National Association of Minority Contractors

Presidential Acknowledgement of Transportation Week - May 13, 2011

THANK YOU!!!!! so much for your participation in the White House Champions of Change Roundtable to kick off National Transportation Week. We appreciate your time and your energy—but mostly we appreciated your great insights and thoughts about moving forward collectively to enhance our nation's transportation infrastructure and workforce across modes and across the country. As we said yesterday, we hope this is the beginning of this cross modal conversation that we can continue moving forward.

We also wanted to share a few photos with you—and a link to President Obama's Proclamation for National Transportation Week! Please feel free to share with colleagues throughout your industry—and your neighbors and friends too!

Click here to see the Proclamation

THANKS for all you are doing! We look forward to connecting soon! Have a great day!

Bryna Helfer, Ed.D.
Director of Public Engagement
Office of the Secretary
U.S. Department of Transportation

DOT DBE Rule Change Position Paper - July 7, 2010

July 7, 2010

The Honorable Ray LaHood
Secretary of Transportation
U.S. Department of Transportation
1200 New Jersey Avenue, S. E.
Washington, DC 20590

RE: Department of Transportation (DOT) Docket No. OST – 2010 – 0118

Dear Secretary LaHood:

The National Association of Minority Contractors (NAMC) appreciates the opportunity to contribute to the constructive dialogue on modifications to the Disadvantaged Business Enterprise (DBE) Program via the comments period of the current Notice of Proposed Rulemaking (NPRM). NAMC's membership includes contractors (involved in vertical and horizontal construction), suppliers and manufacturers, industry-related professional service providers as well as local governmental entities. On behalf of our membership, we actively engage in professional enrichment training, legislative advocacy and partner with entities with similar missions.

NAMC's GENERAL POSITION ON DBE PROGRAM

The construction sector is one of the most competitive and precarious business environments in which to operate. It has historically been an economic indicator for disenfranchised sectors of the business community. Failure to establish and enforce a DBE Program with tangible goals and corrective abilities is counterproductive - in essence resulting in historically disadvantaged businesses continuing to absorb long-lasting operational burdens and financial hardships. Take, as an example, the existing statutes use of "aspirational goals" (CFR Title 49, Part 26.41) – while NAMC supports aspirational goals as a means for obtaining work opportunities, the fact that they need not be complied with locally remains counterproductive. As such, NAMC recommends that these aspirational goals are complied with locally.

GOOD FAITH EFFORTS

While NAMC recognizes the rationale and purpose for maintaining a methodology to capture sincere attempts, good faith efforts have been a consistently abused tool and an ineffective process to confirm legitimate efforts. As a result, it has been the experience of many NAMC members that disingenuous efforts prevail. One of the most egregious examples involves prime contractors committing to use DBEs (in good faith) but at their discretion terminating DBEs for convenience, as noted in this NPRM under Terminations and Substitutions of DBE Subcontractors (Pg. 25821). Under Improving Oversight (Pg 25817), this NPRM proposes means of improved oversight. NAMC recommends that these measures should be modified so that they incorporate the monitoring of good faith efforts such as those involving DBE substitutions and terminations, as well as when there exists documented data regarding diverse capacity in the respective market. Another example where expanded oversight of good faith efforts would be warranted is the issue of overconcentration of DBEs within a particular type of work (CFR Title 49, Part 26.33). This is an area where good faith efforts can be misrepresented. New methods of oversight should be developed that disallow reliance on unsubstantiated resources to calculate concentration verses overconcentration.

COMPLIANCE

It is NAMC's position that effective compliance is based on the successful act of goal setting (proactive) and compliance monitoring (reactive). With regards to goal setting, under Accountability for Recipients With Respect to Overall Goals (Pg 25816), this NPRM proposes reactive methods (namely analyzing why the recipient fell short and establishing corrective actions after the fact). NAMC proposes that the NPRM modify the statutes allowance of recipients to demonstrate evidence of the availability of "ready, willing and able" DBEs. Suggested resources, such as census data (CFR Title 49, Part 26.45), do not reflect real-time availability or socio-economic circumstances, therefore making the definition of a reliable base figure for the relative availability of "ready, willing and able" DBEs questionable.

With regards to monitoring, under Goal Submission (Pg 25817), this NPRM proposes that recipients submit goals every three years instead of annually as a means to reduce administrative burden. While NAMC can appreciate the ill effect of a burdensome regulatory mandate, per this proposed modification, DBEs stand to incur the greater harm by virtue of lost opportunity. In order to reflect real-time conditions of the potentially erratic construction industry, NAMC recommends maintaining annual reporting of goals by recipients.

Furthermore, documented experiences of NAMC's membership across numerous states has revealed poorly developed if not intentionally misrepresented goals involving (1) the misidentification/counting by recipients of firms featuring inappropriate NAICS codes and (2) ownership misrepresentation (or "flipping" the majority ownership of a firm to a non-minority woman to qualify for DBE status). Those examples involve cases where architects have been counted as concrete workers or engineers counted toward carpentry or a husband runs a company's daily operation but on paper his percentage ownership reflects a minority interest in said company. In these all too common cases, the net result is that the recipient "meets its goals" but there remains 0% participation. To date, efforts to redress have been ineffective. Examples of such efforts include the Federal Highway Administration's (FHWA) recent admonishment recipients across many states for fraudulent counting via warning letters which featured the threat of repayment – an action, which if followed through on, could cripple a state financially; or, grandfathering as acceptable the results of past counts involving misidentified NAICS codes - under the auspices of training. The attempts appear disingenuous. Therefore, NAMC takes the position that while the NPRM speaks to enhanced compliance it fails to insert commensurate sanctions or substantial penalties for failure to meet goals or CUF violations (discussed below). The NPRM would be of greater value if it adopted the most effective federal compliance models (such as that applied by the Internal Revenue Service).

CERTIFICATION

As reflected under Interstate Certification and Related Issues (Pgs 25917-20), NAMC supports stronger terms and conditions that result in expedited national reciprocity. Consequently, without definitive conditions, this modification could allow fraudulently qualified DBEs to work around the country while legitimately qualified DBEs in their own home state could see substantially less work or become closed out of the market. As such, NAMC supports using those firms from other states only in cases where capacity is not available (described as less than 3 available firms to perform a Commercially Useful Function (CUF) in the associated NAICS code/s). This would require that local DBEs be given priority in their specific state of longest term residence.

As reflected under Certification-Related Provisions (Pg. 25822), NAMC agrees with this NPRM's reinforcement of the statutes initial position that counting issues (how well a DBE satisfies the terms of an awarded contract) are separate from certification issues (a firms general eligibility to be classified a DBE). However, note that NAMC's agreement that firms should be evaluated based on their present circumstances, is predicated on the more reliable utilization of real-time circumstances faced by DBEs.

SMALL BUSINESS PARTICIPATION

As detailed under Fostering Small Business Participation (Pg 25820), the NPRM will require that small business elements be incorporated into DBE Programs. NAMC does not recommend requiring that DBE Programs add such an additional category. Current opportunities for minorities through DBE Programs are disproportionately low already; to add this as an additional category to the DBE Program will only serve to exacerbate this effect. NAMC supports "unbundling" contracts to meet the capacity of the diverse market, however it does not perceive the creation of small business elements as a means to resolve issues associated with "bundled" contracts. Other approaches should be examined such as teaming of like services as well as more direct/accessible lines of credit to fund larger projects. Offering minorities key opportunities and training on reliable long term contracts (such as roads and bridge repair or maintenance of highway-related structures on a five year program) would affirmatively build the capacity of minority owned firms.

PERSONAL NET WORTH

NAMC is encouraged that, as reflected under Personal Net Worth (Pg. 25817), the NPRM recognizes the need for adjustment. The increased net worth would expand the extent of participation, for example, allowing DBEs to further develop the capacities required to compete at a higher level. Having said that, please note that most diverse firms have not yet come within close proximity of the existing personal net worth parameters. As such, NAMC recommends that in addition to using the Consumer Price Index (CPI), additional economic factors should be factored into the analysis to better reflect and address the situation of minority businesses.

Given NAMC's positioning throughout the country via our various local chapters, the organization is a repository of information which reflects the position of many categories/segments impacted by the DBE Program. NAMC welcomes the opportunity to participate in on-going discussions with the intent to achieve a representative consensus along with implementation of initiatives that are intended to achieve equitable solutions.

Respectfully submitted,

Francis Onwualu, President
National Association of Minority Contractors

cc: Don O'Bannon, Chair/Airport Minority Advisory Council
Julie Cunningham, Conference of Minority Transportation Officials

High Speed Rail Grants - Lack of Minority Participation Goals - February 18, 2010

February 18, 2010

President Barack Obama

The White House
1600 Pennsylvania Ave. NW
Washington, DC 20500

RE: High Speed Rail Grants - Lack of Minority Participation Goals

Dear President Obama:

The National Association of Minority Contractors (NAMC) applauds your outstanding efforts to restore America's economy. Your announcement of the $8 billion in grants to High-Speed Rail projects is an investment that will give a special boost to particular projects in California, Illinois, Florida and Wisconsin. Your plan to create the nation's first nationwide program of intercity passenger rail service is indicative of your vision for the future in transportation.

In all, Rail projects in 31 states will get money through the Recovery Act Stimulus Plan, passed by Congress last year to create jobs, transform travel and spur economic recovery. Through the Recovery Act, you are making the largest investment in infrastructure since the interstate highway system was created, putting Americans to work rebuilding our roads, bridges and waterways for the future.

However, NAMC feels that a critical issue needs to be addressed pertaining to this bill. We firmly believe that this bill should include Minority Business Enterprise (MBE) and/or Disadvantaged Business Enterprise (DBE) goals. Currently, there are no goals in the bill in consideration of these categories of potential participants. As any other federally funded transportation projects awarded, we would like to see the same consideration for this particular project.

Without goals, Minority and Disadvantaged Businesses would not equitably benefit from your economic stimulus plan. In the Transportation Bill that Congressman Oberstar sponsored, he addresses discrimination as a legitimate concern for Minority and Disadvantaged Businesses. Our NAMC Transportation Committee Chairs met with Congressman Oberstar's Chief of Staff last year in September to discuss various ideas as well as concerns.

In response to the High Speed Rail Grants, please consider taking the necessary action with utmost urgency to correct the exclusion of Minority and Disadvantaged Business goals for this and other transportation programs. We appreciate your attention to this matter and welcome the opportunity to assist in facilitating change.

Sincerely,

Francis Onwualu, President
National Association of Minority Contractors

cc: Chairman John D. (Jay) Rockefeller IV
U.S. Senate Committee on Commerce, Science, and Transportation
Congressman Jim Oberstar
Harry C. Alford, President & CEO, National Black Chamber of Commerce
US Hispanic Chamber of Commerce

High-speed rail grants lack DBE goals - February 18, 2010

Source: http://dailyreporter.com/blog/2010/02/18/high-speed-rail-grants-lack-dbe-goals/
Published: February 18, 2010
By Sean Ryan

Minority contractors are asking how $8 billion in national high-speed rail grants were awarded without the same contracting goals that apply to highway projects.

The rail grants awarded last month, including $822 million accepted by Wisconsin, did not include disadvantaged-business enterprise contracting requirements for the construction and engineering work.

The National Association of Minority Contractors is trying to change that policy by pressuring Congress and the White House to add the contracting goals, said Tom Burse, president of the association's Wisconsin chapter and a DBE-certified consultant seeking work on the Madison-to-Milwaukee line.

"We would like to see very similar percentages that we would see on our federal transportation highway and bridge projects," said Burse, owner and CEO of Buveck Consultants LLC, Milwaukee.

Congress in 1983 ordered the Federal Highway Administration to ensure 10 percent of its contracting money goes to DBEs, which are small companies and businesses owned by minorities and women.

VISIT THE DAILY REPORTER'S HIGH-SPEED RAIL PROJECT PROFILE PAGE

But the Federal Railroad Administration, which awarded the rail grants, is not authorized by Congress to set DBE goals, said Warren Flatau, senior public affairs specialist. Instead, the agency holds education sessions with state departments of transportation on how to promote fair contracting, he said.

"It's what every federal agency does," Flatau said, "whether they have a DBE program or not."

Kathy Meyer, president and CEO of DBE-certified Meyer Contracting Inc., Minneapolis, said NAMC next week will send letters to President Barack Obama and U.S. Rep. Jim Oberstar, D-Minn., chairman of the House Committee on Transportation and Infrastructure, asking that DBE goals be added to the $8 billion in grants.

"We have asked for an amendment," said Meyer, a member of the NAMC board. "And we have asked for all future dollars that are appropriated and opened for public letting include DBE goals."

Burse said federal DBE rules carry more weight than those enforced by state departments of transportation. With federal goals in place, general contractors are required to look for DBE companies that could work as subcontractors. If generals do not meet the contracting goals and apply for waivers, the generals must show there are no DBE companies with the experience or capacity to do the work.

Meyer said her company has the skill and ability to work on the high-speed rail projects. Her firm excavated and moved water utilities as part of a project to build a streetcar system in Minneapolis and St. Paul, Minn. That project, she said, had a 15 percent, state-enforced DBE goal.

"You need true enforcement," Meyer said. "If you had true enforcement, you would see those small DBEs grow and flourish."

Burse is trying to grow his company by pursuing a consulting contract for the Madison-to-Milwaukee rail line. The Wisconsin Department of Transportation, after holding meetings in December to invite DBEs to pursue the work, is interviewing engineers this month for the consulting contracts.

But, with no DBE rules in place for the contracts, Burse is competing for a prime contract against much larger companies, he said.

"What better way to break into a market where there aren't any goals?" Burse said. "To just flat-out win."

Legislative Initiative Letter - September 28, 2009

Greetings:

The National Association of Minority Contractors recently held our 40th Annual National Board Meeting in our Nation's capital.

From this meeting NAMC National was able to generate several initiatives that we feel would be of great impact to small and minority contractors across the nation.

The National Association of Minority Contractors, Inc. is a non‑profit construction association dedicated to focusing on construction industry concerns for its members at the local, state and federal levels. The creation of meaningful, well‑paying jobs provides economic security and dignity to our members. A strong economy provides the tax base necessary to support government's role in educating, building infrastructure, protecting the environment, and caring for its citizens. Economic growth and job creation combat social problems such as unemployment, poverty and crime.

Clearly, the top priority for ethnic minority and small business contracting firms and government leaders must be to advance policies aimed at parity in building a stronger economy for our families, our communities, and the country's future. To accomplish this, NAMC has identified three (3) key initiatives that are critical for minority contractors and small businesses to effectively compete in the local, state and national construction marketplace. The following initiatives to address and implement action strategies are:

1. Access to Stimulus Funding:

Address the perceived shortfalls of the current plan with regard to access to dollars or contracts by small and minority owned firms.
Engage the process to mitigate the above concerns in how future funding programs should be developed to: (i) fund capacity building initiatives/tools (such as credit lines, bonding and insurance) accessible by small and minority firms; and (ii) fund projects at the pencil ready state, not only shovel ready state which will allow for Design Build teaming configurations.

2. Clarify goals and parameters for inclusionary efforts and tracking of diversity initiatives. Implement clearly defined categories of diversity to mitigate competition between these categories to facilitate results in equitable distribution of opportunities/funds.

3. Ensure that healthcare proposals are designed to lessen negative impacts on small and minority firms.

We look forward to working with you throughout the year on our mutual concerns and interests.

Sincerely,

Francis N. Onwualu

President

NAMC Executive Committee:

Francis Onwualu, President
Darryl Samuels, Vice President
Howell Shaw, Treasurer
Tina Dortch, Secretary
Gloria Shealey, Member