In a step to protect local small businesses, Los Angeles Metro adopted a measure to ensure that small business owners hired as subcontractors do not bear the brunt of voluntary consultant fee reductions after Metro’s Board of Directors yesterday approved a motion authored by Los Angeles County Supervisor Hilda L. Solis, Director James Butts, and Director Jacquelyn DuPont-Walker.
“Small businesses are the engine that drive our regional economy, and I will do all I can to help industrious entrepreneurs get through this economic downturn,” said Supervisor Solis, who also serves as a Director on the Metro Board. “With yesterday’s approval of my Board motion, we demonstrate our commitment to our hardworking subcontractors. They are valued members of our Metro team, and we will do all that we can to make sure they are not disproportionately impacted by cost-saving measures.”
In response to declining revenues due to COVID-19, Metro has launched a number of cost-saving initiatives, including requesting voluntary fee reductions from all consultants. However, Metro’s Transportation Business Advisory Council (TBAC) found that several of Metro’s subconsultants had assumed that fee reductions were mandatory, placing an undue burden on them. Many of the agency’s subcontractors are small businesses struggling to weather the pandemic.
According to the Los Angeles Economic Development Corporation, 93 percent of businesses in Los Angeles County have less than 20 employees, and it is these businesses that have been most impacted by the COVID-19 downturn.
Many applauded Supervisor Solis’ Metro Board motion. The TBAC lauded Supervisor Solis for her “support and advocacy.”
“On behalf of TBAC, comprised of small and diverse businesses including DVBE organizations, we appreciate the support and advocacy of Supervisor Solis to ensure that large primes commit to ensuring that small and diverse businesses are not overly taxed with the voluntary 2 percent fee reduction,” said Schenae Rourk, Chair of the TBAC. “We appreciate her commitment to small and diverse businesses.”
Supervisor Solis’ motion directs Metro to ensure that all consultants considering a voluntary fee reduction under a Metro contract must state in writing within 30 days that their subcontractors have been informed that all fee reductions are voluntary, not mandatory. Further, they are to ensure subcontractors will not absorb the entirety of these fee reductions.
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