Ferrovial Construction

Ferrovial Construction US Projects Surpass $1 Billion in Payments to DBEs in Past Decade

Working on major highway projects can be challenging for many Disadvantaged Business Enterprises. Since DBE firms are small, by definition, the companies often do not have the capacity, working capital, and staff size necessary to take on projects where subcontracts can total millions of dollars. Ferrovial Construction US (Ferrovial) has faced this challenge head-on while working as a lead construction firm on major highway projects, primarily in the Southeastern U.S., and has found creative ways to partner with DBE firms to exceed participation goals on each project. These results have helped Ferrovial surpass $1 billion in payments to DBEs firms since beginning work on its first U.S.-based projects to build the North Tarrant Express Freeway and the LBJ Express Freeway in the Dallas Metroplex in 2010. Since that time, Ferrovial has been the lead construction firm for six additional projects, with three currently in progress.

Ferrovial is the U.S. subsidiary of Ferrovial, S.A., a Spanish multinational infrastructure company based in Madrid, Spain, with annual revenue exceeding €6.3 billion. The parent company is involved in the design, construction, financing, operation (DBFO) and maintenance of transport infrastructure and urban services. Although Ferrovial is a worldwide leader in the infrastructure industry, company leaders had little experience with the USDOT Disadvantaged Business Enterprise Program when they entered the U.S. market. However, the company quickly embraced the program and selected Angela Berry Roberson, an experienced DBE Program professional, to lead its DBE Program and contract compliance efforts. This hire gave Ferrovial the in-house expertise to create an effective DBE Program and assist project managers through the process of implementing DBE Program requirements.

One of Roberson’s first initiatives was establishing the practice of hiring a full-time diversity contract compliance manager for every project. The compliance managers ensure Ferrovial maintains day-to-day administration of the DBE Program on each project; making sure DBE firms, project staff, and project owners have a direct point of contact for the administration of the DBE Program. The presence of a full-time compliance manager also ensures ongoing outreach efforts, contract compliance activities and reporting requirements are performed in a timely and professional manner.

A key factor in Ferrovial’s overall success with administering a successful DBE Program on its projects is recruiting experienced professionals to lead compliance efforts. These positions provide expertise regarding the DBE Program – and the skills to effectively serve as a liaison between project staff, a government agency’s DBE Program staff, and the DBE business community.

Transform 285/400 Interchange Improvement Project

One example of the success of Ferrovial’s DBE Program is the Georgia Department of Transportation’s $800 million Transform 285/400 Interchange Improvement Project in the Atlanta area. Construction of the collector-distributor lanes of the Georgia The Ferrovial-led North Department of Transportation Transform 285/400 Interchange Perimeter Contractors (NPC) Improvement Project in Atlanta, Georgia. team hired Nykita Hurt to serve as diversity contract compliance manager for the project. Hurt joined the NPC team after retiring from GDOT as an Equal Employment Opportunity Officer in the Office of Civil Rights, where her role included certifying businesses for the DBE Program. This experience allowed Hurt to hit the ground running and to advise NPC project staff on GDOT’s expectations and requirements regarding working with DBE firms. “I had a personal connection with many of the DBE firms after retiring from GDOT as an EEO Officer in Metro Atlanta where I had certified many of the firms,” Hurt said. “So, I could call them, tell them about the project and ask them to submit a proposal to do some work for us.”

NPC’s support of the DBE Program led to exceeding the project’s 17% DBE goal by more than $10 million so far, with more DBE payments expected before the completion of the project in December 2021. NPC has paid more than $11 million to design/professional services DBE firms on 29 different subcontracting agreements and has paid more than $75 million to construction-related DBEs on 49 different subcontracting agreements.

Nykita Hurt, diversity contract compliance manager for North Perimeter Contractors LLC.

Hurt is particularly proud of the efforts of NPC to offer opportunities to DBEs that had not worked on GDOT projects in the past. One DBE received a small contract for marketing and information services, then after completing that contract, mentioned to Hurt that their company also could provide guardrail installation and maintenance services. Hurt shared this information with NPC project staff, and the company was awarded a small contract for guardrail services. Hurt said, “The DBE firm exceeded expectations on the first guardrail work and was able to ask VDOT to add guardrail services to their DBE capabilities; and they have been blowing up ever since.” The same firm has since purchased a few dump trucks and added hauling to its list of approved services.

These creative approaches offering opportunities to DBE firms demonstrate the commitment of Ferrovial to meeting its clients’ expectations and supporting the intent of the DBE Program. Hurt said: “There were scopes of work that the DBEs in Georgia weren’t prepared to do, so we sat down and evaluated the capacity of each firm and allowed them to tell us what they were comfortable with doing. We then adjusted our contracts to accommodate their comfort level. Then as they completed contracts, we would issue change orders to add more work and keep them on the project.”

I-77 Hot Lanes DBE Success

Another successful project for Ferrovial’s DBE Program is the North Carolina Department of Transportation I-77 Hot Lanes project in the Charlotte area. The Ferrovial-led Sugar Creek Construction, LLC team completed the state’s first public-private partnership by overcoming several obstacles to complete the project on time and within budget. The project also has been a success for DBEs in the Charlotte region by achieving over $119 million in payments to DBE firms – more than twice the project’s 12% DBE goal of approximately $59.6 million.

Like the Georgia project, the I-77 Hot Lanes project was Ferrovial’s first project in North Carolina, and virtually none of the DBEs in the state had heard of the company. However, through extensive outreach efforts during the proposal stage and the hiring of Michael McKoy as Sugar Creek Construction’s Diversity Contract Compliance Manager, the DBE Program excelled. McKoy joined Sugar Creek upon retiring from the North Carolina Department of Transportation after more than 25 years of experience in roles with the Highway Construction Unit and the Civil Rights Department. McKoy led the DBE Certification Unit within the NCDOT Civil Rights Department for several years.

McKoy’s experience provided the Sugar Creek team valuable knowledge of DBE firms in the Charlotte area and knowledge of the procedures used by NCDOT project staff when managing construction projects. McKoy said, “For DBEs to have a recognizable face that they could come to and ask questions was a good place to be to facilitate partnerships with the Sugar Creek team.”

Michael McKoy, diversity contract compliance manager for Sugar Creek Construction LLC.

McKoy used his knowledge of the North Carolina DBE community to identify firms for specialized scopes of work in areas like pavement markings. “A DBE was probably not going to be able to do all that pavement marking work, but we were able to separate areas like the y-lines and the service roads to allow a DBE to do that work, as opposed to doing the long line markings on I-77,” McKoy said. This strategy allowed a DBE firm to perform more than $4 million in pavement marking work on the project. McKoy also helped assemble a team of DBE hauling firms that could meet the needs of the Sugar Creek team, since no one DBE firm had the capacity to take on the hauling work for the entire project.

These types of DBE recruitment and contracting strategies on both the Georgia Transform 285/400 Interchange Improvement Project and the North Carolina I-77 Hot Lanes Project have increased opportunities for DBEs on Ferrovial-led projects across the Southeast region of the country. Combined with other initiatives – such as increasing the speed of payments to DBEs for certain scopes of work and increased outreach through participation in local and national organizations – there is increased DBE recognition of the Ferrovial brand and widespread acceptance in the market.

Southbound I-77 Express Lanes driving toward downtown Charlotte.

Ferrovial has continued its success with DBEs on its latest two projects: the VDOT Transform 66 – Outside the Beltline project in Northern Virginia working as the lead contractor in the FAM Construction Joint Venture, and the TXDOT $1.5 billion Interstate 35 Northeast Expansion project near San Antonio. Ferrovial is already well ahead of achieving the 15% DBE goal on the I-66 project and is confident in its potential for success in San Antonio. Hurt believes the success of Ferrovial’s DBE Program is due to staff members being willing to take extra steps to provide contracting opportunities. “I feel we have gone above and beyond in giving DBE opportunities that they would not have had otherwise,” said Hurt. “I know in Georgia, we have companies working on the project that have been certified for 20 years, but have never had an opportunity to work on a GDOT project.”

Although Roberson left the company to pursue another opportunity in May 2021, Ferrovial appointed Stella Vargas to serve as the new director of corporate diversity and inclusion. Vargas also brings significant expertise to the position, after serving in a similar role for Webber Inc., a subsidiary company of Ferrovial located in The Woodlands, Texas. Vargas said, “My goal is to continue strengthening Ferrovial’s reputation as a company that values the contributions that our DBE community can make towards a project’s successful completion. I also want to keep empowering our diversity team to find creative solutions to maximize DBE participation and growth.”