# Presentation: 703214

## Nightmare on Negotiation Street

**NEGOTIATING FAIR SHARE OBJECTIVES**

## Fair Share Objectives

- A fair share objective is ***an objective based on the capacity and availability of qualified, certified MBEs and WBEs in the relevant geographic market*** for the procurement categories of
- construction, 		-equipment
- services 			-supplies
- compared to the number of all qualified entities in the same market for the same procurement categories, adjusted, as appropriate, to reflect the level of MBE and WBE participation expected absent the effects of discrimination.

## Fair Share Objectives

- A fair share objective is _**not a quota**_.
- A fair share goal is a  _**numerical aspirational**_ goal.
- A recipient cannot be penalized for not meeting its fair share objectives

## ESTABLISHING A RELEVANT GEOGRAPHICAL AREA

- This area may be a geographical portion of a state, an entire state, or a multi-state area.
- Simply ask yourself, “Where do I normally purchase my construction, equipment, service, and supply needs?”

## DETERMINING THE BASE FIGURE USING AN AVAILABILITY ANALYSIS 

- Analyze the availability of qualified, certified MBEs and WBEs by utilizing directories, or bidders lists.  SBA directories of certified firms, or DOT directories of certified firms are good sources.
- Separately divide the number of qualified, certified MBEs or WBEs by the number of all businesses to derive a base figure for the relative availability of MBEs or WBEs in the market.  Census Bureau data can be used to determine the number of all businesses within the relevant geographic buying market.

##      2002 Survey of Business Owners for Georgia- Construction

| Geographical Area | NAICS Code | NAICS Code Description | Ethnic Group | Gender | Number of Firms |
| --- | --- | --- | --- | --- | --- |
| Georgia | 23 | Construction | ALL | All | 101,718 |
| Georgia
 | 23
 | Construction | ALL | Woman owned | 7,079 |
| Georgia
 | 23
 | Construction | Hispanic or Latino | ALL | 5,869 |
| Georgia
 | 23
 | Construction | Black or African American | ALL
 | 6,293 |
| Georgia
 | 23
 | Construction | Alaskan or Native American | ALL
 | 1,050 |
| Georgia
 | 23
 | Construction | Asian | ALL
 | 701 |
| Georgia
 | 23
 | Construction | Hawaiian or Pacific | ALL
 | 33 |

**     ****2002 Survey of Business Owners for Georgia- Construction**

## How to calculate the Fair Share Objectives

- _FORMULA:_
- Target Business/ All Business = Base Figure
- _EXAMPLE:_
- WBEs:	7079/ 101,718 =  0.0695 or approximately **7%**
- MBEs:	13,946*****/101,718 = 0.137 or approximately **13.7% **
*****sum of highlighted figures (all minority firms)

| Geographical Area | NAICS Code | NAICS Code Description | Ethnic Group | Gender | Number of Firms |
| --- | --- | --- | --- | --- | --- |
| Georgia | 23 | Construction | ALL | All | 101,718 |
| Georgia
 | 23
 | Construction | ALL | Woman owned | 7,079 |
| Georgia
 | 23
 | Construction | Hispanic or Latino | ALL | 5,869 |
| Georgia
 | 23
 | Construction | Black or African American | ALL
 | 6,293 |
| Georgia
 | 23
 | Construction | Alaskan or Native American | ALL
 | 1,050 |
| Georgia
 | 23
 | Construction | Asian | ALL
 | 701 |
| Georgia
 | 23
 | Construction | Hawaiian or Pacific | ALL
 | 33 |

## OTHER METHODS FOR DETERMINING THE BASE FIGURE

- Utilize data derived from a valid, applicable disparity study, no more than 10 years old.
- Use the approved fair share objective of another recipient, with the same or similar relevant geographic buying market, purchasing the same or similar items.

## OTHER METHODS FOR DETERMINING THE BASE FIGURE

- When using the Fair Share Objective of another EPA recipient, there must be adjustments made for differences in the markets, and in the recipient’s procurement program.
- Alternative methods may be used to determine a base figure for the overall objective.  Any methodology chosen must be based on demonstrable evidence of local market conditions and be designed to ultimately attain an objective that is rationally related to the relative availability of MBEs and WBEs in the relevant geographic market.
- Prior to submission, the base figure should be further scrutinized for verifiable accuracy.

## ADJUSTING THE BASE FIGURE

- A recipient must examine the evidence available in its jurisdiction to ***determine required adjustments***, if any, are needed to the base figure in order to arrive at the fair share objectives.
- The following are the different types of evidence that should be considered:
- The current capacity of MBEs and WBEs to perform work under EPA financial assistance agreements
- Evidence from disparity studies conducted in relevant geographical areas.

## ADJUSTING THE BASE FIGURE

- The following are the different types of evidence that should be considered **(continued)** :
- adjusted for differences in the local market and the recipient’s procurement program.
- A recipient may also consider available evidence from related fields that affect the opportunities for MBEs and WBEs to form, grow and compete.  These include:
- Statistical disparities in the ability of MBEs and WBEs to get the financing, bonding and insurance required to participate.
- Data on employment, self-employment, education, 			training and union apprenticeship programs as related to MBE/WBEs in the program.

## TIMING FOR FAIR SHARE OBJECTIVE SUBMISSION AND EFFECTIVE DURATION

- A recipient must submit its proposed MBE and WBE fair share objectives and supporting documentation to EPA within 90 days after its acceptance of its financial assistance award.
- EPA must respond in writing to the recipient’s submission within 30 days of receipt, either agreeing with the submission or providing initial comments for further negotiation.  Failure to respond within this time frame may be considered as agreement by EPA with the fair share objectives submitted by the recipient.
- MBE and WBE fair share objectives must be agreed upon by the recipient and EPA before funds may be expended for procurement under the recipient’s financial assistance agreement.
- FSO will remain in effect for three fiscal years unless there are significant changes to the data supporting the fair share objectives.

## EXEMPTIONS FROM FAIR SHARE NEGOTIATIONS

**Grant and loan recipients receiving a total of ****$250K or less**** in EPA financial assistance in a given fiscal year.**
**Tribal recipients of Performance Partnership**** Eligible grants under 40 CFR Part 35, Subpart B.**
**There is a ****3-year phase in period**** for the requirement to negotiate fair share goals for Tribal and Insular Area recipients.**
**Technical Assistance Grants**

## Negotiation Street is Now at a Close