Winter/Spring I 2020
Austin Commercial Makes Diversity & Inclusion a Corporate Practice Also in this issue Columbia Agencies Support Diverse Business Success DFW Airport Creating Opportunities for ACDBEs
Greater Orlando Airport Powers Economic Engine with DBE Firms Elsperman Leads AGC Towards Greater Inclusion Illinois DOT Secretary Osman to lead more than $33 Billion in Capital Improvements
Your Career Journey Begins with Us The Metropolitan Washington Airports Authority (MWAA) offers small businesses and job seekers a place to grow. The Department of Supplier Diversity is strongly committed to maximizing the inclusion of small businesses in MWAA's contracting opportunities. To learn more about small business certifications, outreach events, current and upcoming contracting opportunities, the Airports Authority Small Business University, and conducting business with the Airports Authority, please visit http://www.mwaa.com/supplierdiversity.
Reagan National Airport
Dulles International Airport
We hope you will choose to start your career journey with us! We believe in diversity, our workforce is our strength, comprised of an array of backgrounds, cultures and interests which only makes us stronger. We offer a competitive total rewards package. Join our team: http://www.mwaa.com/careers. Dulles Corridor Metrorail
MWAA.COM Your Journey Begins with Us Dulles Toll Road
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SEEKING DIVERSE SUBCONTRACTORS & CONSULTANTS
FOR THREE INFRASTRUCTURE PROJECTS FAM Construction, LLC
Transform 66 Outside the Beltway, Northern Virginia
This project will transform 22.5 miles of Northern Virginia’s Interstate 66 between I-495/Capital Beltway and U.S. Route 29 in Gainesville, VA into a multimodal corridor. The $2.3 billion design-build project will build two new express lanes alongside three general purpose lanes in each direction; auxiliary lanes where necessary, major interchange improvements, new expanded park and ride lots with more than 4,000 spaces, and multiple segments of a corridor-wide shared use path. Contact dbeinfo@fam66.us for contracting opportunities or more information
North Perimeter Contractors, LLC
Interstate 285/SR 400, Atlanta, Georgia North Perimeter Contractors (NPC) was selected by the Georgia DOT and the State Road and Tollway Authority to design, build and partly finance the I-285/SR 400 project. The contract sum is approximately $457 million. NPC will rebuild the I-285/SR 400 interchange and make upgrades to the adjoining I-285 and SR 400 corridors. Contact npcdbeinfo@ferrovial.us for contracting opportunities or more information
Grand Parkway Infrastructure
Texas SH 99 Grand Parkway Segments H, I1 and I2, Houston, Texas TxDOT awarded the design-build contract for two segments of SH 99 Grand Parkway to Grand Parkway Infrastructure – a joint venture between Ferrovial Agroman, Webber LLC and Granite Construction Inc. The segments begin north of Houston, TX in New Caney, TX and continue south for more than 52 miles to Baytown, TX; spanning four counties – Chambers, Harris, Liberty and Montgomery. The construction value of the project is approximately $900 million and has a 10% DBE goal. Contact info@gpi-99.com for contracting opportunities or more information
POTENTIAL CONTRACT OPPORTUNITIES* Barrier/Guardrail, Bridge Construction, Aggregate/Material Suppliers, Erosion Control/SWPPP, Concrete Structures, Drainage, MSE Walls/ Panels, Noise Walls, Misc. Design Services, Misc. Utilities Services, Traffic Control, Drilling (Sign Posts/Caissons), Utility Relocation Design**, Rebar , Flatwork, Electrical Work, Demolition- Exterior, Grading/ Earthworks, ITS and TCS Civil Work, Landscaping, Materials Testing, Lighting, Saw Cutting/Sealing, Striping, Steel Stud Walls, Utility Relocation**, Recycling/Milling, Paving, Excavation, Environmental, Geotechnical, Fencing, Misc. Concrete Work, Technical Design Engineering, Signage, Surveying, Ready-mix Concrete, Traffic Supplies/Signals, Trucking/ Hauling, Terrazzo, Masonry, Finishes (Tile, Carpet, Resilient Flooring), Framing, Drywall, Specialty Ceiling. *PLEASE NOTE: This list is not inclusive of all available opportunities, but a sampling of potential services that could be available on a project. The opportunities available on specific projects may vary depending on the type, scope and size of the project. ** Additional pre-qualifications may be required for these services.
Contact the email address for each project listed above for specific contracting opportunities. However, for general questions about the Ferrovial Agroman Diverse Business Program email DBEinfo@ferrovial.com
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Features
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21
DBE Program Spotlight
10
Austin Commercial Recognized for Practicing Diversity and Inclusion
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Small Businesses Help Power Greater
Transportation
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Orlando Aviation Authority’s Economic Engine AGC President Elsperman Prioritizes Diversity and Inclusion During Term as National President
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DBE Power Player
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Creative NxGen Petroleum Prepares to Soar
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KOBA Consulting Aims to Bridge the Gap for DBEs
By Jordan Taylor
Columbia Agencies Spur Growth of Diverse Enterprises in South Carolina
Airports DFW to Expand with Six New Concessions Opportunities By Sarah Magargee
Transit Fort Lauderdale COMTO Chapter Wants ‘Wow Factor’ at the COMTO 49th Annual National Meeting and Training Conference By Peggy Beach
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Civil/Highway Illinois DOT Secretary Osman to Lead Largest Capital Improvement Program in State’s History
Business Development
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Strategies to Increase Bonding Capacity – Starting with the Submission Process Issues on DBE Programs By Karen Barbour
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Successful Entrepreneurs Plan for the Future By Allen Brown
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40 Winter/Spring I 2020 Volume VII - Issue I Publisher Shelton A. Russell Managing Editors PR PROS, LLC Creative Director Pan II Creative Digital Media Premier Web Design Solutions
Branding Campaigns
Editorial Karen Barbour Peggy Beach Allen Brown Sarah Magargee Philip Russell Jordan Taylor
Crisis Communication
Copywriting & Editing Graphic Design & Layout Media Coaching & Training Public Relations & Media Relations Research & Strategic Planning Social Media Management
Headquarters 514 Daniels Street, #186 Raleigh, NC 27605
Strategic Communication Video Production Services
Website www.AmericanDBE.com About American DBE Magazine American DBE Magazine is the premier industry resource for individuals and stakeholders who work within the federal Disadvantaged Business Enterprises program administration. American DBE Magazine is published quarterly and distributed in all 50 states — plus Puerto Rico and the U.S. Virgin Islands — to DBE program administrators, business owners, and professionals in the Aviation, Highway Construction and Public Transit industries. Subscriptions American DBE Magazine is published quarterly in Fall, Winter, Spring and Summer editions. The annual subscription rate is $24.99 including online editions, special industry reports, and four issues: single copy list price is $6.99 plus postage originating from Raleigh, North Carolina.
Advertisting Sales editor@AmericanDBE.com (919) 741-5233 (Office)
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Upcoming National Events Conference of Minority Transportation Officials (COMTO) 49th National Meeting and Training Conference July 18-21, 2020; Hollywood, Fl https://members.comtonational.org/page/2020-conference
Public Transportation Association (APTA) TRANSform Conference & EXPO 2020 October 11-14, 2020; Anaheim, CA https://www.apta.com/conferences-events/future-meetings/
National Association of Women in Construction 65th Annual National Conference August 12-15, 2020; Houston, TX https://www.nawic.org/nawic/Annual_Conference.asp
National Minority Supplier Development Council NMSDC Conference and Business Opportunity Exchange October 25-28, 2020; Phoenix, AZ https://nmsdc.org/events/
American Contract Compliance Association (ACCA) National Training Institute August 25-30, 2020; San Antonio, TX http://accaweb.org/nti/2020nti.html
American Association of Highway Transportation Officials (AASHTO) 2020 AASHTO Annual Meeting November 4-8, 2020; Baltimore, MD https://meetings.transportation.org/overview/2020-aashtoannual-meeting/ * Please visit the conference or event website directly for updates regarding the COVID-19 impact on scheduling.
Helping Small Business Move Forward
How We Help • • • • • •
Bonding Education Program Women & Girls in Transportation Initiative DBE Certifications Procurement Assistance Capital Access Program Counseling and Technical Assistance
South Atlantic Region
DC Metro Area • Kentucky • North Carolina • Virginia • West Virginia
For additional information contact: Alyssa Mako, Project Director amako@TheInstituteNC.org (919) 956-2331 U.S. Department of Transportation Small Business Transportation Resource Center
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www.TheInstituteNC.org
HAMPTON ROADS CONNECTOR PARTNERS invites you to be a part of
VIRGINIA’S LARGEST
TRANSPORTATION PROJECT The I-64 Hampton Roads Bridge-Tunnel in southeastern Virginia has long been one of the region’s most congested corridors. The existing 3.5-mile facility consists of two 2-lane immersedtube tunnels on artificial islands, with trestle bridges to shore. These tunnels opened in 1957 (current westbound lanes) and 1976 (eastbound lanes) and are approximately 7,500 feet long.
OVER
$100 MILLION
IN PROJECT OPPORTUNITIES FOR DBE AND SWaM FIRMS
Traffic on these four lanes exceeds 100,000 vehicles per day during peak summer traffic. The Hampton Roads Bridge-Tunnel Expansion Project will ease this congestion with the addition of twin 2-lane bored tunnels just west of the existing eastbound tunnel. Also, the 4-lane segments of the I-64 corridor in the cities of Hampton and Norfolk will be widened.
WORKFORCE PARTICIPATION GOALS FOR LOCAL MINORITY AND WOMEN JOB CANDIDATES
Visit the project’s website at
www.hrbtexpansion.org to stay up to date on opportunities. Hampton Roads Connector Partners | 240 Corporate Blvd. | Norfolk, VA 23502 | 757-578-9284 HAMPTON ROADS CONNECTOR PARTNERS IS AN EQUAL OPPORTUNITY EMPLOYER
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From the publisher
The Practice of Diversity and inclusion “Love is not what it says, but what it does.”
O
ne of my former pastors would often say, “Love is not what it says, but what it does.” Over the years I have adapted this accurate statement to also include my thoughts while advocating and striving for greater diversity and inclusion in business contracting. Similarly, “Diversity and Inclusion isn’t what it says, but what it does.” To that end, much of what we strive to highlight with the American DBE publication is the practice of diversity of inclusion by organizations, companies and individuals. The term practice in this sense relates to its Oxford Dictionary definition meaning: the “customary, habitual, or expected procedure or way of doing of something.” Our goal at American DBE is to highlight instances of organizations and individuals making the inclusion of DBE and ACDBE companies a customary, habitual and expected procedure of doing business; thereby demonstrating a true desire to level the playing field for all companies in the engineering, construction and transportation industries. The term “practice” is used here in contrast to the term “program.” Most government organizations, transportation agencies and large corporations have some type of program to promote diversity and inclusion for minority- and womanowned businesses. Although these programs typically have a codified process and procedures for engaging
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diverse firms – and have one or more staff dedicated to administering the program – most fail to make Diversity and Inclusion a universal internal practice that becomes a part of the organizations DNA.
thinking organizations that value the contribution and impact of diverse companies on their local economies and strive to maximize opportunities for small businesses of all types to do business with them.
While the difference between a practice and a program appears small, the results are significant. The organization that makes Diversity and Inclusion a practice does so because it has a business culture that supports and encourages employees who demonstrate the practice; and a business culture that quickly separates from employees who don’t. Conversely, organizations that make diversity a program only, relegates responsibility and accountability to one or a few professionals who administer the effort, while the rest of the organization participates only as needed and often with as little engagement as possible. In these organizations, Diversity and Inclusion becomes only a task to complete or a box to check.
Other stories in this issue highlight the efforts of the Associated General Contractors of America Past President Dirk Elsperman and the AGC’s Diversity and Inclusion Council to enhance opportunities for diverse businesses in the construction industry; and the Fort Lauderdale Chapter of the Conference of Minority Transformation Officials’ preparation to host the 2020 COMTO National Conference in July.
This issue of American DBE features a cover story on Austin Commercial and its industry leadership in making Diversity and Inclusion a corporate practice across the company. The practice continues to distinguish Austin Commercial from its competitors as clients applaud their strategies and success in engaging diverse business partners; and the business partners value the win-win relationships that Austin creates with subcontractors. This issue also highlights the Greater Orlando Aviation Authority, the Illinois Department of Transportation and the Dallas-Fort Worth International Airport. These agencies represent forward-
I hope you enjoy this issue and wish you continued success in your effort to demonstrate and practice Diversity and Inclusion in business. Best regards, Shelton A. Russell, Publisher
400+ Firms mentored by Austin have received contracts exceeding $3 billion. Austin Commercial is committed to recognizing, embracing, and supporting workplace diversity. As a construction industry leader, Austin takes pride in creating minority economic opportunities.
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www.austin-ind.com
FEATURE
Austin Commercial Vice President-Diversity Affairs Simeon Terry (2nd from left) accepts the 2020 AGC Diversity & Inclusion Excellence-Grand Award from AGC President Dirk Elsperman, Willis Towers Watson Practice Leader-Diversity Solutions Network Kim Waller and AGC Diversity and Inclusion Council Chair Rita Brown (from left to right)
Austin Commercial Recognized for Practicing Diversity and Inclusion
A
ustin Commercial is recognized as an industry leader in the area of Diversity and Inclusion in the construction industry. This recognition is based on a continuous series of major projects across the country where the company exceeded client expectations by implementing successful initiatives to create business opportunities for diverse firms and employment opportunities underrepresented workers. The latest indication of the company’s leadership in the industry is receiving the “Grand” award from Associated General Contractors of America for Diversity and Inclusion Excellence at the 2020 AGC Convention in March 2020. The
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award is the third year in a row Austin Commercial has been honored for its Diversity and Inclusion program achievements. Austin has continued to raise the bar for success by increasing its contracting with diverse companies over the past three years and in FY 2019 made more than $300 million in payments to companies owned by minorities or women. Austin Commercial Vice President of Diversity Affairs Simeon Terry accepted the latest award at the Las Vegas conference in March 2020 but refuses to accept the credit for the company’s success. “It’s not about me, but it’s a total team effort by our leadership, staff and the Diversity Affairs team,” Terry said.
Walking the Talk Austin’s commitment to Diversity and Inclusion has made the practice part of the company’s corporate culture and more than a program. A program may come and go with changes in an organization’s focus, leadership and commitment, but a practice is a characteristic that becomes a part of the identity of the organization. “I’ve been with Austin for 20 years. Our DNA and what we do in the Diversity and Inclusion space is what we have always been about,” Austin Commercial President Brad Brown said. “Our walk matches our talk… We have proven results and tangible stories that show what we have done.”
Austin Commercial has forged meaningful partnerships with several diverse firms that have completed their Mentor/Protege Program. Pictured above: Austin Commercial Senior Manager-Diversity Affairs Bianca Sandoval, Austin Commercial President Brad Brown, Carrco President Javier Huerta, Alpha-Omega Industries Senior Vice President Milton Quinn and Austin Commercial Vice President -Diversity Affairs. (credit Cloyce Wall - Austin Commercial)
Austin applies its practice of being a diverse and inclusive company on every project, public or private and regardless of the client requirements for diverse business inclusion on a project. This corporate practice confirms to diverse business partners and internal staff that the company is sincere in its commitment to diversity and inclusion. The practice also creates an atmosphere of teamwork and clarity because the entire organization understands this value and the benefit it provides to the company.
supported commitment inspires project executives to take ownership of Diversity and Inclusion on their projects and partner with Terry’s team of Diversity and Inclusion professionals as a valuable resource to help complete successful projects and surpass client expectations. Business Partners Echo Success
This result is different from companies who approach Diversity and Inclusion as a program to be administered by staff assigned to this function. In these companies, employees must determine the importance of Diversity and Inclusion based on their client’s or agency’s requirements, since there is no internal commitment by the organization. This approach leads to a lack of consensus, sincerity and collaboration between project staff and staff charged with administering the program.
Austin’s success is further evidenced by the diverse business partners that are long-standing business partners on projects. The company has developed a cadre of diverse businesses that consistently bid on opportunities to work on new projects. A primary source of business partners is the company’s mentor/protégé program and other training courses to help firms improve their business practices and learn how to successfully partner with Austin on projects. These efforts allow diverse firms to develop relationships with Austin leadership and project executives; and learn skills to improve their probability of success.
Terry says his Diversity Affairs team doesn’t face this challenge at Austin because everyone from leadership to project staff has a clear understanding of the company’s practice. This clarity allows his team to focus directly on the best strategies to maximize the company’s effort to create outstanding results while maximizing Diversity and Inclusion in subcontracting and employment. Buy-in for Austin Commercial organization is expected and assumed. “We have internally mandated goals as a part of our policy,” Terry said. “The accountability is there 24-7.” This internally
Javier Huerta, president of Carrco Painting began to participate in Austin’s training courses in 1999 and has been a consistent business partner on projects for nearly twenty years. Huerta says his experience in working with Austin has been “great” and that his business has grown as a result of working on Austin projects. “They are one of the companies that do what they say they are going to do,” Huerta said. Carrco has grown from a small painting contractor over the years to become a full-service wall and floor covering contractor. Carrco has worked on an Austin project every
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Austin Com
Rendering of the Tom Bradley International Terminal at Los Angeles International Airport (LAX). Austin Commercial received a contract in 2018 to build the Terminal Cores of the terminal in support of the Landside Access Modernization Program.
year since 1999 and in 2018 completed a $5 million project working on the Toyota Headquarters facility in Plano, Texas. Huerta believes the ongoing mentoring Carrco Painting employees have received from Austin’s project executives have been a key reason for their growth. “Our employees have been able to work closely with Austin’s project staff and bring what they have learned back to our company and that has helped us to increase our capacity and grow,” he said. Another firm that has a long relationship with Austin is Alpha & Omega Industries, based in Dallas. Milton Quinn, Alpha & Omega senior vice president of operations completed Austin’s mentor/protégé program in 2004 and has worked with Austin on several projects over the years. “Our first project was the DFW Central Utility Project. We started out with a $5,000 contract and by the time we were done did well over $1 million on the project,” Quinn said. Quinn also says his company regularly partners with other companies he met during Austin’s Mentor/Protégé program; and that the relationships he made with Austin staff has been very beneficial
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to his company. “Being able to pick up the phone and reach out to people like Chuck Cleveland (SVP of Marketing/ Business Development), or Simeon Terry, or even Brad Brown to talk about things that happen at that level, or how we are dealing with issues, or the changes in the marketplace has been really nice,” he said. Leadership & Workforce Diversity Austin continues to make strides toward greater Diversity and Inclusion through efforts through its leadership ranks and workforce development initiatives. The company promoted Terry to its senior leadership team as a vice president in 2015. Since then, the company’s leadership has become more diverse by gender and race. “Having senior level staff that are minorities and women further enforces the company’s commitment and practice of diversity and inclusion at all levels,” Terry said. The company also strives to create positives economic impacts on the communities where it completes projects by hiring
workers from the local communities, specifically targeting workers from underrepresented groups. These workforce and economic development initiatives helps Austin maximize the economic impact of the construction project on the local community and provide new career opportunities in the construction industry for workers seeking employment. For instance, Austin implemented a local workforce development program where the prime contractors and Austin hired over 150 unemployed workers from the Tampa, Florida community for the $500 million Tampa International Airport Rental Car Center and SkyConnect APM project. The workers earned over $2 million in salaries while working on the project and learned a variety of construction skills during the 4-year project. “These are things we do as a by-product of support we have from our leadership. Those things aren’t usually a mandate in any kind of way, but we have been able to structure that as part of our overall program,” Terry said. “We don’t just do it from a reactionary standpoint, it’s a part of our overall program.”
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Winter / Spring I 2020
FEATURE
Small Businesses Help Power Greater Orlando Aviation Authority’s Economic Engine
E
very engine needs a source of fuel to run at its optimal level, and the economic engine that is the Greater Orlando Aviation Authority (GOAA) is no exception. GOAA owns and operates the Orlando International Airport, one of the leading sources of economic impact in Central Florida. The airport is one of America’s largest and in 2019 served more than 50 million passengers for domestic and international travel. The Orlando Airport is in the midst of a $4.2 billion capital improvement program that includes major projects such as extensive upgrades to the North Terminal Complex, ground transportation improvements, airfield enhancements, and a new $3 billion South Terminal Complex. The new terminal is under construction with an expected completion date of 2021. The latest capital program follows the completion of a previous program that added the $1.3 billion South Airport Automated People Mover (APM) Complex in 2017.
Greater Orlando Airport Authority CEO Phil Brown (left) and Director of Small Business George Morning celebrate receiving an award presented by the presented by the African American Chamber of Commerce of Central Florida.
GOAA leaders recognize the economic opportunity resulting from the airport’s new development and from its ongoing operating expenditures. These expenditures represent a robust economic engine creating a perfect environment for business and economic growth in the region, fostering new jobs, tax revenue and a growing economy in Central Florida.
Enterprise Program (ACDBE); a Minority/Woman Business Enterprise Program (MWBE); a Local Developing Business Enterprise Program (LDB); and a Veterans Business Enterprise Program (VBE). These programs help small businesses partner in keeping Orlando International Airport as the busiest airport in Florida and one of the top airports in the nation.
The GOAA leadership team also recognizes that small businesses are a major component of the region’s economic ecosystem and administers five programs helping small firms participate in powering the airport’s economic engine. GOAA administers a Disadvantaged Business Enterprise Program (DBE); an Airport Concessions Disadvantaged Business
To better understand the full impact of the airport on the Central Florida economy, the authority engaged Dr. Sean Snaith, director of the University of Central Florida’s Institute for Economic Forecasting, to study the economic impact of small businesses working on the South Terminal APM Complex and the South Terminal Complex. “The study determined
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A rendering of the New South Terminal scheduled to open in 2021
that the economic impact of small businesses completing $170 million in contracts on the South Terminal APM Complex created 1,500 jobs and more than $7 million in local tax revenue,” said GOAA Director of Small Business Development, George Morning. The study also provided a forecast of the anticipated impact small businesses working on the South Terminal Complex will have in Central Florida. The study determined that small businesses will likely earn more than $400 million in revenues, which will create an economic impact of $660 million. They will also create 4,300 jobs and add $20 million in local tax revenue. “We did this study to demonstrate, on a much more definable basis, the impact that small firms have on our local economy” Morning said. Minority- and woman-owned firms earned more than $309 million in FY 2018 on GOAA contracts, largely related to the completion of the South Terminal APM and the beginning phases of the South Terminal Complex. These numerical calculations support what GOAA leadership has recognized for years – that small businesses
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make up an invaluable part of the local business community and are an integral source of vendors for the development, operation and maintenance of the airport. “Our goal is to put as much money into the hands of minority, women and local small businesses as possible. It has a huge effect on the local community,” Morning said. He also believes small businesses hire the disenfranchised and the unemployed; and that it is employees of small businesses who support the community. “The employees attend and participate in public school programs; they take care of our seniors and assist the community in moments of catastrophic incidents. Employees of small business are the fabric of the community,” he said.
are expected to perform at least 20% of the work on the project.
New South Terminal Complex
GOAA’s economic engine does not end with its capital improvement, operations and maintenance activities. The Orlando International Airport also administers a concessions program that serves passengers traveling through the terminal daily. The current North Terminal contains more than 82,400 square feet of concession space and had food and beverage concession revenues of just under
The South Terminal Complex, Phase 1 and Phase 1 Expanded, is a planned three-story facility that will add 19 gates to the airport’s capacity. It is located adjacent to the South Airport APM Complex and Intermodal Terminal Facility (ITF). The project will reach peak levels of activity during 2020. Small businesses in GOAA’s programs
Hensel Phelps is the contractor for the airside portion of the project, and the Turner-Kiewit Joint Venture is the contractor for the landside portion. Both companies committed to reaching the project’s diversity and inclusion goals. Morning expects small businesses to eventually exceed $500 million in contracts on the South Terminal Complex. “We are expecting 110 to 120 different small businesses to work on-site,” Morning said. “There are already more than 50 firms working and the primes will be adding additional small businesses as the work continues in 2020,” he said. Concessions Program Growth
GOAA hosts the annual Small Business Networking Event in December 2019 with more than 1,200 participants.
$200 million in FY 2019. The new South Terminal will add approximately 213,500 square feet of space for additional concessions opportunities including food & beverage, retail and specialty concepts. As of 2019, GOAA secured three food and beverage concessionaires and two retail concessionaires to operate in the new South Terminal. HMS Host, Delaware North and Master ConcessionAir (MCA) will operate food and beverage concessions, while Paradies Lagardère and Marshall Retail Group will operate retail locations.
Administration. Eight new ACDBEs have entered into concession agreements in the last two years as a result of increased outreach to local businesses with the potential to become airport concessionaires. “I met an award winner at the African American Chamber of Commerce Eagle Awards in 2018 and talked to him about GOAA’s concessions program,” Morning said. “One year later he was on the MCA team for a food & beverage package … We have not only increased the number of certified ACDBEs, but also the number that have new agreements,” he said.
GOAA ensures that ACDBEs have an opportunity to participate in the economic opportunity the concessions provide by setting a 30% goal on all concession contracts. “We have exceeded the 26% goal on the five new concession agreements for the South Terminal and have reached 30%,” Morning said. “We also extended three concession agreements in the North Terminal and they met the 30% goal.” This level of participation led to ACDBE revenues at the airport reaching more than $98 million in FY 2019, and that amount is expected to increase substantially when the new terminal opens.
Part of the ongoing success of GOAA’s ACDBE program is due to continually pursuing efforts to make improvements. Morning said, “we are updating our monitoring and reporting program to include a higher emphasis on the review (to include development and structure) of the joint venture agreements.” The efforts will encourage more sub-concessionaire agreements and provide reviews of financial agreements/arrangements between the prime and ACDBE partners. GOAA will review how the agreements are developed for ACDBEs, including joint ventures, sub-concession and subcontracting agreements.
The airport authority made strides to reduce financial barriers and increase the number of new ACDBE operators in accordance with recent guidelines from the Federal Aviation
Engaging Outreach Efforts Bring Results One of the strategies GOAA uses to reach out to the diverse and small business community is an annual Small Business Networking Event, held in December each year. The 15th Annual Small Business Networking Event was held at the Hyatt Regency Orlando Hotel near downtown Orlando. The program has grown to become the premier event for small businesses seeking to learn about GOAA business opportunities and to network with airport staff and large companies working at the airport. “This event has grown from about 500 participants in 2016 to over 1,200 this past December,” Morning said. “It has grown due to in part the leadership from the GOAA Board and Authority department directors who participate and make themselves available to small businesses that want to work at the airport.” Morning believes GOAA’s leadership and staff engagement with small firms at the annual networking event underscores the agency’s overall commitment to maximizing relationships and opportunities for companies to do business with GOAA. “Our board members and Chief Executive Officer Philip Brown continue to provide maximum support and resources and it’s making an impact.”
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FEATURE
Dirk Elsperman, COO of Tarlton Corporation, served as AGC President from 2019-2020.
AGC President Elsperman Prioritizes Diversity and Inclusion During Term as National President
D
irk Elsperman’s career has grown and matured along with his membership in the AGC of America. He was first introduced to the industry by his father Robert Elsperman, a long-time member and former President & CEO of Tarlton Corporation, based in St. Louis, Missouri. Dirk Elsperman joined Tarlton shortly after graduating from college and was encouraged by his father to attend a national AGC conference and to get involved by participating on committees inside the organization.
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The suggestion took root in 1996 and now 24 years later, Elsperman has moved up through the ranks and is completing his term as national president of the largest construction industry association in America. “I drank from the firehose initially and did a lot of things in AGC,” Elsperman said. “I was on things like the Project Delivery Committee and the closelyheld Business Committee; I chaired the Commercial Division and eventually ended up as national president.”
One of the areas of focus during Elsperman’s term as president has been increasing the awareness of Diversity and Inclusion as a business imperative. His support and engagement with the AGC Diversity and Inclusion Council has helped the committee continue efforts to promote the benefit of a diverse and inclusive industry through educational programs for AGC members, the dissemination of a white paper report titled “The Business Case for Diversity & Inclusion in the Construction Industry,” and
Members of the AGC Diversity and Inclusion Council at the 2020 AGC Conference in Las Vegas, Nevada.
an annual Diversity & Inclusion Excellence Awards ceremony at the AGC Convention each year. “The first thing that the D&I group did was the Business Case for Diversity and Inclusion in the Construction Industry,” Elsperman said. “That was a powerful piece. It’s like hey, the facts show it; those that are more inclusive are more successful. It’s because they are getting a variety of viewpoints,” he said. “The national board has certainly been significantly supportive of our activities, which is a wonderful evolution because we are a pretty young committee in the AGC ecosystem,” said Diversity and Inclusion Council Chair Rita Brown. Also an entrepreneur, Brown owns BCC+, a structural and miscellaneous steel detailing company in the Metro Detroit area. She believes that the council has been able to address substantive challenges toward increasing diversity and inclusion in the construction industry. “I am proud of the Business Case for Diversity & Inclusion report because it shows that what is important is the bottom-line effect that a good solid Diversity and Inclusion Program has on profit. It is about the economics of the situation,” she said. “We don’t want lipstick and
rouge; nobody in our D&I group wants lipstick and rouge – we want to create substantive programs that help our companies grow.” Elsperman believes the AGC should strive to make everyone feel welcome in the organization. “There is a home for everybody in the AGC,” he said. “We have a program called ‘Culture of Care’ and its goal is for folks from all walks of life to feel welcome in the industry.” The Culture of Care program began in the Washington State Chapter but launched as a national program of the AGC at the 2020 conference. The program will work to increase business recruitment, workforce development and employee retention in the construction industry. Elsperman brings a unique perspective to the construction industry as his company, Tarlton Corporation, is a certified Women’s Business Enterprise (WBE) led by his sister Tracy (Elsperman) Hart, who serves as president & CEO. Elsperman serves as Tarlton’s Executive Vice President/Chief Operating Officer. “I think being a WBE has really helped us as a firm. I am looking at all the great things my sister has done as president of the company,” he said.
“One of the great things is that it made us attractive to other women in the industry who believe there is a path for them at Tarlton.” The company has been in business since 1946 and performs projects for clients in the life science, higher education, health care, commercial, power and industrial markets. Tarlton Corporation also provides pre-construction, general contracting and construction management services, with special expertise in concrete construction, restoration and maintenance. The “University of Construction” was Elsperman’s theme for his term as president, with the goal of promoting the vast array of knowledge, training and resources available to AGC members. He believes that whether a firm is a general contractor or specialty contractor in vertical building construction or road building, that the AGC construction professionals succeed in the industry. “This is where you come to learn how to run a construction company,” he said. “You can make contacts, build a partnership, get mentoring or gain education to build a successful business.” Elsperman selected this theme because he knows the AGC is where he learned to run a construction
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company. “I didn’t learn how to run a construction company in college, but being in the AGC provided me the education and it can do the same for anyone who takes advantage of the opportunity.” Elsperman knows that the benefits of the AGC extend to companies owned and operated by diverse individuals as well. He encourages companies to join the AGC and to get involved, because the involvement is what provides the real value for the members. “If you don’t see somebody like you in your local chapter of AGC, I would suggest you give us a chance and get involved on a national level,” he said. “Come to the convention and you’ll see a lot of MBE firms that are working their way through becoming a successful business. Brown agreed that businesses from all groups need to participate in the AGC and its programs. “Change has to come from within and without, and
AGC is one of our premier industry organizations. It needs to change, and it needs our voices in it to facilitate that change,” she said.
“It’s about how we continue to build up and celebrate success that we are having. That is a lot of what we are doing with the awards.”
One of the final roles of Elsperman’s tenure was leading the 2020 AGC Diversity and Inclusion Excellence Awards program at the 2020 AGC Convention. The program recognized AGC members and a local chapter that are champions in advancing diversity and fostering a culture of inclusion within their workforce, supply chain and in the community. 2020 marks the third year of the awards program, and Elsperman said the program has been effective in raising the importance of diversity and inclusion by AGC members. “The D&I awards demonstrate that there are firms out there that are successful in their efforts, and AGC chapters are doing a lot of great things,” he said.
The 2020 convention marked the end of Elsperman’s term and he believes his tenure had an impact on the level of diversity and inclusion in the organization. He said, “I like to think that we have been an inclusive group and that we’ve raised the dialogue on why it’s important to re reaching out to all sectors of our demographics.”
“If you don’t see somebody like you in your local chapter of AGC, I would suggest you give us a chance and get involved on a national level.” - Dirk Elsperman, AGC President
High-Quality, High-Impact Training for DBE/ACDBE/UCP Professionals
Essentials of DBE/ACDBE Program Management Training 3-DAY CLASS
July 28-30, 2020; New Orleans, Louisiana
What You Will Learn: DBE/ACDBE Program History, Background, Purpose and Trends Duties/responsibilities of the DBELO/ACDBELO DBE/ACDBE Reporting The Airport Concession DBE Program Review of Joint Ventures for Concessions Counting DBE Participation/Commercially Useful Function (CUF) Compliance Monitoring & Reporting Goal Setting & Good Faith Efforts The Latest “Final Rule” (49 CFR Part 26, Nov. 3, 2014)
Register at www.natdbe-ti.com/registration/ National DBE Training Institute, P.O. Box 3113, Wilmington, NC 28406 Phone: 910.762.6297 | Fax: 910.762.5963 | Email: kwa-office@kwaplanning.com | Web: www.natdbe-ti.com
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DBE POWER PLAYER
A Creative NxGen Petroleum driver fuels equipment on a construction work site in Virginia.
Creative NxGen Petroleum Prepares to Soar By American DBE Staff
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harlene Reynolds has faced many challenges during her 25 years as an entrepreneur. She launched Creative Insurance Concepts, Inc. in 1995 and over the years endured recessions and economic challenges to build a solid core of clients – providing commercial insurance, risk management and surety bonding in more than 20 states across the country. Her clients include a variety of industries, construction contractors, car rental companies, and airport concession operators. She also provides probate bonds for individuals. Reynolds found a niche in the airport industry after becoming certified in the federal DBE Program in 2013. She was helping highway construction subcontractors get bonding when she learned about similar opportunities for airport concessionaires. She learned about writing bonds for airport concessionaires after attending a conference and meeting a concessionaire who asked if she could write a bond to help free up an $800,000 letter of credit he was using as security on a concession
agreement. She said yes and then started a line of business writing bonds for other concessionaires working in airports. “Writing bonds for airport concessionaires became a great line of business for me. By utilizing a concessionaire bond for airport contracts, it helped companies put 78% back into their cash flow by freeing up their letters of credit,” Reynolds said. A letter of credit is often secured by a cash deposit in a bank, which makes the capital unavailable for cash flow. While the insurance and bonding business was challenging enough, Reynolds came across an unusual opportunity in 2017 when one of her bonding clients offered her a joint venture opportunity as a fuel supplier; and it was an opportunity she decided to pursue. Reynolds’ research included talking with the Federal Aviation Administration and reading their joint venture guidelines to get an understanding of what was involved. Other due diligence included talking with potential clients and fuel suppliers about the industry.
She also began to consider the legal structure of the business relationship and agreed to be a partner in a joint venture LLC, with two other minority women. During the joint venture negotiations, Reynolds requested a face-to-face meeting with the fuel distributor who was to provide access to fuel terminals. “I spent over a year learning about the fuel industry and negotiating the joint venture terms before being presented with the supplier agreement by my potential partners,” Reynolds said. However, the deal fell apart once Reynolds and her attorney recommended changes to the structure of the supplier agreement and it was never executed. Reynolds didn’t have a way to purchase fuel without the supplier agreement, so she reached out on her own to the fuel distributor whom she met earlier, and he executed the same agreement her potential partners had walked away from. Reynolds decided to pursue the fuel distribution business alone. “I had the strong support and encouragement from a large circle of business associates and support
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with state and federal regulations; and making sure drivers comply with the USDOT regulations. After completing the DBE and ACDBE certification process, Reynolds and Sigee endured a tedious search for a fuel truck on a self-funded, start-up budget. They ultimately located a truck in Houston, Texas, so Reynolds flew a driver to Houston to pick up the truck and bring it to the Virginia office.
Charlene Reynolds, founder and owner of Creative NxGen Petroleum, LLC
from friends, some offering financial support,” she said. “I was propelled to move forward by my faith and belief in the scripture which says ‘With man it is impossible, but not with God. For all things are possible with God.’” As a result, Creative NxGen Petroleum, LLC was created. Creative NxGen Petroleum (CNG) is a bulk reseller of petroleum products, offering a range of branded and unbranded fuel products, including diesel fuel, biodiesel, gasoline and biodegradable spill kits. Both Creative Insurance Concepts and CNG are based in Chesterfield, Virginia, a suburb of Richmond. CNG also has an office in Beaumont, Texas. “This is not an easy industry to break into,” Reynolds said. “You have to have relationships, capital and the expertise of how the market works.” She is using her skills and relationships to carve out a niche in the industry, where most of her competitors have been in business for decades and have built generational wealth. One of the first actions Reynolds took was to hire an operations manager for the day-to-day administration of the company. Toni Sigee came aboard in 2018 and has more than 16 years of industry experience. Sigee manages the Texas office and has the role of overseeing safety protocols; making sure trucks and tanks are compliant
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Today, Reynolds handles most of the business development activities for the company and spends much of her time calling on the array of relationships she’s built over the years through her Creative Insurance Concepts. “I’ve taken time to build my infrastructure and gain some experience; now I am ready to soar and take the business to the next level,” she said. Target clients for the fuel company include car rental companies, airports, government agencies, construction companies and dump trucking firms. CNG also provides fuel cards offering discounts for fleets that prefer to buy at retail locations. One of the company’s early successes was landing accounts with a national car rental company to refuel storage tanks on airport locations. The company also secured contracts with construction firms needing to refuel their off-road construction equipment on active construction sites. Another source of business is medium-sized dump trucking firms that need their fleets refueled each night to be prepared for the next morning. The company recently completed a fuel delivery project for the Virginia Commonwealth University Children’s Hospital of Richmond expansion project. CNG is the only minorityowned fuel supplier in the State of Virginia, and the only 100% womanowned start-up fuel supplier in the state. Securing the working capital necessary to finance the company’s growth continues to be at the forefront of Reynolds’ strategic plan. For example, the traditional Net 30 days payment term is not standard practice for this industry. Being a fuel distributor the liquidity to pay suppliers and haulers
for delivered fuel in less than two weeks from the date of purchase. Most suppliers draft their payments automatically, so “you have to have the funds in the account when they take out the payment or else you won’t be able to get any more fuel,” Reynolds said. “I have been very intentional about how I grow the company because I have to have clients that can make timely payment, until we can build up a larger line of credit.” So far, Reynolds is pleased with the growth and development of the company – and believes she is on the right track for continued growth in the future. CNG recently won a diesel fuel delivery contract with Greater Richmond Transit Company (GRTC), the public transit company in Richmond, VA. She represents the only minority company with such an award. Current plans for CNG including pursuing the fuel supplier opportunity for the Hampton Roads Bridge Tunnel Expansion Project. This project is slated to be the largest transportation project in the history of Virginia and Reynolds hopes her company’s DBE certification will be a driving force in contract opportunities on this project. Reynolds also plans to get CNG certified in the federal HUB Zone program to access opportunities for fuel contracts with the federal government. She says that most bids for fuel contracts don’t have goals for the use of small or diverse firms; and that other agencies often have master contracts for fuel supply that small companies do not have the capacity to fulfil. “There are rarely subcontracting opportunities for fuel suppliers to work with a prime, and this has been a barrier that we have faced nationwide,” Reynolds said. The company’s growth has been slow, but Reynolds said it is because she has taken precautionary measures while navigating the industry. “I am picking the low-hanging fruit,” she said. “In this industry, you have to learn and grow at a different pace to avoid catastrophe from happening.”
Making An Impact Inclusion Drives Innovation
In 2019, Messer Construction Co. spent $201M, 18.6% of our purchases, with certified M/WBE businesses across our regions in the Midwest and Southeast. Dedicated resources for strategic partnerships
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DBE POWER PLAYER In addition to educational and informational outreach events, KOBA Consulting also encourages smaller firms to partner; leveraging their respective strengths to gain access to larger opportunities and contracts. The company helps business owners connect with other business development resources, such as the Maryland DOT “Opportunity MDOT” Center of Excellence. The Center provides business assessment services to help companies identify strengths to build on, along with weaknesses to improve on, while also surveying the business landscape to prepare for external threats and take advantage of upcoming opportunities related to the I-495 and I-270 P3 Program.
KOBA Consulting founder and president Adrienne Barnes speaks at a meeting for the Conference of Minority Transportation Officials in Baltimore, Maryland.
KOBA Consulting Aims to Bridge the Gap for DBEs By Jordan Taylor
After spending 28 years on the agency side of contracting – working in city government – KOBA Consulting Founder and President Adrienne Barnes left to launch out on her own. She has now been an entrepreneur since 2018 and already has secured several large consulting projects in the Prince George’s County, Maryland, area – providing communications, public engagement and DBE outreach services for public and private contracting partners. During her tenure working in communications inside multiple government agencies and departments, Barnes also gained experience working in Housing, Public Works and Transportation, honing her communications and outreach skills
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in the process. In between leaving her job and starting her company, she spent several months attending classes and workshops to expand her knowledge base – and learning how to become even more effective in supporting small, woman- and minorityowned businesses in constructionrelated projects. KOBA Consulting specializes in DBE and MBE mobilization efforts on large projects that have significant participation goals for minority business inclusion. The KOBA team visits different counties, and coordinates with local business advisory councils – targeting outreach toward small businesses, MBEs and DBEs. “I like engaging the public – I like informing them,” she said.
The name KOBA Consulting is a tribute to Barnes’ beloved pet Kobey, a Bichon Frise, who died after 10 years. She blended Kobey’s name with her initials to always keep his memory close to her heart. According to company materials, KOBA provides expertise in professional marketing, public relations and independent compliance monitoring to support government agencies, prime contractors and the team partners who serve them. KOBA Consulting is an MBE/DBE/ SBE Maryland Certified Firm, offering outreach information services, media relations, business management, consultation, coordination of community meetings and special events. Previously, Barnes worked with the Baltimore City Department of Transportation as chief of communication from October 2001 until July 2018. She developed and organized the newly formed Public Information unit after the department separated from the Department of Public Works and became its own agency. Prior to this appointment, Barnes served as the chief of community relations for the City’s Department of Public Works.
Barnes has a bachelor’s degree from the University of Maryland in College Park, Maryland, and a master’s degree in Legal and Ethical Studies from the University of Baltimore. She has been a member of the Conference of Minority Transportation Officials (COMTO) since 2005. She became 2nd Vice President in 2006 – and within the next two years was elected president where she served two terms from 2008 until 2012. Barnes said a key observation of her work within the construction industry is that prime contractors often select the same vendors for construction products and services – individuals and companies that they already know and have a relationship with. She’s working to change that by making introductions, supporting strategic partnerships, and connecting contractors to new individuals, MBEs and DBEs who are ready, willing and able to work on projects. She said: “They say 90 percent of your success is who you know. We want DBEs and job seekers. My job is to help mobilize and get as many people as possible
ready for opportunities. We’re trying to raise the bar.” KOBA Consulting is currently working with the Maryland Port Authority on a Community Benefits Package project, providing community engagement meetings, training sessions and access to jobs. For example, work on the Howard Tunnel Project and the subsequent community disruption caused by construction and increased traffic, paves the way for KOBA Consulting to bridge gaps and build relationships between the agency and the community – creating mutually beneficial results. Barnes said her company’s role is to bring agencies and communities together. Similarly, another project with a large construction engineering firm has contracted with KOBA to coordinate outreach meetings and identify potential DBE participants in spring 2020. When she’s not meeting with contractors, business owners or project planners, Barnes spends time
speaking to industry and youth groups to encourage current and future entrepreneurs to pursue their dreams. Barnes said she especially wants young people to know that they aren’t simply a product of their environment – that they have options and opportunities. In addition to various speaking engagements at schools and youth-focused organizations, she also participates as a mentor for Women in Transportation. Barnes said she likes that this new independent consulting role allows her to be a part of the city’s growth and give back to her community. So far, one of her most important business lessons is the importance of follow-up. She said: “Follow-up is important; you miss opportunities when you don’t follow up.” She said it’s always important to let people know that you’re interested in pursuing opportunities and that you’re serious about doing business.
Creative NxGen Petroleum, LLC Fuel, Flow and Go... Creative NxGen Petroleum, LLC (CNG Petroleum) is a woman- and minority-owned bulk distributor of petroleum products. We offer a wide range of branded and unbranded fuel products. Our supplier network has over 60 years of industry experience, allowing CNG Petroleum to provide dependable and reliable products and services.
DIESEL
GASOLINE
SPILL KIT PRODUCTS
We deliver on-road, diesel #1 and off-road diesel or (red-dyed) #2 fuels. These fuels are used in diesel vehicles, trucks and equipment.
Our gasoline products are delivered on demand, with as little as 24-hour notice, using tank monitoring software technology when available.
We are a distributor of Oclansorb, a costeffective, bio-degradable, non-toxic and nonabrasive organic peat moss. It is landfill-friendly, reducing hazardous clean up expenses.
BUSINESS CERTIFICATIONS Airport Concessions Disadvantaged Business Enterprise (ACDBE) Disadvantaged Business Enterprise (DBE) HubZone (Pending) Minority/Woman-Owned Business Enterprise (MBE/WBE) Small Women and Minority Buiness (SWaM) Micro-SWaM
8012 Midlothian Tpke, Suite 202B Richmond, VA 23235 Charlene J. Reynolds – (804) 864-0733 cngpetroleum.com info@cngpetroleum.com
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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.
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DBE PROGRAM SPOTLIGHT
Chappelle Stevenson,
Melissa Lindler,
Columbia International Airport Director of Human Resources and Diversity
Director of the City of Columbia Office of Business Opportunities
Columbia Agencies Spur Growth of Diverse Enterprises in South Carolina
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olumbia, South Carolina, has acheived greater success in the participation of minority- and womanowned companies due to leading agencies in the metropolitan area’s efforts to expand contracting opportunities to diverse businesses. The City of Columbia and the Columbia Metropolitan Airport Authority (CAE) have made supplier diversity a core component of their business practices and the results are having a positive impact in the region. The success is largely the result of leadership at both agencies taking a proactive approach to greater inclusion by establishing legislation, internal policies and procedures to create accountability at the managerial level where buying decisions are made. The enhanced policies and accountability measures are
administered by professionals like Melissa Lindler, director of the Office of Business Opportunities for the City of Columbia, and Chappelle Stevenson, director of Human Resources and Diversity at CAE. Both leaders are committed to effective program implementation and community outreach. At the City of Columbia, initiatives like the Mentor/Protégé program, the Columbia Disadvantaged Business Enterprise Program, the Subcontractor Outreach Program, and a city-wide goal for M/WBE participation has increased participation from 5.9% of city expenditures at the end of fiscal year 2017 to 12.9% at the end of fiscal year 2019. The city expects participation to grow even more in this year, after Columbia City Manager Teresa Wilson established a city-wide goal of 15% for M/WBE participation during the current fiscal year. These
initiatives have ignited a surge in participation that has brought new firms to city contracts and helped existing firms expand their capacity to perform on larger city projects. “This has been very important to our city manager; and to our City Council as well,” Lindler said. “They have been questioning things and want to make sure our community has access to everything here at the city. This not only includes the services the city provides, but that our procurement process and those that are benefiting from the contracting opportunities are reflective of the city we represent, which is majority minority,” she said. Likewise, CAE continues to demonstrate its commitment to doing business with diverse firms through internal policies to foster engagement from staff in expanding opportunities to new businesses. Efforts led by Chappelle Stevenson, the airport’s
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Participants in the South Carolina Airports Coalition Annual DBE Fly-In network during the event.
director of human resources and diversity, and her team over the past several years have led to new DBE firms winning contracts and becoming successful vendors for CAE. The strategies led to DBE firms earning 41% of CAE payments made for eligible purchases on non-federally funded contracts and earning 16% of payments for eligible purchases on federallyfunded contracts in FY 2019. City of Columbia Growing Success The Columbia City Council passed legislation creating the Columbia Mentor/Protégé program in 2014. The program helps small and diverse firms from Richland County, where Columbia is located, and surrounding counties learn to work successfully on projects in the Water and Sewer Division. The program’s goal is to increase protégés’ capacity so they can eventually perform as prime
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contractors or prime consultants for the city. The program was well-received by local firms and the number of participants as mentors and proteges has grown since the program started. In addition, the number of mentor/ protégé teams working on city projects increased as well. Twenty mentor/ protégé teams are currently active in the program for construction-related services, with seven of the 20 proteges being certified as DBE firms. There are an additional 14 DBEs enrolled in the professional services part of the program, with some professional services firms participating in multiple mentor/protégé relationships related to various engineering disciplines. One of the protégé firms has grown through the program to become a mentor to other smaller firms participating in the program, while also participating as a protégé to continue to expand their capacity.
Columbia City Council also passed legislation to establish the Columbia Disadvantaged Business Enterprise (CDBE) Program in 2015 to expand opportunities on Water and Sewer Department projects beyond those covered by the Mentor/Protégé program. The CDBE program empowers the city’s Office of Business Opportunity to work with city engineers to establish contract goals for the participation of diverse firms on construction work. The CDBE program applies to projects larger than $200,000 containing enough subcontracting opportunities for diverse businesses to have meaningful participation. Since the program started in 2016, projects totalling more than $152 million contained CDBE goals and those projects created more than $24 million in contracts to diverse firms, representing approximately 15% CDBE participation.
we could, to churches and outreach meetings hosted by other agencies,” she said. The increased focus on outreach led Stevenson to become a founding member of the South Carolina Airports Coalition to sponsor a series of meetings called Disadvantaged Business Enterprise (DBE) Fly-Ins in 2015-2016. CAE partnered with the Charleston Aviation Authority, Greenville-Spartanburg International Airport, and Myrtle Beach International to host meetings at each of the four airports to introduce new firms to opportunities in the airport environment.
Participants in the City of Columbia, Office of Business Opportunities Access to Capital Symposium discuss financing options with a potential lender.
While the Mentor/Protégé Program and the CDBE Program have increased participation in the city’s Water & Sewer Division, the city-wide M/ WBE goal has encouraged all city departments to be accountable for reaching out to do business with diverse companies. “The city manager Table 2 has taken ownership of the city-wide goal, which has made it not an OBO program, but something that our leadership wants,” Lindler said. The overall success of the city’s programs has increased optimism for diverse businesses in the local community as well. In the fiscal year ending June 30, 2019, the city paid roughly $36 million to M/WBE firms. Columbia Municipal Airport (CAE) Continues its Commitment When former CAE Executive Director Dan Mann came to CAE in 2010, he realized that the airport could improve the participation of DBE and ACDBE firms’ future contracting opportunities. Mann called upon Human Resources Director Chappelle (Broome) Stevenson to assume leadership of the airport’s DBE and ACDBE programs to elevate them in the organization and to lead outreach efforts to bring diverse firms to the airport. Stevenson, the daughter of an entrepreneur, combined her passion for helping diverse companies with her organizational
skills to begin a transformation of the airport’s business diversity program. “Our participation was around 10 to 12 percent when I took over the program; Dan Mann said that he wanted to double these numbers,” Stevenson said. She used this charge to take several steps to meet the challenge to transform the program. First, she and DBE administrator Tammie Head analyzed all airport expenditures to identify which items were noncontractable and which could be open to greater participation. “There were areas like our utilities or fire trucks that we knew we couldn’t buy from a DBE, but we set a goal on any item that was contractable,” she said. Next, they engaged department heads to require that DBEs be included in all procurement opportunities and made this requirement a part of the performance appraisals of airport staff responsible for purchasing decisions. “Adding outreach and participation to annual reviews helped stress the importance of the DBE goal,” Stevenson said. The final step in the airport’s process was ramping up outreach efforts to inform the community about business opportunities and locating firms that would make good vendors for future contracts. “We went everywhere
CAE’s commitment to inclusion has continued under the leadership of current airport Executive Director Mike Gula, and CAE continues to register DBE participation well above its DBE goal of 11.2%. During this process the airport has developed several success stories of diverse firms becoming active vendors for the airport. One of these DBE firms is Sims Petroleum Company, a fuel supplier based in Columbia. “I met Wayne Sims and told him about an opportunity to supply fuel for the airport and he ran with the opportunity by finding a larger company to mentor him and get him started in the business,” Stevenson said. “Now Sims Petroleum provides fuel for all our maintenance vehicles, fire trucks and other vehicles. He even has provided fuel for one of CAE’s car rental company.” A Beacon of Hope “The City of Columbia and the Columbia Airport have been a beacon of hope for the M/WBE community in the Columbia area,” said Allen Brown, Midlands Coordinator and Business Consultant for the Columbia Area Small Business Development Center. Brown has worked with several companies that are participating in the City’s and airport’s programs. Brown said: “Without these two agencies in Columbia, a lot of the opportunity would dry up. But they keep plugging and keep engaging to support the MWBE community.”
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AIRPORTS
DFW to Expand with Six New Concessions Opportunities
Rendering of a potential Buffalo Wild Wings restaurant location at DFW Airport. By Sarah Magargee
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overing more than 26 square miles, the Dallas/Fort Worth International Airport (DFW) is expansive – and growing – with six new concessions in Terminal A creating opportunities for Airport Concessions Disadvantaged Business Enterprises (ACDBEs). Today, DFW is the largest American Airlines global mega-hub in the world, offering non-stop service to 67 international and 193 domestic destinations. In 2020 DFW is projected to grow 3.4% and at least 2%-3% annually over the coming decade. As the number of flights and passengers increase at DFW, so does the demand for airport concessions
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and services. DFW has one of the largest concession programs in North America, providing 245 restaurants, shops, and services and employing more than 3,000 workers. Last year concessions alone generated more than $425 million in gross receipts. A New Take on Airport Concessions Zenola Campbell, Vice President of DFW’s Concessions Department, said that customer segmentation studies indicate overall passenger growth and an increase in spending are creating a growing demand for airport shops and restaurants. Subsequently, DFW is adding six airport concessions in Terminal A that will bring even more local culture and flavor to passengers.
“We are looking for new and innovative ideas on Terminal A,” Campbell said. “We want concepts that will talk about the local flair of north Texas and exceed customer expectations with some of the best-in-class shopping, dining and service experiences. We are also looking for blended concept offerings.” A “blended concept” pairs goods and services traditionally not sold together in airports; for example, a bookstore that also has fresh drip coffee and donuts, or a spa that serves wine and champagne along with traditional spa services.
Currently, between 30%-40% of DFW’s concessionaires are ACDBEs, and this percentage is growing. New ACDBEs entering the airport concession arena will find ample support and mentoring from DFW and its established ACDBEs. “This is a great opportunity for an ACDBE to start something unique and thrive,” Lee said. “We have many success stories here and look forward to many more.”
Rendering of a potential gaming concept at the DFW Airport.
“The landscape of what passengers are looking for today has changed,” Campbell said. “It has opened a huge opportunity for entrepreneurs to get in and get creative with what they are offering.”
simulators and other virtual options. “At DFW, we are looking at ways to give our customers a unique experience,” Campbell said. “Today’s travelers want to relax, eat something healthy, shop for souvenirs, and have fun.”
In other DFW terminals, concessions are changing drastically from the traditional airport fast food and travel essential stores to high-tech, blendedconcept “living rooms.” In these “living rooms,” travelers can enjoy local treats, along with fresh, healthy food, gourmet coffee, and entertainment.
Designed with DBEs in Mind
Campbell described the recently completed F1 portion of Terminal D that has eats, drinks and sweets from the Trinity Grove area in Dallas. This area features self-ordering from a mobile device, with text message notification when the order is ready for pick-up from a food locker. Guests can also select to have their orders delivered to their seat in the terminal via a concierge service. One ACDBE-owned concessionaire is opening a new venture in DFW later this year that will blend the popular restaurant Buffalo Wild Wings with Topgolf, a global sports entertainment company headquartered in Dallas. Unlike a traditional Topgolf location that has a full driving range, this blended concept will have golf
The six new concession packages for Terminal A are geared toward ACDBEs having full ownership of the venture, a point that Lee takes great pride in. “Historically, many ACDBEs at DFW were joint ventures with another prime,” Tamela Lee, vice president of DFW’s Business Diversity and Development Department said. “This was helpful when there were not a lot of ACDBEs in the state – and gave them a chance to partner and learn. Now we want them to take the next step and to go out on their own. We hope that we are empowering our partners to take the lead and have 100% ownership.” Lee said that when an ACDBE has complete ownership in an airport concession, 100% of the revenue belongs to them. As that location thrives, the ACDBE has an opportunity to expand to other terminals and airports, growing their business and opening new doors.
DFW created a two-step application process for two packages in Terminal A that made it easier for ACDBEs to apply with minimal risk. Interested parties first submitted a Request for Qualification (RFQ), which is a short questionnaire to pitch an initial concept. No proposal deposit was required at this point in the process. From those RFQ responses, DFW will select a short-list of qualified proposers to complete a full Request for Proposal (RFP). The other four packages require a full RFP and deposit without the initial RFQ. “One of the things we have heard from interviewing our ACDBEs was how costly it is to put together an RFP. Unlike construction RFPs, an airport concession RFP is extremely involved and costly. You want to sell your concession concept in these,” Lee said. “They are graphic heavy and require a lot of work to generate. By first requesting RFQs instead of a full package, we hope more ACDBEs will be able to apply.” The Packages Of the six package offerings, two are food and beverage, three are retail, and one is service-oriented. Of these, two of the retail packages require an RFQ before a full proposal. Each concession package has unique requirements and includes a percentage of Women and Minority Business Enterprises (W/MBE) to be utilized during the concession buildout. The largest concept covers more than 6,000 square feet and includes three packages: a fresh market, a bar, and a coffee shop with a bar, all sharing an integrated gate lounge and dining area. The “fresh market” will feature
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a self-serve bar with items from local vendors, including coffee, pastries, fresh produce, salad, and a soup bar. The “coffee and bar” will serve inline food, coffee, and a full bar with seating and an integrated hold room. The “bar” will feature full-service domestic and international alcoholic beverage service, including beer and liquor. Another food and beverage package is for a “fast-food chicken” concept that offers a fresh-prepared menu built around chicken. This might focus on one specific cuisine, or might be themed to a type of preparation, such as fried chicken, chicken salads, or chicken wings. Three retail packages are grouped into one concept. A 2,956-squarefoot “travel essentials” store will offer innovative, current, and emerging reading technology along with fresh drip coffee and snacks.
A 728-square-foot electronics specialty retail store will provide a selection of electronic accessories and might offer entertainment options with a small section to view, download or play video games. A third “accessories” store will feature either single or multiple branded accessories, including handbags, jewelry and gifts at a variety of price points. The two retail packages requesting an RFQ are a high-end “candy shop” and a “travel essentials with branded coffee.” The 627-squarefoot “candy shop” may revolve around a specific type of candy, bulk candy, or freshly prepared treats and could offer engagement through online purchasing, sampling or live demonstrations. The “travel essentials with branded coffee” package must offer innovative, current and emerging reading technology with a branded coffee cafe such as Starbucks or Dunkin’ Donuts.
“We want concepts that will talk about the local flair of north Texas and exceed customer expectations with some of the best-in-class shopping, dining and service experiences.” - Zenola Campbell, Vice President, DFW Concessions Department
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The sixth and final package is for a “spa with wine and champagne,” which provides wine and champagne to passengers as they enjoy express day spa services and purchase spa-related merchandise. Campbell encouraged ACDBEs to be creative in their proposals for these six packages. “We are looking at how we can improve our program, making sure it is viable to travelers in 2020 and beyond,” Campbell said. “We want to honor the types of things our customers are looking for and then bring them to the party. We encouraged applicants to be creative in their concepts and bring a local flair to the offerings.”
TRANSIT
COMTO Fort Lauderdale Chapter President Kesha A. Davis (left), COMTO Fort Lauderdale Chapter board members and chapter members celebrate the kickoff of planning activities for the 49th Annual COMTO National Meeting and Training Conference.
Fort Lauderdale COMTO Chapter Wants ‘Wow Factor’ at the COMTO 49th Annual National Meeting and Training Conference Conference to provide education, networking and business opportunities By Peggy Beach
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roward County, Florida, will host the 49th annual conference for the Conference of Minority Transportation Officials (COMTO), July 18-21, in Hollywood, Florida. Kesha A. Davis, president of the Fort Lauderdale Chapter of COMTO, said she is excited about hosting the conference and highlighting the Broward County region. “Broward County is a great location because it’s tourism and business friendly. We are looking forward to the conference being a huge success,” she said. Having attended four COMTO national conferences and experienced what other chapters have done in the past,
Davis and the Fort Lauderdale team said they are incorporating the “wow factor” from beginning to end. Davis is Assistant to the Director of Broward County’s Transportation Department. She said: “The 49th national meeting and training conference has an amazing conference location (The Diplomat Beach Resort) with breathtaking views, friendly people and great food. Each event will be thoughtfully planned.” Davis said a lot of people may not be aware of the diverse background of Fort Lauderdale, one of the larger cities within Broward County. The city’s current population is 1.9 million people, and its demographic makeup has a variety of ethnicities and nationalities.
Fort Lauderdale is a tourist destination in its own right and Broward County welcomes more than 13 million visitors annually, according to www.broward. org. Conference Planning and Activities The primary goal for the conference is to provide transportation industry professionals training to improve their growth and performance in the industry. To that end, the planning committee is creating an agenda filled with general sessions and breakout sessions to discuss current transportation industry trends and best practices with industry experts and recognized leaders.
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According to Davis, there are more jobs in the transportation industry than many people realize. “When people think aviation, for example, traditionally they think pilots or flight attendants,” Davis said. “You can be an engineer or an architect, for example.” Davis pointed to the growth of jobs in the transportation sector. “Minorities and young people need to be more aware of these opportunities and career paths,” she said. The Youth Symposium and CITY Internship Program are two programs and initiatives that assist with this effort. Conference To Highlight Business Opportunities in Broward County
Broward County Office of Economic and Small Business Development Director Sandy Michael McDonald, from left, Assistant to Broward County Transportation Department Director Kesha A. Davis, and Vice President of Greater Fort Lauderdale Convention & Visitor’s Bureau Al Tucker celebrate Kick-Off of the COMTO 49th Annual National Meeting and Training Conference.
The theme of this year’s conference is “Innovation Beyond Imagination,” and the planned educational tracks include: Accessibility and Innovative Mobility, Historically Underutilized Businesses, Leadership, Transportation Policy, and Technical Best Practices. The conference is targeted to all modes of transportation including aviation, transit/bus, maritime and rail. Davis said the conference will allow attendees the opportunity to network with a wide array of industry professionals and elected officials during conference sessions and signature events, including: a sunset cruise off the coast of the city, the chapter’s inaugural scholarship golf tournament, and a welcome reception sponsored by Hello Sunny (The Greater Fort Lauderdale Convention and Visitors Bureau). “The golf tournament is open to all novice and experienced golfers in the area,” Davis said. COMTO National will host the annual Careers in Transportation for Youth (CITY) Internship Program. The CITY Interns will participate in a two-day session at the conference. Since 2004, approximately 350 college
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students have been placed in more than 22 major U.S. cities where COMTO chapters are located for a 10-week paid internship. The internships are designed to expose the students to various careers within the transportation industry. The Garrett A. Morgan Youth Symposium, another component of the conference, works to foster the interest of high school and first-year college students in pursuing transportation industry careers. The Youth Symposium occurs Saturday, July 18 and is free and open to students within the tri-County (Broward, Miami-Dade and Palm Beach) area who register. Symposium Co-Chair Trevia Taylor, Superintendent of Service & Capital Planning for Broward County Transit, is looking forward to speaking with the students and sharing her non-traditional path into leadership. “We want to open the eyes of students and plant seeds of the wide variety of career opportunities in the transportation industry; career fields like accounting, engineering and information technology,” Taylor said.
Another goal of the conference will be to highlight the significant business opportunities coming to Broward County resulting from the passage of a penny surtax in November 2018, that will fund transportation projects for the next 30 years. The surtax generated $177 million for projects in fiscal year 2020 that include community shuttles, roadway improvements, complete streets and resiliency initiatives. Future surtax projects include creating new express bus routes, building a light rail system and improving traffic signal synchronization in all 31 Broward County municipalities. More than 1,100 projects are contained in the Transportation Surtax Plan. Davis said the incoming revenue will bring “a vast array of opportunities and construction projects for DBEs and local businesses in Broward.” Fort Lauderdale – Active COMTO Chapter Fort Lauderdale is one of more than 30 COMTO chapters across the country. Nationwide, COMTO has about 3,000 members and is soon expected to grow internationally. The organization was founded in 1971 to provide opportunities and increase participation in the transportation industry for minorities, veterans, people with disabilities, and certified M/WDBE businesses. Leadership training, professional development, scholarship and internship funding, political advocacy, partnership building,
Kesha A. Davis, right, recognizes Ginger Cunningham, owner of Ginger Cunningham & Associates, as a corporate sponsor of the Fort Lauderdale chapter of COMTO.
and networking opportunities are key to COMTO’s mission to increase diversity in the transportation industry. The Fort Lauderdale chapter was founded in 2008 and has 140 members, making it one of the largest chapters in the nation. “Most chapters have 40 to 80 members,” Davis said. Agency members and corporate partners in the chapter include Broward County Transit, the South Florida Regional Transportation Authority, Broward County Aviation (Fort Lauderdale-Hollywood International Airport), Broward County Office of Economic and Small Business Development (OESBD), Urban League of Broward County, Hello Sunny (The Greater Fort Lauderdale Convention and Visitors Bureau), Kimley-Horn, and others. Like all COMTO chapters, the Fort Lauderdale chapter focuses on professional development, leadership development, partnership building, and scholarship funding. This past February, the Fort Lauderdale Chapter’s Garrett A. Morgan (GAM) Event featured a Career Day program at Deerfield Beach High School. Previous GAM Event Days have
been held at Broward County Transit Facilities where students received a behind-the-scenes view into a transit facility or the Fort LauderdaleHollywood International Airport. Annually, the chapter sponsors four separate scholarship categories for students: a $750 scholarship for technical/vocational students; a $1,000 scholarship for graduating high school students; a $1,500 scholarship for undergraduate students; and a $2,500 scholarship for graduate students. This year’s scholarships will be awarded on August 5, 2020, at the chapter’s Annual Scholarship Luncheon at the Sonesta Beach Resort.
Davis encourages everyone in the transportation industry to attend COMTO’s 49th National Meeting & Training Conference. “This conference helps people understand the current transportation issues and provides the knowledge and tools to become better change agents to be ahead of the issues moving forward,” she said. The conference will take place on July 18-21 at The Diplomat Beach Resort in Hollywood, Florida. For more information, visit https:// comtonational.org/ or https://www. comtoftlauderdale.org/
Professional development is also an important part of the chapter’s mission. On April 30, the chapter will host its Annual Professional Development Series called “Up Close and Personal” at Nova Southeastern University in Davie, Florida. “The attendees will be involved in interactive sessions with the speakers,” Davis said. The speakers will answer attendee questions at the table, versus from behind a podium. “It’s a more engaging style to interact with industry icons and leaders,” she said.
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Our buildings change skylines. Our people change lives. Turner was the first major construction firm to establish a full time community outreach department within its organization during the early 1960s, with the major goal of raising the economic viability of traditionally under-represented businesses. In 2018 Turner awarded $1.64B in volume and 3380 contracts to under-represented businesses.
650 individuals graduated from the Turner School of Construction
Management in 2018. This nationally recognized training program is celebrating its 50th anniversary this year. The program helps UBE’s build networks, establish joint venture partnerships, and form long-lasting relationships.
Winter / Spring I 2020 36 www.turnerconstruction.com
CIVIL/HIGHWAYS
Illinois DOT Secretary Osman to Lead Largest Capital Improvement Program in State’s History Illinois Department of Transportation Acting Secretary Omer Osman, P.E.
llinois Department of Transportation (IDOT) Acting Secretary Omer Osman paid his dues working through the ranks of the department to become head of one of the nation’s largest state transportation agencies. Osman began his career at IDOT nearly 31 years ago after finishing the civil engineering program of Southern University, a historically black university located in Baton Rouge, Louisiana. However, the change from southern Louisiana to the Midwest was not the biggest change Osman had experienced when he began his career at IDOT in 1989. A few years earlier he changed continents when he moved from the East African country of Sudan to enroll at Louisiana State University. Osman later transferred to Southern University where he earned a Bachelor of Science degree. “Somebody young of African descent coming in for the first time to the USA is a culture shock, but I found my comfort zone at an HBCU (Historically Black Colleges & Universities),” Osman said. Osman steadily moved through the ranks by succeeding in every position he held. This progression proved to be excellent training for his current role of leading the agency through the largest capital program in the
state’s history – financed by a sixyear, $45 billion infrastructure capital bill called “Rebuild Illinois.” Rebuild Illinois provides funding for extensive investments in roads, bridges, railroads, universities, early childhood centers and state facilities. The state estimates that the bill will create and support 540,000 jobs over the life of the plan and revitalize local economies across the state.
Sixty-eight percent ($33.2 billion) of the capital bill’s funding will go to projects administered by IDOT, and Osman believes this is exactly what is needed to bring the state’s infrastructure upgrades into the future. “The infrastructure need is so massive, and the capital bill is exactly what we need for us to resurrect the infrastructure,” Osman said. “It’s the up-keep and reconstruction of several segments, taking care of our bridges, improving safety, reducing fatalities, and making sure the transit system in our major cities are being updated.” This amount of investment will create enormous opportunities for businesses in Illinois and Osman believes this is the time for small and diverse businesses to get involved. “To me this is the opportunity of a lifetime. We have yet to see a capital program of this size in the history of the state of Illinois. This opportunity cannot be passed up,” he said. Osman is only the third transportation secretary to rise through the ranks of IDOT and the first person of color to hold the position. He believes that one of the hallmarks of his leadership will be increasing opportunities for diverse firms owned by minorities and
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Coach Ken Carter, whose story was highlighted by the movie “Coach Carter,” shared an inspirational message with participants at the IDOT Today’s Challenge, Tomorrow’s Reward Conference in February 2020.
women. He said: “We must level the playing field. Our job is to bring newer companies in so they can prosper. If they prosper, the community prospers.” Secretary Osman also believes finding ways to reduce bureaucratic red tape and unnecessary requirements are a means to increase opportunity. “We must re-double our effort and look within. While there are certain requirements and things a business must have, we also have to look at how we can make it easier for small companies to be pre-qualified with us, whether they are on the engineering side, construction side or supply side.” IDOT will look to the Office of Business and Workforce Diversity (OBWD) to help educate and prepare firms to take advantage of the many opportunities the capital plan will provide. OBWD is led by Director Pamela Simon, an IDOT veteran with more than 31 years at the department and the first African American woman to lead the office. Simon is well-acquainted with the needs of small and diverse firms having worked her way up to the director position by serving in other managerial positions in the office. Osman said that OBWD is an integral part of the department and a focal point for minority, female and veterans’ communities to get connected to IDOT. “They are the go-to place for resources and they are very good at what they do,” he said. “They provide a multitude of services to a beginning company, or to somebody who is established, but looking to expand into a new
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line of business.” The OBWD offers managerial skills training and technical skills training in areas such as how to bid on a contract, or how to do an estimate. IDOT also maintains a resource center for emerging companies in each of its nine district offices. The centers are serviced by IDOT staff with the technical expertise to help firms navigate through the process of becoming a successful contractor for the state. Getting the word out about upcoming opportunities and encouraging firms to participate is another strategy the
The 30th annual event was held in the state capital of Springfield, Illinois, from February 10-11, 2020, with over 400 participants from across the state. “What we hope to accomplish with the conference is to bring everyone together,” Osman said. “Networking is underrated now. As critical as transportation and infrastructure is, the industry is not that big. So, knowing who is in the business, trying to glean from somebody else’s experience, trying to be available and get your questions answered right away is very critical and is your next step to something different.” OBWD also uses the conference as an opportunity to recognize companies providing excellent service to the state by completing projects and supporting the Diversity & Inclusion efforts of the agency. “We want to celebrate those companies who have succeeded; for one to celebrate them and then also for the people who are aspiring to learn from their experience,” Osman said. Osman is confident IDOT will successfully complete the large number of projects included in the six-year capital plan, but he also wants to ensure small and diverse firms participate in the economic opportunity this level of investment will create. Osman said:
IDOT Office of Business and Workforce Diversity Director Pamela Simon speaks to participants at the Today’s Challenge, Tomorrow’s Reward Conference.
OBWD uses to get more firms involved in IDOT contracts. The department began hosting the “Today’s Challenge, Tomorrow’s Reward” Conference in 1990 to provide networking, training and share upcoming opportunities to small and diverse firms.
“I’m not concerned about completing the capital plan; we will get that done. The bigger issue for me is in what shape or form we will accomplish that, and who will accomplish that. The who part, for me personally, is the number one priority. No one single entity should accomplish this – it takes a department of 5,200 employees and it takes the suppliers and the workers and the trades: an entire industry including engineers, contractors, the community and mayors of cities and counties. Everybody must be involved, not only established companies. We would like to see new companies. We’d like to see established small companies get bigger and get involved in areas that they have not traditionally been involved in.
Capacity builders advocating for contractors nationwide.
410.876.9610 • thebarbourgroup.com Colette Holt & Associates has changed its name
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BUSINESS DEVELOPMENT
Strategies to Increase Bonding Capacity – Starting with the Submission Process - Company and Owner(s) Personal Credit and Payment History with Creditors - Banking Relationships and Bank Line Borrowing Capacity, if any. - Company History & Largest Projects Completed (Sureties tend to extend two-times largest job completed for bonded jobs and two-times largest backlog completed for aggregate limits. Typically, backlog is defined as the total cost to complete at any one point in time.) - Ownership and Experience of Owners and Key Staff - Subsequent Events (if any) - Financial Statement Analysis (Three to 5 years of history to discuss changes in working capital, net worth, key ratios, intercompany accounts, stockholder borrowing, and equipment spending habits, etc.) - Personal Financial Trends - Affiliated Companies - Work in Progress History (This section discusses any profit fade, key projects and pending change orders.) - Insurance Coverages - Legal Issues (if any) - Indemnity Package By Karen Barbour
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hat happens to a submission once a bonding agent has viewed the documents? What surety companies will they target for a bonding program? Is the agent knowledgeable in surety or only in commercial insurance? These are important questions to ask for contractors who want to grow bonding beyond the typical “fast-track” creditbased surety program limits. For startups and contractors seeking a surety bond program up to
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If your projects involve a scope of work that is repetitive in nature, such as laying carpet tile for example, surety companies may look beyond the “two-times completed” rule. 1
$1.5 million, the underwriting process is not cumbersome. For companies with a proven track record in project delivery that want to grow and scale up, the underwriting process can be complex. Agents in the latter situation will need to canvass every aspect of the contractor’s operations. Their letter to the surety may include a full list of topics including:
The more information supplied under such headers, the more likely the underwriter will negotiate favorable surety credit terms.
A contractor has every right to ask their agent what surety companies will be targeted for their account. It is always best if the agent doesn’t use a mass marketing approach. Sending out submissions to multiple surety companies at one time is typically used only to block access by competing agents, because once an agent submits an account to a surety company, no other agent can access that surety unless the contractor provides them with a broker of record letter. This letter will essentially “fire” the incumbent agent from that surety company and allow the new agent access. Since the surety underwriter may uncover and reveal some issues (not known to the agent) to the contractor, it is best to find out what they are and address them before sending the submission to another surety. Keep in mind that a surety broker makes credit worthy statements on the applicant’s behalf to the surety. If a contractor fails to fully disclose any and all issues to their broker, it can damage the applicant’s and the broker’s reputation with the surety company. Financial Statements and Internal Accounting Just as a person can outgrow or make major renovations to their home, contractors need to rethink the presentation of their financial statement and possibly the CPA firm they have engaged. Surety companies enjoy working with certain CPA firms. It’s advisable to routinely inquire with the CPA firm regarding which surety companies they work with. If a CPA does not network with surety companies or is not known to them, this may raise concerns for the surety underwriter. As an aside, if seeking a bond program of $50 million or more, an audited financial statement may likely be required. If a business is receiving bonding support under the SBA Office of Surety Guarantees, the SBA requires CPA Audits to support projects $6.5 million and higher. A sophisticated cost accounting system that can update jobs weekly is necessary to grow bonding capacity. This will most likely be the surety’s
first line of questioning. The surety may require quarterly or monthly work in progress schedules if support for a large spike in bonding capacity is requested. Increasing and maintaining a surety program can be costly. Producing a CPA Reviewed or Audited statement and implementing a cost accounting software program can increase overhead substantially. Such costs can be considered indirect job costs and allocated to project costs. In this manner, a company will be positioned to absorb the impact to the bottom line. Indemnity Concessions and Financial Benchmarks When growing bonding capacity, it’s also wise to ask about any indemnity concessions and the financial benchmarks the surety requires for such consideration. For example, if a contractor can demonstrate that their company is not their “personal bank” (i.e., no large stockholder or owner receivables or unnecessary large distributions; able to forecast sales to show modest growth, not exponential growth; and amassed retained earnings in the company that are at or in excess of $1 million), then certain reasonable indemnity concessions can be requested. If the applicant firm is pledging both company and personal indemnity, the surety may – given the scenario above – waive the applicant’s homestead. For example, if the applicant has a long-term relationship with the surety, they may consider a capital retention agreement, limited dollar indemnity, or perhaps waiving personal indemnity. It all depends on the surety and how much excess liquidity the applicant has in the statement to support the program currently or in the future. To bolster liquidity, applicants may consider subordinating any stockholder or owner notes payable. Subordinating the debt to the surety will convert the payable to quasiadditional capital in the “eyes of the surety,” not the IRS. If you are Sub S or an LLC, consider converting such notes payable to additional capital for
stronger consideration of the cash infusion. (Converting such notes into capital in a C-Corporation is not advised because the money will be taxed twice.) Keep in mind, stockholder or owner notes receivable are not treated as a current asset for underwriting purposes. If such notes have plateaued or increased over time, the IRS could consider them as additional salary and apply tax on the outstanding amount and assess a penalty. The surety would rather an owner increase their salary than show such receivables on the balance sheet. Such notes payable can be a red flag for sureties and banks. Growing Capacity Growing capacity may also affect bond premium rates. Every surety company has a different rate structure accompanied by unique guidelines. If the company is not an active bond user, chances are that preferred or super preferred rates will not be offered. Nonetheless, there are surety companies that may offer a very low premium rate structure just to capture new accounts. Though low initial premiums seem ideal, such rates are often subject to an increase. Additionally, shopping rates can cause diminishing returns for a firm’s reputation as a contractor. Sureties do not see themselves as a commodity. If a firm is looking to scale up and win support from a surety company that will take the business to the next level, it’s important to be upfront and candid about the rate structure without making it a priority. The agent should know how to finesse this situation to the business’ favor. Above all, firms should find an agent knowledgeable in surety. A local commercial insurance agent will most likely not possess the skill set needed to establish or grow a firm’s bonding capacity. Remember, a surety agent is not an adversary, but an advocate. It does not matter if the surety agency is large or small, it just matters if the agent has the talent and a healthy amount of appointments with surety companies, along with a healthy sense of urgency.
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BUSINESS DEVELOPMENT
Successful Entrepreneurs Plan for the Future Allen Brown is a South Carolina-based CEPA (Certified Exit Planning Advisor) advisor helping entrepreneurs and executives of privately held businesses elevate their activities in order to get control of their companies while achieving their personal, business and financial goals. For more information and to download the Transferrable Value eBook, go to: www.wealthexchange.com By Allen Brown
Do you know how to leverage the value of your business to create the financial freedom you’ve always wanted? Have you spent the time needed to have the best options available when you’re ready to exit your business? Most entrepreneurs don’t want to exit their business, at least not under their current conditions. Let’s be crystal clear about exiting your business: every entrepreneur, partner and shareholder will eventually sell or transfer all or part of their interest in the business. This may come during the life of the owner or upon death, but it will come. Additionally, everyone employed by the business will eventually transfer the authority and responsibility they have within the business to someone else; unless they dwindle or liquidate the assets of the business first. Seller’s Remorse The stress of selling a business, having to make decisions about investing the proceeds, and determining the seller’s next phase in life all at once can be debilitating. Most of the time the decisions are complicated, but not complex. However, because the decisions can be complicated, without
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proper assistance, entrepreneurs think about putting a plan in place for the business but fail to act on executing the plan. Although these individuals are typically disciplined in other aspects of strategic and tactical planning, they become undisciplined in planning for exiting the business, which often comes back to bite them. Why? Because unlike the other aspects of their businesses, they fail to write down their thoughts, to create goals, and add steps to their goals creating livable, breathing plans. Founders and their families often wait for the businesses to fail, by not preparing for the inevitable transition of the business. They don’t take control of the process of managing the clock, cultivating potential buyers, cleaning up the balance sheet, timing the market (no one can really do this) and selling at the top. They don’t manage the illiquid wealth locked inside the business. They are not of thinking about their future need for liquidity until tomorrow. If founders and the next generation of owners (often parents and their children) think about how they have built a company through trust and working together, they will realize the
actions that led to success: planning, recruiting talent, acquiring resources, executing a business plan, making adjustments, etc. They have often become pros at these actions. When it comes to the necessary skills and habits needed in planning for the transition of the company, these same founders and next generation fail to take control. Yes, it is complicated to determine the best way to transition a company, but it is not complex. And because it’s complicated, entrepreneurs often just don’t think about it. They don’t think about this aspect of their businesses because they are afraid if they do, they will have to take their foot off the gas pedal that created their success. That is a limiting belief. The problem may lie in the fact that entrepreneurs often see ownership as a zero-sum game – either I am the leader of the company or I am not, with no grey area in between. But successful transitions often happen gradually and more strategically with the owner figuring out how to own the company, without being the sole owner. Every entrepreneur needs a succession plan for their business, but most entrepreneurs do not embrace
selecting who it will be, or how it will be done. Instead of thinking about business risk, strategy, viability and market share they focus on the loss of control. The detrimental assumption most entrepreneurs make is that they always will have the ability to exit the business on their own terms when they are ready. Hence, there is always time to think about succession planning later and not now. Unfortunately, in many cases this assumption is incorrect and someone else – not selected by the owner – is left to decide how the company will transition from one owner to the next generation of ownership. This miscalculation about how they will transition from ownership can create financial and business disaster if the wrong decisions are made by subsequent decision makers for the business. In this instance, the fault doesn’t belong to these decision makers, but belongs to the founding entrepreneur who procrastinated in addressing this inevitability through planning and preparation.
A One Percent Solution The good news is that entrepreneurs don’t have to travel this road alone. Chris Mercer, author of “Unlocking Private Company Wealth,” offers a strategy to help entrepreneurs better plan for the process of transition from ownership and maximizing the value of the company. He calls the strategy the “One Percent Solution” and it involves investing a set percentage of the illiquid value of the business into services by professionals to help the owner plan for the succession of the business. This budget is used for things such as financial statement preparation, performing employee appraisals, wealth management compensation, buy/sell agreement pricing, life insurance and other services that will prepare the business for transition. For instance, if a business is valued at $5 million, allocating 1% annually would create a $50,000 budget to hire professionals to assist the owner prepare for the future. This concept is based on the premise that owners of closely-held businesses
should treat their ownership interests as important investments, realizing that 80% - 90% of a business owners personal wealth comes from the value of their business. This is only one strategy, but the takeaway is that entrepreneurs should spend time and effort determining the succession plan and strategy for their business. Professional consultants and service providers can certainly help with this process and offer valuable insight on the proper methods and resources available to maximize the value of the company and increase the probability for the success of the company after the transition.
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