November 7, 2002

Working toward diversity after I-200

Associated Builders and Contractors publishes a reference manual to help emerging contractors compete for business. Randy Bosley of Sovereign Enterprises is the chairman the organization’s Western Washington Diversity Committee. Nick Cooper of Walsh Construction, left, is its past chairman.

As minority contractors emerge as a relatively new force in the industry today, many are realizing that the ability to build relationships is as critical to their success as the quality of job performance.

A company must obtain the work first before it can prove itself on the jobsite. Along with this comes recognition that minority contractors need to work together to improve their odds of success individually, and as a group, within the construction industry.

During the years that set-asides were mandated for public work, minority contractors believed they were building relationships with other contractors, as well as filling quotas. However, when Initiative 200 ended set-asides, minority contractors found that not only did they lack strong relationships with prime contractors, they didn’t know each other. They had no network or forum to help each other deal with their post I-200 world.

Adding to their difficulties was the fact that the minority-owned firms often don’t have the bonding capacity to meet the requirements of large public contracts, and don’t have deep enough pockets to buy materials, pay their workers and wait the 60 to 90 days or longer it takes to get paid on major bid work. Many wondered how they would survive.

There is still much more to be done, and members of the minority contracting community and established contractors are taking positive — and important — steps.

Reaching out

Minority contractors are coming together under the Contracting Development and Competitiveness Center (CDCC), which is funded by the city of Seattle and housed at the Urban League. The center will provide assistance and training, and serve as an advocate on behalf of women, minority and emerging contractors.

Recognizing a critical need, the Associated Builders and Contractors (ABC) of Western Washington’s Diversity Committee has reached out to the local minority community to help build a culture and structure to encourage diversity, to provide education and networking opportunities, and to build on the diversity-friendly environment that already existed within ABC.

The national ABC organization published a 380-page reference manual for emerging contractors that covers industry issues from business organization, planning and budgeting to relationship-building, bonding and employee policies.

It has sold nearly 20,000 copies nationally and is being used locally as the reference for the School of Construction Management for women, minority and emerging contractors, a 14-session program run in conjunction with the CDCC. Instructors are volunteers from throughout the industry who teach classes in their areas of expertise. In addition, graduates can participate in a mentoring program.

The school fills an important role. As Pat Oda, general manager of Shinstine/Associates and a volunteer instructor and mentor at the school said, “There are no Michael Jordans and very few successful minority contractors to mentor emerging contractors.”

Not ‘quota fillers’

Another initiative designed to help contractors create a more diverse workforce is the new “Excellence in Diversity Self-Evaluation Manual” produced by ABC’s National Diversity Committee.

Nick Cooper, a project manager with Walsh Construction and a member of the national committee, describes it as similar to the Safety Training and Evaluation Process (STEP) program. Companies use the form to analyze their practices against a group of best practices, scoring their commitment to both internal and external diversity.

“This is a great tool for contractors to examine their procedures, especially for recruiting minority- and women-owned subcontractors and suppliers,” Cooper said.

General contractors need to be encouraged to think of minority contractors as viable options in a more diverse world, not just as “quota-fillers.” One successful general contractor said he believes most business people are colorblind and, if they know the minority contractors, they will use them without hesitation.

On the other hand, many minority contractors think discrimination still exists. One related the experience of calling a general contractor he had worked with on many occasions and being told that he wouldn’t be able to bid on the job because they didn’t need a minority contractor on it.

Losing public contracts

While some suggest that unbundling work on large public projects is an answer to allow emerging contractors better access to public projects, that is not the type of solution that will help position them in the mainstream.

Statistics from the Office of Minority and Women’s Business Enterprises show that of the $349 million in contracts awarded by Cabinet-level state agencies for fiscal year 2001, only 5.6 percent went to minority-owned businesses.

During fiscal year 2002, state agencies and educational institutions reported that $1.9 billion was spent on goods and services subject to the state’s WMBE program, of which $29.6 million, or 1.5 percent, was spent with minority business enterprises. Another $33 million, or 1.7 percent, was spent with women’s business enterprises.

That compares unfavorably with expenditures from 1995-1998, when WMBEs reaped an average of 9.8 percent of the state’s spending on projects that fall under the program.

Clearly, public work is going in the wrong direction. Although unbundling may help to provide more opportunities on public works, we need to put even more energy into helping women and minority contractors compete successfully in the private sector.

To truly integrate the industry, we need a much better understanding of each other. Established contractors must understand what the emerging contractors’ needs are and, if they are truly committed to diversity, make allowances to meet those needs.

For example, the issue of paying on a less than 90-day schedule would help emerging contractors build reserves so they can continue to take on larger and larger jobs.

On the other hand, minority contractors need to develop stronger relationships, network within the industry, increase their understanding of established contractors’ expectations and learn how to meet them or negotiate terms that will accommodate the needs of both parties.

Building relationships

Chris Clark, chairman of W. G. Clark Construction Co., said prime contractors committed to diversity must get to know who the minority contractors are, ensure that their office and field staff are familiar with them and be certain that they are in the database of subs so they are included when bid requests are sent out.

“Because construction is a relationship-based industry, networking is also tantamount to increasing diversity,” Clark said. “Organizations must provide the forums and the outreach necessary to foster it.”

Members of the first School of Construction Management agree. After learning more about running a successful business, the networking and relationships with instructors and within industry organizations is beginning to pay off.

Jimmy Timms and Willie Hughes of Total Housekeeping Technicians have seen their business grow substantially through what they learned to make them more effective at bidding, the relationships they built with instructors and networking at ABC functions.

It is in the long-term best interest of the entire construction community to have everyone participate and contribute on an equal footing. The public and private sectors, established contractors and the women and minority community need to all work together to identify the challenges and seek solutions. Some good initiatives have been started. Much more needs to be done.

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• Opportunities abound for women in construction
  
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