All Agree: MWBE Is Success

March 28, 2005
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GRAND RAPIDS — It appears there were a few more improvements on the qualitative side than on the quantitative side during the first year the city’s new Equal Business Opportunity (EBO) construction program has been in operation.

The race- and gender-neutral EBO construction program went into effect in January 2004 and replaced a policy that mandated specific participation goals for minority and women subcontractors on city construction projects over $10,000.

The current policy’s intent is to promote inclusiveness in the procurement process by increasing participation among Minority and Women Businesses Enterprise (MWBE) general contractors and subcontractors in city construction projects without using a mandate.

MWBEs that want to participate in the city’s construction activities have to be certified by one of five designated certifying agencies. Upon certification, they can apply to become qualified as certified with the city, which makes them eligible for EBO bid discounts.

Equal Opportunity Director Ingrid Scott-Weekley said the data shows MWBE subcontractors received a total dollar volume of $2.4 million on city construction projects in 2003 and $2.38 million in 2004. The difference was $22,718 less in 2004.

When the city eliminated its mandated goal program in 1990, contractors were asked instead to make “good faith efforts” to include MWBE subcontractors on projects, she said. Subsequently, MWBEs participation in the procurement process fell from 9.96 percent in 1988 to 0.8 percent in 1990.

With the elimination of the 2003 mandated goal program and implementation of the new EBO construction program, MWBE participation didn’t change as drastically — it dipped from 7.9 percent in 2003 to 6.3 percent in 2004, Scott-Weekley pointed out.

She noted that last year the number of certified MWBE contractors increased from 76 to 86 and that bid discount incentives under the new program cost the city $17,054.

Scott-Weekley further indicated that the new program has had some impact on the local construction community. The Downtown Development Authority, the Grand Rapids Building Authority and the Grand Rapids-Kent County Convention/Arena Authority have adopted the same guidelines for their construction projects, and the Grand Rapids Public Schools created a diversity plan that includes MWBE firms in the school district’s construction and renovation projects. She said the race-neutral program could become a model for other cities, as well.

Additionally, some private sector firms are striving harder to include MWBE construction companies in their projects, she said, and “mentor-protégé” relationships were formed between majority firms and MWBE firms in 2004.

The Equal Opportunity Department feels the new EBO construction program, which is coupled with bid discount incentives, is working and has been “successful in maintaining MWBE participation at acceptable levels” during its first year of operation.

John Doherty, executive vice president of Associated Builders and Contractors Western Michigan Chapter, told city commissioners Tuesday that ABC members support the new program.

“Last year I said to a reporter that this program was a leap of faith for all of us because there is no model for a program like the one we have created. It is uniquely a Grand Rapids solution,” Doherty remarked.

The local ABA chapter, the West Michigan Minority Contractors Association, the Association of General Contractors and the Association of Underground Contractors worked with city staff to develop the program.

Doherty said the results are “very promising” and demonstrate the power of rewarding and incentivizing cooperation between MWBE and non-MWBE firms. He applauded city officials and city staff for their commitment to the EBO program and urged continued support of it.

“I have never seen as much positive networking as I have witnessed in the past year. The beginning of mentoring programs is very encouraging also, and meaningful relationships are forming and spilling over into the private sector.”

WMMCA President DeCarto Draper declared his organization’s support of the program, as well. He referred to the one-year results as “very encouraging,” particularly in light of the fact that the program is voluntary.

He reminded commissioners that even though the percentage of overall dollars MWBEs received was lower in 2004, the total amount was nearly the same as in 2003.

Draper acknowledged that WMMCA members were originally “very skeptical” and concerned that when the mandated goal program ended, they would lose out on bidding opportunities.

“The EOB department has provided for us a one-stop approach for the development of minority- and women-owned businesses. There is an increasing number of majority owned businesses that are reaching out to our associations and our members.”    

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