American DBE Magazine - Spring 2016 by American DBE Magazine

// Spring 2016

hmshost.com

2010 ALB

Parvez Sharifipour Albany Airport Donuts, LLC “Dunkin’ Donuts”

REACHING OUT TO MORE ACDBE PARTNERS. IT’S WHAT

MAKES US HOST.

2012 ATL

Tony Morrow The Pecan, Inc. “The Pecan”

2011 PHX Gonzalo de la Melena Emerging Domestic Market Ventures, LLC “Sir Veza’s Taco Garage”

Recently, the DOT’s Office of the Inspector General issued its report: “New Disadvantaged Business Enterprise Firms Face Barriers to Obtaining Work at the Nation’s Largest Airports.” At HMSHost, proudly forging fresh and compelling ACDBE partnerships has always been a priority. We’ve consistently identified new and talented minority and women-owned firms to join our family in developing dynamic airport concessions opportunities. ACDBE sourcing will continue to play a major role in our future. How about yours? Let’s plan together in 2016. Contact Ron Gomes with HMSHost Strategic Alliances: ron.gomes@hmshost.com.

2014 LAX Meg Gill Meg Blonde Ale Holdings, LLC “Blu20” & “Point the Way Café”

2013 SAT Lisa Fullerton A Novel Idea, LLC “Auntie Anne’s Pretzels”

HMSHost-DBE-ARN.indd 2

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5/13/16 10:22 AM

U.S. Department of Transportation Small Business Transportation Resource Center

South Atlantic Region North Carolina • Kentucky • Virginia • West Virginia 114 W. Parrish Street | Durham, NC 27701 | www.ncimed.org For additional information regarding program services and support contact: Kaye Gantt, Regional Director at (919) 956-2341 | F: (919) 688-7668 | kgantt@ncimed.org

Helping Small Business Move Forward

How We Help • Bonding Education Program • Women & Girls in Transportation Initiative • DBE Certifications • Procurement Assistance • Short Term Lending Program • Counseling and Technical Assistance

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From the Publisher

Reflections from the Past, Expectations for the Future

have come to realize that sometimes looking back provides the needed motivation to keep moving forward. When I reflect on some of the advancements I have witnessed in my 50+ years, it certainly occurs to me that things have changed a lot during my lifetime; which in turn gives me encouragement about what the future will hold. For instance, I remember my family getting our first Zenith Black & White television—that broadcast approximately three channels. Now many families can instantly access hundreds of channels on high-definition flat screen TVs; and who knows what new technology the future will hold? I also can remember my family’s first car with air conditioning. Now most families have climate-controlled vehicles that can be adjusted to suit the passengers’ comfort level. And since the only constant is change... who knows what the future will hold? In the area of civil rights, I remember school desegregation and attending a school that was 100 percent black until I switched schools in the fifth grade. Now most schools in the U.S. are integrated and minorities can (and do) attend the most prestigious schools in the country. I also remember wondering if a black person or a woman would ever become President of the United States. Now it seems inevitable that most of us will see both an African American and a woman president during our lifetime – and hopefully sooner rather than later. My point is that sometimes we have to reflect at how much things have changed when our present circumstances appear as though things are changing slowly, or not changing at all. I write these thoughts coming from the State of North Carolina, where political influences want to actually go back in time with restrictions to voting rights and civil rights. Sometimes it seems that for every step forward, someone or something is attempting to hinder progress. Even as it relates to the DBE Program, if we look back prior to 1980, very few minority- or woman-owned businesses were participating in the transportation industry. Now, every state in the U.S. implements the DBE Program, and revenues by DBEs nationwide exceed 10 percent of USDOT contracts. However, if you look at the majority of completed disparity studies and talk to many DBEs across the country, we also know that

// Spring 2016

major barriers still exist to full economic inclusion in the transportation industry. So, the challenge is to acknowledge and reflect on the distance traveled to gain the motivation and energy to keep pushing forward. Additionally, it’s important to keep pushing at a time when advocating for minority- and woman-owned businesses is not popular in today’s political landscape. The current buzz term seems to be “small business.” Certainly, I’m all for small business, because most minority- and woman-owned businesses are small. But small business is not the same issue as diverse business, and the challenges that they face are different. This issue of American DBE highlights the ongoing efforts of organizations like the Conference of Minority Transportation Officials (COMTO) and the Airport Minority Advisory Council (AMAC) to keep the priorities and challenges facing diverse businesses in the forefront and on the minds of legislators. We also delve deeper into the story of a DBE firm learning the perils of not clearly understanding the DBE regulations and/or trying to find a shortcut to success. Other stories in this issue highlight two DBE firms striving to carve out a market in today’s business landscape; and the story of how the Missouri Department of Transportation has partnered with the community for a winning DBE program. This issue celebrates the successes and highlights the distance we still have to go. Enjoy! Best wishes, Shelton A. Russell, Publisher American DBE Magazine

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Spring 2016 Volume 4, Issue 2 Publisher: Shelton A. Russell Managing Editors: PR PROS, LLC Creative Director: BRANDilly MC Digital Media: Premier Web Design Solutions Editorial: Jeff Cazeau Philip D. Russell Shelton A. Russell Jordan Taylor Headquarters: 514 Daniels Street, #186 Raleigh, NC 27605

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About American DBE Magazine: American DBE Magazine is the premier industry resource for individuals and stakeholders who work within the federal Disadvantaged Business Enterprises proPublicRelationsCopywritingSocialMediaManagementCrisisCommunica gram administration. American DBE MagConnectazine Blog Link Pinquarterly Hangout Post Tweet Email Blog Pin Hangout Share—REPEAT— TweetPublish Publish EmailConnect Connect BlogLink Link Pin Hangout Share is published and Share—REPEAT—Post distributed in all 50 states—plus Puerto Rico and the ocialMediaManagementCrisisCommunicationsMediaCoachingBrandEnhancementMediaMonitoringDigitalMedia U.S. Virgin Islands—to DBE program PublicRelationsCopywritingSocialMediaManagementCrisisCommunicationsM administrators, business owners, and proPost Tweet Publish Email Connect Blog Link Pin Hangout Share—REPEA fessionals in the Aviation, Highway Construction, and Public Transit industries.

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// Spring 2016

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// Spring 2016

Oscar M. Lewis

President & U.S. Patent Inventor

Representative Peter DeFazio (center) addressed participants at the 2016 AMAC Leadership Summit in Washington, D.C. He is pictured here with AMAC Board Member Farad Ali (r) and former AMAC President/CEO Shelby Scales (l).

27 TRANSPORTATION

DBE POWER PLAYERS

Transit

Anointed Flooring

Civil/Highway

Departure Media

Aviation

COMTO Honors Women Who Move the Nation P3 Opportunities for DBEs in Transportation ACI Industry Awards

Finds Success With Faith and Family Team Soaring High in Airport Advertising

BUSINESS DEVELOPMENT

DBE Certification

Executive Education

Austin Commercial

DBE Fraud

AMAC Continues

ALSO IN THIS ISSUE

FEATURES 20

'Styx' Between A Rock and A Hard Place DBE Fraud Case Concludes Develops ‘GIFTed’ Firms

Legislative Push for DBE Program Improvements

DBE PROGRAM SPOTLIGHT

The Appendix E Process Gains Clarification Tuck’s Entrepreneurship Education Builds High-Performing Businesses Whistleblower to Receive $500,000

Spring 2016 Calendar of Events

Missouri DOT DBE Program Partners with the Community // Spring 2016

PROUD TO GIVE BUSINESSES A LIFT CATS is proud to provide opportunities for businesses to create local jobs through the advancement of transit projects. CATS also seeks to create an environment that gives small and socially or economically challenged local businesses the opportunity to compete for publicly funded contracts by participating in the Small Business Opportunity (SBO) and the Disadvantaged Business Enterprise (DBE) Programs. On the LYNX Blue Line project, for example, CATS spent $42.9 million with 38 DBE firms to build the new light rail system. As the major provider of public transportation to Charlotte and the surrounding region, CATS relies on the communities we serve to build and operate the service every day. By working together on these new opportunities, we can all keep our communities moving in the right direction. For more information, visit ridetransit.org.

// Spring 2016

transit

COMTO Honors Women in Transportation The Conference of Minority Transportation Officials (COMTO) recognizes the important contributions of women in the transportation industry. By American DBE Staff

COMTO Award winners (from left) Bryna Helfer, Ph.D., Grindly Johnson, and Feysan Lodde share their thoughts on the impact of women in the transportation industry at the Celebrating Women Who Move the Nation program.

he Conference of Minority Transportation Officials (COMTO) recognized the important contributions of women in the transportation industry at its 5th Annual Women Who Move the Nation awards ceremony on March 16, 2016, coinciding with America’s annual recognition of Women’s History Month. The yearly breakfast and awards ceremony honors women from all facets of transportation who have demonstrated exemplary leadership, a commitment to diversity & inclusion, and the advancement of minorities and women in the transportation industry.

COMTO President and CEO Mioshi Moses said, “The Celebrating Women Who Move the Nation event is important not only because it celebrates women’s contributions to advancing the transportation industry, but also because it encourages women and minorities to continue striving to make a difference in the industry for generations to come.” Transportation Secretary Anthony Foxx gave special remarks to the more than 500 guests at the event congratulating 14 // Spring 2016

COMTO honored the following women with the 2016

Women Who Move the Nation award:

honorees on their achievements. He also took the opportunity to share his vision and goals for creating greater “ladders of opportunity” for minorities and women through the impact of transportation infrastructure and development. “These 14 phenomenal individuals serve as an inspiration to a generation of young women who want to be engaged and involved in our nation’s transportation sector,” Secretary Foxx said. “They are doing some truly transformative work – leading the charge to innovate and improve our transportation systems across the board, while also further connecting people to opportunity.”

Deborah Flint Executive Director, Los Angeles World Airports Kimberly Avery Southwest Region Engineer, Michigan Department of Transportation (MDOT) Flora Castillo Vice President of Community and Strategic Engagement, UnitedHealthcare Grace Crunican General Manager, San Francisco Bay Area Rapid Transit (BART) The Honorable T. Bella Dinh Zarr National Transportation Safety Board Polly Hanson, Chief of Police Amtrak Dr. Bryna Helfer Deputy Assistant Secretary for Public Engagement, U.S. Department of Transportation Grindly Johnson Deputy Secretary of Transportation, Virginia Department of Transportation (VDOT) Feysan Lodde Founder, MV Transit Valarie McCall Chair, American Public Transportation Association (APTA) Margaret O’Meara Vice President, WSP|Parsons Brinckerhoff (Boston) Dr. Karen Philbrick Executive Director, Mineta National Transit Research Consortium Leanne Redden Executive Director, Chicago Regional Transportation Authority (RTA) Mary King Posthumous Honoree, formerly of AC Transit

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U.S. Transportation Secretary Anthony Foxx congratulates the award winners and shares his thoughts for creating ladders of opportunity in transportation.

Moses said, “We were thrilled that Secretary Foxx was able to participate. His presence demonstrated his strong commitment to serving diverse communities and addressing their transportation and business needs.” State Government Award Honoree Grindly Johnson, Deputy Secretary of Transportation for the Commonwealth of Virginia, was recognized largely for her accomplishments and commitment to creating opportunities for Disadvantaged Business Enterprises (DBEs). Johnson led the development of Virginia’s first Business Opportunity and Workforce Development Center and has been a champion for ensuring DBE participation on major highway and bridge projects. “I am passionate about the DBE program and for making sure minorities and women have a fair opportunity to succeed. I have an outstanding team of professionals in Virginia that make our program one of the leading DBE programs in the country,” Johnson said during her award acceptance remarks. COMTO National Chair, Warren Montague said: “COMTO

is delighted to recognize these exceptional women who innovate and play influential leadership roles in the transportation industry and truly move the nation. Each of these women represents not only a cross-section of modalities, but a cross-section of America’s rich diversity.” COMTO also leveraged the excellent attendance by COMTO leaders and members from across the country to spend time on Capitol Hill meeting with politicians impacting transportation legislation and policy. Over 50 COMTO members participated in the annual “A View from the Hill” program held on Tuesday, March 15—the day before the awards program—in the Rayburn House Office Building on Capitol Hill. The session featured interactive discussions with Andrea Martin, Senior Policy Advisor & Staff Counsel, from the Office of Rep. André Carson (D-IN); Helena Zyblikewycz, Staff Director, House Committee on Transportation and Infrastructure, Highway and Transit Subcommittee; and Lucinda Lessley, Policy Director, Office of Congressman Elijah E. Cummings (D-MD). The speakers updated participants on legislation affecting transportation in minority communities and ways to create more opportunities for DBE firms in transportation opportunities.

Los Angeles Metro President/CEO Phillip Washington (r) makes comments on the issues facing diverse businesses at COMTO's A View From the Hill Program.

Since assuming the leadership of COMTO in 2015, Moses has focused on the organization’s advocacy efforts and wants to increase COMTO’s impact on the legislative process. “COMTO is going to be more engaged with our legislative representatives,” Moses said. “A part of our mission is to advocate for stronger policies and laws that will increase the participation of minorities in the transportation industry, and this first meeting on Capitol Hill is a step in the right direction.”

“Each of these women represents not only a cross-section of modalities, but a cross-section of America’s rich diversity.” Warren Montague, COMTO National Chair,

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Advertise With Learn more at: www.americandbe.com //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// // Spring 2016

civil/highway

P3 Opportunities Abound for DBE Firms By American DBE Staff Although most P3 projects developed by government entities have been diligent to include requirements for the participation of DBEs, firms seeking to benefit from these opportunities face challenges to be ready, willing, and able to take advantage of the opportunity. Even though the scopes of work are the same as with traditional infrastructure projects, the nature of the P3 and Design-Build project delivery methods creates specific nuances that DBEs must be prepared to navigate in order to succeed in this emerging area of business.

Business Transformation Group President/CEO Joe Lewis works with government agencies and primes to help DBEs prepare for contracts on P3s projects.

ublic-Private Partnerships (P3s) represent a new and fast-growing contracting vehicle for public entities, such as state governments and airport authorities, to finance major infrastructure projects. P3s allow agencies to fast-track large projects by partnering with private companies seeking an investment vehicle with shared risk and promising returns. Through a P3 project, privately-owned corporations capitalize on the opportunity to fill the gap between the public demand for infrastructure improvements and the supply of government financing to meet the demand. P3 projects are a transportation industry trend that is gaining momentum across the U.S., with 33 state governments now authorizing the use of P3s as a bona fide project delivery method. While many consider this trend good news to augment inadequate funding sources from federal, state, and local governments to keep up with growing infrastructure development and maintenance needs, P3s represent both a challenge and an opportunity for Disadvantaged Business Enterprise (DBE) firms.

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Joe Lewis, principal of Business Transformation Group (BTG), a management and technology consulting firm, confers on behalf of government agencies and prime contractors to help DBEs succeed on P3 projects. His firm has worked with several agencies in Washington D.C., Maryland and Virginia. His firm also has worked extensively with the Virginia Department of Transportation (VDOT) on several projects as VDOT has been one of the national leaders in the use of this contracting method. “P3s are a different animal for DBEs,” Lewis said. “The opportunities are there, but DBEs have to be sure these types of projects are a good fit for their business.” Lewis’ work and methodologies have been recognized by the Federal Highway Administration (FHWA) as a best practices approach. In the past year he has been asked by the U.S. Department of Transportation to discuss his body of knowledge throughout the country. As such, he recently spoke to DBEs interested in contracting opportunities on the upcoming I-77 Hot Lanes project in Charlotte, N.C. The I-77 project is a P3 sponsored by the North Carolina Department of Transportation. NCDOT has selected I-77 Mobility Partners, LLC to design, construct, finance, operate, and maintain the 26-mile highway project in the Charlotte Metro area. I-77 Mobility Partners is a consortium led by Cintra Infrastructures S.A, a subsidiary of Spanish infrastructure developer Ferrovial.

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Specifically, Lewis spoke to DBE firms interested in working with Sugar Creek Construction, LLC; the contractor hired by I-77 Mobility Partners to build the project. Sugar Creek is a joint venture between FA Southeast and English Construction. During the presentation Lewis shared several strategies for DBEs to succeed in gaining opportunities and success on P3 projects. ...........................................................................

1. Understand the Nature of P3 Projects Lewis stressed that working on a P3 project is different than a standard bid-build or design-build project, where a prime contractor receives a contract from a government entity and then hires subcontractors (including DBEs) to complete the project. He shared that on P3 projects there is a private investor organization that is the concession operator that will own and typically maintain the project for an extended period of time. This type of relationship presents additional considerations for DBEs with regards to the structure, oversight, and the layers of authority the project will entail. In some cases, the concessionaire firm may be a multi-national company and/or a large conglomerate corporation, which brings a level of bureaucracy different from a locally-based highway contractor on other projects. P3 projects typically have a different process for administering the DBE program. Many agencies require the concessionaire’s construction firm to submit a DBE plan in its contract documents that outlines how the DBE goal will be achieved on the project. This is different than the good faith effort and outreach process required on standard projects, where the contractor submits its full list of DBE subcontractors at the time of bid. In some cases, DBEs are not hired by a construction company on a P3 project until months or years after the project begins. ...........................................................................

2. Assess your company’s capacity Lewis said: “DBEs must have a clear assessment of the firm’s managerial team and capacity to handle what comes with a P3 project. This includes the company’s ability to finance longer payment cycles, provide bonding if necessary, and have the administrative structure to handle the documentation and paperwork.” P3 projects will likely have longer payment cycles due to a different payment structure. On a typical project, payments for completed work are processed by the government agency that pays the prime contractor, who then pays the subcontractors. However, on a P3 project, DBEs may not enter until the secondtier level or lower, meaning progress payments may take even longer to process. Therefore, it is important for DBEs working on P3 projects to understand their firm’s capacity to manage these types of issues successfully.

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3. Market your business effectively DBEs seeking to work on P3 projects should also understand that their marketing strategy may need to be different than on a typical bid-build project. Since P3s are typically large, high-profile projects initially owned by private investors, concessionaires may require a higher level of scrutiny and assurance before hiring subcontractors. This will require spending additional time and effort marketing their firm and demonstrating their capability and desire to work on the project. Many concessionaires host several outreach meetings and training classes to educate DBEs on how to do business with their company and to assess the level of interest by potential subcontractors. Oftentimes, simply submitting a quote to the construction firm on a P3 project is not sufficient to motivate them to hire a subcontractor. DBEs should set aside time to meet with the contractor who will actually subcontract the work they are seeking to perform—and work to establish trust and a level of comfort before landing a contract. Additionally, the joint venture firms may not regularly perform work in the market where the P3 is located, so the DBE also must take time to develop and foster new business relationships.

Large P3s like the Transurban I-395 HOV Lanes project in Virginia offer significant opportunities for DBEs that are ready, willing, and able to complete work.

................................................

4. Excel at project execution P3 projects are likely to be large complex projects with many moving parts simultaneously taking place. Project scheduling, coordination, and inspection are of the utmost importance. Lewis said: “There may be several levels of oversight on a P3 project. First, you have the government agency conducting oversight; then the concessionaire/owner will have oversight; and then if a DBE is at the second tier or below, there will be oversight from their first tier contractor. The DBE must be aware of this going in because it will affect scheduling and inspection of the work product. These type considerations must be included in the pricing structure because the work can be slowed down or postponed while wading through multiple tiers and/or rework based on multiple levels of quality assurance. Firms may need to have the capacity to work on different areas of the project at the same time depending on the scheduling of the project.”

Another critical area of project execution on P3 and other Design-Build infrastructure projects is safety. Lewis advises DBEs to make sure they have a solid safety program and dedicated safety officer to ensure they have a handle on this aspect of operations. Again, due to the size and complexity of the P3 project, the lead construction firm will likely have a very detailed and rigid safety program that all subcontractors must adhere to. Therefore, it is imperative that the DBE be current on any safety certifications and ensures that all workers on the project abide by the safety rules on the project. ................................................

5. Master project administration requirements

The final area of consideration offered by Lewis is project administration. This area entails the DBE completing the administrative tasks associated with the project in an exemplary manner. Lewis said, “Subcontractors of P3 projects

must be diligent in maintaining daily activity logs and submitting invoices and other documentation in a timely manner.” Despite the number of issues a DBE must take into account when considering opportunities on a P3 project, Lewis encourages firms to pursue business in this emerging and growing area of transportation contracting. He said, “Although there is a lot involved in working on a P3 project, the opportunities far outweigh the challenges. Through P3 contracts, DBEs can win larger opportunities that allow them to increase capacity and distinguish themselves from other firms in the industry, in addition to potentially developing new skills and relationships that they can take to other projects in the future.”

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45th National Meeting & Training Conference Conference of Minority Transportation Officials

21st Century Multimodal Transportation: The Future is Now

SAVE THE DATE

When July 8 â&#x20AC;&#x201C; 12, 2016 Where Dallas Omni Hotel 555 S. Lamar St. Dallas, Texas 75202 Register online www.comto.org/conference

COMTOâ&#x20AC;&#x2122;s National Meeting and Training Conference is the premier gathering of professionals in the US transportation industry seeking best practices, tools, and solutions for workplace and industry challenges.

// Spring 2016

Aviation

aci industry awards Spring 2016

ACI-NA Honors Business Diversity with the 2016 Inclusion Champion Awards Airports Council International-North America (ACI-NA) recently announced the recipients of the 2016 ACI-NA Inclusion Champion Awards during an April 5th awards gala dinner at the ACI-NA Business of Airports Conference in Orlando, FL, which was attended by nearly 500 commercial management, human resource, and finance executives from the North American airport industry. This year’s Inclusion Champion Award winners are Miami-Dade Aviation Department, Indianapolis Airport Authority, Jackson Municipal Airport Authority, and MarketPlace Development. “The Inclusion Champion Awards celebrate exceptional achievement in promoting and sustaining diversity throughout the airport industry’s workforce,” said Kevin M. Burke, ACI-NA President and CEO. “Diversity is good business and we are proud to recognize our airport and associate members who are committed to promoting inclusion.”

Large Hub Inclusion Champion: Miami-Dade Aviation Department Miami-Dade Aviation Department’s (MDAD) ensures that local women- and minority-owned small businesses are aware of its contracting opportunities through a number of federal and local initiatives, including: the Airport Concession Disadvantaged Business Enterprise program; the Disadvantaged Business Enterprise program for construction and design contractors; the Local Developing Business program for airline service contracts; the Small Local Car Rental program for car rental concessions; and the Department’s Maintenance Contractor Program. To encourage small business participation, MDAD hosted 61 outreach events in fiscal year 2015 and includes a small business participation provision and Affirmative Action Plan articles in all airport concession and construction contracts. As a result of MDAD’s efforts, small businesses accounted for $202.7 million, or 17.1 percent, of its $1.1 billion in contracts in FY 2015. In addition, MDAD’s inclusive and diverse workforce is reflected in its leadership team as well as throughout the Department’s 1,225-employee workforce.

Medium Hub Inclusion Champion: Indianapolis Airport Authority The Indianapolis Airport Authority (IAA) is deeply committed to fostering meaningful opportunities and increasing participation of Disadvantaged, Minority, Women or Veteran Business Enterprises (DMWVBE) by facilitating participation of diverse suppliers in procurement opportunities. The IAA continues to focus on hiring diverse leadership and to seek more diversity in hires throughout the organization. To date, more than 50 percent of the IAA’s senior leadership is made up of women or racial minorities. Nearly 35 percent of IAA professional staff is made up of women or racial minorities. The IAA continues to attract diverse talent by participating in informational and educational events at several career fairs. To foster employee engagement in the aviation industry, the organization identifies high-performers through constant employee-manager feedback, annual performance reviews, and a quarterly recognition program.

To date, more than 50 percent of the IAA’s senior leadership is made up of women or racial minorities. Nearly 35 percent of IAA professional staff is made up of women or racial minorities. // Spring 2016

Small Hub Inclusion Champion: Jackson Municipal Airport Authority The Jackson Municipal Airport Authority (JMAA) has formed its policies and procedures to actively encourage, support and mentor small and disadvantaged businesses. To ensure the whole community is engaged in their business practices, JMAA hosts public meetings to announce new business plans. Similarly, JMMAA’s Workforce Inclusion Program recognized the value of total diversity in the workplace and has made it a priority to recruit and hire key personnel from a diverse pool of qualified candidates. The JMMAA’s Leadership in Aviation Excellence Program is designed to prepare the authority’s employees for the next step in their aviation career. Through this program, eighteen leaders have joined the organization’s diverse leadership team. In addition, JMMAA supports future aviation professionals in their community through their internship program.

Associate Inclusion Champion: MarketPlace Development

Marketplace Development received the Associate Inclusion Champion Award at the 2016 ACI-NA Inclusion Champion Awards. Shown left to right: Maureen Riley, ACI-NA Chair; Clarence LeJeune, President of LeJeune and Associates; Paul McGinn, President of MarketPlace Development; Michael DiCosola, Executive Vice President of MarketPlace Development; and Kevin M. Burke, ACINA President and CEO).

About ACI-NA Airports Council International-North America (ACINA) represents local, regional, and state governing bodies that own and operate commercial airports in the United States and Canada. ACI-NA member airports enplane more than 95 percent of the domestic and virtually all the international airline passenger and cargo traffic in North America. Approximately 380 aviationrelated businesses are also members of ACI-NA, providing goods and services to airports. Collectively, U.S. airports employ more than 1.3 million people and account for $1.2 trillion in economic activity—or 7 percent of the total U.S. workforce and 8 percent of GDP. Canadian airports support 405,000 jobs and contribute C$35 billion to Canada’s GDP. Source: ACI-NA Press Release

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MarketPlace Development (MarketPlace) has a strong commitment to the inclusion of businesses that represent the diversity in the regions where they do business. The company’s aggressive approach to ensure the participation of small, local and diverse businesses has resulted in inclusion of their operations at Philadelphia International Airport, LaGuardia Airport Terminal B, Ronald Reagan National Airport, and Washington Dulles International Airport. MarketPlace’s commitment includes strong minority participation in the ownership and management structure, with 60 percent of the corporate leadership being female and 40 percent minority. In order to continue to succeed in nurturing a diverse workplace, MarketPlace assists their merchants by coordinating job fairs, often in conjunction with local colleges and community organizations. In 2015, over 3,326 people attended the job fairs at PHL, DCA and IAD that the company supported. In receiving ACI-NA’s Inclusion Champion Award, Paul McGinn, President of MarketPlace Development, thanked ACI-NA for the honor and recognized the MarketPlace staff for their strong and demonstrated commitment to the inclusion of businesses that represent the diversity in the regions in which MarketPlace does business. “Our MarketPlace staff in Boston, New York, DC, and Philadelphia should take pride in this award,” McGinn said. “It is their work that enabled MarketPlace to be recognized for being in the forefront of providing meaningful participation by Airport Concession Disadvantaged Business Enterprises in all aspects of our business.”

ACI-NA member airports enplane more than 95 percent of the domestic and virtually all the international airline passenger and cargo traffic in North America.

AUGUST 19-23 Huntington Convention Center of Cleveland

EXPAND AIRPORT MINORITY ADVISORY COUNCIL

YOUR

REACH!

#AMAC2016CLE www.amacbusinessdiversityconference.com // Spring 2016

John “Styx” Cuthbertson has owned Cuthbertson Trucking since 1989 and is rebuilding his company after being sentenced in a government DBE contract fraud case in November 2015.

'Styx' Between A Rock and A Hard Place DBE Fraud Case Concludes By American DBE Staff

ohn “Styx” Cuthbertson has invested 26 years into building, growing, and running his trucking firm in Monroe, North Carolina, approximately 25 miles southeast of Charlotte. Cuthbertson started Styx Cuthbertson Trucking in 1989 while employed at a steel manufacturing plant. Cuthbertson learned about opportunities in the trucking industry from a friend who had made a similar investment in a tractor trailer while working at the steel plant. But, instead of going into the freight trucking business, Cuthbertson decided to go into dump trucking and eventually purchased two trucks that he

// Spring 2016

leased out to drivers while still working at the steel mill. Things were going well with the part-time business until 1992, when work at the steel plant slowed and Cuthbertson was laid off. He then decided to get his Commercial Drivers License and go into the dump trucking business full time. Cuthbertson’s first and primary customer was Boggs/Vaughn Contracting Inc., a company owned by Carl Boggs Jr. Boggs/Vaughn was also based in Monroe and was the leading asphalt paving contractor in Union County, an area just southeast of Charlotte. Cuthbertson

developed a solid relationship with Boggs Jr. during his early years in business and the relationship continued when the Boggs Jr. turned the business over to his sons Carl Andrew (Drew) Boggs III and Chris Boggs. However, the younger Boggs had much bigger plans for the paving company. Soon after taking over the company, Drew and Chris Boggs began an aggressive strategy to grow the company. Cuthbertson said, “Things began to change when the sons took over the business. They wanted to make the company bigger and they were wheeling and dealing all over the place.” The Boggs brothers renamed the

company Boggs Paving in 1994, and grew the company from its initial Monroe location to a total of six offices located throughout North Carolina, South Carolina, and Georgia. They also diversified the company to own six asphalt plants, a rock quarry, sand mine, and a transport company. Although the closely-held family business does not publish its annual revenues, estimates place the company’s revenues in excess of $50 million annually. Cuthbertson saw the rapid growth of Boggs Paving as a great opportunity to grow his company too since he had consistently worked on Boggs projects. As the Boggs operation grew, Cuthbertson’s long-standing relationship with the Boggs family enabled him to add additional trucks to his fleet. He knew he had the support of Boggs team members, who gave him assurances that more work would follow to pay for the trucks. “We would go to the auction together,” Cuthbertson said. “If I saw a good truck they would tell me to go ahead and get it.” It was during this period that the lines of the relationship began to get blurry. The first sign came when Boggs managers approached Cuthbertson with the idea of allowing Boggs Paving staff to help Cuthbertson “keep up with his paperwork” in the fledgling business. Boggs’ management was aware that Cuthbertson’s sister helped him with the administrative part of the business and sometimes had trouble keeping up with backend responsibilities. Cuthbertson’s company had grown to as many as five dump trucks while continuing to work on different Boggs projects. It was at this point that Boggs Paving management hatched an illegal plan that would help them meet ongoing DBE program requirements under the guise of helping Cuthbertson with his bookkeeping and administrative challenges. Boggs Paving managers offered to help Cuthbertson perform his bookkeeping for a fee of $400 per month; and they offered a way for him to earn additional money by allowing Boggs to run trucks under his company’s DBE certification in order to meet DBE goals on NCDOT and SCDOT projects. Although this setup seemed to help both companies at first, Cuthbertson’s decision to participate in the arrangement all but destroyed the company he had spent years trying to build. Federal investigators caught up to Boggs Paving and Cuthbertson Trucking in 2013 when Boggs president Drew Boggs, five Boggs employees, and Cuthbertson were indicted on 29 counts of government procurement fraud by the U.S. Attorney’s District Office in North Carolina. Then, in October 2014, Cuthbertson and four members of the Boggs Paving construction company were convicted in federal court for participating in the fraudulent scheme to undermine the federal Disadvantaged Business Enterprise Program. Boggs Paving and Styx Cuthbertson Trucking were found guilty of

Boggs Paving President/CEO Drew Boggs and four other employees were indicted and pled guilty to participating in government contract fraud.

Cuthbertson saw the rapid growth of Boggs Paving as a great opportunity to grow his company too since he had consistently worked on Boggs projects. // Spring 2016

misrepresenting DBE participation on over 30 federally-funded contracts worth more than $87 million in the states of North Carolina and South Carolina. At the conclusion of the trial, a federal judge handed down the heaviest sentences and fines to executives of the Boggs Paving Company. CEO Drew Boggs III was sentenced to 30 months in prison and two years of supervised release; and received a $15,000 fine after pleading guilty to conspiracy to defraud the United States Department of Transportation (USDOT) and a money laundering conspiracy. The judge also fined Boggs Paving Company $500,000. Other Boggs Paving employees were also convicted in the case. Kevin Hicks of Monroe, N.C. was sentenced to two years of probation and was ordered to pay a $2,000 fine after pleading guilty to conspiracy to defraud USDOT and money laundering. Greg Miller, 61, of Matthews, N.C., was sentenced to 15 months in prison and two years of supervised release; Greg Tucker, 42, of Oakboro, N.C., was sentenced to two years of probation and was ordered to pay a $1,000 fine. A fifth co-defendant, Arnold Mann, 56, of Fort Mill, S.C., was previously sentenced to a term of probation after pleading guilty to a count of conspiracy to defraud USDOT. Cuthbertson, the only member of Styx Cuthbertson Trucking convicted in the case, was sentenced to two years of probation—three months of which will be served in home confinement—and was ordered to pay a $2,000 fine. The federal court described the fraudulent relationship in a press release at the conclusion of the case. To execute the scheme, Boggs Paving made commitments to subcontract hauling services to Styx Cuthbertson Trucking in order to help meet the DBE participation goals on the projects awarded to Boggs. However, instead of Cuthbertson performing the work, Boggs consistently pulled a “bait and switch” by performing

// Spring 2016

most of the work with their own trucks, but reporting that the work had been performed by Styx Cuthbertson Trucking. In order to create a paper trail for the fraud, Boggs asked Cuthbertson to open a bank account in his company’s name to deposit checks made out to Styx Cuthbertson Trucking for the amount of hauling services performed by Boggs’ trucks. Then Boggs would funnel the money back into their hands by using [a] signature stamp with Cuthbertson’s signature to write a check back to Boggs Paving. Boggs would also issue a check to Cuthbertson equal to 1% of the larger check that served as compensation to Cuthbertson for participating in the scheme. Investigators discovered $3.7 million in payments to Styx Cuthbertson Trucking over the ten year period from 2004-2013 that were reported by Boggs for DBE participation credit. The indictment states the defendants “took careful steps to conceal their fraud.” Those measures included: lying to North Carolina and South Carolina DOTs on a variety of DBE documentation; submitting bids purporting to be from Styx when they were from Boggs Paving; and using magnetic decals bearing the Styx company logo to cover the Boggs logo on company trucks. Boggs Paving also performed numerous clerical functions in Styx’s name, including creating phony quotes on Styx letterhead; drafting bogus subcontracts between Boggs Paving and Styx; creating dummy invoices; and giving Styx Cuthbertson pre-prepared quotes, contracts, and DBE reports for his signature. Cuthbertson now says that he had very little idea of what was going on during the whole process. “Man, I had no idea they was doing all that,” Cuthbertson said. “They would just give me papers to sign and I would just sign them. I’m not good with all that paperwork on account that I don’t read too well. They said they just wanted to help me with my paperwork. I just wanted to work, that was all.”

“I’ve been working all my life, but now they have me wearing this thing like I’m some criminal or something. I’m too old for all of this. I’m 71 years old, not some young jitterbug.” John “Styx” Cuthbertson

While Cuthbertson’s sentence was not as harsh as the executives of Boggs Paving, at the end of the day he still finds himself on the short end of the stick in the whole deal. Cuthbertson’s company is nearly defunct, and all but one of his five trucks is out of commission and in need of repair. Although he’s now finished with the home confinement part of his sentence, the experience was humbling and humiliating, as he was ordered to wear an ankle bracelet 24 hours a day and could only leave home for nine hours a day for work purposes. During this part of his sentence Cuthbertson said, “Man, this is embarrassing; I’m a working man. I’ve been working all my life, but now they have me wearing this thing like I’m some criminal or something. I’m too old for all of this. I’m 71 years old, not some young jitterbug.” Meanwhile, despite Drew Boggs’ prison sentence, Boggs Paving has reconfigured under the leadership of two former Boggs managers. The new company, called Lynches River Contracting, has landed more than $27 million in new government projects across the Carolinas. By court orders, Boggs Paving was barred for three years from bidding on contracts; as are its affiliates, companies with interlocking management, and those with a “common use of employees.” Nevertheless, Drew and Chris Boggs signed paperwork in September 2015,

creating Lynches River Contracting at the address of an existing Boggs Paving affiliate. They turned ownership over to two separate trusts that they established to benefit their children. The State of South Carolina investigated ways to prevent the new company from performing work in their state. South Carolina Inspector General Patrick Maley said in a report, “The setup means Boggs Paving can essentially continue to generate economic wealth for their families, which indirectly benefits the debarred wrongdoers.” As of now, no action has been taken to stop the new company from working in South Carolina. In addition to the new contracts under the Lynches River name, the Boggs brothers will continue to benefit from work as one of three joint venture partners on the $840 million Monroe Bypass project in North Carolina. This is

because federal suspension regulations do not apply to existing contracts. Although the North Carolina Department of Transportation asked Boggs Paving to remove itself from the joint venture in light of the federal indictment, Boggs management simply replaced Boggs Paving with one of its subsidiary companies called Boggs Materials Company, also owned by the Boggs brothers. While the Boggs brothers have successfully transitioned to life after the trial—with Drew Boggs serving out his sentence in a federal prison while his companies continue to thrive— Cuthbertson is still left picking up the pieces. Cuthbertson’s son has started his own trucking firm and now uses the one operational truck Cuthbertson had left. John "Styx" Cuthbertson has been spending his time trying to get his other trucks repaired so he can revive his business after this devastating period. He

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even received a call during the interview for this article from a Boggs employee inquiring about the status of his trucks. Cuthbertson seemed excited that he might be able to get his trucks repaired and potentially get back to work... even if it is for the Boggs companies. Cuthbertson said he now understands his level of accountability, but insists he didn’t know all of what was going on. He said: “I thought everything was cool and it was legal. They were giving me a little 2 percent, but that wasn’t no money. I wasn’t worried about the money because they were going to keep me working. It got me in a bunch of trouble. I should have told them to keep it. If I would have told them to keep it and took none of it, I would have been better off. Then the feds wouldn’t have been able to get me for nothing. I just wanted to work.”

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// Spring 2016

Austin Commercial Develops ‘GIFTed’ Firms

Austin Commercial (Austin) is the commercial construction arm of Austin Industries, one of the nation’s largest and most diversified construction companies, with annual volume of nearly $2 billion. By American DBE Staff

imeon Terry serves as Vice President of Diversity Affairs at Austin Commercial, L.P., based in Dallas, Texas. Austin Commercial (Austin) is the commercial construction arm of Austin Industries, one of the nation’s largest and most diversified construction companies, with annual volume of nearly $2 billion. Terry’s position places him at the forefront of the company’s Disadvantaged Business Enterprise (DBE) Program activities for several major transportation projects across the country. These projects include major airport projects at the Charleston (SC) International Airport, the Phoenix Sky Harbor Airport, San Francisco International Airport, Tampa International Airport, and Chicago O’Hare International Airport.

The Austin Commercial team has used a comprehensive outreach effort to provide opportunities to DBE & M/WBE firms on the Tampa International Airport ConRAC and APM projects. Pictured above is Pier 58 of the APM leading up to the ConRAC facility.

// Spring 2016

Austin’s work on these projects has led Terry to develop a thorough understanding of what it takes to run a successful DBE Program on major transportation and other government projects. This understanding includes a keen awareness of the necessary considerations from the view of both the prime contractor and the project owner in seeking to ensure the maximum opportunity for disadvantaged firms. Terry’s experience in working with agencies across the county has led to the development of a four-step strategy he uses to advise clients on how Austin will implement a successful approach to running a winning DBE Program. Terry calls his approach the ‘GIFT’ strategy. GIFT is an acronym meaning Growth, Identification, Focus, and Implementation. He believes that these four actions, applied in earnest to any project, will yield success for the owner, prime contractor, and diverse firms participating on the project.

Growth Terry believes that the goal of the DBE and similar programs is to make a positive impact on helping firms grow and succeed, not just to comply with the regulations. Therefore, Austin strives to maximize inclusion on projects rather than just aiming to meet the contract goal. Maximizing inclusion means that project owners should encourage and reward collaborative strategies such as teaming agreements, joint ventures, and mentor-protégé relationships as a means to grow diverse firms. He also believes owners can maximize inclusion by creating stronger contract requirements and clear good faith effort standards during the proposal process to accurately indentify prime contractors that will provide the greatest opportunity for inclusion on the project.

The mentor-protégé program worked with disadvantaged businesses to improve their operations by sharing best practices, networking, and opportunities to work with Austin.

For instance, Austin implemented its own mentor-protégé program in Tampa, Florida on its $730 million contract to build a consolidated rental agency complex (ConRAC) and automated people mover system (APM). The mentorprotégé program worked with disadvantaged businesses to improve their operations by sharing best practices, networking, and opportunities to work with Austin. M/WBE firms participated in seminars that addressed such topics as contracts, insurance and bonding, bid and award processes, administrative and site logistics, how to get paid, lien rights and claims avoidance, safety, marketing, and technology. Although the mentor-protégé program was not a part of achieving the project’s participation goal, it offered firms an opportunity to discover ways to grow their businesses. Identification The second component of a successful program is the identification of all areas of opportunity for disadvantaged, minority-, and women-owned (D/W/MBE) firms. These opportunities may include scopes of work that local firms cannot provide, but ones that regional or national firms can handle successfully. Therefore, Austin will seek to locate both local and non-local firms that can perform work on a project, which leads to higher diverse business participation overall. Another area of identification entails capturing participation by diverse firms at all levels of the project, and not only those of the first-tier subcontractors. Terry encourages owners to track diverse firm participation at all levels of the project; and to consider ways to unbundle scopes of work in the design and construction phase to maximize opportunities for diverse firms. This will help the prime contractor identify more firms to participate in the work. “The owner should incentivize all of these actions by giving credit during the proposal process for prime contractors willing to commit to these types of efforts,” Terry said.

Austin Commercial’s Simeon Terry (r) receives the AMAC Hall of Fame Award from Airport Minority Advisory Council Board Chair Darryl Daniels at the 2015 Business Diversity Conference.

Focus The third component of the GIFT strategy is to maintain focus on the program through continuous monitoring of diverse business participation during the project. This includes monitoring payments to subcontractors and considering incentives for contractors to expedite payments to subcontractors. Focus also includes evaluating any potential change orders or scope changes to consider the impact on the project’s diverse business participation. This analysis may lead to additional opportunities for inclusion. // Spring 2016

Another facet of focus is evaluating and monitoring when retainage payments will be returned to subcontractors once their work is completed. All of these factors impact the overall success of a project in addition to the initial goal for diverse firms. While a prime contractor may commit to a promising goal attainment during the proposal phase of the project, their subcontractor administration procedures may do significant harm to firms working on the project through delayed payments, unfair withholding of retainage, and contract changes unfavorable to subcontractors. Terry says owner should consider these factors when considering the overall success of a prime contractor’s DBE Program success. Transition The final component of the GIFT strategy is to transition the program from just a compliance effort, to enhancing the capacity and growth of diverse firms. Terry believes that the mission of the DBE and similar programs is to transition small companies from small subcontractors to companies with the skills and capacity to perform major projects. He believes that owners and agencies should establish goals for the development and improvement of diverse firms over time and select prime contractors that will help achieve these goals. Potential goals include efforts such as conducting assessments of firms’ current capabilities, capacity, and relationships, and then creating developmental plans to help the firms improve. Developmental strategies may include seeking mentoring relationships or joint venture opportunities for firms to help accelerate their growth through partnering with more advanced firms that possess the capabilities the firm needs to learn. Austin has implemented its GIFT strategy on the Tampa ConRAC and APM project successfully and the project is on track to surpass the projects 19 percent DBE goal by several percentage points, while creating significant opportunities for the inclusion and growth of diverse firms. “Tampa has been one of our better projects,” Terry said. “Our big focus now is creating economic development within the community. So in addition to exceeding the goal we strive for a maximization of firms, because we know that the more firms we use, the more jobs are created and the greater the impact throughout the community.” Terry believes that Austin’s commitment to building strong relationships in the communities where Austin completes projects is the key to the company’s success. He said, “We focus on relationships. We take time in the community meeting with leaders and organizations, so it’s not a canned approach. Yes, we are going to build it safely, on time and under budget; but we are going to also leave the community better than we found it.”

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AMAC continues Legislative Push for DBE Program Improvements By American DBE Staff

he Airport Minority Advisory Council (AMAC) continued its ongoing advocacy for DBE Program improvements at its Leadership Summit on Capitol Hill event on March 23, 2016. AMAC’s most urgent push is to support a long-term Federal Aviation Administration (FAA) Reauthorization Bill in Congress. However AMAC also believes the bill should include provisions to expand the DBE Program to include projects funded by passenger facility charges (PFCs) collected by U.S. airports. Currently, the FAA authorizes U.S. airports to collect up to a $4.50 fee on every departing ticket leaving its airport and then use these revenues for maintenance and capital improvement projects.

AMAC is aggressively pursuing this change to the DBE program due to current proposals to allow the increase to PFC fees as an offset to reductions in Airport Improvement Program (AIP) grants provided by the FAA. The Obama Administration and other supporters believe that increasing PFCs will save the federal government money by allowing airports to collect money for improvements directly from passengers instead of relying on increasing levels of AIP grant funding. However, AMAC contends that without changes in a long-term bill that require PFC-funded projects to include DBE Program provisions, DBEs will receive fewer opportunities on airport projects going forward. FAA’s current authorization

expires in July 2017, and Congress is currently debating a long-term bill that could pass before this summer, or after the presidential election in early 2017. The Leadership Summit on Capitol Hill event began with more than 100 AMAC members meeting at the offices of K&L Gates, a Washington, D.C. law firm that serves as AMAC’s lobbyist. Attorney William Kirk moderated a series of panel discussions and presentations updating the participants on the status of AMAC’s legislative efforts and the current legislative initiatives of several federal agencies including the U.S Small Business Administration, U.S. Department of Transportation, and the Federal Aviation Administration. // Spring 2016

"It’s important for them to know that we are concerned and interested in the impacts their decisions will have on small and disadvantaged business enterprises." - Shelby Scales

Clifford A. Bailey, President/CEO of TechSoft Systems (l) moderates the CEO panel discussion with MWAA President/ CEO John Potter (center) and BWI CEO Ricky Smith.

The Honorable Congressman Peter DiFazio (DNV) also provided remarks to the group stressing the importance of a long-term FAA Reauthorization to provide economic certainty and funding for airports across the country. DeFazio currently serves as the Ranking Member on the House Transportation & Infrastructure Committee, which has jurisdiction over the Coast Guard, highways and transit, water resources, railroads, aviation, and economic development. DeFazio said: “The problem with short-term extensions is that projects need to be funded and airports are hesitant to start major projects if they are uncertain that the funds will be there to pay for them. We are going to forego a lot of work this summer when construction season starts because of the uncertainty that is being created with the short-term reauthorization. It is imperative that we get something that is at least 18 months, if not longer.” Stephanie Jones, Senior Counselor to the Secretary and Chief Opportunities Officer for the U.S. Department of Transportation (USDOT) also addressed the meeting. Jones is charged with advising Transportation Secretary Anthony Foxx on an array of issues and ensuring that his priority “Ladders of Opportunity” initiatives are coordinated, advanced, and implemented across all levels of DOT with department stakeholders, and the public. Jones told the group, “Secretary Foxx has charged us at USDOT to do everything we can to strengthen the DBE Program, to step up our enforcement and make sure that the program is benefiting as many DBEs as possible.”

// Spring 2016

Participants in the AMAC Economic Opportunity and Policy Forum’s Bonding & Insurance Learning Lab share information during the event.

Following the morning’s presentation and discussions, participants were divided into 14 groups of 4-6 people to visit offices of legislators on Capitol Hill. Each group was assigned at least three legislators to visit and share AMAC’s key legislative concerns which are: 1) The support of a long-term FAA Reauthorization Bill; 2) The support of an increase in PFCs to increase airport capital improvement projects; and 3) The support of the expansion of the DBE Program to include projects funded by PFCs. Groups traveling to Capitol Hill met with both legislators and the aides of legislators who were not in Washington at the time. “We want to make sure we stay effectively engaged and active with legislators that can move our concerns forward," said (now former) AMAC President & CEO Shelby Scales. “It’s important for them to know that we are concerned and interested in the impacts their decisions will have on small and disadvantaged business enterprises.” AMAC hosted the Leadership Summit event in connection with its 22nd Annual Airport Economic Opportunity and Policy Conference, which was held on March 22 at the Renaissance Washington, D.C. Downtown Hotel. The conference was sponsored by the Metropolitan Washington Airport Authority and featured a wide range of speakers and panelists discussing opportunities for DBE and Airport Concession DBE firms to do business in the aviation industry in 2016. Sessions during the event included topics such as opportunities with airport concessions, rental cars, airport construction, and the airport hotels industry.

AMAC Board Chairman Darryl Daniels (l) and former AMAC President/CEO Shelby Scales welcome USDOT Senior Counselor to the Secretary and Chief Opportunities Stephanie Jones to the annual AMAC Leadership Day.

A highlight of the conference was an intimate discussion with Ricky Smith, CEO of the Baltimore Washington International Airport (BWI), and John Potter, President and CEO of the Metropolitan Washington Airport Authority (MWAA). The two airport leaders shared with conference attendees a frank discussion on the opportunities and challenges of doing business at a major airport. Both leaders stressed that small and DBE firms must be persistent and patient when seeking to break into the industry. They also shared that DBEs, like all businesses, must offer a way to add economic value to an airport either through cost reduction or increased revenues in order to thrive in the airport business.

“AMAC looks forward to bringing more relevant events to the small business community,” Scales said. “Our Economic Opportunity and Policy Forum promotes industry opportunities as well as provides members pathways to participate effectively in legislation and policy issues facing DBE and ACDBEs.”

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// Spring 2016

Opportunity and Community By American DBE Staff

MoDOT External Civil Rights Director Lester Woods focuses on ccommunity partnerships to achieve DBE Program success.

p r o g r a m

s p o t l i g h t

MoDOT DBE Program MoDOT ECR Connects the Dots Between

Woods has led MoDOT’s External Civil Rights Division for the past 12 years, after he was promoted from a position in the Human Resources Department in 2004. Although Woods was new to several Civil Rights program areas, he had gained experience in Equal Employment Opportunity while working at the University of Missouri and in MoDOT’s Human Resources Department. Woods gravitated to the

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issouri Department of Transportation External Civil Rights (ECR) Director Lester Woods understands his division’s role in connecting the many “dots” representing the different stakeholders in MoDOT’s programs and projects. The dots Woods refers to represent all of the groups that must come together for MoDOT initiatives to be successful, including MoDOT internal staff, prime contractors, small businesses, federal regulators, and the area which often gets overlooked – the community. However, Woods has made creating strong community partnerships a key component of how he leads MoDOT’s external civil rights programs. These programs include the Disadvantaged Business Enterprise (DBE) Program, On-the-Job Training (OJT) Program, Equal Employment Opportunity/ Contractor Compliance Program, Title VI/Environmental Justice Program, and the Americans with Disabilities Act (ADA) Program.

// Spring 2016

MoDOT Regional Advisory Committees meet monthly to review workforce utilization, DBE participation, and upcoming MoDOT projects.

area after asking his boss at the University of Missouri if he could lead the updating process for the university’s Affirmative Action Plan. “I saw our plan sitting on the shelf, and it needed to be done, so I offered to take it on,” he said. The experience of reviewing strategies to increase employment opportunities for minorities and women helped Woods develop the philosophy that the community must be involved to make these efforts successful; and Woods has furthered this philosophy in his leadership of MoDOT’s ECR Division. The importance ECR has placed on creating strong community partnerships has been crucial in helping MoDOT thrive, as the agency completed several major projects directly impacting the Greater St. Louis area—doing so during the challenging times in the St. Louis area following the Michael Brown shooting incident in 2014. “ECR’s role is connecting people together. We do this by engaging the community and all other stakeholders to build relationships,” Woods said. “This calls for thinking outside of the box to engage with a variety of community organizations including business associations, urban leagues, and faith-based organizations to make sure we reach all areas of the community impacted by MoDOT.” ECR’s approach helped MoDOT achieve stellar results on the New Mississippi River Bridge Project (now called the Stan Musial Bridge) in inner-city St. Louis. The project garnered great community interest because the project directly impacted minority communities. However, through extensive outreach and community involvement, the project became a model of how transportation projects can have a positive impact by creating business opportunities and jobs, in addition to greater mobility. “This was a great project for us, because it

demonstrated what can happen when people work together in partnership for the greater good,” Woods said. To bring about success, ECR led the creation of a Workforce/ DBE Advisory Committee that was selected by the participants of a series of community roundtable meetings for the project. The group met throughout the project to provide guidance and oversight to DBE and workforce initiatives of the project. This level of involvement helped the project exceed the 18 percent DBE goal by awarding over $144 million in contracts to 117 firms; and to exceed the 14.7 percent minority workforce goal by achieving 22.7 percent of total minority workforce hours worked on the project. Woods also credits MoDOT’s willingness to partner with the Conference of Minority Transportation Officials (COMTO) with helping develop innovative strategies to engage the DBE community along with more minorities and women interested in employment on the project. COMTO helped MoDOT develop a community partnering approach that is now known as the “Missouri Model.” The Stan Musial Bridge was the third project that utilized this comprehensive approach to reach out to community organizations and leaders to provide meaningful input into transportation projects. “The involvement of COMTO brought a level of objectiveness and credibility to what we were trying to do,” Woods said. “They helped MoDOT remove barriers, share information, and think outside the box when it came to community engagement.” The success of the Workforce/DBE Advisory committees on major projects led Woods to recommend transitioning the committee into two new Regional Advisory Committees in // Spring 2016

order to maintain the goodwill and momentum created. The Regional Advisory Committees now work on an ongoing basis with MoDOT district engineers in the St. Louis and Kansas City regions to monitor DBE participation and the utilization of minorities and women in the workforce on transportation projects. “Our Regional Advisory Committee will review DBE participation and monthly workforce tracking reports for over 100 projects across the state, and they have also helped developed new contract special provisions related to on-the-job training,” Woods said. The ongoing relationship with the community helped MoDOT to respond to the push for government agencies to do more to address unemployment and minority business development after the Michael Brown shooting in the St. Louis area. The ECR office mobilized in the Northern St. Louis area to offer an aggressive DBE Supportive Services set of training and development courses aimed at small business owners. Courses were offered in topics such as business planning, highway transportation technical skills, financing, and bonding to offer DBE firms assistance in doing more business with MoDOT. “We knew we had to do something to address the level of unemployment and DBE business utilization to that community,” Woods said. “Our efforts were well-received and a lot of businesses participated in those programs."

All of these efforts are aimed at fulfilling Woods’ vision for the ECR Division. “We are here to effect change in people’s lives,” Woods said. “If you are going to have success in this work you have to have people with passion and drive, led by a clear vision. And that vision has to be that the federal requirements are only the baseline of what we are here to accomplish. We are here to truly make a difference.”

“We knew we had to do something to address the level of unemployment and DBE business utilization to that community.” Lester Woods, MoDOT

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dbe power players

Anointed Flooring Finds Success With Faith and Family By American DBE Staff

odney Farris realized that his fledgling flooring business needed more than he had to give in order to survive, so he turned to the person best suited to help make the company what he dreamed it could be – his wife Camisha Farris. Camisha was working in the banking industry at the time, and had no entrepreneurial experience to speak of, but Rodney knew she was what his company needed. Eventually, Camisha left the security of her corporate job to become president of Anointed Flooring, and although there have been challenging times, their business has blossomed. “It took six months to make a decision after Rodney asked me to join the company,” she said. “It has definitely been a walk of faith.” Rodney knew that his wife’s corporate skills were better suited to lead the day-to-day administration of the company, while he focused on installing flooring and managing workers. Although he initially started the company, Rodney was comfortable with assuming the role of vice president and operations manager. Camisha said, “My husband is great at flooring and estimating and has no interest in the administrative parts of the business. I am very determined and outgoing; and I like talking to people, so it works well for us.” Anointed Flooring opened in 2004 as a fullservice flooring company performing all types of floor covering services including: carpet, tile, wood, and other flooring materials. At the time, Rodney was in his early 30s and had been installing flooring since he was 16 years old. After gaining experience in both residential and commercial flooring, Rodney knew he had acquired enough skills to step out on his own. Business went well for the new company until the recession hit hard in 2009. Anointed Flooring’s primary source of business at the time was in the residential construction industry, which was booming due to the subprime mortgage industry fueling new housing construction in the Charlotte region. However, as the mortgage industry crashed and the recession intensified, business slowed down. “We really started to see the plummet in 2009,” Camisha said. “Those early years were really hard.”

Camisha Ferris, president of Anointed Flooring, attended the 2016 Executive Networking Conference in Charlotte, NC to network and gain valuable business development information. [Photo Credit: Cover photo and inset photo by Rick Crank Photography]

// Spring 2016

Anointed Flooring provides residential and commercial flooring installation services including carpet, ceramic tile, resilient tile, and sheet vinyl.

The recession years prompted the company to begin pursuing more commercial and government contracts and Camisha eventually got Anointed Flooring certified in the City of Charlotte’s Small Business Program, the State of North Carolina’s Historically Utilized Business Program, and the Disadvantaged Business Enterprise (DBE) Program. Gaining these business certifications, as well as taking advantage of organizations like the Metrolina Minority Contractors Association (MMCA) and the Women’s Business Center (WBC), helped Camisha to learn about more business opportunities and to network with other contractors. “I took advantage of everything there was,” she said. “I went to training classes hosted by the WBC, and I took classes at the Small Business Center at Central Piedmont Community College. I also took advantage of the networking and relationships of the MMCA and learned how to use our certifications to find business opportunities.” Camisha’s willingness to network and market the company, coupled with Rodney’s great service and customer satisfaction in the field, has helped the company return to a solid foundation and build a strong reputation throughout North Carolina. The company now has four full-time staff members and regularly hires up to 19 subcontractors who work for the company on an as-needed basis. The company has worked on several

// Spring 2016

commercial projects, including work as a DBE subcontractor at the Charlotte Douglas International Airport. “We have done a few projects at Charlotte Douglas International Airport,” Camisha said. “We did tile flooring in the restrooms, as well as carpeting for the Leo/Mesa project. We also did the flooring for one of their maintenance facilities known as the SPX project.”

in projects. They have also received several awards for their efforts. Anointed Flooring won the 2016 Future 50 Award presented by SmartCEO , 2016 Client of the Year presented by the Women Business Center of North Carolina, 2015 Women in Business Award presented by The Charlotte Business Journal, and the 2015 Subcontractor of The Year presented by Charlotte Construction Coalition.

Anointed Flooring performed on high-profile commercial projects for the Charlotte Housing Authority as a subcontractor on the Time Warner Cable Arena (Home of the Charlotte Bobcats NBA team), and also installed new flooring at the N.C. Air National Guard Base in preparation for a visit by President Barack Obama. “We have been on some good projects with the help of our certifications,” Camisha said.

In 2014, Anointed Flooring was selected to participate in the Goldman Sachs 10,000 Small Businesses entrepreneurial development program at Babson College. “The Goldman Sachs program was really excellent,” Camisha said. “It was like a mini MBA program that really taught you about running a successful business.”

Like any business, there continue to be ups and downs. One persistent challenge is that some of the same companies that Anointed Flooring works for on government projects (with goals for small or minority business), don’t necessarily invite them to work on private jobs. “We know we do excellent work, and our customers tell us we do great work, so that is a challenge,” she said. Despite the challenges, the company has continued to grow and over the past few years has contracted more than $1 million

The Farris team has not put a limit on how far their business can grow. The couple has three sons and one daughter that they hope will take over the company in the future. Camisha said, “We see the sky as the limit. Three of our children are working with us now, and the last one is still in school. He may join us one day as well. So we are not doing this for us, we are doing it for them.”

dbe power players

departure media Team Soaring High By American DBE Staff

Departure Media currently manages advertising for 10 airport facilities across the country. Pictured here is a display in the baggage claim area of Pensacola International Airport.

eparture Media Airport Advertising is the largest prime ACDBE Advertising Concessionaire in the country; the company is 100 percent woman-owned and certified throughout the United States as a W/MBE, DBE, and ACDBE (Women/Minority Business Enterprise; Disadvantaged Business Enterprise; and Airport Concession Disadvantaged Business Enterprise). CEO Leslie Bensen founded the Charleston, South Carolina-based company in 1996. Departure Media designs advertising display environments to enhance airport

terminal aesthetics, create an improved passenger experience, and generate revenues for airports. The company currently manages advertising for 10 airport facilities across the country. Bensen got her start in airport advertising after graduating from the University of North Carolina at Chapel Hill, where she majored in Journalism. She said: â&#x20AC;&#x153;I was looking for employment after graduating from UNC-Chapel Hill and saw an advertisement in the Charlotte newspaper for a marketing position at the Charlotte Douglas International Airport. I applied and was offered the

position to work with the Charlotte airport, Columbia Metropolitan Airport, Fayetteville Regional Airport, Wilmington International Airport, Charleston International Airport, and the Asheville Regional Airport. That was a long time ago! After 10 successful years working with the large national firm, I launched Departure Media Inc.â&#x20AC;? However, it took six years of persistence before Departure Media was awarded its first advertising concession contract, which still continues today. Fortunately for Bensen, hard work and perseverance are a part of who she is. â&#x20AC;&#x153;I have always // Spring 2016

been a very driven person that - for some unknown reason - is not afraid to fail,” she said. “I have been working since I was 10 years old and I love to work. I want to make a difference, and most of all I love to help people. I saved enough money to buy my first car at 14 years old, before I had a drivers license. My determination to succeed has always been a part of who I am.” She attributes her upbringing, attitude, and can-do spirit to helping her build and grow the company. “I was creating unique advertising opportunities for airports and noticed most markets were being underserved and lacked a creative approach; both in advertising messages and display opportunities. I never doubted for one second that I could fulfill my promise. I met with as many airports as I could, just for a chance to launch Departure Media” Bensen said. According to the Departure Media team, airports have long been viewed as merely a place for airlines to operate and for passengers to transition. Today, progressive airport management realizes the passenger’s complete experience is crucial and that timely and accurate information is invaluable. Seizing an opportunity to fill a void in the marketplace, Departure Media offers attractive, customfabricated displays that complement the airport’s interior architecture. Departure Media develops new products and technologies that enrich the passengers’ overall airport experience based on an understanding that a quality airport provides relaxing, engaging and entertaining space, which are essential to customer satisfaction.

Over the past two decades Departure Media has expanded to provide the following services: » Creating, designing, and installing advertising display devices » Supervising advertising display fabrication and installation » Increasing airport advertising net revenues through an equitable partnership » Providing a Departure Digital Network System to captive locations throughout the terminal promoting local, regional, and national advertisers

// Spring 2016

Departure Media President/CEO Leslie Bensen (l) and VP of Business Development Robin Bloomston (r) greet U.S. Transportation Secretary Anthony Foxx at the Beyond Traffic Forum in Charleston, SC in October 2015.

The company’s mission, vision, and commitment to supporting local business is clearly stated: “Departure Media’s aggressive commitment to support local businesses effectively impacts the economic growth of our airport communities by increasing jobs is apparent once we are awarded airport contracts. We support ‘local’ in each of our markets by hiring people that are native to the area. As a proud member of AMAC (Airport Minority Advisory Council) and a member of the Charleston area Women in Aviation chapter and as a woman-owned business, we understand the importance of actively engaging all minority- and women-owned businesses throughout the term of our contract.” Bensen said that the toughest challenge in sustaining her business has been the process of breaking down barriers that prevent small and woman-owned businesses from competing in the aviation industry. She said there have been many hard business lessons, but one of the most difficult times was during the recent economic recession. “One of the hardest [times] was losing the majority of our advertising clients and our largest airport account at the same time during the Great Recession—the most difficult economic time.” As a result, she and her team learned several lessons: Never give up and always focus

on “The Now” and the future. “It is not in my nature to give up, but had I during that extremely difficult time, Departure Media would not have rebounded to become a better, more improved organization today,” she said. “My husband uses the analogy that passengers are not walking up to a counter to buy advertising like they are a beverage or magazine. Our job is to go out in the community and create business by cultivating relationships, making friends, and educating the community on the benefits of the airport and the ability to reach the influential business traveler in a unique environment.” Other encouragement and career advice came from Liz Hair, her former boss—and also a good friend and mentor. Bensen commented about Hair: “She was an amazing leader; she represented Charlotte City Council as the first woman to be elected in that role and she paved the way for women in politics. Liz often reminded me that challenges come in all sizes. She would say, ‘if you can swim in 5 feet of water, then you can swim in 500 feet of water.’ She was an inspiration to so many women and I want to carry on her legacy of helping women.” The future looks bright for Departure Media, as air travel is at an all-time high—showcasing the team’s creativity to countless passengers and potential customers each day.

“I am so fortunate, so thankful to be working with the best professionals in the industry. We have an incredible team of women at Departure Media—women that care about one another—and care about doing things right, no matter what. We are living a dream because we have the opportunity to give back to each of the communities we work with,” Bensen said.

“I never doubted for one second that I could fulfill my promise. I met with as many airports as I could, just for a chance to launch Departure Media.” Leslie Bensen, CEO

// Spring 2016

business development

DBE Certification The Appendix E Process Gains Clarification By Jeff P. H. Cazeau, Becker & Poliakoff

ince 1997, the U.S. Department of Transportation has made clear that firms owned and controlled by individuals who are not presumed to be socially and economically disadvantaged can obtain Disadvantaged Business Enterprise (DBE) and Airport Concessions Disadvantaged Business Enterprise (ACDBE) certification on a case-by-case basis. In 1999, the Department issued the final rule governing how individuals who are not presumed to be socially and economically disadvantaged could obtain certification in Appendix E to the DBE regulations in the Code of Federal Regulations Title 49 Part 26. Since the implementation of the Appendix E process for obtaining DBE certification, anecdotal evidence suggests that very few firms have been certified through this process. There are several likely reasons for this. First, Appendix E actually contains little guidance on exactly what is needed to support an application based on that section. Second, there has been a lack of understanding by agencies on what type of evidence is actually required to prove social and economic disadvantage under Appendix E. Last, there have been few decisions by the DOT’s Departmental Office of Civil Rights (DOCR) interpreting the Appendix E process. In late 2015 and early 2016, DOCR rendered three decisions, McKay Ventures, Inc.; Ref. No.: 15-0032; Trademasters Service Corporation; Ref. No.: 14-0174 (December 2015); and T. Castro Produce Co.; Ref. No.: 15-0121 (February 2016) that have changed the way agencies and applicants should look at the Appendix E process. Below is a brief exploration of some of the ways each decision has significantly improved the Appendix E process. ..........................................................................

1. Corroborating evidence is not a requirement under the regulations. In all three cases, the DOCR re-emphasized that a narrative describing the discrimination that an individual has faced

// Spring 2016

in American society as a result of “at least one objective distinguishing feature” is sufficient, on its own, to prove that an individual is socially disadvantaged. Although corroborating evidence, comparative information or documented proof is helpful in proving social disadvantage, it is not a requirement and the lack of such evidence is not a bar to certification. ..........................................................................

2. Clarification of the “Preponderance of the Evidence” standard. Appendix E makes clear that applicants must prove by a “preponderance of the evidence” that they are both socially and economically disadvantaged. However, in many cases agencies have applied the stricter standard of “clear and convincing.” However, the DOCR in the recent cases explained that the standard of “clear and convincing” does not apply in the Appendix E process.

..........................................................................

3. Appendix E Applicants should not be unduly burdened beyond what is normally asked of other applicants. In T. Castro, it took more than a year before the applicants received their first denial. On their second application, it took the agency nearly 10 months to deny the application, even after the applicant pointed out that the agency was required to render a decision within 90 days. The agency also requested a significant amount of information wholly unrelated to the matters it had found to be at issue. The DOCR cautioned that agencies have the obligation to remove unnecessary barriers facing qualified individuals and that agencies should not ask Appendix E applicants for more than would be required from other applicants. ..........................................................................

4. In determining economic disadvantage, agencies should focus on the barriers faced by applicants, not their successes. In Trademasters, the agency argued that the applicant was not economically disadvantaged because, despite the applicant’s disability, he had achieved some measure of success in business. The agency concluded that, “despite your disability you have gained such success in your given industry to become a leader among your peers.” DOCR disagreed with this conclusion, stating that the record contained persuasive evidence of unequal access, exclusion, and costs directly attributable to the applicant’s disability. The DOCR concluded that the agency had focused on the applicant’s ultimate success while DOCR “read the Regulation, in contrast, to focus on hurdles encountered in developing a business and barriers to advancement.”

could not have experienced discrimination. In support of this position, the agency provided a list and biographies of “successful” individuals of that ethnic group – including some of the agency’s own employees. DOCR held that “no portion of the Regulation – including the Appendix E guidance on individual determinations of social disadvantage – instructs certifiers to compare an applicant to other members of that applicant’s ethnic group.” ..........................................................................

6. Applicants are not required to provide agencies with evidence of the financial position of competitor firms. The Appendix E regulations require that agencies consider the financial condition of the applicant firm in comparison to the profiles of other small businesses in similar lines of business. For a long time this meant that the applicant firms had to provide agencies with the financial information of their competitors in order to prove economic disadvantage. However, this is all but impossible. In all three cases, the DOCR recognized this undue burden on small businesses and directed that agencies review the profiles of other businesses through third party providers such as American Fact Finder, a tool on the census website or Risk Management Association Annual Statement studies. This clarification of the rules has removed an all but impossible hurdle for firms applying for certification using the Appendix E process. These cases have proven that with some minor revisions and clarification the Appendix E process can be made better and easier to understand by all parties involved. In that way, all disadvantaged individuals, regardless of race and ethnicity, can continue to benefit from the DBE and ACDBE programs.

..........................................................................

5. In determining social disadvantage, applicants should not be compared to other members of their ethnic group. In determining social disadvantage, applicants should not be compared to other members of their ethnic group. In McKay, the agency decided that the existence of successful individuals from the applicant’s ethnic group proved that the applicant

Jeff P. H. Cazeau is a shareholder with law firm Becker & Poliakoff who focuses his national practice on helping businesses of all sizes from around the country obtain, keep, and leverage minority business certifications. He may be contacted at jcazeau@bplegal.com.

// Spring 2016

business development

Executive Education Tuck’s

Entrepreneurship Education Builds HighPerforming Businesses By American DBE Staff

any minority- and woman-owned businesses get their entrepreneurial education at the school of hard knocks. Although that school can provide a comprehensive education, its lessons can be harsh and often unforgiving. However, the Tuck Business School at Dartmouth College offers entrepreneurs the opportunity to share their experiences with other business owners and receive practical executive education to enhance their real-world education to accelerate the path to success.

Dartmouth’s Tuck School of Business professors teach practical strategies to participants seeking to build a high-performing business.

Tuck’s Building a High Performing Minority Business Program gives experienced entrepreneurs the chance to connect with likeminded business owners for a one-week session designed to help improve their business performance. The program is held twice a year in April and November on the campus of Dartmouth College in Hanover, New Hampshire; allowing participants to get away from the day-to-day operations of their company and take time to work on their business, instead of in it.

The goal of the program is to help entrepreneurs achieve greater profitability and growth through training from educators at one of America’s top business schools. Tuck faculty provide participants with innovative approaches to business leadership and growth, including creating mergers and acquisitions, pursuing joint ventures, and diversification into more profitable segments of the value chain in a chosen industry. “Our program is friendly, but brutally honest,” McKinney said. “Our faculty challenge entrepreneurs to rethink their business processes and strategies; and to make changes that will help them become more successful.”

Established in 1980, the program is the oldest continuously running executive education program for minority businesses in the world, and has over 1,000 alumni spread across the United States and around the world. Fred McKinney, Managing Director for MBE Programs, said the program is designed to help business owners transform the way they think about their companies. “Although participants can’t transform their businesses in a one-week program, they can change their attitude toward their business and make the commitment to improve their company once they leave Tuck,” McKinney said.

The intensive one-week curriculum of the program is geared to provide practical knowledge and information that entrepreneurs can use to immediately impact business growth and profitability. Curriculum courses include topics such as Business Strategy and Implementation, Financial Statement Analysis, Managing the Customer Asset, Refining the Management Structure, and Assessing Operations. “What participants essentially receive is a mini-MBA in entrepreneurship,” McKinney said. “Participants in the program leave excited and motivated to go back to their businesses and make changes to improve their businesses.”

// Spring 2016

Forty-two participants from a variety of fields completed the most recent session of the program in April 2016. Industries represented included construction, information technology, retail, professional services and others. The participants ranged in diversity, including Native American, African American, Hispanic, and Asian. In addition, seven international participants completed the program, traveling from Canada, Costa Rica, Ghana, Kenya, and Brazil. “We have made an effort to increase the international reach of the program,” McKinney said. “This provides a richer conversation among the participants and has sparked conversations about business collaboration as well.” Alumni Keith Tillage, president of Texas-based Tillage Construction, LLC, credits the Tuck Program for helping his company grow to over $20 million in revenues. “Tuck made me start looking at my business from a holistic standpoint, not just day-to-day. I saw the value of time. I saw the value of money. I saw the value of what I brought to the company and how it could be best utilized,” Tillage said. The cost to attend the program is $4,900, which covers tuition and lodging during the program. However, approximately 70 percent of participants receive sponsorships to cover their costs. McKinney said, “Many of the entrepreneurs that come to the program are supported by sponsors that are interested in their business success. Organizations like General Motors, Wells Fargo, Bank of America, IBM, the Connecticut Department of Transportation, and others will send suppliers to help them grow.” The sponsorship can be a win for both parties since the improvements made by the participating entrepreneurs may result in a more efficient and capable supplier for the sponsoring organization.

Building a High Performing Business: Tuck School of Business at Dartmouth, Hanover, New Hampshire

McKinney advises minority- and woman-owned firms interested in the program to check with their major customers and business development organizations for sponsorship opportunities. “We are now in the process of reaching out to state departments of transportation around the country to sponsor promising DBEs’ participation in the program through the use of DBE Supportive Services funding,” McKinney said. He believes the Tuck curriculum is well-suited to help DBEs performing transportation contracts to improve their business and achieve greater success in the industry. “I know we have something that can help construction firms with making their business stronger and more profitable,” he said.

// Spring 2016

Tuck’s Building a High Performing Minority Business Program is one of three executive education programs offered to minority businesses. A second program called Building a Minority Business to Scale furthers the training offered in the first program to move business owners further into organic and inorganic strategies to increase the capacity and scale of their businesses. Participants in the second program receive greater in-depth training on topics like business diversification, strategic partnerships, mergers, acquisitions, and joint ventures as strategies to accelerate growth to compete in a global marketplace. The Building a Minority Business to Scale program is offered once per year—and in 2016 will take place from June 5-10 at the Tuck Business School. A third program called Digital Excellence for Minority Business was launched in 2015 and created in partnership with Google. The program teaches minority businesses how to develop an effective digital strategy to enhance business growth. The course curriculum addresses topics related to social media marketing, website marketing strategies, and business analytics. This program will be offered twice in 2016. The first session was held in May at the Google Headquarters in Mountain View, California, and the second will take place October 21-23 in Chicago in conjunction with the National Minority Supplier Development Council’s annual conference.

McKinney appreciates the difficulty many entrepreneurs face when taking time away from their business in order to attend development programs like Tuck, but he views the experience as a part of the maturity process for a small business. He said, “One of the benefits of getting away for a week is that it is a part of developing a business or enterprise; and we preach that at Tuck. If you are serious about your business as the owner, it is your job to make sure that you have systems and structure in place that allow your business to continue when you are not there doing the stuff day to day.”

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// spring 2016 Calendar of Events 2016 AASHTO Civil Rights National Training Symposium June 5-8, 2016; Alexandria, Virginia ascr.transportation.org

National Association of Women in Construction (NAWIC) 61st Annual Meeting and National Conference August 17-20, 2016; San Antonio, Texas nawic.org/nawic/Convention.asp

National Association of Minority Contractors (NAMC) 47th Annual National Conference June 15-18, 2016; Atlanta, Georgia namcnational.org/2016-events

Airport Minority Advisory Council (AMAC) 2016 AMAC Annual Business Diversity Conference August 19-23, 2016; Cleveland, Ohio amac-org.com

Women’s Business Enterprise National Council (WBENC) National Conference & Business Fair June 21-23, 2016; Orlando, Florida conf.wbenc.org

American Contract Compliance Association (ACCA) 2016 National Training Institute August 30 - September 4, 2016; Chicago, Illinois accaweb.org/acca_training.html

Conference of Minority Transportation Officials (COMTO) 45th National Conference July 8-12, 2016; Dallas, Texas comto.org/events

National Minority Supplier Development Council (NMSDC) 2016 NMSDC Conference + Business Opportunity Exchange October 23-23, 2016; Chicago, Illinois http://www.nmsdc.org/2016-conference/

// Spring 2016

business development

dbe fraud

Whistleblower to Receive $500,000 By American DBE Staff

on Meadows, the former employee of Mountain States Contractors, LLC (Mountain States), will receive $500,000 compensation as his share of a $2,250,000 False Claims Act (FCA) settlement agreed to by Mountain States. The settlement agreement is in response to allegations that the company submitted false claims for payment to the United States in connection with the United States Department of Transportation’s Disadvantaged Business Enterprise (DBE) Program. Mountain States is an affiliate company of Jones Brothers, a Tennessee-based large highway construction contractor operating across most of the southeastern United States. Meadows originally filed a lawsuit against Mountain States under the qui tam (or whistleblower) provisions of the FCA, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery. “Enforcement of the False Claims Act is a top priority of the Department of Justice and this office,” said Acting U.S. Attorney Jack Smith. “This enforcement effort includes investigating schemes to exploit federal programs aimed to help small and minority businesses to compete in the federal marketplace. The U.S. Attorney’s Office will continue to devote the resources necessary to investigate these and other False Claims Act violations in order to protect taxpayers’ interests and aggressively pursue fraud, waste, and abuse.” The United States government alleged that Mountain States and its affiliated company HMA—as the prime contractors on federally-funded construction projects—agreed that they would use DBEs to perform subcontracted work on the projects. For a number of these projects, Mountain States and HMA subcontracted with G&M Associates. Although G&M Associates is a certified DBE, evidence obtained during the investigation indicated that Mountain States had improperly “loaned” its employees to G&M to perform the DBE work on the projects. The entities claimed these employees as DBE employees for purposes of obtaining payment for their work despite the fact that the prime contractors continued to provide their health insurance. The prime contractors also improperly leased equipment to G&M, which the entities then counted against the projects’ DBE goals. In his lawsuit, Ron Meadows

also said he was forced by his superiors to do work that G&M should have been doing. According to a search warrant issued to search the G&M offices, G&M and parent company Jones Brothers conspired to make it appear that G&M’s workers were doing work on projects for the Tennessee Department of Transportation and the Metro Nashville Airport Authority. The companies went so far as to have Jones Brothers’ workers put G&M magnets on their truck. “Fraud schemes like that committed by Mountain States harms the integrity of law-abiding, small business contractors trying to compete for contracts on a level playing field,” said Marlies Gonzalez, regional Special Agent-in-Charge of the U.S. Department of Transportation Office of Inspector General. “Working with our federal, state, and local law enforcement and prosecutorial partners, we will continue our vigorous efforts to pursue those who violate the law, and hold individuals and companies accountable that choose to illegally take advantage of minority and women-owned business enterprise programs.” In addition to the settlement, Mountain States will enter into a monitoring agreement with the Federal Highway Administration. This agreement will help to prevent similar conduct in the future. This matter was investigated by the DOT-Office of Inspector General and the United States Attorney’s Office for the Middle District of Tennessee. The United States was represented by Assistant U.S. Attorney Christopher C. Sabis. // Spring 2016

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// Spring 2016