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Utilization is expressed as the percentage of state dollars paid to M/WBEs within the relevant geographic boundaries and across those industries that make up at least 75% of the total state spending on the analyzed contracts for the study period. The relevant industries for this study were determined using North American Industry Classification System (NAICS) codes. In this study, the authors used what they termed a “1 percent” rule which resulted in the inclusion of at least 75% of the total state spending for the study period. This means they included and analyzed: • all NAICS codes for state contracts where the NAICS codes’ share of total contract dollars was at least 1 percent of the total of all contracts, plus • all NAICS codes where the share of prime contractor dollars was at least 1 percent of the total dollars spent, plus • all NAICS codes where the share of the subcontractor dollars was at least 1 percent of total dollars spent. After narrowing the market based on industries using the most prevalent NAICS codes from the contract data, the market was narrowed to the geographic boundaries that represent the territory covered by most of the state’s purchases. The study authors determined that since 97.9% of the state’s relevant dollars were spent within Washington State, the relevant geographic area for this study was Washington State. Levels of availability were determined based on data regarding the numbers of M/WBEs that existed within the identified NAICS industry markets within Washington State. In addition to the Final Contract Data File that was compiled by the study authors, two additional databases were relied on to estimate availability: (1) an “M/WBE Directory” compiled by the study authors for this study through independent research and (2) a Dun & Bradstreet/Hoovers Database. The availability numbers were then adjusted to show “weighted” availability percentages of MWBE firms within the relevant geographic and industrial markets. The study authors present this information in Table 4-9: Aggregated Weighted Availability as follows:
Black
Hispanic
Asian
Native American
White Women
MWBE Subtotal
Non- MWBE 84.8%
Total
1.7%
0.7%
2.6%
0.6%
9.6%
15.2%
100%
These weighted availability percentages show what the expected utilization rates would be if such businesses were utilized in direct proportion to their availability to provide goods and/or services of the type purchased by the state within the geographic boundaries of the state.
The disparity ratios presented in the study were then calculated by dividing the utilization rate by the weighted availability. Where the utilization rate is less than the availability for that group, it suggests the group is underutilized.
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