let's move.

21 The first thing, pretty basic. In your 22 packets you should have, if I'm correct, a copy of 23 the summary of the major elements of the proposed 24 rule. We are not going to go through this entire Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 lxxxix 45 1 document. I don't want you to fall asleep on me.

2 So we condensed it into something smaller that hit 3 the key points and outlines the major changes in 4 how we're going to operate. So if you'd take that 5 out and follow along with me, it is what I am 6 using.

7 I am going to try not to read to you.

8 It is a personal irritation of mine to read when 9 they have something in front of them. Just to move 10 quickly with this, please follow along, okay? And 11 please stop me if you have questions as we're going 12 along. Go to the mic and we will stop and we will 13 ask questions, that we can answer them, and also 14 give you the public comment because that is really 15 what we are here about, to hear from you about 16 comments on this rule.

17 The first major change is the change in 18 name. We are no longer going to be the MBE/ WBE Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xc 19 program, or some of you may have heard 20 " meebee weebee." We are now going to be the 21 " deebee." ( Laughter) We're going to be the DBE 22 program, which is the disadvantaged business 23 enterprise program. We changed the name primarily 24 for consistency. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xci 46 1 At this point, DOT's program is a DBE 2 program, and it's a very big program much, much 3 larger than ours, but people recognize the name 4 DBE, so we are doing that to give some consistency 5 across the federal government. A lot of times 6 we're looking for consistencies from the different 7 agencies. And we are trying to make this as simple 8 as possible for people. That name, DBE, is going 9 to include all of the categories WBE/ MBE once 10 covered. So we are going to one name. Okay?

11 The next major thing that will affect 12 you as a business owner is the certification that 13 we are going to require. In the past, EPA allowed 14 the DBEs to be self certified under our indirect 15 program. That day is long gone.

16 DIRECTOR BROWN: Once this rule is final.

17 MS. PATRICK: Once the rule is final. Let me 18 make that very clear. Until the rule goes final, Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xcii 19 you can still self certify. But once this goes 20 final, we need something more than you just saying 21 " Hi, I'm a minority." Pretty much right now that's 22 all you need to do.

23 Once this goes final, we are going to 24 need some documentation. We are going to look at Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xciii 47 1 ownership and control. We are going to take a much 2 deeper look at what's going on and certify this to 3 that extent. Because  yes, sir.

4 DIRECTOR BROWN: I need you to go to the mic.

5 MR. JESSE ANZALDUA ( Anzaldua Mechanical,

6 Inc.): I want to go back to A. What is SBRA? You 7 said that this is new. What is that?

8 MS. PATRICK: That's business in rural areas.

9 MR. ANZALDUA: Oh, rural areas.

10 MS. PATRICK: Yes, correct.

11 MR. ANZALDUA: Okay, thanks.

12 MS. PATRICK: Okay. Back to certification.

13 Where was I?

14 DIRECTOR BROWN: The next one is recognizing 15 the certifications of

16 MS. PATRICK: One of the things we are going 17 to

18 MR. RODNEY COTILLIER ( Absolute Fortunate Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xciv 19 Finds): Very quickly.

20 DIRECTOR BROWN: Name.

21 MR. COTILLIER: Will these changes

22 DIRECTOR BROWN: She needs to capture who you 23 are in the question.

24 MR. COTILLIER: Rodney Cotillier, Absolute Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xcv 48 1 Fortunate Finds. Will these changes affect 2 contracts that are already in place now?

3 MS. PATRICK: No.

4 MR. COTILLIER: So this will be future 5 contracts?

6 MS. PATRICK: Yes. Usually, it is when this 7 rule goes into effect, which we will tell you about 8 that what we're looking at in terms of time frame.

9 With the certification portion, because 10 EPA does not have a vehicle and probably not the 11 inclination to go into the certification business,

12 we decided that we are going to accept SBA 13 certification, and we're also going to accept DOT 14 certification as long as EPA's citizenship 15 requirement is met. That's very key to the 16 business owner, so that you're not going out and 17 getting more certifications and going through more 18 process than you need to go through. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xcvi 19 If you already hold an SBA certification 20 and DOT certification, you have a U. S. citizenship 21 requirement, then what you need to do is show us 22 proof of that certification, and, in turn, we will 23 certify you. No further probing, no further 24 questions asked. Because SBA is a certification Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xcvii 49 1 business and our standards are pretty much the same 2 as theirs.

3 Yes, sir.

4 MR. LANCE STOKES ( ECI Unlimited, Inc.): Lance 5 Stokes, ECI Unlimited, Inc., out of Detroit,

6 Michigan. We are environmental engineers and 7 consultants and we are certified 8A. Regarding 8 that, my comment is, listening to this gentleman,

9 he is very correct, yes, we need to state our 10 opinions here. And my opinion is that I do not 11 recommend that EPA do certification, because why 12 reinvent the wheel? As a matter of fact, those 13 resources could be utilized to do some of that 14 necessary policing and other things.

15 So I would recommend that certification 16 be left to other government agencies, such as SBA 17 in the 8A, or DOT.

18 MS. PATRICK: Well, let me finish and I will Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xcviii 19 explain, and you will get a picture why we have to,

20 in some circumstances.

21 Along with SBA and DOT certifications 22 we're also accepting state, locality, residential,

23 municipality and tribal certifications, as long as 24 their standards are the same as ours. Okay. That Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 xcix 50 1 will also reduce the number of certifications EPA 2 would have to do itself as a matter of first 3 impression.

4 Now, EPA's program has some things that 5 are unique about it. They are different from DOT 6 and they are different from SBA. Currently, SBA 7 does not certify women, but DOT does. So to the 8 extent that there are women owned businesses out 9 there that do not have a DOT certification, EPA 10 will have to certify those women owned businesses,

11 because we look at women owned businesses as part 12 of our program. Now, the SBA certification for 13 women owned businesses is something in the works 14 and something that you heard is coming, they are 15 going to end up doing, but for right now, we would 16 have to certify that group, because SBA does not.

17 DIRECTOR BROWN: And that's been on the books 18 for SBA for at least two to three years, and I Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 c 19 understand most recently they were, when the 20 services, disabled veterans got their new program,

21 which was a couple weeks ago, right before 22 Christmas, the women owned business had to go back 23 to the drawing board on some of the statistics and 24 the numbers. So we don't know when that is going Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 ci 51 1 to come. And when we started this process, SBA was 2 not certifying women at all.

3 Yes, ma'am.

4 MS. HEDY M. RATNER ( Women's Business 5 Development Center and Federation of Women 6 Contractors): Hedy Ratner with the Women's 7 Business Development Center. May I propose that 8 instead of the EPA getting into certification, and 9 I would agree with the gentleman who spoke before,

10 which is not your area of expertise. It is much 11 easier to use third party certifiers who already 12 have established credibility at the federal level,

13 such as with minorities in the national  National 14 Minority Supply Development Council, but for Women 15 Business Enterprise, there is a national certifying 16 council for the women's business with partnership 17 sites all over the country that could certify WBEs 18 and it could be utilized by the EPA. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cii 19 MS. PATRICK: At this point we do have in 20 works some language in the proposed rule, an option 21 for EPA to use private certifiers, as well. And 22 once we get started, because we don't know what the 23 volume is going to be like for us, we didn't want 24 to take away that option for us. And we didn't Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 ciii 52 1 want to build it in as a fact we are going to do.

2 We wanted to wait and see what the volume was like,

3 what the flow was like before we made a decision as 4 to whether or not we're going to take private 5 certifiers or whether or not we are going to 6 continue to do the program in house.

7 What we are going to do with that is 8 something that is still up in the air and pretty 9 much in the future. Aside from the women owned 10 businesses and disabled, service disabled 11 veteran owned businesses, there's two categories,

12 so EPA is unique in certifying like that. EPA has 13 a very unique certifying  sorry, very unique 14 statute, in that in our 8 percent statute, the 15 standard is the business must be owned or 16 controlled. In our 10 percent statute, it is owned 17 and controlled.

18 DIRECTOR BROWN: But we have both. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 civ 19 MS. PATRICK: We have both.

20 DIRECTOR BROWN: Yes. We, EPA, in our 21 statutes, we have one statute that says " and/ or"

22 and one statute that says

23 MS. PATRICK: We have one statute that says 24 " or." Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cv 53 1 DIRECTOR BROWN: And one statute that says 2 " and."

3 MS. PATRICK: And one statute that says " and."

4 I don't know what anyone was thinking not making 5 the two the same, but this is what we are left 6 with, because we can't go back and change the 7 statute. We have no choice but to certify 8 businesses that are owned or controlled. SBA 9 doesn't do that. DOT doesn't do that. EPA does.

10 DIRECTOR BROWN: But our statute does.

11 MS. PATRICK: So even  we try to find every 12 way to get ourselves out of the certification 13 business, trust me. Because that's just  that's 14 another whole can of worms we'd rather not open.

15 However, because of the uniqueness of our program,

16 even if we do the third party certifiers, no one is 17 certifying owned or controlled, and so there is a 18 number of other categories where we know that as a Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cvi 19 matter of first impression because we're EPA, we're 20 going to have to certify those entities to be a 21 part of our program.

22 Sir, did you have

23 MR. SYL SAFFOLD ( Jacob Business Resources):

24 Yes. My name is Syl Saffold and I'm from Jacob Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cvii 54 1 Business Resources. And my comment is in reference 2 to a lot of the talk regarding the teeth and 3 enforcement, and I think in terms of that type of 4 enforcement, you already commented, that it's 5 probably not in the EPA's power legally to enforce 6 with pit bull grip, but my suggestion is this: Is 7 these public hearings and things like that are good 8 for individuals who may already be acquainted with 9 the EPA or other federally, you know, other things 10 like that, but my suggestion is that you get a 11 firm, like Jacob Business Resources ( laughter), to 12 go into the South Side  we are a South Side 13 business  to actually penetrate that market.

14 Chicago has a wealth of minority owned,

15 women owned businesses. Actually do some programs 16 that actually penetrate these areas where these 17 businesses are and open this up and bring more 18 qualified businesses into the fold whether its Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cviii 19 being certified by DOT or some other certification.

20 And then once you have that pool of qualified 21 businesses, then these grantees can no longer say 22 there are not people available, you know. You can 23 actually document efforts EPA has done to actually,

24 you know, increase the number of qualified firms Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cix 55 1 able to be subcontractors.

2 MS. PATRICK: Thank you.

3 DIRECTOR BROWN: Sir.

4 MR. LESTER LEWIS ( Paradigm 2000, Inc.):

5 Lester Lewis, Paradigm 2000 out of Detroit. The 6 certifications, they're full of  Wayne County,

7 the certifier says I'm a minority. The state of 8 Michigan, the certifier says I'm a minority.

9 Detroit, Michigan, the city certifies us as a 10 minority. We have got to have all these 11 certifications prior to us getting awarded to 12 anything.

13 DIRECTOR BROWN: Uh huh.

14 MR. LEWIS: So now you say  and you said it 15 was a hundred  you had to be a hundred percent 16 owned?

17 MS. PATRICK: 51 percent.

18 MR. LEWIS: 51 percent. When I got my Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cx 19 disadvantaged certification, I had to be 100 20 percent owner. Okay. It's already there. All 21 right. I don't  I mean  and so now for me to 22 present my certifications to you, my question would 23 be, which one do you want? ( Laughter)

24 DIRECTOR BROWN: My response is, which one Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxi 56 1 meets our standards.

2 MR. LEWIS: Then let me say this, you gave me 3 two criterias. Where would I find the criteria?

4 Because I have got a handful of them. I've got a 5 handful of certifications.

6 MS. PATRICK: Once this rule goes final,

7 you'll get another document looking pretty much 8 like this, but instead of staying " proposed" on the 9 front, it will say " final."

10 MR. LEWIS: Okay.

11 MS. PATRICK: Every criteria you need to know 12 is in here. Now, what I would suggest to you is,

13 you pick your certification that matches what we 14 have in here, you send it to us, then you're done.

15 Okay.

16 MR. LEWIS: Thank you.

17 MS. YULANDA McCARTY HARRIS ( City of Toledo):

18 Before you move on, can you tell me, as an Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxii 19 attorney, and I am an attorney myself, how does the 20 new decision that came out of Colorado affect the 21 Atarand decision? Or have you even taken that into 22 consideration in your proposed changes?

23 MS. PATRICK: What new decision out of 24 Colorado? Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxiii 57 1 MS. McCARTY HARRIS: It came down probably 2 about in September, October of 2003. It's a 3 Colorado decision in which the Supreme Court

4 basically, you got the same type of facts. You had 5 a company out of Colorado that was not 6 minority owned. It challenged the system, and the 7 Supreme Court basically refused to hear the 8 decision.

9 Well, some critics were saying, well,

10 the fact that the Supreme Court refused to hear it 11 draws question on whether or not the Atarand 12 decision is as teeth biting as we are taking it to 13 be. So have you taken it into consideration in 14 those proposed changes?

15 MS. PATRICK: To the extent that the court 16 decided not to hear it, we took that to be 17 affirmative. There are two ways you take that. If 18 the court refused to hear it, you could say, well, Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxiv 19 maybe Atarand doesn't have the teeth it has or you 20 could say the court is standing on its decision in 21 Atarand. So that is the way we took it and moved 22 forward.

23 MS. McCARTY HARRIS: Well, the Colorado goals 24 still stand in which they use their goals to Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxv 58 1 basically, and I think they probably just had 2 availability of knowledge to basically satisfy 3 their goals. They didn't have the references, but 4 they did have their goals, and their program is 5 still standing today.

6 DIRECTOR BROWN: And so we take that as, we 7 have to still adhere by what the Atarand decision 8 made for, or meant to, the federal government.

9 That's why we have these changes, and because they 10 were solid or didn't look at that, we are still 11 looking at those.

12 MS. McCARTY HARRIS: Traditionally, you say 13 that the DBE that you adopted is basically for 14 consistency basis. Now, there are some people that 15 say the DBE is not because of consistency but to 16 bring those that are not minorities into the fold.

17 MS. PATRICK: That is also true. I can't deny 18 that. Because when we look at  the things we Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxvi 19 base it on to look at to determine economic 20 disadvantage, the disadvantaged status, race is 21 just one of the things that we have to look at. At 22 this point if someone who is a nonminority came in 23 and can show us things that lead up to economic 24 disadvantage, we can't deny them access to the Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxvii 59 1 program. So you are exactly right. I can't deny 2 it.

3 DIRECTOR BROWN: And I can say, I know out of 4 the 8A program, on the other side, you do have 5 people from Appalachia and some other places who 6 are not minorities, but because of their 7 socioeconomic status, they have acquired 8A status 8 or maybe determined to be or certified as 9 disadvantaged.

10 Sir.

11 MR. R. LEE FIELDS ( Robco Industrial Waste 12 Management, Inc.): Lee Fields, Robco Industrial 13 Waste Management, environmental engineers. My 14 question is, in the State of Illinois, if you want 15 to do state business, you have got to be certified 16 by the state. If you want to do city business, you 17 got to be certified by the city. If you want to do 18 county business, you got to be certified by the Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxviii 19 county. Federal, SBA. Now you're saying there's 20 another certification with EPA.

21 DIRECTOR BROWN: Possibly.

22 MR. FIELDS: Possibly another certification.

23 What does it possibly mean to be certified with the 24 EPA after all these other redundant certifications? Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxix 60 1 It seems as though the minority businesses are 2 placed under a microscopic review. And I would 3 like to see this microscopic review placed on your 4 primes to see what they're doing, what are their 5 good faith efforts, because this is about 6 relationship building. I can be certified with 7 everybody in the world, but unless I put a 8 relationship with people who get your money, they 9 are never going to call me, right? So what does it 10 mean  what's my incentive to be certified by the 11 EPA?

12 MS. PATRICK: There are a number of answers to 13 that question. First of all, having you all 14 certified continues to make our program legally 15 defensible.

16 Imagine  let us look at the flip side 17 of that. Imagine if we didn't certify and right 18 now you are whoever you say you are. That means Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxx 19 someone who is looking to be dishonest can very 20 easily take opportunities and directly away from 21 you as a minority women owned business. Because if 22 we have nothing to substantiate that you are who 23 you say you are, that means that all the things 24 that are there for you, are completely open, anyone Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxi 61 1 who wants to lie about it, because if you don't go 2 behind and ask any other questions, can be self 3 certified.

4 So it serves a dual purpose. It keeps 5 us legally defensible and keeps things that are for 6 you, programs that help you directly related to 7 you, so that you get what you are supposed to get 8 in terms of this program.

9 I understand the part of resources and 10 the part of using that to go out and add more teeth 11 to our program. In terms of the EPA, we are 12 working very hard to put MBE  I'm sorry, it will 13 be DBE, MBE/ WBE on the forefront of things that go 14 out and these reviews are done for grants'

15 oversight management. We are working very hard to 16 educate not only our grant specialists, but our 17 program people. We are doing a lot internally that 18 you don't see to make sure that these things are Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxii 19 looked at when things are done. We take it very 20 seriously when people abuse it. We don't like it 21 any more than you do, but we are working with what 22 we have to make it as effective as possible.

23 DIRECTOR BROWN: The other part that I will 24 add, sir, it's a business decision, and if you are Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxiii 62 1 a business owner, that is something you would have 2 to make. We thought when we went into this, if we 3 were to accept the DOT certification, except where 4  when you look at the citizenship requirement or 5 the SBA certification, that we would not have to 6 certify as many businesses, because many of you 7 already have that. But we recognize and 8 understand, as we have travelled all over the 9 country, a lot of businesses have decided not even 10 to be certified by SBA or DOT and so some of those 11 businesses may very well want to come to us from 12 some of these local areas where  we just left 13 Montana, Billings, Montana. Anybody been there?

14 FROM THE FLOOR: Sure.

15 DIRECTOR BROWN: So you know what's there.

16 Not a whole lot. But there are businesses that are 17 there that many of them didn't have a clue where 18 SBA was and what they did, but they were out there Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxiv 19 doing work. There may very well may be able to or 20 want to come get some of this EPA work from some of 21 our grantees. They may have not acquired it.

22 Our first choice is to have you be 23 certified by one of them, because we don't want to 24 do it. We want to spend our resources doing Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxv 63 1 something else, but should we have to, we will.

2 Okay. Sir?

3 MR. LANCE STOKES ( ECI Unlimited, Inc.): Lance 4 Stokes, ECI Unlimited, Inc., out of Detroit,

5 Michigan. We are environmental engineers and 6 consultants.

7 You said  well, let me first say this:

8 I, as one African business owner, want to thank you 9 very much for being here and allowing me this 10 opportunity. You are probably going to get beat up 11 on before the morning is out, but  it sounds like 12 that.

13 MS. PATRICK: That's okay.

14 MR. STOKES: When you talk about these 15 percentages of 8 percent, then 10 percent, and then 16 you said earlier, we are going to change the name 17 so it is no longer WBE and MBE, so the minority, it 18 becomes obscure. And my concern is, looking back Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxvi 19 over 300 years of history, I always feel that we 20 become  and I say we, African Americans, get 21 pushed to the back. White women owned businesses 22 far out rank in Michigan, the so called quote,

23 unquote, minority businesses. And even though 24 they're women, they are not a minority. In Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxvii 64 1 Michigan, and particularly one of the largest 2 banks, Commerical Bank, is another one that doesn't 3 have African American anything to do with the 4 environmental.

5 MR. LEWIS: Don't go there.

6 MR. STOKES: I will tell you, we have 7 minorities here, we have women, but it's white 8 women, not black women, not Asian women, it's white 9 women. Many of those women owned businesses, some 10 of the women don't even work in the businesses,

11 they have nothing to do with the business, their 12 husband owns  he is really the owner. The wife 13 is just a front and can produce all of the 14 documents for you to see. So my import is, rather 15 than just saying a 10 percent or 8 percent, or 16 whatever that is, how about being specific in 17 giving the minority side some fairness, the ethic 18 minority some fairness so that we don't become Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxviii 19 obscure and overridden by white women businesses?

20 And that's with all due respect to women owned 21 business that may be in here, but that's a fact.

22 MS. PATRICK: Okay. There are a number of 23 things in that. First, when we look at economic 24 disadvantage under what's going to be in place once Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxix 65 1 this rule goes final, being a minority is only one 2 way to show or prove economic disadvantage. We are 3 allowed to say, if you show us your paperwork and 4 you say that you're Asian, we can look at that and 5 that's one determining factor on a list of things 6 that's already been identified as a group that are 7 economically disadvantaged.

8 And so  and your comment on 8 percent,

9 10 percent statute that we are talking about here,

10 those are EPA goals. 8 percent under clean water,

11 10 percent under clean air. Those are agency 12 goals. What we used to do was, we didn't go out 13 and negotiate goals. We just said we have an 14 internal 8 percent, let's just pass it on down to 15 the grantee. We can't do that anymore. Okay?

16 The same thing for the 10 percent, we 17 say, okay, let's pass it on. No negotiation. Can 18 you do this? Okay. That is out the window, too. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxx 19 When I get to the actual part where we talk about 20 negotiation of goals, it will become a lot clearer 21 for you. Okay?

22 MS. BETH DORIA ( Federation of Women 23 Contractors): Ms. Clark, to your point on 24 certification, and  I'm sorry, Ms. Patrick. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxxi 66 1 MS. DONLEY: Clark, Kimberly Clark.

2 DIRECTOR BROWN: Kimberly Clark.

3 MS. DORIA: To your point on certification and 4 the language, you said that there were two 5 different criteria, one in which said " owned" and 6 the other that said " controlled."

7 MS. PATRICK: " Or" and " and."

8 DIRECTOR BROWN: " Or" and " and."

9 MS. DORIA: Okay. " Or" and " and" and then you 10 said that EPA may have to become certifiers because 11 no one certifies the " or" portion of it.

12 And I would suggest that there is a 13 reason why no one certifies on that " or" portion,

14 and that is exactly the reason why, the point that 15 the gentleman brought up about white women front 16 companies.

17 We have been tirelessly working with a 18 lot of the certifying entities to ensure that these Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxxii 19 front companies, these white women who just on 20 paper have ownership or control, that we are able 21 to weed those out, so that the true owners of the 22 company, who are truly the risk bearers, as well as 23 those that share in whatever profits, that they are 24 legitimately women owned and controlled companies. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxxiii 67 1 MS. PATRICK: We do not disagree with you. If 2 we could go back and somehow change the language of 3 the statute, we would make it " and," because it 4 completely makes sense. At this point, we can't 5 change the statute. That's something Congress has 6 put down and it's etched in stone the way it's 7 written. And so we are left with having to enforce 8 what Congress told us we have to go out and do.

9 And that is owned or controlled on one side of the 10 house.

11 MR. JESSE ANZALDUA ( Anzaldua Mechanical,

12 Inc.): I only have one question. As far as the 13 certification, we've gotten so callused that we can 14 print out a certification in about 30 minutes on 15 the computer now. We've got so many different,

16 MMBC, whatever it is, every state. Michigan, we 17 got everybody. But with  in regard to using

18 everybody is talking about whether we do it or Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxxiv 19 don't do it. To get certified with your program,

20 somebody has to fill out a form. Well, I'm 8A,

21 DOT, MBOT. What do we do? Are you going to go 22 through that list and get our name or do we have to 23 supply something?

24 MS. PATRICK: Supply something to us. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxxv 68 1 DIRECTOR BROWN: You have to supply what you 2 have.

3 MS. PATRICK: There are forms which will be 4 done soon. They are at OMB right now. The form is 5 a much shorter form for you if you have one of 6 those certifications. And you  it pretty much 7 gives you  it gives general information, name,

8 address, so forth and so on, necessary, but then a 9 portion of it that asks whether or not you hold one 10 of those certifications. You tell us what that is,

11 you provide us evidence of that certification and 12 then move forward. So it is a much shorter 13 process.

14 Now, if you're certified by an entity 15 that you don't already know match our program, if 16 you want to submit your state certification, you 17 would have to turn in to us the criteria that your 18 state uses so we can look at that and do an Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxxvi 19 analyses and see if it meets the certification.

20 One of the things that we did, we did a 21 very preliminary review of the business states to 22 see who had programs that matched our criteria.

23 This was not a hard fast rule. It is very quick.

24 It is not OGC sanctioned  I will just put that Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxxvii 69 1 out there. But we looked to ourselves to see what 2 it is going to look like.

3 Out of 50 states, there were about 10,

4 10 to 12, I believe, who either did not have a 5 program or their certification standards did not 6 meet ours. So most of the state certifications, we 7 would not be able to accept.

8 The local municipal ones we have to look 9 at.

10 MR. RODNEY COTILLIER ( Absolute Fortunate 11 Finds): I like what you're doing. You have to 12 make change for improving, but I don't think that 13 the EPA and many other organizations are really 14 looking at the problem.

15 The problem is that you can scrutinize 16 and make sure this minority firm is what he's 17 supposed to be, but he is still not getting work.

18 Because if you don't make the prime, hold that Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxxviii 19 prime accountable  Lambeau Field was a 20 percent 20 requirement, and there's only 10 percent minority 21 in that community. We finished with 24 percent,

22 because they had sanctions against them. The 23 contractors had to go out, they had to hire a 24 company like us, they had to meet those goals. And Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxxxix 70 1 they did. Otherwise, it came out of their pocket.

2 Now, those same contractors are doing 3 other projects with DNR and EPA loans right now and 4 grants in the city and in that area, and they are 5 not hiring anybody because you're not biting.

6 MS. PATRICK: Let me tell you the difference 7 between the EPA thing and the Lambeau Field. With 8 the Lambeau Field project, they had the power to 9 dictate what the contractors were going to do. If 10 you want to apply pressure, I will tell you what 11 levels to apply the pressure. You need to talk to 12 the grantee, recipient, your state, to say, " Look 13 here, state, I know what your practices are,

14 they're not working"

15 DIRECTOR BROWN: They're not working and you 16 want it to change.

17 MS. PATRICK: You just do the same thing you 18 did at Lambeau Field. EPA cannot dictate to the Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxl 19 states what its procurement practices are. We 20 can't say you must do this, that and the third.

21 MS. LYNN DONLEY: I think that  this is Lynn 22 Donley with the Office of Regional Policy.

23 MS. PATRICK: Stand up, Lynn.

24 MS. DONLEY: And I work with Pat Thompson and Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxli 71 1 Sharon Green to help states and other entities 2 establish their goals. And what I always tell 3 these people, is that these are goals. They are 4 not affirmative action steps. They are not set 5 aside. But if it turns out that your good faith 6 efforts are not truly good faith efforts and we are 7 informed of that, we will have serious problems.

8 The gap that many of the folks in this 9 room have identified is how are we informed of it,

10 how do we take that information and move forward.

11 And I am sorry to inform you, that the best way you 12 can do that is to file a lawsuit. But that is a 13 fact. We can't police it, and we won't police it.

14 But when we see an Atarand style 15 decision, we act and change. And a lot of times 16 that is what you have to bring. You guys have the 17 capacity to bring a class action suit

18 DIRECTOR BROWN: Against your state. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxlii 19 MS. DONLEY:  against the state or against 20 contractors whom you have good reason to believe 21 are fraudulently presenting good faith efforts.

22 But we will not do that for you, and, you know, I 23 wish I could say we would, but it would be unfair 24 and unreasonable to let you leave this room with Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxliii 72 1 the impression that we would.

2 I understand your concern about 3 sanctions. I agree with your concern about 4 sanctions, but Congress has not given us the power 5 to act on those.

6 MR. WALTER PEARSON ( State of Missouri 7 Department of Natural Resources): The state of 8 Missouri did a disparity study back in 1994. And 9 from that, the state has a goal originally

10 ( WHEREUPON, Ms. Amy Crowe 11 entered the proceedings.)

12 MR. PEARSON:  based on the disparity of 20 13 and 10. This is for contracting and procurement, as 14 well.

15 After that, through the executive 16 Oversight Review Committee, we decided to reduce 17 the goal to 10 and 5. But the desired goal was 20 18 and 10. Now, understand that's there's a state Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxliv 19 goal here. There's a fair share negotiation with 20 EPA over here. We use  EPA used the goal that 21 the state had required by the executive board.

22 Now, understand the scenario, because I 23 want to go back to something that you said  and I 24 am only speaking from the state perspective, given Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxlv 73 1 the contract, given the grantee, given the 2 subgrantee, given the contractor, and given the 3 subcontractee, okay. Now, what happens is that we 4 receive a grant as grantee from EPA. We also give 5 a grant or loan to a municipality. Okay? The 6 municipality subcontracts this out and gets a 7 contractor to come and do the work. The contractor 8 knows that there is a good faith effort, as you 9 call it. Good faith effort doesn't work.

10 But all of a sudden  but what he does 11 is, he says, okay, we are going to build a 12 wastewater treatment center, we are going to do 13 this, and I want to submit to the subgrantee.

14 Now, the state doesn't track the 15 subgrantee. It doesn't track the sub  the 16 subcontractors, so there's no way that we, as a 17 state agency, based upon our goal, based upon our 18 criteria, can see what exactly that contract was Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxlvi 19 doing. So in terms of tracking the subcontractor,

20 who is the contractor who got the contract, so 21 we  we are not actually tracking that. So we 22 don't get the credit from that.

23 Now, one of the things that you were 24 saying in terms of lawsuits, what happens is that Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxlvii 74 1 EPA  and we have a person who works with EPA over 2 us, the compliance, the teeth, and it really

3 goals doesn't work. You know what works is the 4 amount of dollars that goes into the business'

5 pocket at the end of the day. And when you begin 6 to look at goals, I am  at first I was  I saw 7 the disparity study was done by Mason Tillman. And 8 first of all, I was really a goal setting kind of 9 person, coming from the Deputy Director of the 10 Program of Economic Development.

11 Let's try to increase the certification.

12 I'm not really into certification. I think that we 13 need to change that whole paradigm shift, and so 14 that these conversations that I'm hearing today,

15 I've been hearing for the last ten years. And at 16 some point, given the legislation, given the 17 conversation, but it's like the road to 18 construction  the road to success seems to always Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxlviii 19 be under construction. ( Applause) I always find 20 that. It always seems to be under construction,

21 but how do we get beyond that, because I think that 22 giving the women  and I think that to grow small 23 businesses is the bottom line in terms of how we 24 receive contracts, whatever process it be, whatever Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxlix 75 1 program it is, at the end of the day, is there 2 money that's going into businesses that are 3 creating jobs, that are creating infrastructure,

4 that are creating community development?

5 That's the kind of success that I 6 believe is important. The certification of these 7 processes are fine. But I think we will probably 8 have less amount of concerns of the front 9 companies. I think we have a less amount of 10 concerns instead of certifications, I think we have 11 less amount of concerns where  a lot of concerns 12 that we have here today, if there was some process,

13 some way that we could be able to grow business.

14 I have one example how to do that. I 15 will be very short. I will be very short with 16 this. ( Laughter) If we look at how do we put more 17 dollars into small businesses and cut some of these 18 processes down, you will see a change in this. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cl 19 Thank you. ( Applause)

20 DIRECTOR BROWN: I do have to say, when I look 21 at the reporting form, you are required, in 5

22 Section 5E, it says actual MBE/ WBE procurement 23 accomplished this reporting period by loan 24 recipient, SEP recipient  Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cli 76 1 MS. PATRICK: And your prime contractor

2 DIRECTOR BROWN:  and your prime contractor.

3 MS. PATRICK:  which would include

4 DIRECTOR BROWN: This is not a new rule. You 5 are required. Now, I can't tell you, " Hey, Pat,

6 you need to talk to him."

7 MS. PATRICK: Thank you.

8 DIRECTOR BROWN: " Okay. Make sure you talk to 9 your grantee," if they're not giving us that 10 information. You're required to give us that.

11 MR. PEARSON: That's true, it's required, but 12 states don't do it. They don't.

13 MS. PATRICK: Well, you're at the state level.

14 If you can't make your own state do it, I mean, if 15 you

16 MR. PEARSON: Excuse me. Again, Walter 17 Pearson. What you have is that you have water, you 18 have various programs, you have the clean drinking Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clii 19 water program.

20 DIRECTOR BROWN: The form is the same for all 21 the programs.

22 MR. PEARSON: You have all these programs and 23 you have people that are administering these 24 programs. Okay. They change. They have turnovers Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cliii 77 1 and turnovers.

2 DIRECTOR BROWN: We recognize that.

3 MR. PEARSON: But the compliance, the teeth 4 has to come from you to us. It has to come from 5 what this lady was saying, is there be  be it

6 be 7 it  I can't say this, so just you put it down if 8 you want to, some kind of reaction based upon this 9 class thing that she just talked about ( laughter),

10 okay, to draw not only from a regional, but also 11 from a national. Then you begin to have some kind 12 of results.

13 Very shortly. Brownfields, 1983, where 14 they tried to dump some soil into a landfill, and 15 what did the people do in North Carolina? They 16 stopped it. Which started the Brownfields Program.

17 The Brownfields Program started from MBE/ WBE deal.

18 I am just saying, in doing the history, it has to Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cliv 19 happen like she said.

20 DIRECTOR BROWN: Not from

21 MR. PEARSON: That's the way you get things 22 done.

23 MR. JOHNNY JOHNSON ( Johnson Marketing &

24 Management Company): My firm is 8A, certified as Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clv 78 1 8A SDB, and I want to know if I'm certified as an 2 SDB, could I bid on current contracts with EPA? If 3 not, how long does it take to one get certified 4 with EPA if the company has an 8A SDB already?

5 MS. PATRICK: Okay. If you are talking about 6 doing business with EPA, that's direct procurement,

7 on the other side. If you hold those 8 certifications, go forth, do business. Work it 9 out.

10 DIRECTOR BROWN: And I will talk to you about 11 that afterwards.

12 MS. PATRICK: If you're talking about 13 procurements under EPA grants, at this point, we 14 self certify. It is not until this rule goes into 15 effect. Okay? Until this rule is final, that it 16 will be required for you to have EPA certification.

17 We don't know how long the process is 18 going to take. Our vision is, most of the people Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clvi 19 who will seek our certification will already have a 20 certification. And in your case, you have a 21 certification, it will cut down the process a lot.

22 And SBA has done the leg work for us. They looked 23 at all your financials. They have done all of 24 that, so we don't have to do it and so that makes Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clvii 79 1 the process a lot shorter. In my dream, it will be 2 very quick. But we won't know until we start doing 3 this, because we are completely 100 percent brand 4 new to this type of process.

5 MR. JOHNSON: So when can we seek business on 6 the grant side?

7 MS. PATRICK: You can do it now. You can do 8 it right now.

9 DIRECTOR BROWN: Can we go to the next 10 session?

11 MS. PATRICK: No, no, not yet.

12 MR. JOHN FRENCH ( SynergyOne LLC): John 13 French, SynergyOne, Indianapolis. I would change 14 that, that we would be  if you hear us requesting 15 that EPA accept federal certification that 16 companies hold. If 8A certified, the EPA should 17 accept that when the program starts.

18 MS. PATRICK: We are. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clviii 19 MR. FRENCH: When the program starts, without 20 further certification.

21 MS. PATRICK: Yes, we are. We're just 22 asking

23 DIRECTOR BROWN: We still have to see your 24 paperwork. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clix 80 1 MS. PATRICK: We can't

2 DIRECTOR BROWN: We can't just take your word 3 for it, then you say you are an 8A contractor and 4 you have nothing to back that up with. We are just 5 saying, show us your paperwork from SBA.

6 MS. PATRICK: Show us your certification.

7 DIRECTOR BROWN: And that's fine.

8 MR. FRENCH: You just said you had no idea how 9 long it's going to take.

10 MS. PATRICK: No, he said how long was the 11 actual process. He said once he showed me his 8A 12 certification, and I looked at it and verified this 13 is a real certification, blah, blah, blah, how long 14 will it take me to send him an EPA certification 15 based on that. And I don't know because we've 16 never done it before.

17 DIRECTOR BROWN: I would think

18 MS. PATRICK: I think it will be a very quick Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clx 19 process, because once we see that you have a 20 certification, like I said, SBA has done the leg 21 work. We can turn around and send you your EPA 22 certification in the mail, also, immediately. We 23 don't know what kind of volume we're dealing with.

24 So I can't give him a number of days for what the Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxi 81 1 turnaround will be to get back out.

2 DIRECTOR BROWN: I can't tell you that  is 3 it on?

4 MS. PATRICK: I think you killed it.

5 DIRECTOR BROWN: Hello?

6 We need a break. Is that working? This 7 is a good time to take a break.

8 MS. PATRICK: Take a ten minute break.

9 And when we come back, we are going to 10 move on.

11 ( WHEREUPON, a recess was had.)

12 DIRECTOR BROWN: All right. We have now a 13 comment to be made from the Commissioner of the 14 Metropolitan Water Reclamation District of Greater 15 Chicago District.

16 MS. AMY CROWE ( Metropolitan Water Reclamation 17 District of Greater Chicago): My name is Amy 18 Crowe, and I'm the Affirmative Action Administrator Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxii 19 for the Water Reclamation District here in Chicago.

20 Commissioner Barbara McGowan is the chairperson of 21 the District's Affirmative Action Committee, and 22 Commissioner McGowan will be presenting excerpts 23 from a resolution which was passed unanimously by 24 our Board of Commissioners at the Water District Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxiii 82 1 after Commissioner McGowan called an affirmative 2 action study session last week to discuss these 3 changes that are being proposed by the EPA.

4 Commissioner McGowan will present the 5 significant points which have come forward in the 6 form of a board resolution as a result of the 7 District's review of these proposed rules. And the 8 District's Board of Commissioners would like to 9 have these  this resolution entered into the 10 official record for this hearing and made part of 11 the docket. Thank you.

12 Commissioner McGowan.

13 COMMISSIONER BARBARA J. McGOWAN ( Metropolitan 14 Water Reclamation District of Greater Chicago):

15 Thank you, Amy. Good morning.

16 First of all, I would like to thank you 17 for allowing me to speak this morning. I will be 18 as brief as possible in the interest of time but Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxiv 19 also individuals that may want to speak this 20 morning. I do have about seven points here

21 DIRECTOR BROWN: Okay.

22 COMMISSIONER McGOWAN:  that this board 23 adopted on January 8th.

24 The Water Reclamation District disagrees Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxv 83 1 with the EPA's definition of disadvantaged business 2 enterprise and instead suggests that the proposed 3 rule be limited to the language now set forth in 4 the district's affirmative action ordinance.

5 Two, the Water Reclamation District 6 disagrees with the inclusion of disabled American 7 owned businesses and private and voluntary 8 organizations controlled by individuals who are 9 socially and economically disadvantaged. And 10 instead suggests that the proposed rule be limited 11 to the language now set forth in our affirmative 12 action ordinance.

13 Three, the District disagrees that the 14 inclusion of any organization that is only 15 controlled by individuals who are socially and 16 economically disadvantaged, and instead suggests 17 that the proposed rule be limited to organizations 18 that are owned, controlled and set forth in the Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxvi 19 district affirmative action ordinance.

20 Four, the district disagrees with the 21 method of establishing a fair share objective on 22 irrelevant geographic market and instead suggests 23 that the District be allowed to follow the language 24 now set forth in the District affirmative action Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxvii 84 1 ordinance.

2 Five, the District disagrees with the 3 discussion of available analysts and suggests that 4 the district be allowed to follow the language now 5 set forth in the district affirmative action 6 ordinance regarding the availability analysis and 7 that it be allowed to remain in effect without 8 further study as long as it reflects the needs of 9 the committee.

10 Six, the District disagrees with the 11 discussion of brokering and suggests that the 12 district be allowed to follow the language now set 13 forth in the district affirmative action ordinance 14 regarding the calculation of credit for 15 participation by subcontractors, suppliers and 16 brokers.

17 The district acknowledges the discussion 18 of the adoption of a personal net worth standard to Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxviii 19 determine the eligibility of socially disadvanced 20 individuals to participate as DBEs. Let me say 21 that the DBE program identifies certain areas where 22 we must pull people from. Right now our program 23 doesn't say, you have to live over in area A or you 24 have to live over in area B. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxix 85 1 We take our MBE, WBEs and SBEs from all 2 over, and we would like to continue to do that.

3 Our other concern is, what effect would this DBE 4 requirement have on our present goals that we now 5 have set for our MBEs, WBEs and SBEs, and would 6 this program exclude any of those people that we're 7 already accommodating?

8 Thank you so much.

9 MS. PATRICK: Thank you.

10 MS. AMY CROWE ( Metropolitan Water Reclamation 11 District of Greater Chicago): I would also like to 12 point out a couple of areas that we do agree with 13 the direction the EPA is headed. One of the 14 discussion areas was bait and switch, to eliminate 15 that, and we've eliminated that in our program 16 through ensuring that all minority businesses who 17 are listed on our utilization plans that are 18 submitted with the bid do receive a letter of Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxx 19 intent and that's considered a responsiveness issue 20 for bids that are accepted at the district.

21 Some of the forms that are now being 22 introduced certainly go in that direction in terms 23 of ensuring prompt payments, resolution of 24 disputes. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxi 86 1 The area of certification is an area 2 that has been addressed in the proposed rules and 3 certainly one that we agree with in terms of 4 principle and concept. We, as I say, have some 5 areas we are concerned about. These were 6 articulated by Commissioner McGowan, so we 7 appreciate the opportunity the EPA has given us 8 this morning to allow us to share our concerns with 9 you.

10 Our ordinance probably should be 11 included in the record, and I have brought our 12 ordinance, because there are a lot of items in the 13 testimony that refer to the ordinance. May I 14 furnish that?

15 DIRECTOR BROWN: Yes, thank you. We look for 16 us to see that because we have no idea what it is,

17 either.

18 MS. CROWE: Thank you, Director. I appreciate Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxii 19 that.

20 MS. PATRICK: All right. Okay. Now we are 21 going to try to make a little bit more progress.

22 The next thing we are going to highlight 23 is $ 750,000 net worth provision. If you turn to 24 page 3 of the summary No. 4, the practical effect Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxiii 87 1 of the provision as they are adopted, is that  if 2 these provisions are adopted, individuals with a 3 net worth greater than or equal to 750,000 will be 4 precluded from initial eligibility. That net worth 5 requirement excludes the personal interest in the 6 business and excludes your personal residence in 7 calculating the net worth.

8 Let's see. Good faith efforts. This is 9 the fun part. We have had a lot of discussion 10 about the good faith efforts and it appears to me 11 many of you are familiar with them. Currently, in 12 one part of the regulation it is called the six 13 affirmative steps. In another part it is called 14 the six positive efforts. We realize they both say 15 the same thing, so we combined them under one name 16 and called them six good faith efforts. That's 17 just a name change, but the practical effects of 18 those six efforts are still the same efforts in Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxiv 19 terms of content. So nothing about what is in them 20 has changed. Okay?

21 The next thing is contract 22 administration provision. These are very 23 important, because we see these provisions as ways 24 of doing a little bit more of the policing and Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxv 88 1 making sure that some things don't change mid flow 2 in permitting some of the bait and switch tactics 3 that we know occur with prime contractors and how 4 the entire world changes once they finally get the 5 contract and suddenly the subcontractor disappears 6 out of somewhere. The MBEW we were going to do 7 business with is suddenly gone.

8 We have provisions that we hope will 9 safeguard against that. The first one, recipient 10 must be notified in writing, recipient being the 11 grantee, must be notified in writing by its 12 subcontractor prior to any termination of the DBE 13 subcontractor. A lot of times these terminations 14 occur and the recipient has no idea that it's 15 happened. They have no idea that, you know, that 16 the plans that they had talked about with the prime 17 contractor had changed.

18 We want to make sure that they are Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxvi 19 notified in writing before any type of termination 20 takes place in the DBE subcontract.

21 Number two, when a DBE subcontractor 22 fails to complete its work under the subcontract 23 for any reason, the recipient must require the 24 prime to make good faith efforts in hiring another Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxvii 89 1 subcontractor. This provision ensures that the 2 good faith efforts do not go away with the first 3 attempt.

4 So if the prime contractor wants to say 5 well, we decided not to go with them, we want to go 6 with someone else, our push back is, " Okay, fine,

7 go with someone else, but you have to go through 8 the same steps again in making sure that you 9 include minorities and women in the process."

10 Number three, a recipient must require 11 its prime contractor to make a good faith effort 12 even if the fair share objectives are met.

13 A lot of times, once a recipient meets 14 it 12 percent goal, they're like, okay, I met my 12 15 percent, I'm done. But that doesn't mean you are 16 done spending the EPA's money. So what we're 17 saying, even after you have met your goal, every 18 time you go out there procuring those four Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxviii 19 categories, you have to continue to make the same 20 good faith efforts. They don't just stop once the 21 goal is met. As long as you have our money, as 22 long as you keep spending, you keep doing the 23 process.

24 Next, a recipient must require its prime Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxix 90 1 contractor to pay it subcontractors for 2 satisfactory performance in a specific number of 3 days when the prime contractor is in receipt of 4 payment from recipient. This is very important.

5 Across the country we received a lot of comments 6 about this. The primary one is that, EPA, you need 7 to find a specific number of days, because if you 8 leave it open, that number of days can be 30, it 9 can be 60. I even had one recipient during the 10 process of the hearing say that where they are, it 11 is seven days. And so we'd like to receive more 12 comments from everyone about what you think a 13 specific number of days should be or what's 14 reasonable in terms of that, because we are very 15 open to putting in a specific number of days in the 16 recognition, leaving this sort of open to the 17 contract negotiations between the sub and prime.

18 We would like to establish what that number of days Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxx 19 is because, really, there is no excuse for not 20 having almost immediate payment once the prime is 21 paid.

22 Sir.

23 MR. LANCE STOKES ( ECI Unlimited, Inc.): As we 24 go through this  Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxxi 91 1 DIRECTOR BROWN: Name again.

2 MR. STOKES: I'm sorry. I'm Lance Stokes.

3 I'm still him. Environmental Compliance 4 Improvement, Inc., out of Detroit Michigan. I 5 guess we are still environmental engineers and 6 consultants.

7 As we go through this, I cannot help but 8 observe, and this really, I find disturbing, when 9 you speak about the prime contractor through 10 discussions, and as is written here, you always 11 speak about the subcontractors, the DBE. So I just 12 wonder what's wrong with that picture? Is that the 13 message that we have all come to that state of 14 mind, that the DBE, the minority is going to be the 15 subcontractor? What about the minority being the 16 prime contractor?

17 MS. PATRICK: What we're saying is, whether 18 the prime contractor is a minority or not, these Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxxii 19 things still have to take place. When we're 20 talking about some of these provisions only kick in 21 if you're dealing with a subcontractor who happens 22 to be a DBE subcontractor, we're saying you can 23 terminate anybody else you want, but if you 24 terminate a DBE subcontractor, you need to notify Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxxiii 92 1 the recipient that you've done it.

2 We're saying you can pay anybody else 3 from the time you want to pay them, but if you're 4 dealing with a DBE subcontractor, you're going to 5 pay them in a specific number of days. We're not 6 picking on the DBE saying they only have potential 7 to be the subcontractor. They can be the prime,

8 but if they are the prime, these things still 9 apply.

10 DIRECTOR BROWN: If you are a DBE and you are 11 the prime and you have other DBEs under you as 12 subcontractors, you would have to pay them and 13 adhere to these, as well.

14 MR. STOKES: Would have to pay them. As a 15 prime and an ethnic minority, what good faith 16 effort  I wouldn't have to go and get minorities 17 or women owned businesses. I am a minority.

18 MS. PATRICK: Oh, yes, you would, if you Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxxiv 19 subcontract.

20 MR. STOKES: If I subcontract.

21 DIRECTOR BROWN: If you subcontract, you 22 would.

23 MR. STOKES: That's why I say if you handle 24 the whole contract  Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxxv 93 1 DIRECTOR BROWN: Then that's fine.

2 MS. PATRICK: That's true.

3 MR. STOKES: Okay. That's why I say, it makes 4 it appear as this is the prime. There's always a 5 nonminority.

6 The other question I was going to ask 7 you when you said, somebody asked you about the 8 certification thing is, isn't EPA part of ProNet?

9 Because if you're 8A or whatever your status is, or 10 you can register on ProNet with the CCR on the 11 internet. That is all what government agencies are 12 supposed to go to.

13 DIRECTOR BROWN: But this is separate and 14 distinct. Under the grant process, you don't have,

15 necessarily, and we do recognize  and ProNet is 16 gone, the CCR. Everybody know that? If you don't,

17 you should. We will talk about that in direct 18 procurement, but you need to be registered there. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxxvi 19 Okay?

20 And as of January 1, 2004, in order to 21 do business with any federal government for direct 22 procurement, you got to be registered in CCR. If 23 you're not registered, you can't do business, but 24 that's another program. We will talk about that Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxxvii 94 1 later.

2 We have worked to identify other places 3 where state and local government, our grant 4 recipients can go to identify minority and 5 women owned businesses. We have brought in for our 6 conferences people from SBA, when ProNet was there,

7 to identify  we brought in people from MBEA to 8 use the Phoenix database, et cetera, to show them 9 and to tell them and to make that kind of 10 information readily available to them. But we're 11 not saying that that is the only place that they 12 have to go or should go to look. A lot of these 13 local jurisdictions already have a listing that 14 they keep through their minority supplier, the 15 government agency or council. You can go to your 16 Chamber of Commerce. There are a number of places,

17 and we don't want to limit anybody, because, there 18 again, everybody within this country is not Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxxviii 19 registered as business owners with ProNet. That's 20 a choice that people made to do business with the 21 federal government, but at the local level.

22 When I am in Billings, Montana, and most 23 of them  see, we're looking more broader and 24 that's what you, I would hope that you could kind Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 clxxxix 95 1 of understand. Everybody has not decided to do 2 work with the federal government. I have to work 3 with local municipalities, local jurisdictions, as 4 well, and so there may be some unique programs that 5 are available from those areas that we have to take 6 into consideration, as well. Okay? So there is a 7 difference.

8 Yes, ma'am.

9 MS. KAY SAUNDERS ( Bellewether, Ltd.): Kay 10 Saunders with Bellewether, Ltd., a Kansas City 11 organizational development and training company. I 12 want to go back to your question. And your 13 question, as I understood, is what is a reasonable 14 amount of time in which to expect payment.

15 As you're looking at the DBE as a 16 subcontractor, moneys have been expended on behalf 17 of that subcontractor in fulfilling that contract,

18 and so those are not moneys that have been paid in Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxc 19 arrears but are actually expended up front.

20 DIRECTOR BROWN: Right.

21 MS. SAUNDERS: It has been our experience in 22 the past that within a seven to ten day time frame 23 seems very reasonable. Banking institutions will 24 typically say, even though they may take your Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxci 96 1 deposit, they may say that money really isn't 2 available to you for seven days. And so in an 3 effort to address that, seven to ten days should 4 certainly seem reasonable. And anything beyond 5 that, I think the contractor is borrowing our 6 money.

7 DIRECTOR BROWN: Thank you.

8 MS. PATRICK: Thank you.

9 DIRECTOR BROWN: Sir.

10 MR. RODNEY COTILLIER ( Absolute Fortunate 11 Finds): I think this is  Rodney Cotillier,

12 Absolute Fortunate Finds, sorry.

13 I think this is pretty steady here.

14 They do hold it for seven to ten days. The reason 15 why is, I know contracts to get major jobs, small 16 business owner doesn't have much money to put out 17 there, and he is paying the work force 30, 45 days,

18 paying union dues, buying material. Then I have Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxcii 19 known them to go as long as 90 days to get paid or 20 they go belly up.

21 So if you do a seven to ten day, that 22 is a sweeter thing. If you go longer than that, it 23 may hurt the minority contractor and subs.

24 DIRECTOR BROWN: Thank you, sir. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxciii 97 1 MS. PATRICK: Thank you.

2 DIRECTOR BROWN: Next.

3 MS. PATRICK: Along these lines  sir, did 4 you have a topic?

5 MR. JOHN FRENCH ( SynergyOne LLC): John French 6 from SynergyOne. I, too, believe that the seven

7 to ten day payment period would be sufficient.

8 MR. LANCE STOKES ( ECI Unlimited, Inc.): Lance 9 Stokes, ECI Unlimited, Inc.

10 MS. LYNN DONLEY: Are you from Detroit?

11 ( Laughter)

12 MR. STOKES: How did you know?

13 Environmental consultants and engineers.

14 I have a concern with this, seven days 15 from the prime contractor's receipt of payment from 16 the recipient. We have been in situations where 17 the prime did not receive his or her money or told 18 us that for like nine months. Mason Tillman Associates, Ltd. June 2005 Draft for Discussion Purposes Only Client Name Disparity Study 1 cxciv 19 MS. PATRICK: But you believed him?