Director Ajegba Leads MDOT to Greater Equity During Rebuilding Michigan Program

Based on Michigan Gov. Gretchen Whitmer’s commitment to fix her state’s longneglected roads, the Michigan Department of Transportation (MDOT) is investing $3.5 billion from the sale of bonds. Gov. Whitmer’s ‘Rebuilding Michigan’ program will rebuild or repair approximately 122 major highways. The program began in 2021 with $2.3 billion in projects scheduled to begin this year, and MDOT leaders expect that the Rebuilding Michigan program will be augmented by the infrastructure bill currently making its way through Congress.

MDOT Director Paul Ajegba, P.E., a 31-year veteran of the department, believes the Rebuilding Michigan program and federal infrastructure bill create an unprecedented level of opportunity for small and diverse firms in the state. “There has never been a more opportune time for DBEs to get involved in the highway transportation industry, both as consultants and construction firms,” Ajegba said.

However, Ajegba knows Disadvantaged Business Enterprises taking advantage of this great opportunity must be prepared to do business, and he wants MDOT to help firms prepare to participate while ensuring that opportunities are extended to those ready to take advantage. “We don’t want to look back at the end of spending this $3.5 billion and the additional federal money and say we have not impacted the DBE community,” Ajegba said.

Michigan Gov. Gretchen Whitmer (r) and State Transportation Director Paul C. Ajegba toured the I-496 project in November 2020. This project was the first of 122 projects throughout the state made possible by the Rebuilding Michigan initiative, allowing the department to advance projects and complete them more quickly. (Photo courtesy of Michigan Department of Transportation)

The objective of the Rebuilding Michigan program is rebuilding the state highways and bridges that are critical to the state’s economy and carry the most traffic. MDOT’s goal is that the program also brings improvement to the small and diverse business that help complete the program. “What are we going to hold up as the legacy of this opportunity? That is the vision I am working to create – a long-lasting change in the makeup of our industry, both on the consulting side and the construction side; and we are putting a lot of things in place to make that happen,” Ajegba said.

Thinking Out Of The Box

A hallmark of Ajegba’s leadership is encouraging MDOT employees to innovate and think out-of-the-box to create new solutions to old problems. Over his career, he has seen many efforts to help DBEs succeed come and go with limited success. Ajegba uses the experience of growing through the ranks at MDOT and learning the only way to make improvements is to be open to new ways of doing things. He encourages his leadership team to challenge conventional wisdom and take calculated risks to move the agency forward toward its goals and objectives. “I started as a Traffic and Safety Engineer and if I had to go back and talk to that young man today, I would tell him not to be afraid to take chances; because if you do your homework, the risk is not as bad as it seems – it’s the only way to innovate. I want our people to know that they won’t be fired for trying something new,” he said.

Ajegba is using this strategy to encourage greater impact in the DBE Program. Early in his tenure as director, he met with Lisa Thompson, administrator of the Office of Business Development (OBD), to encourage her and the OBD team to be innovative and assertive in taking the program to the next level. “I told them I am fully vested in this, and I need them to push to make significant changes. I wanted them to understand that all the way to the director’s level is invested in making the program successful,” he said.

Thompson has taken the director’s charge and began to ramp up DBE Program efforts to move the needle. First, OBD increased its outreach and training activities during the pandemic. OBD used the challenges of the pandemic to create virtual training programs to expand outreach across the state. “We were able to embrace the virtual format, and it has actually been helpful, because it allowed us to reach more places all at once,” Thompson said.

Next, OBD added two additional staff dedicated to expanding outreach to existing DBE firms and recruiting more businesses for the program. Thompson said the increased business opportunities resulting from the Rebuilding Michigan program may cause some firms to exceed the gross revenue size limits to stay in the DBE Program. “We have to find new firms that can join the program,” she said.

Another initiative OBD launched is performing greater analysis of the DBE goal setting process for major projects to ensure MDOT meets or exceeds its overall DBE goal of 8.03% for federal fiscal year 2021. “We have really been taking a closer look and giving more scrutiny to requests to reduce DBE goals on larger projects,” Thompson said. During this process, Ajegba and Thompson met with some of the state’s large prime contractors to stress the importance of maximizing opportunities for DBEs and requesting their buy-in on the effort. “We are seeing results and achieved DBE participation of 9.13% through the first six months of 2021. This amounts to $65.6 million in contracts and we are on track to exceed $100 million to DBE firms by the end of the year,” she said.

Paul C. Ajegba, P.E. has more than 31 years of experience with the Michigan Department of Transportation (MDOT), and after 28 years with the department, he was appointed by Gov. Gretchen Whitmer as director on Jan. 1, 2019. (Photo courtesy of Michigan Department of Transportation)

Ensuring Opportunity

One of the challenges to getting more DBEs involved previously was a limited number of opportunities available for contractors to pursue. This often resulted in firms with the most experience and track record winning work continually, while limiting opportunities for new firms to enter the market. “Our program was not big enough, so it was very tough for new firms to break through,” Ajegba said. He expects the Rebuilding Michigan program to open the door for new firms to do business on MDOT projects.

In 2020, MDOT hired Leading Edge Business Solutions (LEBS), a minority-owned consulting firm, to study the department’s processes and DBE Program and make recommendations to create more opportunities for DBE firms to participate. One initiative LEBS is creating are new policies to improve opportunities for dump truck hauling companies on MDOT contracts. LEBS is working with MDOT officials, the Michigan Infrastructure Transportation Association, and DBE hauling companies to create contracting agreements for hauling firms that are acceptable to all parties involved.

Currently, DBE hauling firms work from an open purchase order instead of a subcontract agreement with a fixed amount. This contracting method makes it difficult for truckers to get bank financing for new trucks because there is no contracted amount for how much they will earn on a project. “The committee is working on this issue, and they are making progress. We expect a breakthrough by this fall,” Ajegba said.

MDOT is also increasing opportunities through efforts to diversify its internal workforce, especially in the engineering field. The MDOT Transportation Diversity Recruitment Program provides internships to students from Historically Black Colleges and Universities (HBCUs) to expose them to working at MDOT. Ajegba is especially proud of this program since he is a graduate of Prairie View A&M University, an HBCU in Texas. “We never had anything like this when I was in engineering school. I used to work at McDonalds in the summer because there were no internships available,” he said.

MDOT hosted 60 engineering students in the summer of 2021, providing housing to the students at state universities across Michigan and a summer internship in the engineering field. MDOT partnered with the American Council of Engineering Companies of Michigan to provide internships for students at engineering firms across the state. “Giving the students the opportunity and expose them to the industry is a good thing. It also teaches them work ethic, like getting up early and getting to work on time, and taking responsibility to get the job done,” Ajegba said.

Lisa Thompson, administrator of the Office of Business Development, makes remarks at the 39th Annual Small Business Development Conference in 2019. (Photo courtesy of Michigan Department of Transportation)

Preparing DBEs for Success

While creating opportunities is vitally important, Ajegba knows DBEs need to be prepared to succeed once the opportunity is provided. This understanding led him to spearhead creation of the MDOT Consultant Mentor/Protégé Program. The program creates a win-win relationship between large consulting firms and DBE firms seeking to enter or expand in the industry. Large consultants working on MDOT projects are offered compensation for mentoring a DBE firm, while DBEs gain valuable experience working with experienced consulting firms on an MDOT project. “We are beginning to see major change on the consultant side and are now beginning to move to expanding this program to the construction side,” Ajegba said.

Ajegba is pleased with the improvement MDOT is making with its DBE Program and wants to see more companies expand their capabilities in the transportation industry. However, he cautions firms to focus their efforts when seeking to enter the industry due to the variety of options for business opportunity. He believes the best approach is to first look at the lay of the land and then create a market strategy based on the area of interest. Next, the firm should find a niche within the selected market; and finally, hone their skills to get very good at it. He said, “The opportunities are there, but you want to be careful to not be all over the place and not do one thing very well.”

A student intern in the 2019 MDOT Transportation Diversity Recruitment Program learns to check the level of asphalt on a roadway project. MDOT hosted 60 students from HBCUs across the country during the summer internship program in 2019. (Photo courtesy of Michigan Department of Transportation)

Although MDOT has taken several steps to create innovative strategies to increase opportunities, Ajegba knows the success of the program lies in creating visible and verifiable results. He was reminded of this fact recently when he made his first hole in one playing a par 3 hole while golfing in July. He said, “Yes, I hit my first hole in one and I have proof, too. I had a witness!” He also hopes DBEs will witness a change in their number of opportunities under his leadership.

One of the challenges to getting more DBEs involved previously was a limited number of opportunities available for contractors to pursue. This often resulted in firms with the most experience and track record winning work continually, while limiting opportunities for new firms to enter the market. “Our program was not big enough, so it was very tough for new firms to break through,” Ajegba said. He expects the Rebuilding Michigan program to open the door for new firms to do business on MDOT projects.