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Metro is committed to small business success. Weâ&#x20AC;&#x2122;ve awarded nearly $600 million to small businesses. Learn more and get certified at metro.net/connect. For a listing of real-time procurement opportunities, please visit us at metro.net/business.
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Plenary Walsh Keystone Partners SEEKING DBE SUBCONTRACTORS PENNSYLVANIA RAPID BRIDGE REPLACEMENT PROJECT CONTRACT VALUE $900 MILLION, 7% DBE Participation (Federally funded)
The Rapid Bridge Replacement Project is a publicprivate partnership with the Pennsylvania Department of Transportation and Plenary Walsh Keystone Partners, an initiative to replace 558 aging bridges throughout Pennsylvania. Replacing the bridges will provide motorists with new, modern structures and allow PennDOT to remove them from their structurally deficient list. Plenary Walsh Keystone Partners believes in engaging local community and disadvantaged business enterprise (DBE) resources to benefit our projects and the
communities in which we do business. We seek to establish relationships with local DBE firms, encourage and assist potential DBEs to obtain necessary certification and prequalification, and aid development of DBEs through their active involvement. The WGJV Team is looking for M/W/DBE companies. We have sub-contract opportunities available for qualified M/W/DBE companies in the areas of: bridge construction, bridge maintenance, bridge inspection (NBIS certified), material supply, professional services.
Interested DBE Firms should visit http://parapidbridges.com/ to view a listing of projects by county, get prequalified, and to learn how to bid on opportunities. Contact Person: Marvin Jackson, DBE Plan Manager, email@example.com 214.585.7308 Plenary Walsh Keystone Partners - Project Headquarters: 2000 Cliff Mine Road, Suite 300 Pittsburgh, PA 15275 WGJV is An Equal Opportunity Employer, Disability/Veteran
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From the Publisher
Nobody Does it Alone
f there is one universal truth in business success, it is that nobody does it alone. While there are many sources of assistance, I have yet to meet the business owner (minority or non-minority) who didn’t get help from somewhere—from somebody else. I make this statement for three reasons: First, I say it for those who seem to conveniently forget that somewhere along the road to wherever they are today, someone helped them succeed. Second, I say it for those who, although they got help, have disdain or disapproval for those seeking someone (or something) to help them along the way. Finally, I say it for those who have to overcome forgetfulness or disdain of the aforementioned groups to stay in the game and strive to build a sustainable and profitable enterprise.
the Baltimore Washington Thurgood Marshall International Airport, exemplifies the mindset of a transportation leader who understands the importance of reaching out to DBEs who need an opportunity to succeed—in the true spirit of the program. This issue also profiles Cleveland, Ohio’s Ozanne Construction and Atlanta’s Precision 2000, two firms that have used opportunities in the airport construction industry to help grow multimillion-dollar enterprises. In addition, we look at four agencies: the Metropolitan Atlanta Rapid Transit Authority (MARTA), the District of Columbia Department of Transportation (DDOT), the Hartsfield-Jackson Atlanta International Airport (ATL), and Philadelphia International Airport (PHL) that are making strides to create a level playing field for DBEs by providing the assistance needed to help them succeed.
Despite its many challenges, the Disadvantaged Business Enterprise (DBE) Program is supposed to help those who may not have access to the same sources of assistance that others may have. I had a saying during my years as a DBE program administrator that ‘Some businesses get certified with not much more than a business card (maybe), a pickup/dump truck and a dream.’ In those cases, maybe a transportation agency representative or DBE program administrator are the first people who can help them along the way to success. Unfortunately, like the majority of small businesses in this country, many DBEs ultimately don’t survive the process, and the decision to start seems to be a mistake. But I am reminded of Albert Einstein’s quote stating, “A person who never made a mistake, never tried anything new.” Starting a business is completely new for most DBEs.
Shelton A. Russell, Publisher American DBE Magazine
This issue of American DBE celebrates individuals who understand their ability and role to help DBEs along the path to success. Our cover story on Ricky Smith, CEO of
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We hope this issue inspires DBEs to keep pursuing success, and inspires those with the ability to help DBEs succeed to stay committed to creating opportunities and leveling the playing field. Best wishes,
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Summer 2016 Volume 4, Issue 3 Publisher: Shelton A. Russell Managing Editors: PR PROS, LLC Creative Director: BRANDilly MC Digital Media: Premier Web Design Solutions Editorial: Iris Ann Cooper Carolyn D. Fitts Jordan Taylor Philip D. Russell Shelton A. Russell Headquarters: 514 Daniels Street, #186 Raleigh, NC 27605
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About American DBE Magazine: American DBE Magazine is the premier industry resource for individuals and stakeholders who work within PublicRelationsCopywritingSocialMediaManagementCrisisCommunica the federal Disadvantaged Business ConnectEnterprises Blog Link Pin Hangout Share—REPEAT—Post Post Tweet Email Blog Pin Hangout Share—REPEAT— TweetPublish Publish EmailConnect Connect BlogLink Link Pin Hangout Share program administration. American DBE Magazine is published ocialMediaManagementCrisisCommunicationsMediaCoachingBrandEnhancementMediaMonitoringDigitalMedia quarterly and distributed in all 50 states PublicRelationsCopywritingSocialMediaManagementCrisisCommunicationsM — plus Puerto Rico and the U.S. Virgin Post Tweet Publish Email Connect Blog Link Pin Hangout Share—REPEA Islands — to DBE program administrators, business owners, and professionals in the PublicRelationsCopywritingSocialMediaManagementCrisisCommunicationsMediaCoachingBrandEnhancement PublicRelationsCopywritingSocialMed Aviation, Highway Construction, and Public Transit industries.
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Austin is committed to recognizing, embracing, and supporting workplace diversity. As a construction industry leader, we take pride in creating minority economic opportunities.
3535 Travis Street, Suite 300 - Dallas, Texas 75204 - 214-443-5500 - www.austin-Ind.com
Dallas, TX Irving, TX // Summer 2016 Austin, TX
Fort Worth, TX Houston, TX Phoenix, AZ
Atlanta, GA Orlando, FL San Diego, CA
Los Angeles, CA San Francisco, CA Chicago, IL
Ricky D. Smith Sr., Executive Director/CEO of Maryland Aviation Administration
DBE POWER PLAYERS
PHL DBE Program
Leading BWI From the Front Continues Leading the Industry
Inner City Capital Connections Fuels Small Business Growth
Thrives in the Airport and Civil Construction Industry Creates Award-Winning ACDBE Program
Top Tax Challenges
The Five Deadly Questions
D.C. Welcomes Redus
MARTA Gets Ready
Heating Up DBE Opportunities in Atlanta Transportation Equity and Inclusion Officer For Transportation
For Contractors and the Construction Industry You Must Answer Before Starting a Business
ALSO IN THIS ISSUE 44
NAMC Student Chapters
Developing Millennial Construction Professionals // Summer 2016
Metropolitan Transportation Authority
COMTO New York Chapter and COMTO National
DBE OPPORTUNITY DAY Learn How to Do Business with North America’s Largest Transportation Agency
For all certified Disadvantaged Business Enterprises (DBEs) who want to take part in the prime contracting and subcontracting opportunities within the MTA’s new five-year $30 billion Capital Program, this session is for you! The new Capital Program includes contracts across the following industries: •
A/E Professional Services
Rolling Stock Subconsulting Opportunities
Prime Construction Contracts up to $3 million within the MTA’s Small Business Development Program (SBDP)
at firstname.lastname@example.org or 646-252-1369 // Summer 2016 8RSVP: Ms. Faith T. Beauzile
MTA Headquarters 2 Broadway, 20th Floor New York, NY 10004
DATE Friday, October 21, 2016
TIME 8:00 AM - 6:00 PM
WHO SHOULD ATTEND •
Certified Disadvantaged Business Enterprises
CEO Ricky Smith welcomes the CEO of Norwegian Air Shuttle to BWI Marshall Airport (Source: BWI Marshall Airport)
The CEO of a major international airport must have the ability to manage myriad diverse and oftentimes competing interests. By American DBE Staff // Summer 2016
he CEO of a major international airport must have the ability to manage myriad diverse and oftentimes competing interests. From the major airlines to board members and politicians; from concession operators to federal regulators; from the environmentalists to the traveling public; and from prime contractors to DBEs, each of these constituencies wants something different from the airport CEO, and they all typically want it now. In the face of these many concerns, it is not uncommon for the leadership needs of the DBE Program to get pushed down the totem pole as other matters consume the time and focus of the airport CEO. Although airports typically have capable professionals responsible for the daily administration of the DBE program, the most successful programs tend to have active engagement from the leader of the organization. One such airport CEO is Ricky Smith of the Maryland Aviation Administration, which runs the Baltimore Washington Thurgood Marshall International (BWI) and the Martin State Airport. Smith considers leadership of BWI’s diversity and inclusion efforts as mission-critical as any other area of running the airport. Smith said:
“When you are leading an organization, there are a lot of requirements that you are responsible for making sure you are giving attention to, and at any given time, one of those requirements may be more important than another. Minority business development is no different. What I have found is that the minority business program— for some—is an inconvenience. Well you know what, environmental compliance can be an inconvenience for some, or complying with budget constraints can be an inconvenience for some; but as the leader of the organization, you have to be willing to make sure that your leadership team, your middle managers and procurement officers, understand that like every other priority they are responsible for, minority business compliance is of equal importance.” Smith puts this core belief into practice through a leadership philosophy focused on performance management. He learned the effectiveness of this management strategy during his 7-year tenure at the Maryland State Highway Administration. “Although most of my career has been in airports, my time in highways taught me the importance of performance management, and I have taken those principles with me throughout my career,” Smith said.
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“However, airports are more dynamic, so now a hallmark of my management style is implementing performance management and accountability strategies that still enable creativity and flexibility. Meaning, I constantly monitor how we are performing while still giving people the room to try new things,” continued Smith. Smith inherited a DBE Program with a long history of success when he was selected to return to BWI as CEO in June 2015, after serving as the head of Cleveland Hopkins International Airport for nine years. Smith had served in senior leadership at BWI before taking over as director of the Cleveland airport, so he knew of the expectations in the area of minority business development from the citizens of the Baltimore-Washington Area, Maryland and Baltimore political leadership, and the BWI Board of Directors. “BWI and the State of Maryland have a history of being very favorable to minority business development. Even now, not a week goes by where our governor and lieutenant governor are not impressing on us, his leadership, the importance of making sure that women, minorities and veterans have access to business opportunities,” he said. BWI will have ample opportunity to pursue this mission as the airport continues record-setting growth in 2016. BWI served over 23 million passengers during FY 2015, a new all-time high for the airport. This growth has continued in FY 2016 as the first four months of the year also set a record for passengers. To address this growth, BWI is constructing the Concourse D/E Connector to improve passenger services and accommodate growing international air service. The $112 million project will create a new security checkpoint to serve domestic and international travelers, construct a new secure connector between two concourses and configure airline gates to support additional flights. Although the D/E Connector project started before Smith began as CEO, he has worked to ensure that the project meets or exceeds BWI’s targets for disadvantaged business participation. “My influence on that project has been to accelerate it to some degree because we are experiencing enormous demand and that is a facility we need to get open as soon as possible,” Smith said. “And from the minority business development standpoint, my involvement has been to make sure our office of minority business development has the capacity and the resources to conduct onsite inspections to make sure businesses that are on the project team are getting access to the opportunities they were promised, and that they are able to perform in a way that is favorable to the execution of the project.”
BWI has experienced record-setting growth over the past two years and has increased the need for additional terminal space and a new hotel. (Source: BWI Marshall Airport)
Another major project slated to increase capacity at the airport is the development of a new hotel on airport property. Smith sees this hotel project as a significant opportunity for diverse firms to get involved. “We are at the concepting stage now, so it is early enough for my team and I to go out and drum up interest in the minority community about pursuing this opportunity,” Smith said. He also believes it is at this stage of the project where the most beneficial outreach can be completed in order to give potential businesses adequate time to prepare for the opportunity, create partnerships and gather their resources to have a legitimate opportunity to win the contract. “I have always said that if businesses are just showing up at the pre-bid meeting, and this is their first time showing any interest in a project— be it large or sometimes small—then it is probably too late already. This is because so much has to happen, particularly with minority businesses, to prepare for the opportunity, that you can’t wait until the pre-bid to get started.”
Despite this potential challenge, Smith encouraged DBEs to get engaged in opportunities like the hotel project early, and to consider collaborative strategies such as joint ventures, partnerships and teaming arrangements in order to increase capacity. “I’m expecting to have real success with the hotel project with respect to having minority involvement, and I think it will be one of the hallmark projects for a few years at this airport,” Smith said. Smith attributes his concern and commitment to creating opportunities for small and disadvantaged firms to his early years growing up on Whitelock Street in inner-city Baltimore. It was from this beginning that Smith learned to respect and value all people, regardless of their background. He said: “I’ve seen how the decisions made by executive leadership can have both a positive and negative impact on people, so I always try to be sensitive to the impact my decisions will have on anyand everyone involved. I try to make conscious decisions. I also think that because of my life experience, I have a
passion for minority businesses, and for developing minority professionals as well. I consider it my ministry… Not a contracting opportunity comes across my desk that I don’t look at through the prism of ‘Are there opportunities for minorities to benefit from this?’ – that’s just a part of my make-up.” Another part of Smith’s make-up can be seen in the two people he said have had the greatest impact on his professional career. His first influence is the late Steven Covey, whose “7 Habits of Highly Effective People” and “Principled Centered Leadership” books and training courses helped Smith refine and improve his management style. Smith said, “I think the concepts that come out of his principled-centered leadership philosophy are concepts that I have embraced for years and I think they have worked; so his philosophy has influenced me a great deal.” In terms of leadership style, Smith said his mentor was his youth basketball coach, Charlie Harrison. “People not from my neighborhood probably don’t // Summer 2016
know the name Charlie Harrison, but he was my basketball coach growing up. He instilled in me discipline, perseverance, patience, and teamwork. That all stuck with me and he was like a father to me. He was the father I didn’t have sometimes,” Smith said.
Ricky Smith gives remarks at BWI Marshall Airport’s celebration for adding Norwegian Air Shuttle to the lists of airlines serving the airport. (Source: BWI Marshall Airport)
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As Smith leads BWI through a period of unprecedented growth and change, he keeps in mind all of the life and professional experiences that made him one of the leading airport directors in the country—and one of only a handful of African-American CEOs of a major airport. Smith understands that in addition to serving as an exemplary leader of BWI, he must also demonstrate why the development of disadvantaged businesses is important. Smith said, "It's important because airports are economic development engines. You can look at any community where there is a mid- to large size airport, or any airport, and they all have a significant impact on that community and on that market. Right-minded people understand that you don't want an engine like this to only benefit one group of people. You want all to benefit.”
U.S. Department of Transportation Small Business Transportation Resource Center
South Atlantic Region North Carolina • Kentucky • Virginia • West Virginia 114 W. Parrish Street | Durham, NC 27701 | www.ncimed.org For additional information regarding program services and support contact: Kaye Gantt, Regional Director at (919) 956-2341 | F: (919) 688-7668 | email@example.com
Helping Small Business Move Forward
How We Help • Bonding Education Program • Women & Girls in Transportation Initiative • DBE Certifications • Procurement Assistance • Short Term Lending Program • Counseling and Technical Assistance
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Ozanne Construction’s two-building headquarters are on the corner of East 25th Street and Payne Avenue, just east of Downtown Cleveland.
Ozanne Construction Continues Leading the Industry By Jordan Taylor
zanne Construction has built a lot more than just physical structures since the company was started in 1956 by founder Leroy Ozanne. Now in its second generation of family ownership with company president Dominic Ozanne, the Cleveland, Ohio-based construction management and design-build firm also has built an enduring reputation for quality, excellence and perseverance through some challenging social and economic times. Founder Leroy Ozanne sold the company to his son Dominic in 1990. During the 1950s, Ozanne Construction was one of a few minority-owned construction firms in Ohio and in the nation, capitalizing off of the dedication and tireless work ethic of its founder and leadership team. The company got its start building gas stations, schools and restaurants, and eventually branched out in to transportation and airport projects which are a part of the company’s current portfolio. Early projects included the Cleveland Hopkins International Airport where Ozanne teamed with Turner Construction in the 1970s on the Concourse C Expansion project. The company also worked in Atlanta to help expand the Hartsfield Airport (now Hartsfield-Jackson Atlanta International Airport) and completed upgrades in 1996 to prepare for the International Olympic Games, which were hosted in Atlanta. Dominic said that he has always worked in the business because his family’s culture was, “get up and get to work.”
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He said that growing up in his parents’ home, the thought of not working was never a part of the conversation and they stressed the principle, “if you’re awake, do something.” From the beginning Dominic’s plan was to attend college, get a business degree, and then return home to work for his father’s company. He did just that and learned the construction business from spending summers working under the tutelage of his father. Dominic earned his Bachelor of Science/ Bachelor of Arts degree in finance from Boston University in 1975. He then attended Harvard Law School, where he was Senior Comments Editor for the Harvard Civil Rights-Civil Liberties Law Review. He received his J.D. degree in 1978. Dominic worked briefly for the law firm Thompson, Hine & Flory, after which he joined the Ozanne Construction Company as general counsel. In 1990 Dominic was named President and Chief Executive Officer of the company and proceeded to expand the firm beyond the Greater Cleveland area by securing a number of significant contracts including: Cleveland Metropolitan Schools Rebuilding Program, the Orleans Parish Sheriff’s Office Rebuilding Program, the Cuyahoga Metropolitan Housing Authority Administrative Campus, and the Elkton, Ohio Correctional Facility. In recognition of his achievements, Dominic was awarded the 1991 Engineering News-Record (ENR) Award for Excellence; Ozanne Construction was named the Best-inClass in Workforce Diversity for middle market companies by the Greater Cleveland Partnership in 2011, and listed in
Ozanne Construction currently has about $80 million in construction projects under contract
NAMC Hall of Famers C. David Moody, Dominic Ozanne, Hoyt Hsiao, and Michael Russell discuss being 2nd generation CEOs at the NAMC National Conference.
the Top 100 Construction Management-for-Fee Firms by Engineering News-Record in 2011. The company is also a member of the U.S. Green Building Council. In 2016, Dominic Ozanne was inducted into the National Association of Minority Contractors Hall of Fame for his exemplary and long-standing successful career as a minority business owner. “It’s a huge honor on a couple of different levels, especially joining my dad who was previously inducted,” he said. Dominic began attending NAMC meetings in the 1980s. “They were enjoyable because you’re surrounded by your peers. Being in that environment was a positive thing,” he said. Through his NAMC participation, he began lobbying efforts to develop opportunities for minority businesses. Following the Supreme Court’s 1990 decision in Richmond v. Croson, Dominic worked with colleagues to help design contracting procurement programs that met the Croson requirements for narrowly-tailored race-based programs. As a result of his efforts, Dominic was elected national president of NAMC from 1989-91. As one of Ohio’s largest minority-owned construction firms, Ozanne Construction currently has about $80 million in construction projects under contract—a combination of construction management, at-risk, program management and joint venture projects—ranging from being a partner with Turner Construction Co. and VAA Architects to build the 600-room Hilton Cleveland Convention Center Hotel for Cuyahoga County, to Innova Apartments for The Finch Group near the Cleveland Clinic’s main campus. Ozanne is also working with the local housing authority in Cleveland, Ohio; University Hospitals on an outpatient facility; apartments in northeast Ohio; the Orleans Parish Sheriff’s Office; and GSA (General Services Administration) on a multi-state cost management contract. The company’s staff ranges from 50 to 60 people, depending on the season and current workload. In addition, Ozanne has returned to the airport industry by winning a project at Cleveland Hopkins International Airport. This project consists of the installation of canopies
Dominic Ozanne (2nd from left) celebrates induction into the NAMC Hall of Fame with fellow Hall of Fame member Art Queen (l) and family members.
for two of the surface parking lots (Red and Blue lots) and a connector. The Red Lot, located the closest to the terminal on the north, will be completely covered by a 75,807 SF canopy. The Blue Lot, located east of the Red Lot, will be covered by a 123,944 SF canopy. Both sites will be adjoined by a 5,071 SF “Connector” over the road to allow for covered parking. Dominic attributes success in business to his many years of experience, along with wisdom and knowledge gained in the process. He advises business owners to build their company around competition and their marketplace competitiveness. “We’re not marketing ourselves or characterizing ourselves as a DBE (Disadvantaged Business Enterprise) or minority business. We are a business that is owned by minorities— just as efficient and talented as anyone else in our industry,” he said. Dominic has been active with building trade organizations like the Associated General Contractors as well as minority contractor associations for 30 years, and he is a staunch supporter of inclusion as a means of developing entrepreneurs from the minority community. The future plans for Ozanne Construction are to grow through territorial expansion. Dominic said, “Job #1 is to sustain. Our growth plan is to continue as we’ve been doing, expand in current markets and continue what we’ve been doing successfully. We’d like to grow in the markets that we’re in through technology and talented people.” // Summer 2016
COLLABORATIVE CONSULTANTS DELIVERING SOLID RESULTS email: info@ShelrocEnterprises.com Office: (336) 329-6810 Mobile: (561) 447-0101 www.ShelrocEnterprises.com
We are committed to cultivating economic vitality that benefits the client and the communities it serves. Itâ&#x20AC;&#x2122;s about a healthy culture, balanced opportunity and agile policies.
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Inner City Capital Connections
Fuels Small Business Growth The ICCC executive training program was started in 2005 to help inner city business owners overcome the challenges of small business development. By American DBE Staff
ne of the biggest challenges facing small companies is finding the money necessary to expand operations, purchase assets and make strategic investments to move the company forward. Although many entrepreneurs have great ideas and the skills to develop the ideas into a business model, without the necessary capital, these ideas often die on the vine of potential, or worse yet, get implemented in an undercapitalized way, minimizing their chance for success. The Inner City Capital Connections (ICCC) Program strives to address this challenge through an executive development and training initiative to help companies overcome the obstacles many small businesses face – increasing their financial, managerial and operational capacity. ICCC Program Director Hyacinth Vassell said, “Our program positions small businesses for immediate and long-term growth through executive education, personalized business coaching, networking and access to growth capital.” The ICCC executive training program was started in 2005 to help inner city business owners overcome the challenges of small business development. Participants receive training from educators at some of America’s best business schools and from industry professionals such as bankers, marketers and business consultants. Course topics taught during the program include: strategic planning, finance, sales, marketing and talent management.
ICCC Program Director Hyacinth Vassell makes a presentation at the National Association of Minority Contractors Conference in Atlanta.
The program tuition is free to business owners who complete the program application and meet the two established criteria for participation. First, the company must have sales of $2 million or more by 2015. Second, the business must be either headquartered in an economically distressed urban area of the U.S., have 51 percent of physical operations in an economically distressed urban area of the U.S., or have at least 40 percent or more of its employees residing within an economically distressed urban area. A notice on the ICCC website states: “On the recommendation of our partners and nominators, we do accept businesses that do not meet our $2 million revenue requirement.”
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The program is held several times a year in urban areas across the country. Cities selected to host the program in 2016 included Chicago, Dallas/Houston, Los Angeles, St. Louis, Philadelphia, Boston and Milwaukee; however, a firm does not have to be located in the host city in order to participate in the program. The next session in 2016 will take place in St. Louis, MO starting on September 29. Although the tuition is free, admitted firms must cover their own lodging and travel expenses to attend the program. ICCC’s structure consists of a kickoff executive education session in the host city, followed by a series of Internet-based webinar courses and a coaching session that participants complete from their office location. The program concludes with a 1-day conference where participants pitch their business model to potential funding sources and peers. The ICCC marketing information states, “The ICCC program is often referred to as an ‘MBA on steroids.’ The average amount of time it takes for a participant to complete the program is about 40 hours spread across a few months. The in-person components of the program consist of a kickoff one-day executive education seminar and a culminating one-day national conference with variety of online sessions between that can be taken in the comfort of the office.”
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Source: ICCC 2015 Impact Report
The program has proven to be a beneficial investment of time for many businesses that have completed the program. Since its inception, ICCC has worked with 1,120 different companies from across the U.S., including 837 businesses that have secured over $1.32 billion in debt and equity capital and created more than 11,000 jobs in local communities. On average, alumni also experience a 56 percent increase in employment and a 23 percent increase in revenue based on a compound annual growth rate. Seville Staffing of Springfield, Illinois is one firm that achieved great benefits from completing the program. Company president Janet Sloan said, “We were denied by about 30 banks… after we went through the program, we went to five banks, and we had three commitments for lines of credit. So the turnaround was just staggering. ICCC trained us on what to do, what to say, and what to have at our fingertips when we went to commercial banks.”
The Inner City Capital Connections Program provides small businesses executive education focused on preparing them to gain access to capital to grow their business.
“ ICCC trained us on what to do, what to say, and what to have at our fingertips when we went to commercial banks.” Janet Sloan, President, Seville Staffing In order to promote the program and recruit urban firms to apply, Vassell conducts outreach to organizations such as the National Association of
Minority Contractors (NAMC). Vassell gave a presentation to over 50 business owners at the 2016 NAMC National Conference in Atlanta, Georgia. Many of the participants were not aware of the program, but expressed interest in attending in the future. Vassell said, “It is important for me to reach out to organizations like NAMC to make sure businesses know of this program and the impact it is having in major cities across the country.” ICCC is one of the programs sponsored by the Initiative for a Cooperative Inner City (ICIC), a non-profit organization founded in 1994 by renowned Harvard Business School Professor Michael E. Porter. The ICIC mission is to address economic development in
distressed urban communities. Other programs sponsored by ICIC include the Inner City 100, which celebrates urban entrepreneurship by annually recognizing the fastest growing innercity small businesses in America; and the 10,000 Small Businesses Initiative. On the latter initiative, ICIC partners with Goldman Sachs on its $500 million investment to help small businesses create jobs and economic opportunity by providing them with greater access to business education, financial capital and business support services. Vassell encourages companies that are interested in future ICCC programs to visit http://icic.org/inner-city-capitalconnections/ to learn more about the program and to complete an application.
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e r a y l p
Guiomar Obregòn co-founded Precison 2000 with her husband Carlos Sànchez in 1998. The Atlanta-based general contracting firm is certified as a DBE, FBE, MBE, SBA 8(m) WOSB, and has graduated from the SBA 8(a) program.
d b e
Precision 2000 Thrives in the Airport and Civil Construction Industry
o w e r
Guiomar Obregòn, CEO of Precision 2000
By American DBE Staff
nly a small percentage of the more than 30,000 certified DBE firms in the United States grow to over 50 employees and annual revenues over $14 million. However Atlantabased Precision 2000 Inc. (Precision) has achieved this level of success and is poised to continue its growth in the booming Georgia infrastructure construction industry. Precision CEO Guiomar Obregón and her husband, company president Carlos Sánchez, combined a reputation for quality work with the business and construction expertise necessary to build a thriving company. Obregón and Sánchez started Precision in 1998 and built a reputation as experts and innovators in pavement repair. For more than a decade, the company has repaired concrete pavement for runways and taxiways at the Hartsfield-Jackson Atlanta International Airport. Precision crews typically complete work at night when flights are finished for the day, and they are done with repairs
in time for flights at the world’s busiest airport to resume in the morning. “Our crews start at 11 p.m. to identify areas that need to be repaired,” Obregón said. “Then we remove the damaged concrete, prepare the area, and then fresh high-strength concrete is poured. We clean the area and finish our work by 6 a.m., and by that time a plane is landing on the repaired areas.” In addition to concrete repair, Precision performs a variety of civil infrastructure and transportation related construction services. “We have completed hundreds of projects for clients such as the Georgia Department of Transportation, the Metropolitan Atlanta Rapid Transit Authority (MARTA), the City of Atlanta, other airports, and military bases,” Obregón said. Precision is the only Hispanic woman-owned company currently involved in the expansion of the Atlanta airport.
One reason for the ongoing success of Precision is the combined education and experience of its two owners. Obregón owns 51 percent of the company and holds a civil engineering degree from Escuela Colombiana de Ingeniería (Colombian School of Engineering) in Bogotá, Colombia; a Master of Business Administration (MBA) and Master of Science in Civil Engineering from the Georgia Institute of Technology; and also an Executive Master of Science in Finance from Georgia State University. Sánchez owns the remaining 49 percent of the company and also holds a civil engineering degree from the Colombian School of Engineering in Bogotá and a Master of Science in Management of Technology from Georgia Institute of Technology. This bevy of educational experience places the owners far ahead of many other small firms. The extensive experience of the owners allows Precision to divide responsibility for the internal and external operations in a way that increases the firm’s capacity. Obregón devotes her time to managing the internal operations of the company, primarily in the areas of financial management, risk management, strategic planning and Human Resources. Sánchez focuses his efforts on the external operations of the business. As an example, Obregón led Precision’s strategy to increase bonding capacity and bank financing to support an increase in sales revenues. She also manages the cost control systems and payroll systems to ensure the company keeps its financial position in order while the company expands. “We work hard to have a solid foundation for our growth,” Obregón said. “We balance the increase in sales while we make stronger our systems to support operations.”
Precision 2000 specializes in airport civil construction and is currently performing airfield safety improvements at Hartsfield-Jackson Atlanta International Airport.
Precision also has maintained a diversified mix of customers and contracts during its growth. In addition to current runway work at the Atlanta airport, Precision is performing work at a fire station for the City of Atlanta. The contract is to complete concrete repair on an apron (reinforced driveway) that is in poor condition due to heavy traffic from fire trucks. Precision’s scope of work is to prepare the grade, demolish the existing concrete pavement and pour new 9-inch-thick concrete according to DOT (Department of Transportation) and city standards for heavy use areas. The company is also performing roadway infrastructure work for the Atlanta suburb of Sandy Springs. Local Sandy Springs officials are working on improving pedestrian facilities and have contracted Precision to provide infrastructure and beautification on a major city street. The project consists of the installation of 9-foot-wide sidewalks with a 2-foot-wide brick paver band. Precision has leveraged diversity and inclusion programs as a key strategy in growing the company. Consequently, the company is a graduate of the
“We balance the increase in sales while we make stronger our systems to support operations.” Guiomar Obregòn, CEO, Precision 2000 federal 8(a) program and is certified as a Woman-Owned Small Business (WOSB) by the U.S. Small Business Administration. Precision is also certified as a DBE firm in Georgia, Texas, Florida and Alabama, which covers USDOTfunded contracts by airports, transit agencies, state transportation agencies and many local governments. In addition, the company maintains Female Business Enterprise // Summer 2016
(FBE) and Minority Business Enterprise (MBE) certifications, which provide access to opportunities with other local and private organizations. These opportunities along with successfully completed contracts for public and private customers have helped the company and its owners receive a number of awards. Precision was named as one of the Top 100 Fastest Growing Hispanic Businesses in 2014. The company was also recognized by the Georgia Hispanic Chamber of Commerce as the Member’s Choice Hispanic Entrepreneur of the Year in 2014; and was named as a Top 100 Women-Owned Businesses in Georgia by Diversity Business in 2014. While these are currently good times for Precision, Obregón vividly remembers the challenging times that came a few years ago during the economic recession. The company’s revenues dropped 50 percent, from a high of $14 million to $7 million over the course of two years. However, Precision decided to not only go through the recession, but to grow through the recession and has fought its way back to success. Obregón said, “The recession caused us to put in place strategies that would help us not only survive, but be prepared to thrive now that the recession seems to have passed. We have become the company of choice for concrete repair at the Atlanta airport… failing was not an option. The challenges we have faced have made me a better business woman who knows what it takes to lead the company and be successful.”
In-Depth Industry Coverage Subscribe Online at www.AmericanDBE.com Call Today!
// Summer 2016
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Thomas F. Prendergast Chairman & CEO, MTA Thomas F. Prendergast Chairman & CEO, MTA
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SAVE THE DATE JACKSON MUNICIPAL AIRPORT AUTHORITY DISADVANTAGED BUSINESS ENTERPRISE Will Host Our 2nd Annual
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PHL Creates AwardWinning ACDBE Program through DBE Partnership PHL is owned and operated by the City of Philadelphia, and responsibility for the ACDBE program falls to two departments within the City’s management structure. By American DBE Staff
PHL concessionaire Erin Zwiercan (3rd from left), CEO of Jack Duggan’s Pub receives the Airport Minority Advisory Council’s (AMAC) Strategic Partner Award at AMAC’s 2016 Business Diversity Conference (from l-r) Bridget Biagas, Avis Budget Group; Darryl Daniels, AMAC Chair; Krystal Brumfield, AMAC President & CEO.
he Philadelphia International Airport (PHL) has developed an award-winning Airport Concessions Disadvantaged Business Enterprise (ACDBE) program with the assistance of Marketplace PHL, its concessions management business partner. The two entities have worked together to implement innovative strategies to not only meet the airport’s ACDBE goal, but to consistently exceed the goal. PHL is owned and operated by the City of Philadelphia, and responsibility for the ACDBE program falls to two departments with the City’s management structure.
The Office of Property Management and Business Development provides oversight of the PHL airport concessions program, and the Office of Business Diversity administers PHL’s ACDBE Program, ensuring that the program complies with federal regulations. The Office of Property Management and Business Development has a concessions management contract with Marketplace PHL, a joint venture between Marketplace Development Inc. and LeJeune and Associates, to operate the concessions program at the airport. Marketplace Development is a Boston-based airport concessions development and management firm operating in several // Summer 2016
U.S. airports, while LeJeune and Associates is a Philadelphiabased DBE firm that specializes in airport concessions operations management. LeJeune and Associates (LeJeune) is a certified DBE firm and has a 30 percent stake in the joint venture relationship. Much of the day-to-day administration work with ACDBE firms is done by LeJeune, who is responsible for managing the daily operations of the PHL concessions program. “Our role in the Marketplace PHL joint venture is to manage the daily concession operation,” said LeJeune president Clarence LeJeune. “Our background is retail operations management and we have moved into airport concessions management with this opportunity.” LeJeune manages the leasing operations, design and construction of concessions, merchant compliance, security, outreach and compliance with the ACDBE program. Marketplace PHL works closely with the City’s Office of Business Diversity and Office of Property Management and Business Development. In fact, they occupy neighboring office space in the airport to keep the lines of communication open and to streamline operations. “We really appreciate our working relationship with the City. Not only has it helped us succeed here in Philadelphia, we have been able to take what we have learned working in this airport to other airports as well,” LeJeune said. The efforts of the PHL ACDBE program team have yielded positive results, as participation of ACDBE firms has surpassed the goal of 35 percent of concessions revenues. This success has been achieved through a mix of ACDBE ownership types consisting of direct subleases and joint ventures in both in-line stores and kiosk locations. “We provide a great deal of assistance to our ACDBE firms,” said Melwood Hannah, executive vice president for LeJeune. “We assist with marketing plans, staffing assistance, customer service training and access to resources that will help them succeed.”
// Summer 2016
Marketplace PHL has also embraced the airport’s DBE Program for goods and services procurement, although these achievements don’t count toward the overall 35 percent ACDBE goal. “We help our concessionaires find DBE firms that can provide the supplies they need to operate in the airport,” LeJeune said. This includes things like accounting services, supplies, cleaning and food management services. We also have an annual job fair to help companies find employees.” In June 2016, Marketplace PHL hosted an outreach event for potential concessions operators to recruit tenants for 26 locations available for lease this fall. The outreach efforts yielded 120 responses to the Request for Proposals (RFPs) issued shortly after the outreach event. LeJeune was especially impressed that all of the large majority firms submitting proposals included ACDBE partners with at least a 35 percent participation in the concession. Marketplace is still evaluating the proposals, but expects that ACDBE participation in the 26 new leases will exceed the airport’s goal. LeJeune hopes that more ACDBE success stories will come from the new group of concessionaires who will lease space at the airport. PHL has several ACDBE firms that have grown to become successful operations and have even grown to other airport locations outside of Philadelphia. One success story is Erin Zwiercan, the ACDBE owner of a Jack Duggan’s Pub and Restaurant in Terminal A-East. Since opening in 2002, Zwiercan’s operation has continued to grow and in 2014, moved to a new and larger location in the airport. Other success stories include Robert Nix III and Iris Goldschmidt. Nix is an ACDBE partner of Paradies Lagardére in several airport locations and has expanded to open a distribution company that provides supplies to concessionaires at PHL. Goldschmidt is the ACDBE owner of Airport Wireless, which started from a merchandise cart in Terminal B of PHL in 1997 and has since grown to have locations in several airports across the U.S.
Philadelphia International Airport has created an awardwinning concessions program in partnership with Marketplace PHL and has achieved ACDBE
participation of over 35%. “One of the keys to success in the airport is really embracing the airport environment.” Melwood Hannah, Executive Vice President, LeJeune and Associates
“One of the keys to success in the airport is really embracing the airport environment,” said Hannah said. “It is totally different than regular retail operations on the street. It is not a 9-to-5 job, and you have to be willing to get in and learn the environment and gain experience.” He recalls one ACDBE firm currently operating at the airport that pursued a concession opportunity for five years before finally getting a lease. “She came to our outreach event every year and learned more about the process, networked with others, and digested the information. Now she is operating in the airport and doing well.”
As a result of successful operations, both the airport and Marketplace Development have been recognized in 2016 for their accomplishments. James Tyrell, Chief Revenue Officer and head of the Property Management and Business Development Office, was honored by Airport Revenue News as the Airport Property Manager of the Year in March 2016. Then in April 2016, Marketplace Development was honored by Airports Council International-North America for its Inclusion Champion Award. PHL is currently planning to host the Philadelphia Minority Enterprise Development Week’s Business Opportunity Forum on October 7, 2016, to educate more businesses about opportunities at PHL. The event takes place at the Philadelphia Airport Marriott from 7:30 a.m. to 1:30 p.m. and more information is available by email at firstname.lastname@example.org. “We are really proud of our ACDBE program,” said Robin Gibson, executive assistant to Tyrell. “We are excited to be able to achieve participation on three levels. First at the management level with LeJeune and Associates, then with our ACDBE program exceeding 35 percent participation, and then with our goods and services program that encourages DBE participation in the supplies used in our concessions program.”
Advertise With Learn more at: www.americandbe.com //////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////// // Summer 2016
A global airport is looking for your business
At Dallas Fort Worth International Airport, we believe that creating a variety of business partnerships is vital to the contribution of our regionâ&#x20AC;&#x2122;s economic growth. That is why we are fully committed to creating and sustaining an environment that empowers small, disadvantaged, minority and women-owned businesses, including concessions, to reach their global potential at DFW Airport. We invite your business to discover, connect and grow with us. Contact our Business Diversity and Development team today. DFW Airport - Business Diversity and Development | www.dfwairport.com/bdd
// Summer 2016
Parvez Sharifipour Albany Airport Donuts, LLC “Dunkin’ Donuts”
REACHING OUT TO MORE ACDBE PARTNERS. IT’S WHAT
MAKES US HOST.
Tony Morrow The Pecan, Inc. “The Pecan”
2011 PHX Gonzalo de la Melena Emerging Domestic Market Ventures, LLC “Sir Veza’s Taco Garage”
Recently, the DOT’s Office of the Inspector General issued its report: “New Disadvantaged Business Enterprise Firms Face Barriers to Obtaining Work at the Nation’s Largest Airports.” At HMSHost, proudly forging fresh and compelling ACDBE partnerships has always been a priority. We’ve consistently identified new and talented minority and women-owned firms to join our family in developing dynamic airport concessions opportunities. ACDBE sourcing will continue to play a major role in our future. How about yours? Let’s plan together in 2016. Contact Ron Gomes with HMSHost Strategic Alliances: email@example.com.
2014 LAX Meg Gill Meg Blonde Ale Holdings, LLC “Blu20” & “Point the Way Café”
2013 SAT Lisa Fullerton A Novel Idea, LLC “Auntie Anne’s Pretzels”
// Summer 2016
Heating up DBE Opportunities in Atlanta
Hartsfield-Jackson Atlanta International Airport launched its 20-year, $6 billion ATL Next capital development program in June 2016. One of the signature projects of ATL Next is the Terminal Modernization Project, which includes installing a canopy over the passenger drop-off and pick-up areas of the airport.
he Hartsfield-Jackson Atlanta International Airport (ATL) recently kicked off its 20-year, $6 billion capital improvement program called ATL Next. The ATL Next program is designed to help the airport keep pace with its evergrowing demand as the world’s most traveled airport. Atlanta Mayor Kasim Reed announced at the program’s kickoff event in March 2016 that the ATL Next investment would ensure Atlanta has a “21st century airport for the 21st century city.” The ATL Next program continues the airport’s legacy as the largest airport in the Southeastern United States and a major economic engine in the Greater Atlanta Region. The airport had its busiest year ever in 2015. The airport served more than 100 million passengers traveling through its 207 gates, supported nearly 500,000 jobs in metro Atlanta, and pumped $71 billion into Georgia’s economy.
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The Atlanta airport has long been a major source of business opportunities for minority- and woman-owned businesses. Ever since former Atlanta Mayor Maynard Jackson created the city’s first Minority Business Enterprise Program in 1974, minority firms have been a significant part of the airport’s capital improvement programs and ongoing maintenance opportunities. The airport continues this legacy today and is generally recognized as having one of the nation’s leading Disadvantaged Business Enterprise (DBE) and Airport Concessions Disadvantaged Business Enterprise (ACDBE) programs. The ATL Next program comes at a boom time for engineering and construction-related firms in the Greater Atlanta area. In addition to the Atlanta airport’s capital improvement program, the Georgia Department of
Transportation and the Metro Atlanta Rapid Transit Authority (MARTA) are also in the midst of major capital improvement programs resulting from the recent passage of the Fixing America’s Surface Transportation (FAST) Act. The combination of these three transportation entities will create approximately $2 billion a year in business opportunities, much of it coming to the Atlanta area. Franklin Rucker, ATL Assistant General Manager – Planning and Development said, “What is unique about our program (ATL Next) is that it is heavily loaded upfront, which means that over the first eight years of the program, it is projected that we will spend about $4 billion; and over the first 4 years about $2 billion. In essence, it is fair
to assume we will be averaging about $500 million in work per year during the early part of the program.” The first project in the ATL Next program started in June 2016 with the expansion of parking facilities and the modernization of the Central Passenger Terminal Complex (CPTC). Over the next 11 years, the airport will spend approximately $922 million on tearing down old parking decks and building larger ones to accommodate anticipated increases in passenger traffic. The CPTC modernization project will renovate and upgrade the curbside drop-off and pickup areas with new canopies; renovate the main atrium and the flight check-in areas; improve the gate hold room areas; and renovate the baggage claim areas. The terminal renovation
project is expected to be completed in 2018 and cost $393 million. The airport is also planning to start on a new 400-room Intercontinental Hotel. The hotel will be combined with a mixed-use commercial complex and a travel plaza containing a gas station and convenience store. The project will begin in the fourth quarter of 2016 and is expected to cost $500 million. Future plans beginning in 2017 include the five-gate expansion of Concourse T and preparations for the construction of the new 10-gate Concourse G on the airport’s east side. In total, both projects will boost the overall number of gates at the airport by 7 percent. This project is expected to take seven years and cost $1.2 billion. // Summer 2016
The Atlanta airport has an overall DBE Goal of 30 percent for the years 2017-2019. Other projects planned in the ATL Next program include the Plane Train People-Mover Turn-back Relocation Project ($307 million), Support Facilities Improvements ($700 million), Cargo Facilities ($217 million), and Concourse D Gate Area Expansion ($50 million). Further down the road, plans call for a new terminal building and another runway. Atlanta Airport Supplier Diversity Manager Joe Jackson is keenly aware of the significant opportunities the ATL Next program will offer to DBE firms. However, he is also aware of the size and scope of the program and is preparing for the challenge of getting firms ready to capitalize on the opportunity. “We have to make sure we let people know that we are looking at a whole different delivery process,” Jackson said. “Not only are we challenged to find M/WBE contractors, we are challenged to find contractors specializing in transportation-related work as a whole to handle the amount of projects we have coming up.” The Atlanta airport has an overall DBE Goal of 30 percent for the years 2017-2019. Jackson’s Supplier Diversity Office is currently planning its annual Supplier Diversity Conference on October 18, 2016, to highlight the upcoming opportunities in the ATL Next program and the need for DBE firms with the capacity to participate. “Our theme this year is ‘Success: Where Demand and Capacity Converge,’’’ Jackson said. “This conference will be a time for us to share with businesses what they will need to bring to the table to be successful in participating in these projects.”
Franklin Rucker, HJAA Assistant General Manager, Planning and Development, shared details of the ATL Next program at the National Association of Minority Contractors Conference in June 2016.
// Summer 2016
Jackson encourages DBEs interested in opportunities arising from the ATL Next program to visit http://next. atl.com/diversity/ to download the forms necessary to register as a vendor and get certified in the City of Atlanta’s M/WBE and DBE Program; and also to find out more about the upcoming Supplier Diversity Conference on October 18.
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.
// Summer 2016
District of Columbia Welcomes Redus as Transportation Equity and Inclusion Officer By American DBE Staff Redus has managed the development and implementation of workforce development and training programs, along with policies and procedures to ensure compliance with federal and state nondiscrimination laws. A native of Louisville, Kentucky, Redus began her career as a defense attorney practicing workers’ compensation law in the Commonwealth of Kentucky. After leaving private practice, she joined the public sector as a staff attorney representing the Commonwealth of Kentucky Justice and Public Safety Cabinet in employment and civil rights litigation.
DDOT recently hired Tyra Redus, Esq. as the agency’s Transportation Equity and Inclusion Officer. Redus brings more than 10 years of experience as an attorney in the public and private sector.
he District Department of Transportation (DDOT) has named Tyra Redus as the agency’s Transportation Equity and Inclusion Officer. In this role, Redus will lead DDOT’s DBE Program and other efforts to ensure equal access to DDOT employment, services and business opportunities. Redus comes to the department while DDOT prepares for major investments to improve and expand highway infrastructure in the Washington, D.C. area. Redus brings more than 10 years of experience as an attorney in the public and private sector to DDOT with expertise in civil rights litigation and in managing equal employment opportunity, along with experience in diversity and inclusion programs for state government agencies.
// Summer 2016
After six years of practicing employment law, Redus joined the transportation industry. She began her work in transportation as the executive director of the Office for Civil Rights and Small Business Development for the Kentucky Transportation Cabinet (KYTC). She was responsible for administering the Disadvantaged Business Enterprise and Small Business Enterprise programs, which included certifying small businesses owned and controlled by socially and economically disadvantaged individuals for the Commonwealth of Kentucky. She was also the ADA/504 Coordinator for the Cabinet and was responsible for monitoring and enforcing internal EEO Programs, which included Titles VI and VII of the Civil Rights Act. One of the first major initiatives under Redus’ leadership will be DDOT’s 6th Annual Disadvantaged Business Enterprise (DBE) Summit. The September 30, 2016, event is an opportunity for DBEs to hear about upcoming projects and to network with other DBE firms, prime contractors and consultants, and DDOT project managers.
DDOT is preparing for the South Capitol Street Corridor Project, which will replace the Frederick Douglass Memorial Bridge starting in 2017. The DBE Summit will feature three concurrent industryrelated workshops. The Construction Contractors Workshop will feature prime contractors discussing what kind of work they subcontract and how they select DBE partners. The Architecture/Engineering Professional Services Workshop will feature representatives from prime consultant companies discussing their future needs for sub-consultants and their processes for selecting partners for business opportunities. The Doing Business with DDOT workshop will introduce companies interested in becoming a direct vendor for DDOT. Staff members from DDOT's Office of Procurement and other DDOT units will discuss the types of goods and services they contract for and the methods used to select vendors.
The outreach effort comes as DDOT prepares for the South Capitol Street Corridor Project – Phase 1. The project will replace the Frederick Douglass Memorial Bridge and transform related sections of urban freeway into a scenic boulevard. The project will increase pedestrian and vehicular safety, improve multimodal transportation options, increase community accessibility and support economic development on both sides of the Anacostia River. DDOT’s public meeting for consideration of the project’s DBE goal was held in April 2016 and the resulting race and gender-conscious goal was determined to be 9 percent for the engineering design portion of the project and 13 percent for the construction portion. The project is slated to begin in 2017 and to be completed in 2020.
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MARTA gets ready For Transportation By American DBE Staff
MARTA Office of Diversity and Inclusion Executive Director Ferdinand Risco Jr. leads the organization's efforts to create workforce and business inclusion opportunities for minorities and women. MARTA’s economic impact is expected to increase even further as the Authority embarks on a 10-year, $5 billion capital program to expand rail and bus service to accommodate the ever-growing Atlanta population. To start, MARTA plans to expend over $800 million in FY 2016, split almost evenly between costs to operate the transit system and capital expenditures to maintain and improve the system.
Ferdinand Risco Jr.
s the ninth largest transit agency in the United States, the Metropolitan Atlanta Rapid Transit Authority (MARTA) maintains over 100 facilities, 38 rail stations and several hundred buses that serve passengers in the Metro Atlanta Region. In addition to increasing the mobility of passengers, studies by the University of Georgia have determined that MARTA also greatly impacts the mobility of money in the region by creating a $2.6 billion annual economic impact. This impact is created primarily through direct and indirect employment fostered by MARTA operations; and by the direct and indirect jobs created by MARTA’s capital expenditures to maintain and expand the transit system.
// Summer 2016
MARTA’s Office of Diversity and Inclusion (ODI) is charged with ensuring that contracting and employment opportunities flowing from this amount of spending is inclusive of all segments of the Atlanta community and stays in compliance with federal, state and local requirements. ODI Executive Director Ferdinand Risco Jr. understands the significance of MARTA’s economic impact and the importance of inclusiveness in business opportunities coming from the anticipated expenditures. Risco said, “Our mission is to ensure that any and all things that the Authority does [will not] adversely impact the people. Those people are our stakeholders, businesses, and communities… and this is across the diversity continuum; that is with our employment practices, our ridership and Title VI responsibilities, as well as our small and disadvantaged businesses.” ODI has lived up to its mission related to business opportunities in the DBE Program. MARTA achieved a DBE participation percentage of 57.8 percent
for federal fiscal year 2015, its highest participation since the Centennial Olympic Games of 1996 in Atlanta. Risco hopes for this level of success to continue in 2016 in order to exceed MARTA’s Federal Transit Authority-approved overall DBE goal of 30 percent. “I am most proud of our increase in race-neutral participation,” Risco said. “Through our small business program, we have been able to increase the participation of disadvantaged firms by 12 percent through offering race-neutral contract opportunities of up to $200,000.” ODI is gearing up for an increase in transportation contracting opportunities for small and disadvantaged firms in the Metro Atlanta Region by implementing the “Get Ready for Transportation” initiative. This initiative will strive to educate and prepare firms for upcoming opportunities with MARTA and other transportation agencies in Atlanta like the Georgia Department of Transportation and the Hartsfield-Jackson Atlanta International Airport. Risco said, "MARTA is open for business and we want to let the world know that there are significant opportunities in and around the Southeast. There are more opportunities in Georgia in the next 3 to 5 years than you will see for a long time.” Risco said there are three goals for the “Get Ready for Transportation initiative.” The first is to close the gap between the
desire for opportunities and the readiness to take advantage of the opportunities that are coming. Second is to develop a pool of qualified firms that are ready to perform, and third is to increase workforce development by doing business with firms that can create jobs in the community.
MARTA currently maintains
MARTA has signed a memorandum of understanding with the U.S. Small Business Administration to help prepare firms for the $20 billion in transportation contracting opportunities anticipated in the next 3-5 years across the state of Georgia. The strategic partnership will help ODI provide training programs to small and disadvantaged firms to increase their rate of success on the opportunities. A portion of the training will focus on the diverse business certifications available to small businesses in order to foster inclusion by the transportation agencies. “There are a number of business certifications that can open doors for small businesses like the federal DBE Program or local small and minority business programs. We need to make sure the companies understand how all of these programs work and the requirements to get certified,” Risco said.
and several hundred buses that serve passengers in the Metro Atlanta Region
over 100 facilities 38 rail stations
The SBA also will help provide tools and resources for firms looking to strengthen their business and increase their capacity. For instance, SBA representatives plan to help firms better understand capacity building by looking at the three Cs of cash, credit and capital, which are key components to being ready for larger contracting opportunities. Finally, the SBA and ODI will help firms review and pursue contracting opportunities as they become available at MARTA and at other agencies around the state of Georgia. Risco said, “If we can strengthen the small and disadvantaged businesses, a rising tide lifts all boats. The community is better off, the industry is better off, and then we have increased workforce development through the creation of livable wage jobs.” Risco encourages businesses interested in doing business with MARTA to visit the Office of Diversity and Inclusion page of the www.itsmarta.com website; select the DBE Program link or email firstname.lastname@example.org.
DBEs Invited Autoabilty, a premier manufacturer of wheelchair accessible vehicles, is seeking partners for existing and new vehicle projects. Interested metal forming and fabrication companies are urged to contact:
DBELO-Autoability P.O. Box 1015, Clarkston, MI 47347 248-620-4200 or email@example.com // Summer 2016
Top Tax Challenges for Contractors and the Construction Industry By Carolyn D. Fitts, IRS Enrolled Agent
hether you are an existing business or a start-up, there are tax laws that affect you. Being prepared for business success means understanding industry tax issues and knowing how noncompliance affects you. Concerns identified by the Internal Revenue Service (IRS) as the biggest problems for contractors and small construction business owners are accounting methods, capitalization of indirect costs to long-term contracts, and independent contractor or employee classification. An overview of each topic is presented below, and 2017 tax updates are provided in the conclusion. ARE YOU USING THE CORRECT METHOD OF ACCOUNTING? Choosing the right method of accounting is important to your business because it affects when you report income and deduct expenses. Most construction businesses use two different methods of accounting; one for their long-term contracts and one overall method for everything else. A longterm contract is any contract that is not completed in the same year it's started. Methods of accounting often used in construction include accrual, cash, percentage of completion (PCM) and completed contract (CCM). Topics not covered are exempt percentage of completion method (EPCM) and home construction contracts.
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Consider the following when determining which method of accounting your business must use. GENERAL RULES â&#x20AC;˘ If your business is a C-corporation with gross receipts over $5 million, you are required to use an accrual method. â&#x20AC;˘ If you must use an inventory method because of incomeproducing merchandise, an accrual method usually must be used for purchases and sales. SMALL CONTRACTOR METHODS: ACCRUAL METHOD OF ACCOUNTING Small construction businesses and contractors may use this method for long-term contracts only if annual gross receipts do not exceed $10 million AND the estimated completion time does not exceed two years. Contractors who are required to use the accrual method cannot qualify for this exception. Industries that are usually ineligible for this exception are mining, manufacturing, wholesale and retail trades or information industries.
ADVANTAGES OF PCM
If you qualify to use the small contractor method of accounting, income is generally earned when work is completed to your customer’s satisfaction, and due when your customer is billed. This means that sometimes you will include an item in income before payment is received. In this case, income is reported when earned, when due or when received from the customer, whichever is earlier.
• Often chosen as a long-term contract method for bookkeeping purposes.
Advance payments for services are generally included in income when payment is received. You may delay including an advance payment in income until the next tax year for services you will perform in a subsequent year. [See Revenue Procedure 2004-34§1]
• It normally achieves the maximum deferral of taxes.
EXPENSES General and administrative (G&A) expenses and job costs are deducted in the tax year incurred. An expense is incurred the later of: • When the merchandise or services are received, or • When the amount of the expense can be accurately determined. This means that sometimes expenses will be deducted before they are paid. If an expense that benefits you for more than one tax year is paid, the cost must be spread over the period you receive the benefit. Remember that capital expenditures usually must be deducted by depreciation or amortization. Examples of capital expenditures are buildings, machinery, equipment, furniture and fixtures, and similar property having a useful life substantially beyond the taxable year. The one variation on the accrual method is an election to exclude retainages from income until an unconditional right to receive them exists. When making this election, wait to deduct retainages payable until they are actually paid. An election to exclude retainages cannot be taken when using the PCM or CCM methods. ADVANTAGES OF USING THE ACCRUAL METHOD
• Produces financial statements desired by banks and bonding companies. ADVANTAGE OF CCM
DISADVANTAGES OF CCM • The books and records do not show clear information on operations; • Income can be bunched into a year when a lot of jobs are completed; • Losses on contracts are not deductible until the contracts are completed; and • It may only be used by small contractors and home construction contracts. WHY IS CAPITALIZATION OF INDIRECT COSTS IMPORTANT? The method of accounting used to account for long-term contracts determines whether contractors are required to capitalize or deduct allocable job costs. Allocable job costs include repairs, equipment maintenance and rentals, utilities at the job site, depreciation on construction equipment, officer’s compensation and workers’ compensation insurance. Job costs that are exempt from cost allocation (non-allocable) are expenses incurred from unsuccessful bids and proposals, and for marketing, selling and advertising expenses. INDIRECT COSTS VS. DIRECT COSTS Indirect job costs benefit the construction project but are not tied as clearly to it as direct costs. Indirect job costs often involve expenses that benefit more than one job and must be allocated among all the jobs that received benefit. GENERAL RULES
• Better matching of income and expenses. • A more accurate picture of your financial position than the cash method. PCM or CCM may be preferred for jobs that extend beyond year-end as they may be more advantageous than the accrual method.
• Contractors using PCM are required to allocate indirect job costs to their long-term contracts. • Contractors using CCM are required to capitalize indirect job costs allocated to long-term contracts until the contract is completed. // Summer 2016
When using CCM, income or loss is reported in the year the contract is completed. For this reason costs MUST NOT be deducted as current period costs on a contract that is not yet completed and accepted. Costs that are not properly allocated to long-term contracts result in overstated deductions. IRS examinations with this error may result in costly problems. Independent Contractor or Employee: Why Relationships Matter! The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person working as an independent contractor are subject to Self-Employment Tax, and reported on Form 1099-MISC. Businesses must weigh several factors when determining whether a worker is an employee or independent contractor. Some factors may indicate that the worker is an employee, while other factors indicate that the worker is an independent contractor. There is no “magic” or set number of factors that “makes” the worker an employee or an independent contractor, and no one factor stands alone in making this determination. Factors relevant in one situation may not be relevant in another. THE THREE FACTORS TO CONSIDER WHEN MAKING THIS DETERMINATION ARE: • Behavioral control – Are instruction, training and feedback provided? • Financial control – Are business investment, cost reimbursement or services available? • Relationship of the parties – Is worker(s) part of the business, have permanent relationships or a written contract?
- 2017 TAX UPDATES! 1. 2016 Extensions Filed are due on October 17 (Oct. 15th is a Saturday).
2. W-2s and 1099s are now due annually on January 31 after close of tax year.
3. Refunds due from EITC and additional child tax credit are released no sooner than February 15.
4. Voluntary Classification Settlement Program (VCSP) – New initiative to treat (reclassify) workers as employees and settle potential employment tax issues.
5. Section 179 Expense deductions are reduced ($125,000). Annual investment limit is reduced ($500,000).
6. Credit for residential energy-efficient property does not apply after 2016.
7. Solar heating credit for units and fuel cells placed in service after 2016 falls to 10 percent.
Other ways to avoid IRS problems are to maintain good records, file all tax returns on a timely basis, respond to letters and notices, and avoid tax scams.
C Fitts Tax Solutions is a tax audit representation and debt resolution practice owned by Carolyn D. Fitts, accountant and federally licensed enrolled agent. Our specialty is helping individuals and small businesses meet U.S. and state(s) income tax filing requirements. https://cfittstaxsolutions.com/
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President & U.S. Patent Inventor // Summer 2016
The Five Deadly Questions You Must Answer
Before Starting a Business By Iris Cooper, www.justaskiris.com
mall businesses die daily, with most failing within the first 5 years, regardless of the circumstances. Some firms suffer a fatal heart attack; the owner is liable for an accident on his site, and assets are liquidated when the insurance company refuses to pay. Other firms shuffle along for several years, ignoring new technology and changing market conditions. Customers quietly switch to the fancy, tech-savvy competitor and death by old age creeps in. Death from loneliness is particularly poignant; the owner is weary and wants to retire, but nobody wants the business, including family members. The owner shuts down and the legacy vanishes into yesterday. However, when a business opens without the answers to the five questions below, the owner is a murderer. With reasonable answers to these queries, more firms might have a chance of survival. 1. Who is going to operate the business, and does he or she have the skills to be an entrepreneur? Entrepreneurs take risks in exchange for freedom to make their own decisions and chart their own course. Success depends on the ownerâ&#x20AC;&#x2122;s education and experience, commitment, human capital and vision. Education and experience provide problem-solving tools to mitigate the damages of an unexpected economic shift, or the entrance of a threatening competitor in the market. Social capital, or personal support network, can offer assistance when the owner is awayâ&#x20AC;&#x201D;or provide an introduction to a prospect for a future business opportunity. Success requires a strong work ethic and a fight-to-win attitude.
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2. What kind of business makes sense and what is the business model? A business model must reflect the strengths and weaknesses of the owner. Hairdressers thrive on creativity and customer service. A carry-out offers a brief encounter at the cash register and requires an owner that can juggle many tasks at once. The business models are dissimilar; hairdressers make money from providing lengthy services and convenient products for patrons that expect perfection; whereas carry-out owners make a profit on every item in the store, with the goal of a quick transaction from a large bag of expensive goodies. Starting an enterprise requires long hours and hard labor; an owner with passion, resilience, knowledge and respect for the model enhances sustainability. 3. Why are you starting a business? Desperation and innovation are opposites when starting a business. If desperation appears from unemployment, the ideal entrepreneurial tool kit may not be available. Self-employment is a reliable go-to action when personal survival is the goal. A business plan is not necessary to paint houses in the spring and summer, or sell cookies on the weekends. If the goal is to open a restaurant to reap financial rewards from a popular family recipe, there will be a great deal of time and preparation needed before the ribbon-cutting ceremony.
SUBCONTRACTORS INVITATION TO BID
THE LANE CONSTRUCTION CORPORATION is bidding on the NCDOT Guilford County project #C203792 TIP #U-2524D – Call #01 NCDOT LETTING BID DATE: Tuesday, Sept. 20, 2016 at 2:00 p.m. DESCRIPTION: Greensboro Western Loop— From US-220 (Battleground Avenue) to SR-2303 (Lawndale Drive). TYPE OF WORK: Grading, Drainage, Paving (concrete and asphalt), ITS, Signals, Structures SUBCONTRACTING OPPORTUNITIES ROADWAY ITEMS: Trucking/Hauling, Asphalt Paving, Grading, Drainage, Utilities/Waterline, Incidental Stone, Geotextiles, Concrete Paving, Shoulder Drain/Underdrain, Rumble Strips, MOT/Work Zone Signs and Traffic Control Materials, Pavement Markings, Erosion/ Seeding/Silt Fencing, Overhead Signs, Signals, ITS. STRUCTURE ITEMS: Box Culvert Work, MSE Walls, Soil Nail Walls, Gravity Walls, Sound/Noise Walls, Bridge Work and all bridge related materials and subcontracting work. DBE Goal 13%: All NCDOT DBE are encouraged to participate on this project. Send quotes to Wes Peace @ JWPeace@laneconstruct.com or fax quotes to (704) 553-6548 (FAX). Formal Invitations to Bid and Bid Items Lists can be sent to interested subcontractors by contacting Wes Peace (email above), or by calling 704-679-0542.
THE LANE CONSTRUCTION CORPORATION 6125 Tyvola Centre Drive Charlotte, NC 28217
704-553-6500 (PH) 704-553-6548 (FX)
4. When will the business open?
5. Where will you operate the business?
What are the chances of survival during a recession, or when the owner is still working full time? What about seasonal risks when starting an enterprise? Timing is critical and seldom are the conditions perfect for launching a business. When the market is ripe, the owner may not have the resources to begin. A comprehensive business plan includes the path to financial stability and identifies the resources, challenges and remedies before the launch. Starting prematurely (before systems are created, social capital is on board, funding is secured, and marketing commences) presents risks to the operation and the brand.
Certain kinds of home-based businesses require zoning approval. If you operate online, few assets are needed except a desk, chair, utilities and a computer. Some businesses depend on foot traffic or ample parking. Other enterprises thrive next door to competitors. Each situation is different and analysis helps to pinpoint the ideal location, features and amenities.
Iris Cooper’s career includes leadership positions in the financial services, economic development, community service, entrepreneurship, communication, government, and education industries. She is the owner of “JustAskIris!” an entrepreneurial coaching firm. Iris is a founder of Glory Foods Inc., a multi-million dollar food marketing company. Iris is recognized nationally as an expert in business strategy and branding, having coached many startups to sustainability. Her newest venture is Finish Your Gloryfied Business Plan Now!, a workshop to foster entrepreneurial success. Iris Ann Cooper (www.justaskiris.com) // Summer 2016
NAMC Student Chapters
developing Millennial Construction Professionals By American DBE Staff
NAMC student member and Purdue University Construction Management graduate student Gregory Brown presents his whitepaper research project at the NAMC National Conference in Atlanta.
he National Association of Minority Contractors (NAMC) has launched an initiative to develop student chapters across the country. The goal of the initiative is to champion and support the transition of millennials into professional careers in the construction industry. As a first step to engaging students on a national level, NAMC partnered with Wells Fargo Bank to sponsor an “Innovative Practices White Paper Competition” to encourage students to research and submit a whitepaper considering innovative processes and strategies that can be incorporated into the construction industry to increase sustainable practices.
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NAMC President Wendell Stemley believes that bringing students into the NAMC organization has great benefits for both students and for the NAMC membership as a whole. “We have to tap into these great young minds for innovative ideas that can move the construction industry forward and create new opportunities for NAMC members,” Stemley said. “Plus, engaging with students allows NAMC to provide mentoring and hopefully jobs when they are entering the construction industry.” Four student chapter members, two from Purdue University and two recent college graduates from San Diego, California were invited to the
2016 NAMC National Conference in Atlanta as finalists in the white paper competition. The students were given the opportunity to present their research results to conference participants. They combined to give a 90-minute presentation to approximately 100 NAMC members summarizing the topics of their whitepaper projects and what they learned during the process. Students Khalid Brown and Tessema Garedew partnered to present their whitepaper titled, “Self-Sustaining Structural Members.” The goal of their whitepaper was to explore the possibilities of developing a selfsustaining building material that can be used to produce structural
members in the construction, design-build and architectural industries. Two potential structural members considered by Brown and Garedew were creating products from structural steel consisting of 80 percent recycled materials and creating members using carbon fibers. They believe structural members made from these two sources are more sustainable than current members made completely from wood, steel or concrete. Binyam F. Gurmu, a construction management graduate student at Purdue University, presented his whitepaper on strategies to develop Net Zero Energy Homes. Gurmu enlisted the help of other Purdue students to evaluate the current use of energy in the average American home, and then to consider all the different variables that come into play to make homes energy self-sufficient. Strategies considered in the paper included using photovoltaic roofing panels, LED lighting, energy-efficient appliances, energy management systems and double insulation. Gregory Brown, also a student at Purdue University, presented his whitepaper addressing the question of whether sustainable materials are more effective when dealing with the life cycle of houses. Brown discussed the reality that while sustainability is an important consideration, there are also challenges that must be addressed to make sustainable building processes a cost effective strategy yielding a positive impact on life cycle costs. Brown’s whitepaper stated: “Sustainability is becoming an important focal point from a global construction perspective. This is highlighted by the significant impact of construction activities on waste, energy use and greenhouse gas (GHG) emissions. The concept of sustainable construction is clearly wide ranging and dynamic, and encompasses sustainable design and operations; in addition to the actual process of construction. While there are many positives, it is also important to consider the negative impacts of sustainable initiatives. In general terms, sustainable materials are relatively expensive compared to more traditional materials. Moreover, their life-cycle performance, while it appears to be sound, has not yet been fully tested. In addition, there can be environmental risks with some sustainable materials, such as potential leaching of contaminants from recycled materials used in road construction. These issues should be recognized and effectively managed.”
Gurmu enlisted the help of other Purdue Students to evaluate the current use of energy in the average American home, and then to consider all the different variables that come into play to make homes energy self-sufficient. The NAMC membership was thoroughly impressed with the innovative thoughts and presentations of the students participating in the whitepaper competition. “We hope to build on our student chapter effort from here and hopefully begin to create student chapters across the country to bring more young people into the construction industry,” Stemley said.
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Gurmu also believes that NAMC can have a positive impact on bringing the next generation of construction professionals into the industry. Gurmu said: “During my relatively short exposure to the construction industry, I have come to notice there is an information gap between two major working groups. The first group is comprised of seasoned professionals of construction that have, through trial and triumph, familiarized themselves with aspects of our industry that most people do not even realize exist. They have mastered the relationships and insider knowledge necessary to succeed, which makes them valuable on any project they step on. The second group—the millennials—are proactive and data-driven individuals with a focus on how to improve processes (such as productivity, energy consumption or document management). They are not shy to trying new things and bring a fresh perspective that breeds innovation on most job sites. Both groups serve their purpose individually, but as the NAMC Student Chapters president, my mission is to ensure that this gap is closed through a mutually beneficial partnership that challenges group 1 to adapt in this constantly evolving market, and provides group 2 with the answers to questions they do not even realize they have."
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