what eventually could be one of the largest contracts ever given by TriMet to a certified Disadvantaged Business Enterprise (DBE) in Oregon.

The TriMet Board of Directors voted Wednesday to approve award of the pre-construction services contract for the Division Transit Project to Raimore Construction. The project will allow new, 60-foot-long, articulated buses to provide service along Division Street from downtown Portland to Gresham.

The initial contract is worth $395,000, but the board will revisit the contract prior to construction, and is likely to ultimately amend it to account for up to $65 million in construction costs, according to the resolution passed by the board. The project in its entirety will cost an estimated $175 million by the time it is carried out, with funding coming from state, regional, local and federal sources.

“It is such a huge deal,” TriMet spokeswoman Tia York said. “TriMet has worked with Raimore for a very long time.”

Raimore Construction is a certified DBE and has worked with TriMet on transit projects for 20 years. This includes construction of the MAX yellow light-rail line through North Portland. During that project, TriMet created its current framework for supporting DBEs as well as minority-owned and women-owned businesses.

Raimore Construction also carried out a $6.8 million project involving construction of shelters along the MAX orange line route. It was among the first instances of a black-owned general contractor completing a major construction project in Oregon. It also is the largest contract to date that TriMet has awarded a DBE.

The federal government defines a DBE as a small, for-profit business at least 51-percent owned by people defined by the government as “socially and economically disadvantaged.”

Division Transit Project construction is expected to begin in 2019, and bus service along the route is projected to start in 2022. As many as 42 new bus stops and 83 new platforms will be built with improved rider amenities.

The new line will offer frequent service, as the heavily traveled Line 4 (Division/Fessenden) does. Buses will arrive at each stop every 15 minutes or sooner, for much of the day.

The project infrastructure will serve an area that is now part of TriMet’s most popular and heavily traveled bus route. Line 4 provides more than 16,400 trips on an average weekday. TriMet plans to split Line 4 this fall into two routes, one that serves downtown and North Portland, the other Division Street.

In addition, the new buses traveling the 15-mile route will be given traffic signal priority to accelerate service.

This article has been edited to show the correct cost of the construction project.

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When Ortiz & Associates President Buzz Ortiz looked at the Oregon Department of Transportation‘s most recent disparity study, he was baffled by the findings.

The study, published in 2011, analyzed whether there is a level playing field for minority- and women-owned firms in the transportation contracting industry and ODOT‘s contracts. The information is used to help ODOT work within the federal Disadvantaged Business Enterprise program for its federally funded contracts. Findings also shape the state agency’s goals to hire minority- or women-owned firms for future contracts funded by the Federal Highway Administration.

“The results were that the Hispanic community was being overutilized in the goals,” Ortiz said. “The truth is it really hasn’t been overutilized.”

The study’s finding that the only minority groups ODOT had underutilized for transportation construction contracts were African American- and subcontinent Asian-owned firms is grossly inaccurate, he said. This led Ortiz, whose Sandy-based firm specializes in asphalt milling, to get involved with the Diversified Builders & Engineers Council (DBEc). He serves as board secretary for the volunteer-run group that aims to serve as a voice for Hispanic and other minority contractors.

Members have been adamant about exposing what they believe are shortfalls with the data collected in the 2011 ODOT disparity study. Together with other minority contractor groups they’re pushing for a more accurate representation of Hispanic contractors in an updated disparity study that’s under way and scheduled to be released next year. In particular, group members say the 2011 study gathered data only from a handful of larger, more successful Hispanic-owned contractors, producing skewed results that leave out smaller companies.

“That’s what got this organization going was trying to bring to light that was happening,” Ortiz said. “We’re trying to say, ‘You have some numbers, but we don’t think they’re entirely correct.’”

Concerns raised by the DBEc and other minority contractor groups about the 2011 study results have led ODOT officials to seek more oversight for the 2016 study being compiled by private consultant Keen Independent Research, said Tiffany Hamilton, small business programs manager with the ODOT Office of Civil Rights. The agency is seeking extensive public input and will expand the study’s sources for information on minority- and women-owned firms, she said.

“A lot of folks said, ‘Hey, we didn’t … participate (in the 2011 study),’” Hamilton said. “It led to a lot of poking at the report … We can control the process and make sure we do it differently this time.”

The DBEc was founded two years ago by Marcela Alcantar. She’s president of Portland-based Alcantar and Associates, which provides support services and project management for the transportation industry. Alcantar said one reason she started the DBEc was to advocate for a more inclusive 2016 study.

“We realized the pot was being distributed unfairly,” she said. “There were improvements that can be done.”

She believes Hispanic-owned construction and engineering companies were misrepresented in the 2011 ODOT disparity study because the firms were not involved enough while it was being compiled. Through the DBEc, these firm owners have been much more vocal about the data collection process for the 2016 disparity study, she said. In addition to serving as DBEc board president, Alcantar is a member of an ODOT external stakeholders group that provides oversight for the updated study.

Alcantar said she and other DBEc members know personally that Hispanic-owned companies, especially smaller startups, continue to struggle to break into the transportation construction and design industries. ODOT’s minority contracting goals can help those firms get a foot in the door, she said.

“We don’t want a handout; we want to work for it,” Alcantar said. “We just want an opportunity. Just give me one opportunity to show that I can. We have tried to bid, but there is a system in place that we can’t break in.”

Serving as a voice for the Hispanic contractor community is one way that the DBEc can ensure the updated disparity study better represents those businesses, said Manuel Castañeda, the group’s board vice president and a member of the external stakeholders group. He’s the owner of Hillsboro-based PLI Systems, which specializes in soil stabilization projects.

When Castañeda approached ODOT with concerns about the 2011 disparity study, he learned that Hispanic-owned firms like his own weren’t involved.

“What I was told is that we were not at the table,” he said. “There was no representation from the Latino community. If you’re not at the table, you’re going to be left out.”

National Association of Minority Contractors of Oregon board President Andrew Colas said the group backs the DBEc’s assertions that the Hispanic community was misrepresented in the 2011 disparity study.

“I tend to agree with the comments in regards to the overutilization of Hispanic contractors,” he said. “That was a skewed result.”

It’s among concerns that NAMCO members raised with ODOT, Colas said. This includes pushing for the 2016 study to widen where it collects data on minority contractors. The study should go beyond relying on numbers compiled by Short Hills, N.J.-based credit reporting firm Dun & Bradstreet because many smaller minority-owned firms don’t register with this listing, he said.

“It’s a real way to create a smaller pool,” Colas said. “If they use the DBE and (Minority Business Enterprise) database, that would be the best pool.”

Hamilton said ODOT does intend to use this state directory to collect data for the 2016 study.

“We’re trying to get as comprehensive a list as possible,” she said.

ODOT officials have listened to NAMCO and the DBEc and acknowledge that results from the 2011 study may have been inaccurate, Hamilton said.

“We’re engaging them and listening to what they have to say,” she said. “Just a couple of firms can throw the whole analysis off.”

Castañeda said he’s confident that the DBEc’s efforts to represent Hispanic contractors will pay off when a draft of the 2016 disparity study is released early next year.

“I have a feeling the results will be different,” he said.

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TriMet awarded $170 million in contracts to minority-owned firms, women-owned firms or disadvantaged business enterprises for the Portland-Milwaukie light-rail project.

That sum is the most the transit agency has spent to hire MWDBE firms since starting a program 14 years ago to increase the number of construction contracts it awards such firms, said Johnell Bell, TriMet’s director of diversity and transit equity.

Previously, TriMet awarded $62 million in contracts to minority-owned, women-owned or DBE firms for construction of the MAX green line, and $36 million for construction of the MAX yellow line.

Of the 538 firms hired to work on the $1.49 billion MAX orange line between Portland and Milwaukie, 130 are owned by minorities or women, or are DBEs.

“One of the things we’re really proud of is it’s not just a handful of firms,” Bell said. “A lot of this work is just having the exposure and the opportunity.”

The MWDBE firms represent 25 percent of all contracted firms working on the project, which is scheduled to finish next year. That exceeded TriMet’s goal of 22 percent, Bell said. The agency set no specific goal for hiring MWDBE architecture and engineering firms; however, 20 percent of the design firms working on the project are certified, he said.

The large percentage of MWDBE participation for the orange line project has garnered attention from the Federal Transit Administration, one of the project funders, Bell said.

“We’re one of the top (agencies) in the nation in terms of hitting DBE goals,” he said.

TriMet officials last week recognized an individual and a firm involved in the orange line project for helping advance the agency’s Disadvantaged Business Enterprise program goals. The 2014 DBE Champion of the Year individual award went to Hoffman Construction project manager Daryle Low. The organization award went to prime contractor Stacy and Witbeck.

To date, the orange line project has created 12,800 jobs, according to TriMet.

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A new $1 million contract might account for only a tiny portion of the $1.47 billion Portland-to-Milwaukie light-rail project, but for Bruce Watts, senior director of TriMet‘s Diversity & Transit Equity department, it represents a huge milestone.

That’s because , a certified Disadvantaged Business Enterprise contractor, has committed to sharing 100 percent of the money with subcontractors with the same designation.

“This is a first for us,” Watts said. “The young man running this company (Jaime Ramos) is tenacious. He’s all about inclusion. It really shows us that the next generation is starting to step up and take interest in diversity.”

The new contract, which will begin this month, follows a December announcement by TriMet that , also a DBE, set a record by sharing 77 percent of the money with other DBEs on its completed contract to build the $3 million Civic Drive MAX station.

The Ramos Landscaping contract, when the work is finished, should break that record, said Kimberly Sutton, a representative with TriMet’s Diversity & Transit Equity department.

“He (Ramos) says he’s going to make all his subs DBEs,” Sutton said. “If anybody can pull that off, he can.”

Ramos did not return phone calls seeking comment.

The contract involves boarding up buildings, erecting fences, performing security patrols, maintaining landscapes and shutting off utilities once the agency is ready to proceed with construction. About 90 percent of the buildings are commercial, and about 10 percent are homes, mostly in the Milwaukie area, Watts said.

And the contract to care for the 60 or so buildings is the largest contract of its type for TriMet, Watts said.

“We’ve never had a need for that many buildings before,” Watts said.

TriMet’s program to help DBE companies has continued to succeed – so much so that it was touted by John D. Porcari, the federal deputy secretary of transportation, in a letter last year. He saluted the program’s work providing technical assistance and breaking up contracts into smaller chunks as a means to help minority contractors get a leg up before the bidding process begins.

“TriMet’s innovative approach to unbundling not only gave more DBE firms the opportunity to participate in the project and to support and train their workforces, it also provided multiple DBEs with exposure to, and the opportunity to become familiar with the contracting process,” Porcari said in the letter, which went out to a host of public transportation agencies around the country.

Surprisingly, Ramos wasn’t the only major percentage DBE bidder for the $1 million contract, Watts added.

“During procurement we had eight bidders, four on the short list, and two of those that were 100 percent DBE,” Watts said. “We were very happy to see that.”

This month, the agency plans to expand its services by kicking off a new internship program aimed at helping more minority students learn about the construction and light-rail industry.

That program, spearheaded by Sutton, was approved by the TriMet board in December. It asks contractors to have at least one minority or female intern on each project, ideally from the local community, she said.

“We ask for one, but we’ve had commitments from contractors for as many as four interns,” Sutton said.

The program is working with Portland State University and other educational institutions with high minority populations around the state.

Interns will split time between a prime contractor and subcontractors on a project as a learning experience, Watts said.

“Our goal will be that an intern will see how a project is built from a number of different levels,” Watts said.

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Related

Union Station renovation

A project to renovate Portland’s Union Station will go forward despite minority participation goals not being met.

“This is the first time since we returned to setting hard goals that we have not had any bidder meet the goal,” said Jill Miller, program manager with the Oregon Department of Transportation’s Disadvantaged Business Enterprise program.

The project represents a collision between the highway and building construction worlds. ODOT doesn’t improve many buildings, and building contractors don’t often deal with the agency’s specific minority participation goals.

“The bidders on this particular project are not folks that are used to working on ODOT projects,” Miller said. “They weren’t really sure on what the process was, and they didn’t get the response from subcontractors that they thought they would.”

For projects using federal transportation money, ODOT sets minimum requirements for work done by African-American and Asian-American firms; for the Union Station job, that requirement was 3 percent of total contract dollars. Those two groups were identified in a disparity study as getting fewer jobs than their availability in the Portland-metro area.

Other public agencies’ participation goals for projects tend to include women, Hispanics and Native Americans as well. It’s easier to find subcontractors in that broader pool, said Steve Bartell, project manager for P&C Construction, which was awarded the $4.3 million contract.

“It’s difficult to find subs that have the right mix that the project needs,” Bartell said. “But we do due diligence and advertise in various papers, make contacts, go through (the Oregon Association of Minority Entrepreneurs).”

P&C officials contacted 30 to 40 minority subcontractors, Bartell said, but couldn’t find firms in the needed specialty areas that were available and capable of doing the work. P&C sought “somebody that can do painting, for example, with lead abatement – how to work around it and contain it,” he said.

“You can find minority and (women-owned businesses) for painters,” Bartell said. “You don’t find DBE, though. That’s true across the board. You don’t very often find them in the electrical end; there’s one or two locally big enough to handle these. Mechanical has a couple; plumbers sometimes go hand in hand with mechanical, but not too often there.”

Maurice Rahming, president of the National Association of Minority Contractors of Oregon, said he could name several DBE electrical contractors, including his own company, O’Neill Electric, that could do the work. Ditto for painting: Ha’s Painting, Billy Suell Painting and Professional Lath and Plaster all do painting, as do DBE general contractors including Pacificmark Construction and Colas Construction, Rahming said.

“If you’re looking at bidding this project, if you said I’ve got a 3 percent goal, like you just did, how hard was that?” Rahming said. “I read it right off to you.”

None of the five bidders called Rahming in his capacity with NAMC Oregon, he said. And none called him as an electrical contractor, he said, although it’s possible someone sent a fax. “I can tell you that, as a minority contractor, we get so many faxes coming in daily, it’s easy to miss one.”

Faye Burch, a consultant who helps contractors meet minority participation goals, said she got a message from one unidentified contractor just before the Union Station  bid due date. “That cannot be counted as a good-faith effort,” she said. “It was not serious outreach.”

Burch wants to see the project rebid. “If they wanted to meet the goal, they could have very easily,” she said. “And we could have helped them.”

It wasn’t that easy, said Barry Goodling, estimator and project manager with Skyward Construction, one of the bidders for the project. “We called everybody and contacted a lot of people and did what we’re supposed to do as part of a good-faith effort.”

Skyward got back only one bid from a disadvantaged business enterprise firm, but it was two minutes to bid time, Goodling said, and the Skyward had already gone with another subcontractor’s bid.

It wouldn’t have made a difference anyway, Goodling said. That line item wouldn’t have been worth 3 percent of the project, which amounts to roughly $150,000.

The subcontracts with bigger values are those for items without as many available minority contractors, Goodling said. “There’s not a lot of African-American (firms) qualified to do a million and a half (dollars) of specialized roofing like this,” he said.

Because none of the five bidders met the project goal, ODOT’s civil rights office reviewed the process, deciding that P&C had met the good-faith outreach effort requirement for the contract. Miller said she didn’t see a need to make any changes to the contracting process because the department has so few building construction projects with federal transportation money attached.

“We did what we could,” she said. “We made the attempt to get DBE participation on that project, and it didn’t seem like there was a lot of interest.

“So we’ll keep doing what we do best, and that’s building roads and bridges.”

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Changes this month to the way the Oregon Department of Transportation counts minority participation on projects made contractors take notice. But an effort by the state’s business development office to explain the changes has instead created more confusion for contractors.

Starting this month, disadvantaged business enterprise, or DBE, contractors earn credit only for work they do under the specific codes in which they are certified. If a DBE contractor performs work classified under another code, the work doesn’t count toward the project’s overall DBE goals.

If a contractor is certified to do concrete work, for example, but not electrical work, the project won’t get DBE credit for electrical work performed by that contractor. Previously, ODOT had counted any work the DBE contractor performed, even if the contractor wasn’t certified in that specific code area.

The change doesn’t mean that firms will lose their DBE status. But that’s the message contractors received in letters from Business Oregon, the state office responsible for certification.

ODOT officials now say at least one letter was incorrect, and that Business Oregon will be sending another to clear up the confusion.

The National Association of Minority Contractors‘ Oregon chapter advised its member contractors that the state’s directive is incorrect. Member Michael Martin with Northwest Infrastructure said he disregarded the Business Oregon letter.

“Someone (from NAMCO) let me know about it and I just threw it away,” Martin said.

Business Oregon sent one letter to firms under the heading “Disadvantaged Business Enterprise (DBE) Review and Recertification.” The letter included an application for recertification.

“The letter that went out from Business Oregon appears to be in error and is giving the wrong impression,” said ODOT spokesman Patrick Cooney. “I can understand the confusion.”

Certified DBE firms don’t need to apply to recertify. However, they have the opportunity to become certified in additional code areas, if they so choose.

Business Oregon will visit or review all 580 DBE-certified firms, Cooney said, to make sure the certifications are up to date and that firms wishing to become certified in new code areas have that opportunity. It will also send out another letter to correct the earlier one.

Melvin Oden-Orr, NAMCO’s general counsel, said that an across-the-board review isn’t necessary and places too big a burden on DBE contractors. “It’s our position that what they’re asking for is unnecessary,” Oden-Orr said. “It’s already in the files.”

“The issue they appear to be attempting to address is that either ODOT or the general contractors have allowed firms to do work in areas they’re not certified in,” Oden-Orr said. “That’s not a certification issue; that’s a compliance issue.”

The changes made this month to the DBE program were intended to put Oregon in line with federal guidelines. They also make it harder to reach goals for participation of DBE firms – those controlled by minorities or women. The ODOT goal has been 11.5 percent participation for those groups.

A particular focus for ODOT has been African-American and Asian-American contractors, groups that a disparity study showed were getting fewer jobs than their share. Those firms will have the first opportunity to certify under new areas, Cooney said.

“African-American and Asian-American firms will be given priority on reviews to make sure that they don’t fall farther behind,” Cooney said. “We apologize for the confusion, and we will get information out to DBE firms that’s correct and explains what they need to do or not do.”

For his part, Martin said he’s not up for recertification anytime soon and isn’t in a hurry to expand his classifications. “I will end up getting recertified in new areas,” he said.

“But there’s nothing going on right now we need to do something about right away.”

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A rule change has made it harder for contractors to meet participation goals for minorities and women on state projects. Starting this month, Oregon Department of Transportation projects have tighter requirements for disadvantaged business enterprise, or DBE, contractors.

Under the change, those contractors earn credit only for work they do under the specific codes in which they are certified. If a DBE contractor performs work classified under another code, the work doesn’t count toward the project’s DBE

“It happens fairly regularly,” said Jill Miller, program manager with ODOT‘s DBE program. Subcontractors often broaden their expertise on job.

“Some firms were using that process to gain experience in those areas,” she said.

Prime contractors make sure their subcontractors meet participation goals, said Tim Hendrix, manager with Wildish Standard Paving Co., but they’ve never had to go deep into the details. “In the past, prime contractors have relied on subcontractors to give us quotes and haven’t paid any attention to the coding, because that wasn’t required,” he said.

“Contractors are going to have to be much more diligent in pursuit of subcontractors,” Hendrix said. “The subcontractor community needs to look carefully at whatever they’re certified in and say, ‘Are those the accurate codes for the work I need to bid?’ ”

The change puts Oregon in line with a clarification the U.S. Department of Transportation posted on its Web site last July. It wasn’t a widely publicized change, Miller said.

“They not only didn’t give us any warning, they didn’t give us any notice when they did post that,” she said. State transportation officials started meeting with prime contractors and subcontractors to find a way to put the new rules into effect.

The Oregon Columbia chapter of Associated General Contractors last week joined the National Association of Minority Contractors of Oregon for a meeting on the rule change.

“Especially in the worst contraction in our industry in at least a generation, any change of rules is going to draw intense interest and a lot of questions,” said John Rakowitz, public affairs director for the AGC chapter. “When you change the rules about how people bid and how you meet DBE goals, people want to know how that will work.

“If there’s a fear out there, it’s (whether) all the contractors out there know early enough exactly how to respond to this.”

Vicqui Guevara is president of Valley Growers, a DBE landscape contractor. One upside of the rule change is that it could provide more oversight to make sure the process isn’t abused, she said.

Some DBE subcontractors will subcontract their own work to non-DBE companies, Guevara said. “That’s something we need to weed out.”

Although Oregon has exceeded its annual DBE goal for the last two fiscal years, Miller said, that will become more difficult under the new rules. The ODOT goal calls for 11.5 percent participation, including a 1-percent race-conscious goal.

“I expect that, because of this change, there will be some credit that has been allowed that will cease,” she said. “That’s going to require more effort by the prime contractors.”

Prime contractors such as Wildish are trying to spread the word, Hendrix said. First, subcontractors need to become certified under every code they’re qualified to work under.

And second, prime contractors need to make certain they’re tracking how they employ their DBE subcontractors. “You don’t want to lose a job, with all the work it takes, in today’s market, because you missed something procedurally,” he said.

“It costs money to put together estimates and bids,” he said. “If you lose it because you’re not dotting your i’s and crossing your t’s, it would be a shame.”

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