Small Business Enterprise & Workforce Goals
Equal Opportunity Programs
The Office of Community Investment and Infrastructure is committed to social and economic equity that extends beyond providing affordable housing and into the realm of employment and business opportunities. OCII promotes equal opportunity in contracting and employment among professional services consultants and construction contractors through its Small Business Enterprise (“SBE”) Program and its Local Construction Workforce Hiring Program. Each program has a robust goal of 50% for SBE engagement and local construction employment, and both programs are enforced by OCII’s Contract Compliance Division. All contracts for construction are also subject to OCII’s Prevailing Wages Policy, which requires the payment of prevailing, livable wages.
Small Business Enterprise
Under OCII’s SBE Policy, prime contractors on OCII-assisted projects must make a good faith effort to award 50% of contract dollars to bona fide SBEs that hold valid certifications and fall within certain revenue thresholds. Additionally, OCII recognizes the City and County of San Francisco (“City”) Local Business Enterprise (“LBE”) Program. Under OCII’s SBE program, project area businesses bidding on agency-assisted contracts are given first consideration, followed by San-Francisco based SBEs, and then non-SF based SBEs. In July of 2015, OCII’s Commission amended the agency’s SBE Policy to conform its small business size standards to the City’s Small LBE revenue thresholds, making it easier for LBEs to participate in OCII’s SBE Program.
In addition to giving first consideration to local firms, OCII’s SBE policy encourages Prime Contractors to award contracting opportunities to businesses that reflect the gender, ethnic and economic diversity of San Francisco.
In FY20-21, OCII’s developer partners awarded professional services and construction contracts on 5 affordable and inclusionary housing-related projects totaling nearly $40 million. Over $31 million (or 78%) were awarded to small businesses, many of whom are LBEs certified by the City’s Contract Monitoring Division. Notably, small businesses were awarded $10 million (87%) of professional services contracts and over $21 million (75%) of construction contracts (See Chart 1). Reflecting the gender and ethnic diversity of San Francisco, minority and women owned firms received nearly $24 million (60%) of professional services and construction contracts.
To ensure inclusion of small businesses in OCII-administered projects, OCII encourages larger and established firms to pair with SBEs by forming associations and joint ventures (JV). These partnerships help Prime Contractors comply with SBE goals by incentivizing them to break up scopes of work when feasible to give smaller firms access to large-scale projects and an opportunity to acquire greater footing and visibility within their trade. OCII recognizes JVs and Associations between SBE firms and non-SBE firms, where the SBE partner performs 35% or more of the work and receives a proportionate share of the profits. Both professional service and construction firms have benefited from OCII’s JV policy.
Prior to the City and County of San Francisco’s adoption of its local hiring policy for construction, the former SFRA and current OCII (as successor agency to SFRA) had a long history of implement- ing a local workforce requirement on agency-assisted construction projects. OCII’s local workforce policy is aggressive and unique in that it establishes a local hiring goal of 50%, with first consideration given to Project Area residents and requires contractors to adhere to State prevailing wage requirements, even on projects entirely funded with private dollars. OCII’s wage policies are demonstrative of the agency’s commitment to livable wages for San Franciscans.
The San Francisco Office of Economic and Workforce Development, through its CityBuild Division, assists OCII with its workforce development program. Contractors and subcontractors are required to submit certified payroll reports through a web-based monitoring and reporting system, which tracks hours by trade, residency, and other relevant demographic information of employees. CityBuild and Contract Compliance staff closely monitors payroll submissions to ensure adherence to OCII’s policies, and to allow for “real time” and actionable remedies for deficiencies.
On OCII-sponsored affordable and inclusionary housing projects in FY20-21, OCII’s Local Construction Workforce Hiring Program created 3,254 construction jobs, of which 461 were filled by San Francisco residents, yielding an overall local workforce participation rate of 18.3%, as measured by work hours. Although the percentage is below the goal, OCII-sponsored projects have one of the highest number of CityBuild worker placements. In addition, the figures represent 100,600 hours of work performed by San Francisco residents and $4.8 million in wages paid to local residents.