In 1996, stakeholders in Portland were fed up with the dearth of public contracts going to woman- and minority-owned companies, and the relative lack of women and minorities in the workforce. City leaders pledged to do better, establishing programs to increase “participation,” which hovered between 3 and 5 percent total for those groups.

Twenty years later, those facts are all roughly the same. O’Neill Electric President Maurice Rahming, a regular voice on this issue, said now he and others are working to keep things from getting worse.

“Ideally, we’d like to see those numbers go up,” he said, “but realistically, we’re fighting to keep those extremely low numbers. We’ve been doing this for 20 years. We’ve been setting goals, but we haven’t been meeting them.”

What’s new today is that the construction industry in Portland is beset by the disruptive effects of a building boom and a labor shortage. To adjust, there’s talk in City Hall of using less of the low-bid procurement method, and “disaggregating” DMWESB data. There are also calls on private industry to step up.

“Looking at the latest data the city has, it still shows very low utilization of minority and women contractors,” said Tony Jones, executive director of the Metropolitan Contractor Improvement Partnership. “While there’s been lots of effort over the last 20 years, when we look at the results, they’re the same.”

Eager for change, at long last

Earlier this month, a shaky half-year after the Portland City Council established the Equitable Contracting and Purchasing Commission, members – including Rahming and Jones – approved a no confidence motion against the city council. The vote will have little practical impact, city officials say. But it did lay bare tensions that had simmered on the commission for six months.

The city later delayed release of video of the meeting and left key details out of meeting minutes, as first reported in The Oregonian.

Commission members received an email asking them to not speak on behalf of the ECPC.

Josh Alpert, the mayor’s chief of staff, said he takes “full blame” for the flare-up. When Mayor Charlie Hales shifted his focus to addressing the problems of homelessness and housing affordability, the business of the ECPC and other matters were pushed aside. Alpert said the city could have done a better job preparing and communicating with the commission.

“There’s a lot that’s been tried over the past few decades, and the numbers really haven’t moved a whole lot,” Alpert said. “The whole point of establishing this commission was to address that.”

In 2007-08, the city awarded minority-owned businesses just $80,000 of $91 million in construction contracts, according to a by the Center to Advance Racial Equity at Portland State University. In 2013, the state of Oregon awarded minorities less than $2 million out of $2 billion, or less than 1 percent.

Last week the commission held a retreat, to “hit the reset button,” according to Alpert. The city hasn’t been effective in finding incentives for established construction firms, he said, “other than all the good reasons that are already out there.”

There are several notable examples of partnerships between a large general contractor and a large DMWESB firm, including R&H Construction and Colas Construction, and Walsh Construction and O’Neill Electric.

The city of Chicago has policies that support large firms that already work with diverse subs on their private projects, Jones said.

“They’re looking at: How do you act when no one’s looking?” he said.

Last week Rahming attended an input-gathering session related to the impending $195 million overhaul of the Portland Building. The council has committed to spending 1 percent of the construction cost on efforts supporting diversity. The meeting was one of two held to determine how that money should be spent.

Interested parties filled out comment cards, calling for pre-apprentice training for women, and for data breaking down minority goals by ethnicity. Nkenge Harmon Johnson, president of the Urban League of Portland, wondered why they weren’t discussing the “99 percent.”

“We’ve heard all this before,” she said after the meeting.

The city is still hopeful that women and minorities play a major role in the interior remodel and seismic upgrade of the 33-year-old Portland Building. The project team opted to pursue the “progressive” design-build method, which brings builders into the fold earlier and allows for closer collaboration between private parties and city staff, according to Christine Moody, the city’s chief procurement officer. This could go a long way toward ensuring diversity targets are reached, she said.

The customary low-bid method required by state law tends to favor larger companies, Moody said. And those larger companies tend to favor larger subcontractors they’ve worked with before.

“In my experience, doing an alternative method allows us more flexibility,” Moody said.

Under Oregon law, getting a project exempted from the low-bid requirement is a lengthy process, one involving completion of a 14-finding test and posting notice for two weeks. One of the findings is for cost savings, meaning alternative procurements are chosen typically for larger projects, where the city can make up costs in the design phase.

Advocates like Nate McCoy of the National Association of Minority Contractors‘ Oregon chapter and Jones of MCIP favor breaking open the initials DMWESB to “disaggregate” the data used by governments. Too often companies will circumvent hiring goals by playing with these numbers, McCoy said.

“Pretty much, most of the certifications are white-dominated certifications,” he said.

At last week’s input-gathering meeting, several attendees said there’s no need for the city to spend money on further studies when their groups have already studied the issue.

Moody said that for the city to use such outside data, it must have been gathered using methodologies that would hold up in court. She suggested at the meeting that a portion of the 1 percent set-aside could be used on a study disaggregating the city’s data – an idea met with frustration by some in attendance.

Acting in ‘good faith’

The city isn’t the only institution in the Portland area performing projects. TriMet, Metro and the Port of Portland fall under the guidelines of the federal Disadvantaged Business program. Multnomah County has a big upcoming courthouse project as well and also maintains six bridges in the Portland area. Portland’s public school districts, subject to state law, also offer opportunities to contractors.

Since 1996, the Portland City Council has adopted a number of policies in this arena, for construction as well as professional services. For each city project, there’s a workforce goal of 18 percent minorities for apprentices and journey-level workers, and 9 percent women.

There are also subcontracting goals, which the city is in the process of changing. The city’s existing “good faith effort” program requires that 35 percent of subcontracts go to women and minorities, and that general contractors act in good faith to reach that total. (State law currently prevents disincentives from being attached to diversity goals.) The city hopes to roll out in the next few months a new program requiring that 20 percent of the overall construction cost go to DMWESBs.

“If you’re not subcontracting anything, it’s kind of easy to meet that existing goal of 35 percent,” Moody said. “When we move to the 20 percent, the contractor can decide what they want to self-perform, and what they want to sub out; they just have to worry about meeting that 20 percent.”

The city also has its Prime Contractor Development program, which emerged from a 2009 disparity study finding that far fewer prime contracts went to women and minorities. The program allows state-certified DMWESB firms to bid against each other – rather than against major firms – for smaller city projects.

Swimming with sharks

Gale Schmidt, who owns A2 Fabrication, said there are lots of “sharks” out there.

“If you’re small, you really get tossed around and chewed on quite a bit,” she said.

Schmidt has been in business since 1996. She has nine employees and recently completed her largest project to date, a $3 million job supplying about a mile of railings for TriMet’s Portland-Milwaukie light-rail line.

Sizable change orders that a major contractor wouldn’t bat an eyelash at can mean success or death for a firm like A2. Schmidt says there’s subtle pressure by general contractors to be agreeable to such changes, or risk not being included in future projects.

Another factor, Schmidt said, is that often bid packages for public projects are too large for a small startup. Last week she saw a posting seeking a steel supplier, including $100,000 in structural beams, along with ornamental steel, railings and other materials. Schmidt could’ve provided the ornamental steel, she said, but not nearly all the steel for the entire job. So she didn’t submit a bid.

It’s this way for other trade divisions. Schmidt said this issue comes up often in conversations with other minority subcontractors. The city’s Christine Moody said alternative procurement methods like construction manager-general contractor or design-build have a better track record because they give general contractors the time and flexibility to break down those large bid packages.

Val Solorzano has operated COAT Traffic Control for more than 10 years. The acronym stands for Chick of All Trades, though these days she focuses mainly on flagging-related work. Many minority owners operate on the fringes, as subcontractors in fields like flagging and custodial work. This helps explain why total wages for minorities are lower than white for large projects like the recent Sellwood Bridge replacement.

Swimming with the sharks on large projects – where payments can take up to 90 days – can quickly sink small, emerging firms. Solorzano suggested establishing a fund for small businesses to draw off.

“You have to be tough, or they won’t respect you,” she said.

The post Fighting for a bigger piece of the pie appeared first on Daily Journal of Commerce.

Discrimination is alive and well in the construction industry, according to Maurice Rahming, president of and the newly elected executive vice president of the .

It stems from a resistance to change, he said. He likens it to a child who refuses to try a new food.

“They drop it in their lap in a napkin and hide it,” he said. “That to me emphasizes the need for policing and the need to make sure that problems are actually being addressed. It’s unfortunate, but I think a lot of times what happens is no one wants to have those courageous conversations and say what a person here is doing is wrong and we won’t allow that to happen in our city.”

For instance, disadvantaged business enterprise fraud continues to be a problem, he said. A husband may take out a business in his wife’s name to qualify as woman-owned, or a contractor may sell materials to a minority business only to buy them back for a fee in order to include those dollars toward mandatory utilization goals.

The results of recent disparity studies by the city of Portland and the Portland Development Commission showed abysmally low inclusion of minority-owned and women-owned contractors, and Rahming said he does not believe the reports accurately reflect the true extent of disparity.

That’s frustrating, especially for a business owner who began learning the value of hard, skilled work as an electrical apprentice at age 16. He remembers fondly one of his first jobs working for a minority electrician on the East Coast.

“We were driving through Boston and he was pointing out the buildings that he had worked on or was a superintendent on the electrical,” said Rahming, 43. “This was extremely enlightening for me as a young minority that didn’t realize that … there are opportunities for me.”

Rahming became one of the youngest electrical journeymen in New Hampshire, where he grew up. He later got his supervisor’s license, and after 10 years working in the field he opened O’Neill Electric with his wife and co-owner, Ali O’Neill, about 14 years ago. The company name was chosen with careful consideration.

“Let’s just say that Rahming Electric wasn’t as big of a driver in the market as O’Neill,” he said. “When we first started our business, we would have people calling us (and) basically saying, ‘Yes, it’s a good Irish name, so we’re going to give you work.’ ”

Today, the company has grown and does $14 million in annual sales. Rahming has also been involved in NAMC’s local chapter for more than a decade; he has served on the board for three years and as past president.

As executive vice president of the national organization Rahming wants to give chapters across the nation access to best practices and greater access to elected officials. He also wants to continue the conversation about inclusion in the construction workplace.

Rahming recently answered questions from the 91��Ƶ.

91��Ƶ: What is the status of discrimination today? How pervasive is it and how has it changed?

Maurice Rahming: I’d say 20 years ago, to discriminate openly was an acceptable practice. And now it’s not open discrimination, but it’s discrimination by a series of reasons why we cannot hire that person. We still hear it – ‘Well, minorities aren’t really interested in this type of work’ would be a common thing that will happen today. And you’ll hear, ‘Women in the industry want to have children, so they’re less dependable.’ So again, it’s a lot more subtle, but it hasn’t gone away.

91��Ƶ: How do people combat that?

Rahming: I think how you deal with discrimination, especially as it pertains to construction, is you make an aggressive inclusion program. So when people see … they’re actually capable of doing that better than my previous contractor, then that breaks down those barriers.

91��Ƶ: So how is Portland doing in terms of inclusion?

Rahming: Look at the diversification of our city and the utilization of minorities as contractors, which is a good career and a good business … 20 percent of residents in the city are minorities, but the utilization – and I might misquote – but I know it’s less than 5 percent are in construction. For Latinos, for every $1 billion or close to every $1 billion spent, the utilization for that group was 0.5 percent – 5 million bucks. That’s nothing … similar African-American numbers, similar numbers across the board. And so if you could think of a cleaning product and you look at the bottle and it says, “Kills 99.5 percent of germs,” … we as a city are utilizing those same numbers. Is it not intentional? If it’s not intentional, then we have to do something to make sure that this doesn’t happen … Anything else would be described as an endangered species.

91��Ƶ: You have said that disparity studies need to be focused on specific minority groups rather than minority- and women-owned contractors lumped in with emerging small businesses. Why?

Rahming: One is going under the assumption that all minority firms are ESBs. That assumption is incorrect … I think what the city has to do is it has to keep it separate. The city can have a vigorous and vibrant small business program, but (it) can also have an equally exciting minority business program to make sure that inclusion occurs on both.

91��Ƶ: You have also said that the city of Portland’s prequalification process is limiting inclusion of minority contractors. Can you explain that?

Rahming: (The city has a prequalification form), which basically says, ‘OK, if you haven’t done this, this particular way at this period in time, you can’t do it for us.’ We did an MRI machine on the VA and we flew it in through the third floor. They had us build out the entire room, do all the coordination and design. If they had a set up a pre-qual form in such a way that said, ‘You need to show that you’ve done five of these before you can do this one,’ we would never have done the one … Instead of looking at what my workforce is comprised of, or what my bonding capacity is comprised of, and how my plan on delivering the product (looks), what the pre-qual does is it just basically (asks), ‘What have you done in the past?’ … It’s pretty much a chicken and the egg. Unfortunately, what happens is a lot of the minority firms either look at another city that might be more receptive, or another state for that matter, so you’re kind of pushing them outside the city.

91��Ƶ: Is DBE fraud a problem here in Oregon?

Rahming: I believe so. There are a lot of bad activities that occur – where we’ll say it’s a bad activity, others will say it’s an opportunity. The state’s responsibility, and the city’s responsibility for that matter, is to ensure – and I told you how low the numbers were – that even with those extremely low numbers, to make sure that if they have 10 percent of it being corrupted, they need to report it to the state and currently I don’t believe that’s happening.

The post Maurice Rahming, NAMC executive vice president appeared first on Daily Journal of Commerce.

Graduation rates in union programs	Minority rate (percentage)	Overall rate (percentage)
Carpenter	23	29
Electrician	71	80
Laborer	15	26
Painter	21	25
Pipefitter	43	67
Plumber	59	61
Roofer	11	14
Sheet Metal Worker	55	56

Data courtesy of Oregon State Building and Construction Trades Council

Trade unions say their member firms offer higher wages, better benefits and more training opportunities than their nonunion counterparts.

Now they’re adding another item to that list, claiming they have greater representation of minorities among their ranks.

In the face of allegations that union halls can’t offer the number of tradespeople needed to fill minority targets on public projects, officials of several local unions have put their numbers on the table.  The verdict, after examining the provided data, is that in almost all instances, minority representation in unions is equal, and in some cases better, than in open-shop firms.

“We hear the same, tired, old story that unions don’t have minorities all the time,” said John Mohlis, executive secretary of the Oregon State Building and Construction Trades Council. “But if you look at the facts and look at the data, we not only compete, but outpace nonunion firms in recruitment, training and graduation rates of people of color and women.”

In 2009, Mohlis said, the Oregon State Building and Construction Trades Council compiled the study “Construction Apprenticeship in Oregon: An Analysis of Data on Union and Non-Union Apprenticeship Programs.”

The study showed that union apprenticeship programs outpaced nonunion training programs in the number of minorities and overall diversity. Minorities, for example, accounted for 16 percent of all union apprenticeship programs, compared with only 12 percent for nonunion programs. Overall, 601 minorities were enlisted in union programs and 338 in nonunion programs.

Some trade unions think the 2009 numbers may actually be conservative.

“(We have) a 34 percent minority workforce in our local hall,” said Kenneth Morgan, business manager for Laborers’ International Local 296.

Clif Davis, business manager for the International Brotherhood of Electrical Workers Local 48, said the group saw a significant increase in the number of minority members in the past few years after it hired an outreach coordinator. Local 48 also started a boot camp to help minority workers prepare to enter apprenticeships. Now the union’s minority representation is around 35 percent as well, Davis said.

Some contractors, however, say the union’s representation numbers shouldn’t be accepted at face value.

While there may be minorities entering union apprenticeship programs, they don’t always graduate, said James Posey, owner of open-shop firm Workhorse Construction and a past president of the Oregon chapter of the National Association of Minority Contractors. And even when they do, he said, the unions are set up to make them fail and not prosper at the same rate as their majority counterparts.

“It comes in waves when they let minorities into their apprenticeship programs so they can use them as window dressing,” Posey said. “They focus on the numbers in the apprenticeship programs, but not what happens when they become journeymen. As soon as they get on the dispatch list, they get sent to places like Southern Oregon, which can be a hostile environment for minorities.”

But according to the 2009 study, apprenticeship graduation rates for minorities are higher for unions than nonunions, and in almost every case, unions graduate more minorities than nonunions do.

Maurice Rahming, president of minority-owned union firm O’Neill Electric, said he has never had problems finding minority workers for his projects from union halls. Over the past four years, he has a 37 percent minority utilization rate for field workers.

“Unions can do better with diversification, but so can everybody,” he said. “It’s not a union/nonunion problem. It’s an industry problem and I admit that. We need to stop pointing the fingers and find a solution.”

The unions would like to see their minority representation numbers improve, Mohlis said, but he just wants to make sure the facts are being presented correctly.

“I’m always willing to have a conversation with anyone about how to better diversify our workforce as long as it’s done in an open environment with honest numbers,” he said.

The post Unions say they are more diverse than nonunions appeared first on Daily Journal of Commerce.

Construction can be a cutthroat business with bottom dollar bidding and tight deadlines. But some contractors say the business goes beyond that and is filled with rumors and flat out lies.

A few local minority-owned contracting firms that are heavily involved in the minority contracting advocacy movement say they are the focus of rumors being spread by competitors to project owners and general contractors. The rumors allege that the handful of contractors don’t use sufficient amount of minority-owned subcontracting companies and minority employees on projects.

The contractors say they have the numbers that dispute those allegations. Still, those rumors are hurting their businesses, they say, and they think something needs to be done.

“It has recently come to my attention that there are rumors floating around that O’Neill Electric Inc. has terrible numbers for diversity,” said Maurice Rahming, president of O’Neill Electric he sent out Tuesday afternoon to contractors around the area. “Specifically, I have heard that my company does not hire minorities and does not give subcontracting opportunities to minority- and women-owned businesses.”

Rahming said he not only thinks his firm has been one of the most aggressive in pursuing the use of minority and women owned firms, he has the utilization numbers to back it up.

After hearing rumors about his company secondhand, Rahmning said he went back and checked his books extensively. Over the past four years, with more than 200,000 hours worked, he says his firm had 37 percent utilization of minorities and women in the field, most of which came in the form of journey level and supervisory positions.

In projects on which the firm has served as the general contractor, the firm’s utilization of minority, women and emerging small business certified firms has been similar. In the past four years 34 percent of subcontracted work for the firm has been done by these firms, he said.

Rahming isn’t the only contractor facing the rumors and accusations

James Faison, owner of Portland-based Faison Construction, said the same thing has been happening to him. According to Faison, other contractors have accused him of not using certified firms on his projects. But Faison thinks his use of those firms is around 50 percent.

“The claims have no factual basis and hold no water,” Faison said. “I’ve talked to Maurice [Rahming] and others about this, and we need to get the correct information out there. I’m tired of this crap.”

The nature of the rumors is nothing new to the industry, according to Sam Brooks, owner of S. Brooks and Associates and founder of the Oregon Association of Minority Entrepreneurs. Brooks said he’s heard these types of allegations pop up stretching back to the 1960s, when he first got involved with the Portland business community.

“I think it’s becoming a lot less prevalent in recent years, especially among the people I’ve been working with at OAME,” he said. “But there are definitely people out there that still make rumors, and a lot of it comes from the people these firms are competing with.

“For some reason some people thinks standing on someone else makes them taller. It doesn’t. It just means you’re standing on someone.”

James Posey, a past president with the Oregon chapter of the National Association of Minority Contractors, an organization that both Rahming and Faison are active in, said Rahming has always touted good utilization numbers and he has no reason to not believe that. But, as Posey pointed out, Rahming’s company is a union firm – as is Faison’s – and the local unions don’t have a strong track record of minority representation.

“Maurice is union and almost none of the union contracts have minority representation,” he said. “Infer what you want from that.”

Brooks agrees that finding minority workers at local union halls is difficult.

“When you’re a minority-owned firm, it doesn’t change the fact that you are there to make money,” he said. “We always try to use a minority to fill a position whenever possible. But when one isn’t available, we aren’t going to go out of business because of it.”

Finding minority union workers requires an extra effort, Faison said, but it’s a step his company doesn’t mind taking.

He, Rahming and a few other contractors say they’re in the process of getting their companies’ minority utilization numbers out in the open. But, as Rahming said, that doesn’t mean they’ll be able to undo all of the negative impacts the allegations may have had on their businesses.

“It affects us when general contractors and project owners hear these claims because even if they don’t believe them, they don’t want to be in the controversy,” Rahming said. “If someone is going to make these claims, they need to come out and give us the basis for that information.”

The post Minority contractors concerned about rumors appeared first on Daily Journal of Commerce.

The Oregon chapter of the National Association of Minority Contractors wasn’t happy with initial results of studies of the city of Portland’s use of minority contractors on public projects.

But now the group is downright frustrated.

The NAMC-Oregon board of directors last week sent the city a list of flaws it found in the methodology and results of the studies, conducted by a Denver-based consulting firm and presented to the city and the Portland Development Commission. The board not only asked for the flaws to be fixed, but also expressed doubt about the strength of its relationship with the city.

“Over the last 10 years our organization’s level of trust in the city of Portland and PDC’s commitment to equity has increased significantly … Unfortunately, based on the findings led by the BBC Research & Consulting firm in the Draft Disparity Study, that trust is now in jeopardy,” the board wrote in a letter attached to the statistics in question.

The 800-page results report for the studies covers a lot of topics, but in essence it found that between July 2004 and June 2009 the city used at least an equal amount of minority-owned contracting firms that were available in comparison to majority-owned firms. For projects owned by the PDC, however, minority-owned firms were employed 4 percent of the time, even though availability was 6 percent. The disparity was larger for projects the PDC didn’t own but contributed money to.

According to Maurice Rahming, former president of NAMC-Oregon and president of Portland-based O’Neill Electric, the studies’ results should be taken with a grain of salt because the numbers the city used are flawed.

For example, he said, the data shows that 0.5 percent of all available firms are Hispanic-owned, and another 0.5 percent are African-American-owned. Any contractor with knowledge of the area would say that Hispanic-owned firms outnumber African-American ones, he said.

“It definitely draws some questions to the validity of the results,” Rahming said. “And considering these results could potentially affect how the city does procurement, we need to make sure the numbers are accurate.”

The board also called into question the sample size for the study. Of the 3,726 firms the consultants tried to contact, 1,972 participated.

“We simply know nothing at all about almost half of the population,” the board said in its statement. “This raises a very real question as to whether statistical sampling would have been a better and more accurate method.”

Rahming added that city officials should have at least sent out a letter to the firms they knew and informed them about the study, and that results could affect procurement. Then those firms could have passed word on to others.

“I know I have call screeners at my office, and you aren’t getting to me if you are calling from an out-of-state number wanting survey results,” he said.

Nevertheless, the city plans to stick with what it was given.

“The basic analysis and study will not be redone,” said Christine Moody, chief procurement officer for the city of Portland. “We’ve been working on this for the past 18 months, and so far, from the comments we’ve received, nothing has indicated we should change the methodology.”

But Moody added that the city is editing the executive summary – which could impact procurement – to more accurately reflect study results. Because the study will go toward creating new programs and altering existing ones, the city wants the most accurate information, she said.

John Jackley, the director of communications and business equity at the PDC, said he recently met with Moody and discussed NAMC-Oregon’s concerns. Jackley said he and Moody decided to forward the questions to the consulting firm, which will respond to NAMC-Oregon directly.

Rahming understands that the study – which cost nearly $1 million – most likely will not be redone; however, he does believe there are some solutions.

“We don’t expect them to fully change the methodology, but there are some things that can be done,” he said. “The solution, in my opinion, is to add more transparency by using a second set of eyes to look at this thing. No one is without error, and having the city auditor take an objective look at the study could really help it.”

Moody said that city staffers will spend the next month adding to the report and finalizing it. They will then present it to City Council during its June 22 meeting. Jackley added that the PDC Board of Commissioners will hold a similar public hearing on the study at a meeting on June 8.

After results are presented to the council and the commission, advisory committees will be formed to develop practices.

The post Minority group says Portland’s disparity study results are faulty appeared first on Daily Journal of Commerce.

A Portland Development Commission study now under way could reveal whether most city contracts intended to benefit women and minorities are being awarded to small firms owned by neither group.

Groups advocating for more city contracts to go minorities and women are seeking a new standard for the Rose Quarter redevelopment. But the city said that even if the PDC study were to reveal a lack of minority participation, it won’t guarantee that minority participation will be greater when Rose Quarter work begins.

The PDC is analyzing minority participation in past projects after hearing concerns that emerging small businesses, possibly owned by white men, were getting more construction and professional contracts than were firms owned by minorities and women. The study is expected to be released in November.

The problem, according to Maurice Rahming, president of the Oregon chapter of the National Association of Minority Contractors, is the city’s practice of lumping together disadvantaged businesses into one category, known as Minority, Women and Emerging Small Business (MWESB). With this approach, emerging small businesses get a substantially larger piece of the pie, Rahming said. For the Rose Quarter project, he would like to see those three groups broken out, and a requirement for awarding contracts so that each group is represented.

Rahming and other Portland residents are working with the PDC to draft a community benefits agreement for the Rose Quarter. It would require, among other things, the developer to award a certain percentage of contracts to underused businesses. Assigning specific percentages for each disadvantaged group should wait, however, until the results of the PDC study are out, said Sam Brooks, a local business owner and resident working on the agreement.

“I know that African-Americans continue to be at the bottom in Oregon and the U.S.,” Brooks said. “But we can’t just move them or anyone else to the top of the list. We need to let this study come out to legally set aside percentages (for the Rose Quarter agreement).”

The PDC’s goal for this agreement is for it to include a set of community-approved recommendations to guide the development process, PDC commissioner Charles Wilhoite said. He agreed that the PDC study could impact which Rose Quarter contracts go to which disadvantaged groups. But he added that there are no guarantees that any recommendations that come out of this agreement will make it into the final development agreement.

“A lot of uncertainties pertain to what we’re discussing,” Wilhoite said. “This agreement is meant to guide the process.”

Any final community benefits agreement that reaches a Rose Quarter developer will be a legal contract between the developer and the community, according to Skip Newberry, economic development policy adviser for Mayor Sam Adams. So if a developer refuses to uphold the agreement, the community could sue. But it may have to do so without city assistance.

“If we come to a situation where the community wants contracting goals that exceed what the city and PDC currently have in place, we subject ourselves to liability under state and federal law,” Newberry said. “If the community wants us to be part of the (agreement between the community and the developer), we have to be careful with the aspirational goals.”

The problem with the city not being tied to the agreement, according to Gale Castillo, president of the Hispanic Metropolitan Chamber, is that the community is left to find and pay for its own legal counsel, should the developer renege on the agreement. She fears that without the legal heft of the city, the agreement would end up being unenforceable.

“There has to be some consequences for a developer not meeting (its) contractual obligations,” Castillo said. “If it’s just the community, I’m not sure (it will) have those resources to pursue legal avenues if the contract isn’t met.”

The community benefits agreement is still being tweaked; however, the community group is likely to vote on its reccomendations this month, before the PDC study is available. More discussion of the agreement and the impacts of the PDC study on Rose Quarter development are likely to occur after a developer is identified, Wilhoite said.

For now, people who have invested time developing the agreement, like Jeri Williams, a city staffer in the Office of Neighborhood Involvement, just want to see something with teeth.

“I don’t want to keep running into this problem where we have women-owned and minority-owned businesses that are actually owned by their white husbands counting towards these requirements,” Williams said.

The post Rose Quarter agreement difficult to enforce appeared first on Daily Journal of Commerce.

Goals for participation by disadvantaged and minority-owned businesses for years have been added to public construction projects.

Now, R&H Construction and Colas Construction have formed a new company, R&H/Colas Construction, to focus on opening doors to the private sector.

The new company presents an opportunity for expansion for Colas, which also will be able to bring smaller, minority-owned subcontractors along to work on larger private jobs.

R&H says it will gain key contacts in the public sector and be able to develop working relationships with smaller, minority-owned subcontractors.

“It will essentially allow subs to bid on work with three different companies,” said Andrew Colas, president of 13-year-old Colas Construction.

Companies such as Walsh Construction and Hoffman Construction in the past have teamed up with smaller businesses to achieve specific goals for disadvantaged and minority business participation. But forming a new company requires time and money, said Don Geddes, spokesman for Walsh Construction. It has never had interest in forming a separate company because the process of setting up insurance and bonding is time-consuming and expensive, Geddes said.

R&H and Colas hope that the new company will be able to put minority contractors to work and help them build their businesses enough to compete for larger, private jobs. R&H and Colas believe the new company will not only provide jobs, but also help improve communities in the Portland-metro area.

Colas Construction has a longtime reputation of putting minority contractors to work on projects, R&H Vice President Dave Gunsul said. “Minority subs realize they have a real shot at winning these bigger bids. They know we really want to see them work on our projects and we want to put small companies to work.”

Maurice Rahming, president of the National Association of Minority Contractors, said the new partnership is a great example of a larger contractor partnering up with a smaller firm in order to help build up smaller, minority subs.

Traditionally, minority firms tend to stick to public work, where participation goals are advertised. With private work, goals are typically not set and so smaller companies don’t even know the work exists, let alone have time to bid on them, Colas said.

But some projects with minority participation goals may require only a “good faith effort” was made to achieve specific percentages. But R&H and Colas say these good faith efforts are not enough and that real change is needed.

Many times a good faith effort simply consists of a contractor calling a certain number of minority-owned businesses and asking them to come out and bid on a project, Colas said. But in an industry that strives on relationships, Colas said these smaller companies often don’t believe they have a real shot.

“When I make a call to a minority-owned business asking (it) to bid on an R&H/Colas project, they know me. They’ve worked with me and they know they have a legitimate shot at getting the bid,” Colas said.

Colas and Gunsul said they call small, minority-owned subs to inform them about private jobs and give them information they need to submit competitive bids.

Jean-Wildy Malary, owner of Affordable Electric, said his company has grown through its relationship with Colas. When Malary started his business six years ago, he was the sole employee. Over the years, primarily through subcontracting jobs working under Colas, he now employs six full-time workers.

“Now, because of my relationship (with) Colas, it has opened the doors for me to talk with management over at R&H,” Malary said. “Now we’re working with R&H more and we’re getting a chance to bid on bigger, private jobs.”

“R&H/Colas is making sure that minority contractors work on their projects,” said Rosa Martinez, owner of PMG Environmental Services. “They’re making a real effort, not just a good faith effort; they are putting in a real effort to reach their goals.”

Both Martinez and Malary have been called by R&H to bid on private jobs since the R&H/Colas company started.

“We’re not giving these companies the work,” Gunsul said. “We’re telling them, ‘If you do good work, we’ll help you grow your company, but you still have to compete.’ But we’re giving these companies a chance to compete on private work.”

The first major project completed by R&H/Colas was a tenant improvement to the Golden West Hotel in Northwest Portland; 47 percent minority participation was achieved. The next major bid R& H/Colas won was work on the new Portland Community College campus in Newberg. The minority participation goal is 20 percent, but Gunsul said he believes it will hit 30 percent.

“We’re going to help people achieve the minority participation goals they’ve been having problems achieving, and introduce these subs to a whole new market of work on the private side,” Colas said. “But our goal isn’t just to hit the numbers; it’s to change communities by providing jobs.”

The post Portland firms join to boost minority contracting appeared first on Daily Journal of Commerce.

The Oregon Department of Transportation last month released its Disadvantaged Business Enterprise goals for a two-year period that begins in 2011, but some contractors say those goals for the future are stuck in the past.

The goals are meant to help small, disadvantaged businesses get a share of public work, a percentage that is supposed to be based on a disparity study conducted every three years. But ODOT didn’t conduct a new study before setting its 2011-2013 goals. Instead, it relied on information in a report from 2007, the last time the agency did a study.

Jill Miller, a spokeswoman for ODOT’s office of civil rights, said the agency has a new disparity study set to start in October and conclude next spring. New goals, however, have to be submitted to the Federal Highway Administration before the end of the year. So ODOT decided it would use data from the 2007 study and then update the goals as needed once the new study was finished.

What the agency didn’t realize was that the FHA doesn’t allow goals to be changed once they are submitted.

“We believed that if our disparity study showed that there had been a shift, that we would be able to submit new goals based on the new results,” Miller said. “We didn’t know that once they approve it, it was set in stone.”

Local contractors say the economy and the state of the construction industry have changed considerably in the past three years, and basing new goals on old numbers is not a fair way to determine what percentage of work needs to be earmarked for disadvantaged businesses.

Maurice Rahming, president of the Oregon chapter of the National Association of Minority Contractors, agrees. His organization’s membership doubled in size during the past three years, even as available work decreased. Rahming suspects a new report would show that disadvantaged businesses are not being awarded their fair share of ODOT contracts.

The goals ODOT planned to submit to the FHA would award 11.5 percent of contracts to disadvantaged businesses, with a hard goal of awarding 1 percent of that number to black- and Asian American-owned businesses. ODOT also filed a waiver with the federal agency to allow the use of the 2007 survey as the basis for 2011-13 goals. If the FHA accepts the waiver, ODOT would be allowed to bypass conducting a disparity study until 2013.

Rahming and his group say that’s too long to wait.

This isn’t the first time the organization has taken issue with the way ODOT deals with disadvantaged businesses, especially when those businesses have minority owners. Although ODOT has one of the largest budgets in the state for transportation projects, it uses minority contractors less than other agencies like TriMet and the Port of Portland, according to organization members.

“(The agencies) all drink out of the same bowl. They’re all dealing with transportation dollars and the rules are the same. But I constantly have contractors telling me they can’t get ODOT contracts,” Rahming said.

Michael Cobb, manager of the office of civil rights for ODOT, said disadvantaged businesses may be underrepresented in awarded work because they’re not bidding on the projects.

“If you bid on an ODOT project, you have a good chance of getting it. But if you don’t bid, you definitely won’t get it,” Cobb said. “When we’re out there looking for small companies to bid on projects, the majority of the time they don’t bid.”

The post ODOT disparity study stuck in past appeared first on Daily Journal of Commerce.

Mike Bellamy took a risk when he left a life he loved in Italy to manage construction of the National Museum of African American History and Culture on the National Mall in Washington, D.C.

And Wednesday evening at the National Association of Minority Contractors‘ conference in Portland, the director of the Smithsonian’s Office of Design, Engineering and Construction asked the minority contractors in attendance to also take a risk on the project.

The federal project will be built using a construction manager at-risk model with a guaranteed maximum price. That means the construction manager/general contractor that wins the project will set a fixed amount for the project up front. If the company exceeds that amount, it will become responsible for cost overruns. And with a federally mandated completion deadline in 2015, there’s no room for mistakes.

“Because this project uses both federal and private funding, delays in receiving that funding could impact design and construction timelines,” Bellamy said. “Any work on the mall goes through numerous agencies to provide comment on the design, which could cause added cost due to schedule delays.”

Despite the challenges Bellamy presented, NAMC Oregon Chapter President Maurice Rahming said the project is a promising opportunity for members of his organization. Contractors bidding on the 350,000-square-foot project will be required to have a Small Business Administration subcontracting program, which will ensure that the bulk of the work will be performed by minority firms.

The project being presented to NAMC first, Rahming said, shows how far his organization has come.

“The Smithsonian has had high utilization of minority firms in its projects in the past,” Rahming said. “There are several general contractors in the room tonight with billings greater than a quarter-billion dollars that could get the job done.”

Bellamy’s honesty about the risk involved with the project is warranted, NAMC Executive Director Tina Dortch said. The museum has a $500 million program, including design, construction and exhibits. It will be located next to the Washington Monument, on a site that was once used for slave trading.

Workers will need to contend with traffic-heavy conditions around the mall. Also, a portion of the museum will be located underground. The area has a high water table, so contractors must take care not to disturb it and turn the Washington Monument into the Leaning Tower of Pisa, Bellamy said.

And if Portland firms want a piece of the action, they’ll have to compete with NAMC’s Washington, D.C. branch.

“Budgets for projects like this have to be tight,” Dortch said. “(Bellamy) is being really honest about the challenges. But the opportunities he’s presenting are fabulous. Firms outside of D.C. could participate as well, but our chapter could easily offer up enough experience.”

Hermann Colas, owner of Portland’s Colas Construction, doesn’t know how likely it is that his firm will be chosen to help build the museum, but the fact that a federal project of this magnitude was pitched to NAMC floored him.

“I joined the U.S. Army because I believed in the promise of this country,” Colas said. “To have this man from the Smithsonian come here with a project of this importance, I don’t know how to express how that feels.”

A contractor won’t be selected until summer 2011, but the museum project already has significant minority participation, Bellamy said. The architectural team of Freelon Adjaye Bond and SmithGroup is led by architect David Adjaye, a native of Tanzania. And the construction management agent for the museum, McKissack & McKissack, is an African-American firm.

Firms interested in pursuing work on the National Museum of African American History and Culture can contact Rudy Watley, manager of the supplier diversity program for the Smithsonian, at 202-633-6430.

The post National museum shows minorities’ progress appeared first on Daily Journal of Commerce.

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.”

The post ODOT project misses minority goals appeared first on Daily Journal of Commerce.