Supporters and opponents of a bill that would hold general contractors liable for wage theft by subcontractors and labor brokers clashed before an Oregon House of Representatives committee on Wednesday.

Contractors and other critics said Senate Bill 426 would make them less likely to hire up-and-coming subcontractors.

“I’m kind of offended, frankly, by this approach,” said Rep. Ed Diehl, a Salem Republican who has commissioned construction projects. “It would put me liable for something I have no control over, and it would change my behavior. I would definitely not be reaching out to new startups.”

Khanh Tran, policy director for the National Association of Minority Contractors‘ Oregon chapter, voiced similar concerns. “This bill specifically disincentivizes hiring new contractors,” he said.

The bill from Sen. Floyd Prozanski, a Eugene Democrat, would make an owner and direct contractor “jointly and severally liable” in a civil action for unpaid wages owed to nonunion employees of the contractors or any subcontractors.

The bill is needed to combat rampant wage theft in the construction industry, Prozanski said.

“It is time to make certain that the men and women who do the work get paid for the work that they do,” he said Wednesday in remarks before the House Committee on Labor and Workplace Standards.

Some testifiers placed much of the blame for wage theft on informal labor brokers, who are required to be licensed by the state, but most are not.

Oregon has two licensed labor brokers, said Josh Nasbe, legislative director for the Oregon Bureau of Labor and Industries. He estimated there are “hundreds” of unlicensed brokers operating in the state.

Supporters of the bill said it would create an incentive for general contractors to hire reputable subcontractors.

“Contractors don’t have any incentive to hire licensed, bonded and responsible subcontractors,” said Hank Kaplan, a board member of the Jewish Federation of Greater Portland. “This legislation would provide that incentive.”

Existing legal processes for remedying wage theft are often too slow and complicated, said Martha Sonato, a lobbyist for the Oregon Law Center, which provides free legal help to low-income residents.

“Current protections aren’t enough,” Sonato said.

A lobbyist for landlords argued the bill creates “unintended consequences” in trying to hold bad actors responsible for wage theft.

“It will only lead to disputes that delay housing projects,” said Molly McGrew, a lobbyist for Multifamily NW.

An Oregon Department of Justice advisor, Leslie Wu, said Attorney General Dan Rayfield would welcome “another tool in the toolbox” to combat wage theft.

SB 426 passed the Senate 18-11 in April, with one Republican joining Democrats in sending the bill to the House.

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The city of Portland has launched a pilot program to create more equitable contracting opportunities for minority-owned and woman-owned firms.

However, many community partners involved in the program’s creation are skeptical that it will be effective.

Under the 24-month pilot policy, the city will accept alternative certifications in addition to the one offered by Oregon’s Certification Office for Business Inclusion and Diversity (COBID) that is required to participate in many contracting programs with equity requirements. The idea, Portland Chief Procurement Officer Biko Taylor said, is to remove a barrier that had existed for some firms.

“We think an inclusive contracting pilot will allow us to cast a broader net and attract other businesses that may not have done business with us before through pilot partner organizations,” Taylor said.

However, the alternative certifications each have different requirements and allow firms with vastly different economic backgrounds and resources to compete for the same contracts.

“The city is not putting together a fair process,” said Faye Burch, president of FM Burch & Associates. “It’s just opening up the market.”

Last year, the city of Portland distributed $798 million to businesses and contractors; $113.4 million of that went to construction projects, according to the city, and 29 percent went to certified minority-owned and woman-owned firms. The remainder was spent on goods such as traffic signs and computers, and professional services.

Currently, the city accepts only COBID certification for contracts. But outside of construction, Taylor said, officials found the COBID-certified pool of minority-owned and woman-owned businesses able to provide those other goods and services to be relatively small.

Firms seeking COBID certification as a woman-owned or minority-owned business or a disadvantaged business enterprise (DBE) must show that at least one woman or minority owns at least 51 percent and manages the daily operations. Also, the business’ annual gross earnings must not exceed $23.98 million.

The pilot program will allow bidding for city contracts by firms with certifications from three other agencies – the National Minority Supplier Development Council (NMSDC), Women’s Business Enterprise National Council (WBENC), and Washington State Office of Minority and Women’s Business Enterprises (OMWBE).

Neither the NMSDC nor the WBENC has an earnings ceiling. However, they do require the 51 percent minimum ownership percentage and management of daily operations. The OMWBE is similar but has an annual gross earnings ceiling of $28.48 million.

Under the pilot program, COBID-certified firms will potentially be competing with much larger businesses for contracts.

Portland’s Procurement Services office intends to self-govern that and “maintain the integrity of those guide rails (COBID), especially in construction,” Taylor said. “This is not a program that is intended to increase business for any businesses that are over $24 (million), $25 million.”

The pilot program follows a previously problematic set of initiatives that aimed to create more contracting opportunities for minority-owned and woman-owned firms. The initiatives included aspirational goals for prime contractors to hire COBID-certified subcontractors as well as alternatives to the low-bid contract award method. The policies also sought to support workforce diversity through grants and programs like the Prime Contractor Development Program (PCDP), which aimed to limit competition on prime construction contracts.

The initiatives were later found by a city audit in 2020 to be mismanaged, flawed in design, and open to gamesmanship.

Contractors were found cheating the system. In some cases, a certified woman-owned firm was observed by city staff without its owners ever present, or with a man. In others, white-owned contractors created smaller companies, registered them as “emerging small businesses,” and then subcontracted to themselves.

Most of the PCDP prime construction contracts were awarded to white-owned firms, and little to none of the grant money made its way to minority-owned and woman-owned firms.

Maurice Rahming, president of O’Neill Construction Group, said it’s “critical” that the city start with a pilot program because there is a lot of potential for fraud with certifications. Now, stakeholders will be able to see where the program can succeed and where there is room for improvement.

Along with the alternative certifications allowed, the city will accept bids from self-identified local minority and woman-owned firms. COBID’s ownership requirements will apply, but there will be no economic ceiling.

Burch called self-certification “egregious” and “reprehensible.”

“I think the whole experiment the city is trying eliminates the opportunity for the smaller business and changes the game to only those bigger companies can compete,” she said. “The only opportunities that these firms are getting now is those carved out by public-sector requirements.”

The Procurement Services office does not anticipate many “self-identified” firms to bid on contracts, Taylor said. The number will likely be in the hundreds and not the thousands, he added.

Full-time city staff has been designated to vet the self-identified firms, Taylor said. During the initial phase, the office will assess the number of likely self-identified firms and allocate more staff to vetting and canvassing if needed.

Kenechi Onyeagusi, executive director of Professional Business Development Group, said she hopes the pilot program does what it is intended to do: support local minority-owned and DBE firms.

Meanwhile, the Portland City Council last week signed the Regional Workforce Equity Agreement and announced the city will launch its first disparity study in over a decade.

Also, Taylor said the city intends to revamp the PCDP in partnership with the National Association of Minority Contractors‘ Oregon chapter and community organizations.

“I know there’s been talk about sunsetting it, but it is a program that I believe in,” he said. “We thought that the framework of it is positive. The results for it were clearly not, but we feel like that is a framework that we can leverage and improve upon.”

The plan is to refer to the 2020 audit and rely on guidance given in the City Council work session in February 2021.

The post New inclusive contracting pilot program under scrutiny appeared first on Daily Journal of Commerce.

Members of an Oregon Department of Transportation advisory committee are calling out the agency’s leadership for its inadequate response to a now-former committee member making racist and sexist remarks.

“The DBE program is just a racist (by definition) scam to gift work to people who either lack the performance to earn it through their own merits, or who happen to be the correct/chosen sex or skin color for a handout,” the person (then a committee member) wrote anonymously in an internal survey.

ODOT staff circulated among committee members before a meeting on Feb. 3. The full comment (No. 7) appeared on the fourth page of a seven-page document. During the meeting, the comment was raised by committee members and not ODOT; Maria Ellis, the agency’s economic equity manager, said ODOT didn’t want to bring the comment to attention because it’s not in line with ODOT’s values.

Following the meeting, ODOT dismissed the member from the committee and notified the owner of the company the commenter represented.

The committee is responsible for guiding ODOT’s policies on equity in construction contracting. The internal survey sought feedback on policies that aim to remediate historical harm caused by discrimination in construction contract awards.

“For me there’s a clear lack of understanding of what equity means to whoever provided that comment,” Statewide Project Delivery Manager David Kim said. “But it also indicates that we have a long way to go.”

ODOT did not respond promptly to calls seeking identification of the former committee member. However, the person’s employer addressed the committee during another meeting on Feb. 10.

Todd Carter, the owner of Carter & Company, told committee members that he fired the individual for making the comments but then reversed his decision. The employee is an estimator and project manager.

Instead, Carter said the employee would undergo corrective training and then be put in charge of helping change the company’s culture so no similar incidents would occur.

Committee member Kelly Kupcak, executive director of Oregon Tradeswomen, said it’s challenging to see the person who holds such views develop the project, content and plan that would counter them.

Committee member Twauna Hennessee, a representative of the Pacific Northwest Regional Council of Carpenters, questioned whether it is a good idea to keep the person in a position involving oversight of estimates on contracts and project management. Estimators are typically the “gatekeepers” who influence bids and subcontracted projects, she said.

Carter told the committee he would be taking a larger role in overseeing the training and programs in his company.

Hennessee added that she’s concerned that ODOT Director Kris Strickler didn’t attend Thursday’s meeting. In the past, the director had shown up to committee meetings involving much less serious issues, she said, and “that’s problematic for me.”

Cooper Brown, ODOT’s assistant director for operations, said the agency’s top leadership is aware of the issue and taking it seriously.

“I understand that the director is aware of it,” said Maurice Rahming, a committee member and president of O’Neill Construction Group. “But the director is not present, and I think that’s what you’re hearing.”

Rahming said businesses like his and others with staff members who are women or Black or Indigenous or people of color (BIPOC) must deal with the type of aggression evident in the survey comment every day in the construction industry. More is needed from ODOT on how it will protect minority-owned, women-owned and disadvantaged business enterprise firms and BIPOC employees, he said.

“I have not heard from ODOT or anyone with any concrete answers,” Rahming said. “The best I’ve heard is we’re going to put a committee together to discuss minority stuff. That is not good enough.”

Brown and Ellis said they would review Thursday’s meeting discussion and return before the committee with concrete actions for the state to take.

The post ODOT committee members dissatisfied in agency’s response to bigotry appeared first on Daily Journal of Commerce.

Efforts by the city of Portland to achieve construction equity goals have been undercut by “mismanagement, waste and gamesmanship,” according to a report released Wednesday.

Auditor Mary Hull Caballero found some contractors cheated the system. For example, certified woman-owned firms were observed by city staff without their owners ever present, or with a man – usually the owner’s husband – in the manager’s role. In other cases, white-owned contractors created smaller companies and registered them as “emerging small businesses,” and then subcontracted to themselves. Also, city staff found instances where a certified firm was not doing the actual work, but another contractor’s equipment was on site.

Caballero’s report comes amid a national reckoning on racism. In the building industry, some Black executives such as Andrew Colas of Colas Construction have called on public agencies to do more to support Black-owned firms, saying existing contracting preferences aren’t working.

Caballero, in an interview, said Portland’s Procurement Services never had clear direction and consistent resources from city leaders.

“They set in motion something that was in contradiction from the beginning,” she said. “Council needs to get clear on what it is trying to achieve and how it can do that legally with the level of resources it’s willing to provide to these programs.”

Advocacy groups called on the city to take action to shore up the equity programs.

“The report gives the opportunity to improve the program,” said Nate McCoy, executive director of the National Association of Minority Contractors‘ Oregon chapter.

The 29-page report focused on a group of programs that were started in 2012 to reduce disparities in contracting and boost opportunities for woman-owned, minority-owned and emerging small businesses. Large public contracts often go to major firms that have been around for decades and are typically led by white owners and executives. The audit found that while the programs succeeded in reducing some disparities, they are “unpopular with many key constituents.”

Widespread dissatisfaction stems from mismanagement and legal constraints that give city officials few opportunities to choose contractors based on race, the audit found.

The audit was especially critical of the city’s Prime Contractor Development Program, which is meant to help small contractors grow. The program “benefited few participants and suffered from mismanagement and waste,” the audit found. “Additionally, white-owned firms won most of the contract dollars awarded via the program. The program’s training and technical assistance programs were generally unsuccessful, disorganized and wasteful.”

The Prime Contractor Development Program’s original focus on minority-owned contractors was diluted, in part because of legal concerns, McCoy said.

“The program was always intended to serve minority contractors,” he said. “Politics and risk and legal authority kinds of things come up, so a program that’s intended to help small minority businesses ends up having to lump everything else in.”

Caballero’s office made 16 recommendations for improving the equity programs. Among them were to take steps to prevent bundling, ensure equal access among contractors to project information, and to centralize and formalize outreach to contractors.

The programs stem from a 2011 disparity study that found stark differences in opportunities for minority contractors.

Then in June 2019, in an audit by Caballero’s office of the Portland Building rehabilitation project, the city was criticized for failing to distribute nearly $1 million in funding set aside for minority contractors.

Advocacy groups joined in the auditor’s finding that there’s a perception certain contractors have an advantage via existing relationships with city staff.

“We call for an end to backroom dealings that undermine the words ‘access’ and ‘equity,’” Professional Business Development Group Executive Director Kenechi Onyeagusi stated in a news release. “We call for public officials and city employees to be unafraid to uphold established processes, abide by its own laws and equity commitments to regain public trust.”

The report focused much of its criticism on the city’s Procurement Services – part of the Office of Management and Finance. Others also bear responsibility for making the programs work, McCoy said.

“There has to be a lot more shared responsibility from our electeds, from bureaus, from (project managers),” he said.

NAMC-Oregon supports the Prime Contractor Development Program, but recognizes changes must be made, McCoy said. The group will issue a full-bodied statement in the coming days, he added.

Caballero said the city now has to make up for lost time.

“Council had good intentions,” she said. “They seemed to want to repair historical inequities and didn’t get the job done. There are consequences for people who are in this industry in terms of wealth creation and advancement and opportunity.”

Caballero will present her findings to the City Council, likely at a Sept. 30 meeting. She expects a “rambunctious conversation” regarding the report and its recommendations, she said.

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In anticipation of the COVID-19 pandemic’s long-term impact, leaders of two Portland-based minority contracting organizations are pressing state and local officials to update rules for public projects in order to help keep their members in business through a looming economic downturn.

In to Oregon Gov. Kate Brown and other elected officials and public agency stakeholders, representatives of the National Association of Minority Contractors‘ Oregon chapter and the Metropolitan Contractor Improvement Partnership (MCIP) warned that minority contractors are the worst hurt in economic downturns. The 2008 recession, the letter states, put a large number of minority contractors out of business because they lacked access to working capital, and prime contractors reduced the amount of work they subcontracted out.

“We don’t want the recovery this time around to be as slow for our industry, so we’re trying to make sure we amplify our very targeted, intentional concerns that our businesses were left behind 12 years ago, and we don’t want to see that happen again,” said Nate McCoy, executive director of NAMC-Oregon.

Maintaining cash flow and payroll are crucial in the short term, as is the ability to apply for Small Business Administration loans and grants, so among the requests are that the state provide immediate technical assistance funding to help minority contractors apply for aid related to COVID-19.

“That only straps you down for the next 30, maybe 60 days, though,” McCoy said. “So the big question is how we stabilize long term.”

The answer, he said, is lifting some of the regulatory requirements and easing the financial burdens of work on public projects, as well as steering procurement toward minority firms.

The groups propose raising the state limits for direct award of contracts to certified businesses from $10,000 to $250,000, increasing the state limit to competition for a contract from $50,000 to $300,000 for certified businesses, lowering or providing financial backing for bonding requirements, and requiring payment of invoices within 30 days.

Because bigger general contractors during lean times self-perform more work and compete for smaller contracts, the groups are asking for a requirement that general contractors on all public projects bid out all scopes of work and limit self-performed work to 10 percent.

The goal, according to McCoy, is not to create a sheltered market, but one of support to keep opportunities within reach of small businesses that can compete among themselves for contracts.

Another request being made is for an immediate moratorium on state-regulated apprentice ratios. While stressing the importance of apprenticeship and pre-apprenticeship training on-site, McCoy said members are questioning the practicality of on-site training during a health crisis.

“Right now, is that ultimately a safe thing to have people learning on the job during a crisis?” he said. “Some of our members don’t think that’s a fair proposition when key employees are leaving. So who’s going to be working with these apprenticeship program participants?”

Also, failure to adhere to apprenticeship requirements can result in liquidated damages, creating another barrier for small contractors that need barriers lowered, McCoy said.

In addition to easing regulations, the letter’s signers – McCoy, NAMC-Oregon board chairman Andrew Colas, MCIP board chairman Erik Esparza and MCIP interim executive director John Jackley – are pushing for a change to a common parlance for minority contractors.

Firms certified as minority-owned, women-owned, service-disabled veteran-owned, and emerging small businesses are registered through the state’s Certification Office for Business Inclusion and Diversity – COBID for short. The similarity in name to the respiratory illness could be harmful to smaller businesses, McCoy said, so the group is suggesting that such businesses be referred to as “certified firms” rather than “COBID firms.”

“We don’t want there to be any moving stigma that continues to make these firms feel marginalized,” McCoy said. “They’re already small businesses trying to survive, and people can joke about how closely related they are, but at the end of the day the firms are telling me that they don’t see it as a laughing matter. That’s a very easy thing for us to start thinking about and considering.”

The requests aren’t being made with a concrete timeline in mind, McCoy said. Ultimately, the goal is for NAMC-Oregon and MCIP to have a seat at the table for decisions impacting their members and the minority contracting community as a whole. The organizations are not expecting change to occur overnight.

“It may not be impacting you today, but I guarantee our industry will be impacted a month from today,” McCoy said. “We don’t want to wait for that storm to come, so we’re trying to be proactive with things that people need to be considering.”

The post Minority contractors proactively seeking governmental support appeared first on Daily Journal of Commerce.

The Professional Business Development Group has a new executive director. Kenechi Onyeagusi took over on Feb. 17.

PBDG focuses on supporting minority-owned and disadvantaged construction contractors and professional services firms to become more competitive through training, mentorship and making connections.

Onyeagusi comes to PBDG from 12 years in commercial banking and portfolio management. A first-generation immigrant from Nigeria, Onyeagusi came to Portland from Cleveland, Tennessee. She has worked for several banks, most recently Heritage Bank, and served on the boards of groups such as Micro Enterprise Services of Oregon.

This interview has been edited for space and clarity.

91��Ƶ: Do you have any near-term goals for the PBDG?

Kenechi Onyeagusi: PBDG’s been around for six years. I feel like it’s one of the better kept – it’s not a secret, because I feel like people in the industry know about PBDG. But folks outside the industry do not know about PDGB. And so bringing awareness to the work that we do and then really highlighting the folks that are members and the people who supported the organization in the past.

91��Ƶ: You mentioned bringing more awareness to PBDG’s work and highlighting what it’s doing. How can you raise its profile so it becomes better known in Portland and throughout the industry?

Onyeagusi: Well I think to do that, you have to highlight the whole industry. When I started doing my research on the subcontractor community, I was like, it’s not a community; it’s an industry.

There’s a whole movement around making sure that there’s equitable distribution of wealth and wealth creation in the community. I think organizations like ours are really one of the vehicles that this is being done.

91��Ƶ: We’ve seen some successful and growing DMWESB firms in Portland and Oregon. Colas Construction getting the Oregon Convention Center contract was a high-water mark. How can the industry or policymakers support contractors in getting those large public contracts?

Onyeagusi: Access to capital is a huge one. Subcontractors should not have to do some of the things they do just to get capital. I don’t know that there’s a lot of attention given to the construction industry – certainly when you’re a certain size. But there’s a hole, right between where you start to where you’re doing $200 million in contracts, and so this whole industry is being built on the backs of HELOCs (home equity lines of credit) and car sales and credit cards, and I think that’s a shame.

We can’t build a subcontracting industry on the back of credit cards or HELOCs. I think that serves nobody well. For a lot of subcontractors, that’s kind of the path of least resistance. You go and get a HELOC. You know, $10,000, $20,000, and you start with a truck and $10,000. But there are ways as a community, and I think Prosper (Portland, the city’s economic development agency) is in position to do this well, where they have a lending program and they can certainly use the resources they have to support a growing community and a growing industry without being in competition with any of the other CDFIs (community development financial institutions).

91��Ƶ: Are they doing a good job of that, or is there more room to grow?

Onyeagusi: There’s room to grow. It’s just starting. So I know they just put it out on the market last year that they’re doing it, so they’re tweaking. I think this is the time. This is the opportunity to really leverage their wealth-creation mission, right? Let’s create wealth in a way that is sustainable for a new industry.

If you’re talking about disadvantaged, minority, small businesses, giving them access to capital, giving them access to predictable capital, to sustained capital – you know, you can give somebody all the contracts you want, but if you don’t give them the tools to do it, that’s just setting them up to fail.

91��Ƶ: The city has some funding coming from the Community Opportunities and Enhancements Program. Where could that funding best be used?

Onyeagusi: Right now, the funding is for the apprenticeship and then organizations like ours that do technical assistance and business support services work, and I think that’s right on the money because we do need to make sure that our apprentices and our workforce get funding.

For the work that we do at PBDG, we can’t do the work consistently and with the right tools if we’re not properly funded.

So it’s wonderful that there’s a sustained channel, but I think the key is to make sure it survives government changes, that it’s not the whim of which politician is in the seat, that it’s really embedded in the framework of doing business with public agencies. It would be a shame to start all this work and then have to stop because a different person is in power.

It’s displacement when you think about it. When businesses start to expect the support we’re giving them, and start to rely on that and you yank it, you’re displacing their resources, and that would be too close to history.

91��Ƶ: It seems in the world of COBID contracts, there are a few fairly large firms that are getting these contracts. Is there too much concentration in the industry? Would it be good to broaden the number of firms who can compete for these contracts?

Onyeagusi: Yeah. That’s one of the things that I think we get through data. There has to be a granularity of data. If you’re trying to make impact, you have to be able to measure the impact of your dollars. How much of that went to job creation, and how many firms benefited from it? It’s time for us to start disaggregating data to really see who is really getting chunks of the money. It’s the only way to grow a fresh crop.

When you look at it from the perspective of money, people don’t want to talk about it because it sounds icky and they’re not doing anything wrong. But it’s not about the money, and it’s not wrong to make money. But what are we trying to do with this work? We’re trying to build businesses, and you don’t do that by doing the same old thing that’s always worked. That’s disingenuous.

91��Ƶ: What are the obstacles you’re seeing for COBID contractors and subcontractors?

Onyeagusi: Other than the lack of money thing? (Laughs) They need technical assistance, they need classes, they need education, being in the right rooms, being a voice.

I see the city and county and Metro really trying to figure out how to do this. And the policies they’ve put in place, they’re really putting the money where their mouths are. It would be great to have 10 companies the size of Colas and Raimore and O’Neill in five years. That’s when you build wealth.

91��Ƶ: If I could ask a more personal question, I’m sure it’s difficult to be an African-American woman in Portland. Portland and Oregon more broadly have a history of exclusion. How has that journey been for you and how could the rest of us do better?

Onyeagusi: It’s been interesting. I’ve always just looked for allies. Banking is one where it’s one of the whiter industries, but I’ve been very fortunate to find allies. And not just people-of-color allies, but white women allies, white men allies, allies that have mentored me and pointed me in the right direction.

I feel a personal … everything I do is in this goldfish bowl, and everybody’s watching, and I’m representing all the black women, and that has pressure.

But I’ve found just owning my voice and being confident in who I am to be helpful. Every room I walk in, probably 95 percent of the time in my career, I’ve been the only person of color. And so I’ve just had to be comfortable in those settings by knowing exactly what I bring to the table and knowing my craft.

It’s felt like a journey of just proving myself over and over and over again. Every room and every meeting, proving myself. I don’t know that that’s particular to me. I think as a woman, as a minority person, you go through that and there’s the pressure of needing to do that even faster than everybody else. But I’ve been fortunate. I’ve had some really good mentors and family support.

The post On a charge toward greater equity in contracting appeared first on Daily Journal of Commerce.

The city of Portland is moving forward on a two-year-old plan to increase diversity and equity in contracting by using money collected from major construction projects to advance opportunities for minority contractors and workers.

Portland City Council is set to authorize $2,234,786 set aside from three major city projects to administer phase one of the Community Opportunities and Enhancements Program (COEP). It has two main areas of focus – providing a path toward stable, high-paying construction jobs for women and people of color in the trades, and providing technical assistance to support disadvantaged, minority-owned, women-owned and emerging small business (DMWESB) and service-disabled veteran business enterprise (SDVBE) firms.

Following the City Council’s approval of the COEP in November 2017, the Office of Management & Finance (OMF) and the Office of Equity and Human Rights (OEHR) in 2018 began developing the program and initiated a request for grant applications for money from the pilot projects. Mayor Ted Wheeler subsequently halted the process and ordered OMF and OEHR to partner with Prosper Portland in developing the program as a means to reduce administrative costs by leveraging the collective experience of multiple bureaus and thereby maximizing available dollars.

The three city bureaus have reached agreement on a memorandum of understanding that clarifies each of their roles in the program. They now will work together to administer the first phase of the plan with funds using 1 percent of total eligible costs from three pilot projects: the Portland Building reconstruction, Washington Park reservoir improvements, and the 10th & Yamhill parking garage renovation.

A Community Equity and Inclusion Committee will be established to provide oversight and advice on how to allocate COEP dollars. After administrative costs, the money will be allocated with 25 percent going toward grants to assist DMWESB/SDVBE firms and 75 percent to workforce assistance for minority workers; those funds will be issued by Prosper Portland, which may subcontract some or all of the workforce assistance efforts to Worksystems Inc.

City Council is expected to soon authorize an intergovernmental agreement between OMF, OEHR and Prosper Portland for administration of the COEP, as well as authorize OMF to utilize money set aside from a Community Benefits Plan from the Washington Park reservoir improvements that predates the COEP. Prosper Portland anticipates issuing requests for proposals in early March and completing the RFP process in April or May.

The post Portland plan to boost contracting equity progressing appeared first on Daily Journal of Commerce.

For Colas Construction, landing the $32 million contract in 2017 to serve as construction manager-general contractor for interior renovations at the Oregon Convention Center was a landmark. At the time, it was the largest contract ever for Colas Construction, and the largest one ever to be awarded to a minority-owned firm in Oregon.

It didn’t take long for Colas Construction to top that. The Portland company has been selected as the construction manager-general contractor for an affordable housing project at 3000 S.E. Powell Blvd. for Home Forward and the Portland Housing Bureau that will exceed the value of the Oregon Convention Center project.

Colas Construction has elbowed its way into several large projects, often on behalf of government clients. In some cases, the family-owned firm has won the jobs over larger firms.

The company has striven to make a diverse workforce its calling card.

“While providing a quality product at a good value, we also are contributing to our community in a way that’s different from any of our other competitors, and that’s by being extremely inclusive and intentional about that at all levels of our business,” Colas Construction President Andrew Colas said. “Every level of management, every level of the trades, we want to make sure that our industry is more so reflective of our community.”

The company has grown rapidly since it was founded in 1997 by Hermann Colas Jr., who had emigrated from Haiti in 1969. The next generation now owns and operates the firm, with Hermann’s children Andrew Colas serving as president, Aneshka Colas-Dickson as vice president and chief financial officer, and Alex Colas as project manager.

Colas Construction has come to occupy a unique position in the Portland area as perhaps the largest minority-owned contractor. That makes the firm a natural fit for public agencies looking to fulfill diversity and inclusion goals, and demonstrate they’re making progress on including minority-owned firms in large construction projects. Colas Construction’s status as a contractor certified by the state Certification Office for Business Inclusion and Diversity (COBID) often is an edge in competitive bidding.

“Colas Construction being a COBID, minority-owned firm was definitely a factor” in it being awarded the Oregon Convention Center contract, said Brent Shelby, senior construction project manager for Metro. “We’re awfully proud of the fact that it was at the time of bid the largest award for a minority contract.”

Half of the Oregon Convention Center project funding, or about $16 million, went to disadvantaged, minority-owned or woman-owned businesses, Shelby said. Colas Construction delivered the project on time and on budget, he said.

The firm’s success in procuring public projects has led to private grumbling from some competitors. Yet the contracting policies appear to be working as designed, providing a leg up for a Haitian-American family firm.

“Unfortunately, I don’t think my father would have been able to found a construction company in the ’60s in Portland, Oregon,” Andrew Colas said. “That’s a sad reality and truth to this state and city.”

Colas said his company now competes against seasoned contractors that can lean on many decades of accumulated capital and business relationships.

“If you look at the majority of the businesses of color that are in the construction industry you won’t find many, if any, that are over 30 years in business,” he said. “So there is no advantage there. Most businesses, they’ve had the ability to have retained earnings for 50 years, and build up huge capital, and that’s a real thing in a very capital-intensive industry.”

Other contractors, including Andersen Construction and R&H Construction, have worked with Colas Construction in joint-venture partnerships. Those collaborations allowed a growing firm to gain experience on large projects.

“Our team enjoyed the opportunity to partner with Andrew Colas and the rest of the Colas family during the early years of their company’s growth as a commercial general contractor,” Norm Dowty, vice president of business development and marketing at R&H Construction, wrote in an email, in response to questions. “During that time, our teams collectively delivered several notable projects for nonprofit entities in the Portland metro area.”

Now, Colas Construction is increasingly getting sizable contracts on its own.

In September, Prosper Portland announced it had selected Colas Construction to build a five-to-seven-story building on a roughly quarter-block parcel at Northwest Fourth Avenue and Burnside Street. The two parties have entered into exclusive negotiations for the project, and Colas Construction is working with Resolve Architecture and SERA Architects on early designs. If the project moves forward, Colas plans to take a floor of the building for its own headquarters. The construction firm’s offices would move from the current location at Northwest Fifth Avenue and Couch Street.

Bow Leung Bing Kong Tong, a local Chinese cultural organization, is also involved in the project with an eye toward taking office space. The project would also include residential units and ground-floor retail space.

“If we were to move forward with this project … we’d want to make sure that it represented as best as possible some of the cultural heritage – Chinese culture, Japanese culture, even African-American culture – within this neighborhood,” Colas said.

Colas Development Group LLC, a new entity formed in June, would serve as the project’s developer.

“We’re not looking into development,” Andrew Colas said. “This is more of an opportunity to put our construction company’s headquarters in what I think is a very unique neighborhood, and we want to add to the fiber and fabric of this neighborhood.”

Another upcoming project would bring a sizable affordable housing development to 3000 S.E. Powell Blvd. The city purchased the former Safari Club parcel near Cleveland High School for $3.72 million in 2017. The Housing Bureau later announced it would use affordable housing bonds to develop the site.

Colas Construction has been tapped to build the project, which will have approximately 175 apartments on four stories over one story of retail space.

Colas Construction is also working with Beam Development to build the ODOT Blocks project in the Central Eastside Industrial District.

Colas Construction executives are well-connected with public agencies. Aneshka Colas-Dickson served a term on Prosper Portland’s board. Andrew Colas currently serves on the Board of Trustees at the University Oregon, his alma mater. Colas said the firm has avoided projects in Eugene during his time on the board to avoid any appearance of conflict of interest. Colas Construction worked on projects in Eugene prior to Andrew Colas’ time on the board.

“We’re a business that stands out and is looked at, so I would never want to do anything that would create that perception,” Colas said. “Long-term-wise, we’ll look to move into other markets. But for now we’re just focused on being really, really good at what we do on our home turf.”

Civil court records show no major cases involving Colas Construction, but only a lien with a developer that was moved to arbitration and a pair of personal injury matters related to vehicle collisions – not uncommon for a construction company. The developer did not respond to a request for comment.

Hermann Colas Jr. came from a family that owned the second-largest rum distillery in Haiti. He started Colas Construction after becoming frustrated with an incompetent contractor who was building his house.

Hermann still comes into the office regularly, even though he sold the business to the second generation years ago. He said he was not surprised Colas Construction has grown large enough to tackle major projects on its own.

“There was never a thought to do something small,” he said.

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Minority-owned businesses don’t get a fair shot when it comes to construction work in Oregon, according to an April report by the Minority Contractor Participation Equity Committee – a group of industry professionals and experts of various backgrounds. By sharing personal experiences, performing research and reading past news stories, the group found that despite state agency goals to increase workplace diversity, the status quo remains unchanged for many projects.

The committee was formed, co-Chairwoman Faye Burch said, after several stakeholders recognized that multiple segments of the construction industry were experiencing the same lack of diversity. This led her to ask for volunteers, who then formed the committee.

The group found that even with participation requirements that encourage industry groups to do business with minority-owned business enterprises (MBE), Oregon’s long history of resistance to inclusion is still present in several forms.

“I think it’s clear to see that disparities continue,” said committee member Ranfis Villatoro, state policy coordinator for the BlueGreen Alliance, an organization dedicated to creating a clean environment and fair economy. “It really does take a whole industry to stop and listen to tackle this problem.”

According to the report, some large, white-owned companies create smaller shell companies that either the owner or an owner’s wife run, potentially fulfilling certifications by counting as an emerging small business (ESB) or woman-owned business (WBE). For this reason, the report reads, ESB is an often known as the “everybody ‘sept the brothers” program.

“There’s not as strong a commitment to cultivate minority contractors and to seeing them as vital parts of the construction industry,” said committee member Roberta Hunte, an assistant professor at Portland State University specializing in gender and race studies. “Construction is a very competitive industry, and you don’t change the status quo without a commitment to cultivating what you want to see.”

Also according to the report, discrimination exists in unions and nonunion trade associations, which in the past have discouraged MBEs from joining. Usually there are costs associated with joining a union or association, which can keep newer firms from seeking membership, the report states.

Another problem, the group found, is the significant barrier to entry established by the network of industry professionals who have dominated the scene for decades. Well-established connections already exist between large industry partners, so it can be hard for smaller firms to break in and gain a reputation, according to the report. Those that do were often started by people who were previously part of larger firms and are well known. In this way, even companies that don’t intend to perpetuate systemic racism benefit from it, according to the report.

The report asserts that progress could be made toward equity if more authentic relationships could be cultivated, and suggests that most of the participants – from unions to individual companies to state agencies – have a role to play.

One method discussed in the report of achieving that progress would be via an increase of programs and education opportunities via unions, associations and industry firms – i.e., major companies interacting with and learning about smaller, minority-owned businesses. Establishing these connections, the report says, will go a long way in making sure MBEs have the chance to grow.

And expanding opportunities for minority contractors is a positive outcome for all involved, Hunte said. Retention has long been a problem for industry firms, she said. As far as government is concerned, fewer people need services and assistance if they’re working, she added.

While the industry is far from perfect, Hunte said there has been a greater focus on the importance of women and minorities in the workplace, and she credited Hoffman Construction and Multnomah County for helping spur efforts to hire more MBEs.

“I think we have a long ways to go,” Hunte said. “But I think we are at a promising moment.”

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Since starting 3 Diamond Construction, a small Portland company, in 2014, owners Ofelia Lara and Dionicio Fernandez grew interested in bidding for public projects.

The company at first had tackled mostly small residential projects. That changed when 3 Diamond joined the city’s Prime Contractor Development Program, which coordinator Stacey Drake Edwards got off the ground in 2013. Since joining the program, 3 Diamond has won several city contracts, including work on Lents Park and the Springwater Trail.

“This program helped us,” Lara said. “We had no clue. Thanks to Stacey’s program, we were able to get into those projects.”

The program works to help women-owned, minority-owned and emerging small businesses bid on city contracts valued at $5,000 to $1 million. In fiscal year 2017-18, via the program, 42 contracts totaling $29.3 million were awarded to such firms. That was an increase of $2.3 million from the previous fiscal year.

The PCDP, part of the city’s Procurement Services office, aims to create a roster of contractors with capacity to bid on public projects. Once part of the program, contractors are encouraged to grow so that when they graduate, they can go on to bid on progressively larger contracts.

“The market right now is really hard,” Edwards said. “Everybody is really busy, and because there’s a lot of public projects going on, you’re competing for these small contractors to bid on your projects.”

The PCDP provides ongoing technical assistance to the small, emerging contractors that take part. As obstacles crop up during projects, the city helps contractors work through the issues. That can involve anything such as invoices, project forecasting or foreman certification. A technical assistance officer will visit project sites and sit it on progress meetings.

“One of the things I always say is I’m not teaching the contractors how to do the work; they know how to do that,” Edwards said. “The key is to get them to understand how the city works and how we do things on our end.”

More agencies are turning to alternative contracting methods that don’t simply accept the lowest bid, said Nate McCoy, executive director of the National Association of Minority Contractors-Oregon.

“Agencies are starting to lean more into these conversations, and look at new and innovative procurement policies for (minority-owned business enterprises) at the sub- and (general contractor) level,” he said.

McCoy praised the program’s emphasis on providing on-site technical assistance.

“As a contractor, who has the time to be in workshops instead of running their businesses?” he said.

City projects larger than $1 million are bid in the open market. Some minority-owned contractors have made significant strides in getting those too.

A $27 million project to renovate the entries and interiors at the Oregon Convention Center isn’t one of the city’s. But it is a public project, and Metro chose a team of Colas Construction and Raimore Construction over Hoffman Construction, a larger and more established firm.

“Some of our members who have worked alongside some of the bigger (general contractors) now are beating them out on projects,” McCoy said. “That’s not a new trend, but the fact that a Colas and Raimore (team) is capable of beating out one of our partners in Hoffman is kind of exciting.”

McCoy said the Convention Center contract was a particularly poignant example because the site was once home to a largely African-American neighborhood that was cleared to make way for the development.

Women-owned firms are also playing increasingly visible roles in programs such as the PCDP and groups like NAMC-Oregon. Examples include Chick of All Trades, a company owned by Valerie Solorzano that provides flagging and traffic-control services, and T Edge Construction, owned by Tammy Edgerly.

“We do really look at ourselves as a program that supports building in the current climate with increasing the number of certified firms,” Edwards said.

The PCDP will be accepting applications in November for its next class.

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