Equity Procurement Analysis
By: Calvin Chen, Irene Tang
With projected annual expenditures totaling over $5 billion in the upcoming 2021–2022 fiscal year, we were curious to find out what story LA’s procurement illustrates with respect to social responsibility. Following the City’s 2021 migration of procurement data into a Salesforce database, we assessed the City’s social equitability in choosing business partners — the first attempt to do so in over 20 years!
We focused on two questions: to what extent is the City contracting with disadvantaged (DBE), minority-owned (MBE), and women-owned (WBE) businesses, and are we sufficiently prioritizing local businesses?
In order to try and answer these questions, we needed to extract the appropriate data from Salesforce and pipeline that into Tableau dashboards and Google Sheets for analysis. We went about this by developing Python scripts hosted on Google Cloud Platform to automatically extract Salesforce data on a weekly/monthly basis, and from there cleaned and extracted the appropriate insights to be displayed in a user-friendly Google Sheet and interactive Tableau dashboards to understand at an aggregated level, by NAICS code, how the city’s procurement services were doing.
And from this pipeline, we found some interesting results.
First, DBE/MBE/WBEs tend to win lower-value contracts. While the quantity of contracts DBE/MBE/WBEs is still incredibly low (a median of 1.4–1.6% over the top 100 NAICS industries with the most opportunities), the amount of money won was even lower (a median of around 0.3–0.4% for these same NAICS industries). These findings have highlighted significant shortcomings the city has faced with maintaining equitable procurement practices, and we recommended a higher emphasis on DBE/MBE/WBEs within these select industries by including additional monetary incentives or prioritizations to these types of businesses.
Second, DBE/MBE/WBE contracting appeared to happen in spikes every 2 years. Initially, we analyzed this in trying to determine what externally could have influenced these spikes to occur, but after additional discussions with Andrew (our project manager on the procurement team), we realized that this was reflective of contracting cycles in the real world — contracts are typically finished every 2–3 years. This didn’t discern any needed recommendations but rather highlighted the reflection our data had on real-world trends, giving us more belief in the integrity of our data.
Third, the City is contracting a lot with businesses headquartered outside LA County (and even outside California) — but this is justified in that for many industries in which the City needs work done, there are not enough local businesses that specialize in that industry.
Many challenges we faced throughout this process had to do with interacting with the data in the first place (how to understand the various data schemas in Salesforce currently, from Opportunities to Awards to NAICS codes), and how to interact with it all via SOQL queries. Since the city only recently ported its procurement data into Salesforce, it was initially difficult to get support on the initial stages of the project, but after enough tinkering, we were able to break through with enough understanding to the other stages of the data pipeline.
We entered this project not knowing what procurement meant to being able to advise the procurement team on recommendations to move forward with in the future, and the both of us have learned incredible things throughout this summer about the city and about the impact we can make. We would love to especially thank Andrew Choi, Eva Pereira, and Preston Mills for supporting us throughout this entire project and through our summers as data interns for the City of Los Angeles — we couldn’t have done this without all of you.
Here’s to seeing what else lies in store for our work in the future!
Attachments:
View our Tableau dashboard work here, and view our presentation slide deck here
