Members of Portland’s Equitable Contracting and Purchasing Commission intend to deliver a message to the City Council this week: The city’s record of incorporating minorities into public projects is dismal and becoming worse.

A outlines declining minority participation rates in workforce and subcontracting over the past three years across several demographics, including among Asian men, African-American women and Caucasian women.

Though the declines aren’t precipitous, the total hours worked by minorities are all dwarfed by the share worked by Caucasian men. For example, during 2014-15, African-American men worked 286 total hours, while Caucasian men worked 6,020.

Data has been a buzzword throughout the ECPC‘s first year of existence. Its volunteer members have repeatedly requested information further breaking down participation by race and gender. They’ve said city officials have tried to use misleading statistics to paint a rosier picture than what exists.

The monthly ECPC meetings have been scenes of tension, with members disagreeing over approach and expressing frustration with being stonewalled by city officials. Mayor Charlie Hales eventually attended an ECPC meeting in May, a month before relocating the nine-member panel from under the Office of Management and Finance to the Office of Equity and Human Rights.

The commission’s presentation includes information about seven recent resolutions passed by the City Council concerning equity in city contracting. The ECPC has been allotted 45 minutes before the council on Wednesday, beginning at 2 p.m.

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Community Benefits Agreements: Contracts tying stakeholders of large projects to objectives that benefit a project-affected community, e.g., targeted hires of women and minorities.

CBAs are now a hot topic at the intersection of social justice and public contracting. Four years ago, the city of Portland established a pilot program to measure the efficacy of the emerging contract delivery method using two Water Bureau projects as test cases. Now, the results of an independent evaluation are in and they don’t portray a sweeping success.

Among the criticisms in the report: a community oversight board charged with disbursing “set-aside” funds that was burdened by too many responsibilities and that operated near the line of conflict of interest – with board members receiving more than 80 percent of the money allotted by the board. Another was the inclusion of a $500,000 line item by the contractor to administer the pilot program. Plus, “few” of the programs funded by set-aside dollars had anything to do with the two Water Bureau projects.

For the reasons outlined in the report, city officials are concerned about a repeat of the pilot project, and worry about using pure CBAs again.

Conflict building

Portland had business goals for hiring more women and minorities prior to a 1989 U.S. Supreme Court ruling striking them down and others like them. In 1994, the Portland City Council established the Workforce Training and Hiring Program under then-Mayor Vera Katz. Other efforts to crack a construction workforce almost entirely white and male followed, including the Sheltered Market Program in the late 1990s, and later the imposition of Good Faith Effort requirements.

Despite these efforts, observers note a stark lack of progress. Some have complained that through the current building boom the city has been able to hit its diversity targets only through increased utilization of minorities in the “peripheral” trades – hauling, flagging, custodial work, etc. – that pay less, are more dangerous, and, some say, reinforce damaging stereotypes.

Community Benefits Agreements were devised as a way to hold developers to promises they often make to governments to win project approval – through the use of contracts with stakeholders and regular check-ins.

In September 2012 the City Council resolved to test CBAs on two Water Bureau projects. Using best practices devised by the UCLA Labor Center as a guide, coalition members spent two years drafting the contracts used in the pilot project, according to Kelly Haines, a senior project manager with Worksystems Inc., an administrative entity involved.

For the $57 million Kelly Butte project, an above-ground 10-million-gallon steel tank was replaced with a 25-million-gallon reinforced concrete underground reservoir. For the $35 million Interstate Maintenance Facility renovation, a 28,000-square-foot building and a 38,000-square-foot building were constructed to replace an outdated bureau facility. Hoffman Construction was the general contractor-construction manager for both projects.

The CBA coalition was made up of community organizations, labor unions, minority business owners and pre-apprenticeship training programs. It was charged with overseeing broad aspects of the two projects, including the dispersal of 1 percent of total construction costs earmarked for CBA-related services (around $769,000). To distribute this money, it formed a group called the Labor Management Community Oversight Committee (LMCOC), which was made up of representatives of groups including the Urban League of Portland, Oregon Tradeswomen, Constructing Hope and Worksystems Inc.

Where the money went

The sole entity responsible for the management of funds and implementation of CBA programs was the LMCOC. According to the report, this arrangement led to numerous issues.

For one, the relatively small group of people who managed the CBA wrote the requests for proposals used on both projects. Though the report states that “no evidence” of actual conflicts of interest was found (members were said to have recused themselves when necessary), the LMCOC’s actions created the appearance of conflict of interest, according to the report by Framework LLC. The private evaluation, released in May, also found no evidence that LMCOC members ever signed conflict of interest statements – a standard move for leaders managing public funds.

Of the $769,651 from the 1 percent set-aside that went to CBA programs, 83 percent was awarded to members of the LMCOC. They include:

• Constructing Hope: $169,600
• Oregon Tradeswomen: $158,793
• WSI/CAWS: $111,687
• Portland Youth Builders: $96,200
• F.M. Burch & Associates: $61,743
• Emerald Cities-Portland: $37,310
• Urban League of Portland: $1,400

The city’s cost to administer the pilot program is estimated at $130,597, or 17 percent of the 1 percent set-aside. This includes staff time for the Procurement Services office, which spent an estimated 460 hours attending LMCOC meetings and preparing minutes and reports – at a direct cost of $25,000. Some of these services are already provided by the city for projects of this nature, according to the report.

Additionally, Hoffman Construction spent $542,000 to meet its workforce and contract diversity requirements, charging the costs to a line item titled, “CBA administration.”

“While some of these costs were related to LMCOC meetings and CBA reporting requirements, it is likely that most costs would have been incurred with or without a CBA,” the report states.

To this, Hoffman Construction Senior Vice President Bart Eberwein said the charges accurately reflect the cost to perform adequate outreach to minority communities and send senior staff members to regular meetings for three-plus years. He noted the pilot project achieved almost all of the city’s lofty diversity goals.

“They put their money where their mouth was,” he said. “I mean, this stuff doesn’t happen without a lot of time and effort. It’s to the city’s credit I think that they put diversity right up there with quality and schedule in terms of importance. And they had to put a little dough into it. And I think people should take their hats off to them.”

Beyond who got the money, there’s the matter of what work was completed. The report mentions that little of the 1 percent set-aside actually went to the Kelly Butte or Interstate projects.

“Few of the workers and firms participating in CBA-funded programs … were placed on or subcontracted to the two Water Bureau projects,” the report states.

In light of the issues mentioned in the report, Fred Miller, head of Portland’s Office of Management and Finance, has pushed to not employ a CBA on the upcoming Portland Building seismic upgrade/renovation, which his office is overseeing. The $195 million project is currently in preconstruction, and its own 1 percent set-aside has been the subject of scrutiny by the city’s Equitable Contracting and Purchasing Commission, and elsewhere.

Miller pointed to a portion of the report comparing the two pilot program projects against other contract delivery methods used by the city – Sheltered Market and Good Faith Effort.

“The aggregate results are not appreciably different from other projects,” he said.

Miller is pushing to use a modified form of CBA for the Portland Building project.

“I’m uncomfortable with a set-up where people don’t sign conflict of interest statements,” he said, “and the vast majority of the money is allocated to themselves.”

Target practice

It’s worth noting that in one important sense, the pilot project was a sure success: achieving its stated mission of meeting the city’s ambitious diversity targets. Fifty percent of apprentice hours for the Kelly Butte project were worked by minorities (the goal was 18 percent). A third of hard construction costs for the Interstate project went to M/W/DBE firms (12 percent was the goal). With the exception of women journey-level workers, all CBA targets for the two projects were hit.

The Framework report doesn’t tell the whole story, according to Haines. Her group issued a clarification following the report’s publication. In it, she wrote that LMCOC members recused themselves whenever their organizations were under consideration for contract awards. She notes that city staff members served on the committee, attended every meeting and prepared meeting minutes.

“If there was any concern about conflict of interest, they were able to voice those concerns,” she said.

Conflicts are hard to avoid in this arena, Haines said, because few groups in Oregon are qualified to perform the services requested by a CBA. Only four organizations in the region were qualified to provide pre-apprenticeship services for the pilot project, and one – Portland Community College – declined to participate.

“It’s kind of a small pool with few fish,” she said. “It’s hard when you want to work with qualified and experienced training providers, and there’s only so many in this area.”

Overall, Haines called the experience “a little bit frustrating.”

“That evaluation pulled out some lessons learned about the pilot program and how we can improve on it,” she said. “But at the end of the day, all the money’s accounted for, people recused themselves – so it was all appropriately managed. But going forward, there can be more formalities in place.”

Several major projects lie ahead for the city, including the Portland Building project, the Washington Park Reservoir project, and park renovations being paid for with a $68 million bond.

Faye Burch of F.M. Burch & Associates said the pilot project retained more minority subcontractors than she’d seen before. The city benefited from having experts like OTI, Portland Youth Builders and Constructing Hope involved with the CBA, she said.

“They helped us get the numbers that we wanted to achieve,” she said.

However, CBAs aren’t right for all projects, Burch said.

“I think they fit some projects, and some projects, they don’t,” she said. “I think you can do it without a CBA, but I think this CBA had some great results.”

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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.

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Oregon’s Bureau of Labor and Industries today made recommendations to the state legislature on how to improve diversity in the field of construction across the state.

As part of its biannual report, , BOLI recommends that the legislature increase funding for pre-apprenticeship programs, reinvest in training at the middle and high school levels, and implement workforce and hiring goals statewide. The report also stated that the state should consider alternatives to low-bid procurement and appropriate funding for comprehensive data collection and analysis.

The biannual report stems from 2007 legislation that established a state goal to increase diversity among workers employed on public improvement projects. The idea is to increase the number of women and people of color on such public projects. Through the legislation BOLI was charged with developing a plan and reporting regularly on recommended steps to increasing diversity on such projects.

As part of the report, Brad Avakian, commissioner of BOLI, pointed out that it’s not only those workers whose opportunities are being limited, but also the Oregon communities that lose out on the contribution of potential role models for the next generation of workers.

BOLI officials said the next report would most likely present firm proposals for meaningful legislation to increase diversity on projects covered by state prevailing wage rate law.

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The Oregon chapter of the National Association of Minority Contractors believes that the real disparities that exist are much greater than recent studies compiled for the city of Portland show.

NAMC-Oregon, a nonprofit building trades association, last week released its initial response to results of studies commissioned in 2009. The studies looked at how often the city and the Portland Development Commission used certified minority- or women-owned firms on their projects in comparison to the number of those firms available for use. Read the 91��Ƶ’s analysis of the studies

“The city’s and PDC’s contracting programs are far from ‘OK’,” the statement said. “The city, PDC and the community cannot be satisfied with a contracting process that sees no prime contracts awarded to an African-American or Asian-American firm over a four-year period.

“In fact, substantial disparities were found for these firms as well as Hispanic-owned firms for prime contracts, even under the city’s Good Faith Efforts (Minority/Women/Emerging Small Business) program.”

The nonprofit also took issue with the finding that minority-owned firms receive less than 0.5 percent of contracting dollars for PDC-sponsored projects – those in which the public agency is not the only financial contributor.

Due to recent U.S. Supreme Court rulings, the studies were needed for the city to maintain its Good Faith Effort program and the PDC to continue use of its Business and Workforce Equity policy.

“NAMC-Oregon acknowledges that the city’s disparity study was a necessary step to identifying and addressing the underutilization of all the talents that Portland’s metropolitan area has to offer, including those of minority-owned businesses,” the statement said. “The study does not, however, address some critical issues that disproportionately affect minority communities in the Portland area (such as) poverty, schools that don’t educate our children, and the historical remnants of societal discrimination that continues to plague the creation and growth of many minority-owned businesses.”

According to the statement, NAMC-Oregon, like the other organizations that have responded to the study, is looking forward to working with the city to identify ways to eliminate the disparities.

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Links to the studies

The city of Portland shelled out nearly a million dollars to learn how minority- and women-owned contractors are being employed on its construction projects.

Now it must decide how to best use the results.

Earlier this month both the city of Portland and its economic development agency, the Portland Development Commission, received results from the studies, which were commissioned in 2009. Disparities were identified in how often the PDC used minority- and women-owned companies compared to availability.

“The numbers are what they are, and they’re not a surprise,” said Sam Brooks, founder of the Oregon Association of Minority Entrepreneurs and president of Brooks Staffing. “But the study isn’t the remedy. It needs to be used to bring the public and private sides together so they can form a partnership and come up with solutions.”

The studies, conducted by a Denver-based consulting firm, total more than 1,500 pages. The study of the city of Portland essentially found no disparities in how often it used minority- or women-owned construction firms or construction-related professional services on its projects compared to the availability of those types of firms in the area.

In fact, the city actually used minority-owned, construction-related (including architectural or engineering) professional services 28.2 percent of the time, even though their availability was only 7.2 percent.

For the PDC, however, the consulting firm found disparities in five of eight categories studied for projects between July 2004 and June 2009 – the same time frame evaluated for the city.

On PDC-owned projects – where the PDC was the only, or main, source of public funding – there was only a small disparity in how often minority-owned construction firms were used. The PDC utilized these firms 4 percent of the time, even though availability was 6 percent.

Conversely, when the PDC was just a sponsor, some disparities were much larger. On these projects, the contractors used women-owned professional services only 0.1 percent of the time, despite availability of 4.8 percent.

“The biggest take-away from our perspective is that the diversity outcome is much better on projects we own, where we write up the construction contracts, compared to the ones that we only contribute to,” said John Jackley, director of communications and business equity at the PDC. “It’s now about getting the private sector together and having a constructive and frank dialogue on how we can all improve our representation.

“We know that a lot of these larger firms like R&H (Construction), Skanska and Hoffman (Construction) have good programs, but it’s about getting everyone else on the same page too.”

In addition to making the studies available for public comment online, Jackley’s team is trying to meet with every firm and organization possible to obtain their opinions on the results, as well as suggestions that could lead to solutions. Jackley last week met with Saundra Stevens, the executive vice president of the Portland chapter of the American Institute of Architects.

“We’ve known for quite a long time that there is a disparity in professional services, but it’s not the only disparity,” Stevens said. “We don’t have any solutions nailed down yet, but we are excited to have this information at our disposal and we are hopeful that we will be invited to the table when looking at ideas.”

Considering that representation of women- and minority-owned professional service firms was low, Jackley said the PDC’s Business and Workforce Equity Policy could benefit from the addition of a clause that specifically indicates when these firms should be used on projects.

While AIA-Portland has never lobbied for such a clause, Stevens said it would definitely be worth consideration.

“There are a ton of different stances on this, and with the demographics of Oregon it’s hard to determine if that is actually the best course of action or not,” she said. “That’s why we think that all of this information needs to be brought together and discussed with the industry as part of a forum.”

Brooks said OAME already has tentatively scheduled for next month a panel discussion that would bring together all the public agencies that have conducted project studies in the past few years – the city, the PDC, the Port of Portland and the Oregon Department of Transportation – to discuss the disparities.

“The studies note the problem, but dialogue is going to find the solution,” Brooks said. “But you have to actually do it.”

Brooks also pointed out that such studies can be double-edged; results were factors in decisions by both California and Washington to end certification programs for minority- and women-owned firms.

“The program may not be a forever remedy to this problem, but Oregon is vulnerable and we absolutely cannot lose it,” he said. “We need to strengthen it.”

The city and state agencies need to be stricter about making sure their money, even for the projects they sponsor, is being used as they intend it to be used, Brooks said. He noted that the federal government checks in on its projects monthly to make sure women- and minority-owned firms are being utilized appropriately.

“Don’t just wait until the end of the contract when there’s nothing you can do about it,” he said. “The federal government has it figured out. If you aren’t using the representation, they’ll pull your contract.”

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The city of Portland and the Portland Development Commission that examined whether minority-owned and women-owned firms are underutilized or underpaid on city projects.

This most recent disparity study was commissioned in 2009. The study team led by BBC Research & Consulting studied data from 2004 to 2009. The study found that, in general, there were no disparities in the city’s overall utilization of MBEs or WBEs on construction contracts.

The study also examined individual city and PDC programs and their effectiveness of getting more minority representation on contracts and subcontracts. The study showed more minority representation in cases when those programs were in place than when they weren’t.

There is an opportunity for public comment , and there will a public  forum held April 21, 6:30 to 8:30 p.m. at Keiser Permanente Town Hall, 3704 N. Interstate Ave.

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There’s a new name attached to the president’s seat of the Oregon chapter of the National Association of Minority Entrepreneurs.

Mark Matthews was elected to the position by an “overwhelming” majority, according to the organization. He will take over from outgoing president Maurice Rahming of .

Matthews is the president of Pacificmark Construction, which he owns and operates with his wife, Deborah. The company serves as a general contractor on commercial, health care and public works projects.

Also elected to leadership seats for NAMC Oregon were Gill Carreon of Liberty Steel as vice president, Vicqui Guevara of Valley Growers Nursery and Landscape as secretary-treasurer, and Faye Burch, who was re-elected as the organization’s DMWESB consultant.

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The Bureau of Labor and Industries is looking for partners to build new supportive services for women and minorities in the highway construction workforce.

The Oregon agency issued a request for proposals Monday to those interested in part of the $1 million it received from the federal government to increase worker diversity.

“The goal is to encourage women and minority groups and apprentices who need supportive services to stay in the workforce,” said Bob Estabrook, a spokesman.

Some programs could include those to help women address child care issues, or to find new ways to support minorities that face cultural issues, he said.

“I think we’ll get a range of ideas coming back,” Estabrook said.

At the end of November, 14.8 percent of construction apprentices registered in Oregon were minorities and 5.7 percent were female, Estabrook said.

Programs that are selected will be split across five state regions: the Portland-metro area, the Willamette Valley and the Oregon Coast, Southwestern Oregon, Central Oregon and Eastern Oregon.

Each region will get a minimum of $100,000 in contracts, with no more than $400,000 going to a single area.

The funds will be distributed by the state Apprenticeship and Training Division, through BOLI and the Oregon Department of Transportation.

“This partnership and the services we will be able to fund in the community send a clear message that Oregon values its workers, including the women and people of color who are not traditionally directed toward the construction career pathways that can lead to high-skill, living-wage jobs,” Brad Avakian, state labor commissioner and head of BOLI, said in a press statement.

Submissions are due by 3 p.m. on Dec. 30. Programs should anticipate starting in early January.

Visit for more information.

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