Deciphering the DBE ‘Disparity’
Charlotte Mayor Foxx & FTA’s Rogoff Celebrate Light Rail Funding AMAC Rental Car DBE Forum 7 Things Killing Business
Ohio River Bridges to Opportunity
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Contents FEATURES
10 14 25 28
Full Steam Ahead For Charlotte’s Blue Line Extension
Ohio River Bridges Opportunity For DBEs
AMAC Connects DBEs With Car Rental Companies
Deciphering the DBE Disparity
DEPARTMENTS 4 6 7 9 19 33
Publisher’s Page Business Development I: Management Teams DBE Power Players: Dynamix Engineering Business Development II: Business Killers DBELO Spotlight: Brenda Nnambi, WSDOT Business Development III: Win With Customers
TRANSPORTATION TRENDS:
AVIATION, CIVIL/HIGHWAY AND TRANSIT 20 22 33
Airport Concessions DBEs (ACDBEs) High Speed Rail Obama Nominates Foxx for Transportation Secretary
ALSO IN THIS ISSUE 5 Upcoming Events
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FROM THE PUBLISHER
Welcome to American DBE Magazine “Find something you love to do, and you’ll never work a day in your life” is the quote credited to best-selling business author Harvey MacKay. While I understand the gist of the quote, I have not found it to be true for me. However, what I have found to be true is that if you find something you love to do, you’ll enjoy working most days of your life. That’s a pretty good deal! Helping diverse businesses grow and succeed is what I love to do. It is why I went to business school more than 20 years ago, and it is why I have been engaged in the development of minority- and women-owned businesses for the past 15 years. That is also the reason I decided to publish American DBE Magazine, a platform for sharing insight, innovations and information that will help level the playing field for Disadvantaged Business Enterprises (DBEs) to achieve success in the U.S. Department of Transportation DBE Program.
I hope you will find information in American DBE Magazine that makes your business better, uplifts your spirit, and motivates you to keep moving toward the accomplishments you desire. Please let us know how we are doing by sending a Letter to the Editor, visiting online at www.AmericanDBE.com or connecting with us on our social media sites. Thank you for joining us on this journey, and welcome to American DBE Magazine!
As a digital and print publication that focuses on the unique opportunities and challenges inherent in the DBE program, American DBE will provide value to all stakeholders within the DBE community by sharing industry best practices, success stories, trends, opportunities and research to enhance
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the overall knowledge base of all industry participants. In every issue, American DBE will highlight current events in the DBE Program across the aviation, public transportation and highway transportation industries. We will present instructional columns from business educators and also share feature articles that uplift and encourage program participants to find innovative ways to create mutual benefit for all stakeholders in the DBE program.
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Best Wishes,
Shelton A. Russell, Publisher
Calendar of Events June 19-21, 2013 National Association of Minority Contractors NAMC Annual Conference Los Angeles, California www.namcnational.org June 25-27, 2013 Women’s Business Enterprise National Council WBENC National Conference & Business Fair Minneapolis, Minnesota www.wbenc.org July 13-17, 2013 Conference Of Minority Transportation Officials COMTO National Meeting & Training Conference Jacksonville, Florida www.comto.org
August 26-30, 2013 Southern Transportation Civil Rights Executive Council (STCREC) Southern Transportation Civil Rights Training Symposium Charleston, South Carolina www.stcrectraining.com September 18, 2013 Airport Minority Advisory Council AMAC Industry Day on Capitol Hill Washington, DC www.amac-org.com October 2-5, 2013 National Association of Women Business Owners NAWBO Women’s Business Conference Miami, Florida www.nawbo.org October 27-30, 2013 National Minority Supplier Development Council NMSDC Annual Conference and Business Opportunity Fair San Antonio, Texas www.nmsdc.org
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Business Development
Management Team: Tough to Grow Without One We have worked with hundreds of businesses across a number of different industries at various stages of their growth and development. One of the most striking things we have observed is the direct correlation between firms with a capable management team and businesses that grow and prosper. The reasons this is true are obvious when you think about them. It starts with the fact that business owners who are trying to do it all have limits on their time, their talent, and their perspective. The “No Grow” Cycle Few business owners are good at everything, and those who believe they can and should do everything are missing the important capability of being brutally self-aware. No one is good at all of the functions of a business. It is also true there are limits on what one person has time to do and just as importantly, do well. This reality also limits a business’s growth. For example, if one person is leading operations and the same person is also responsible for selling new business, the firm gets stuck in the “no grow” cycle. They sell new business when they need work, and do the work when they have work to do. Growing firms must be able to sell work when they have work, and do work while they sell more work. The Functions That Need to Be Managed A management team of three is the basic level needed to grow capacity in a business. Until a business has evolved to have capable individuals leading the areas of operations, sales, and finance, they simply don’t have what it takes to grow. Firms that are ready for accelerated growth also have a person leading their human resources function. Of course, most businesses don’t start with this level of management, but they work their way toward it. Evolving to a Strong Team At first, the business owner handles just about everything, and over time he or she builds a team to handle the various functions. Here are a few tips to help you make this transition. DEFINE. Write a job description for every role. Even before you plan to make a hire, be clear about what the roles are. Also, include the major outcomes you expect from each
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position. For example, you might expect the benefit of a human resources manager to be lower turnover. FILL. First, fill the roles that will free you—the business owner—to do what you do best. If you are the best at selling new business, then consider an operations leader as the first member of your management team. ADD. Expand the resources that allow you to simultaneously perform on contracts and pursue new work. You cannot grow your business until you escape the “no grow” cycle. SELECT. Pick proven people to fill management team roles. I like to say hire the best, but if you can’t do that, at least hire better than you have. Small firms cannot afford to hire for potential, so get someone who has “been there and done that” successfully. No matter how much money you think you are saving by hiring cheap, the poor results will cost you much more. HIRE. When it’s time to make a decision, hire people you want to work with. I got this advice from an executive recruiter and he could not have been more right. People you prefer to talk to and be around work better—especially on your management team. No matter how talented a person is, if you dread talking to them, it is hard to drive good outcomes. Remember, the management team is not an assembly line setup, so the people involved need to share ideas and communicate well with each other. It is hard to do that with people you do not enjoy. The value of the management team to business growth is immeasurable. Businesses with management teams can simply do more and therefore have the opportunity to grow faster and stronger. Businesses with management teams are more sustainable and tend to deliver higher levels of customer satisfaction. If you want to grow your business, you will need to grow an effective management team. Do it slowly and with careful consideration… but do it! Melvin Gravely, Ph.D., is the CEO of TriVersity Construction Company and the founder of the Institute for Entrepreneurial Thinking, Ltd. He has authored eight books including What is The Color of Opportunity and his new book The Capacity to Succeed, due fall 2013.
SUCCESS
walk this tightrope to become the 78th largest engineering firm in the United States, according to Consulting-Specifying Engineer Magazine. Dynamix, led by president and CEO Eugene Griffin, is a full-service mechanical, electrical, plumbing and technology engineering firm specializing in design engineering, assessments, energy services, commissioning and construction administration. Dynamix has grown to support a geographically disAbove: After Port Columbus International Airport Inline Baggage Handling System persed, multi-state and Baggage Claim Improvements. Right: Before. client base. Griffin said, “Some DBE firms only focus on opportunities that come from the program, but we go after opportunities that are not tied to the DBE program as well. We had one client that never knew we were a DBE firm until years after our first contract. That felt good because it told us we were not Achieving success as a Disadvantaged Business Enterprise being hired because we were a DBE, but because we did great (DBE) can be similar to walking a tightrope. Looming on work”. one side of the rope is the perilous fate of being pigeon-holed Griffin started the company with a partner in 1997 after the in the category of being a “disadvantaged” firm, and on the two of them decided to move the mechanical and electrical other side is the equally challenging fate of trying to go it engineering practice out of the architectural firm they were alone without the assistance of a diverse business program working for at the time. “We thought there were greater and still compete in an industry that is not always inclusive or opportunities for us if we were able to focus on just mechaniwelcoming to minority- and women-owned firms. cal and electrical projects,” Griffin said. This move enabled Successful DBE firms walk a fine line between competDynamix to create, sustain and control direct relationships ing like any other firm in the marketplace and with clients, which has allowed the firm to have effectively participating in programs like the longstanding relationships with its customer USDOT DBE Program that have a goal of base. leveling the playing field to give minority- and The firm’s client list includes several transwomen-owned firms an opportunity. portation agencies including the Central Ohio In other words, success as a DBE requires a Transit Authority, the Columbus Regional Airdynamic presence in the marketplace, a presport Authority (Port Columbus International ence capable of maintaining a competitive Airport) and the Ohio Department of Transbusiness approach, and strong business model, portation. In addition, the company works while at the same time utilizing the benefits of with other clients including The Ohio State the diverse business programs that give them a University, the State of Ohio and the City of better opportunity for success. Columbus. The types of projects performed for Founded in 1997 in Columbus, Ohio, Dynathese agencies include services such as indefiEugene Griffin, PE, President/CEO mix Engineering (Dynamix) has managed to nite engineering contracts, design contracts for of Dynamix Ltd.
PowerPlayers:
DYNAMIX ENGINEERING
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facilities renovations, studies of existing facilities, systems upgrades and even projects traditionally reserved for architectural firms. Griffin identified three keys to Dynamix’s success thus far. “First, we do not take ‘no’ for an answer. Second, we focus on marketing by making business development a priority in the company. Finally, we seek to bring on new clients while maintaining our existing clients. Over 90 percent of our business is repeat business.” Dynamix has no plans of slowing down. Griffin said, “We want to continue to grow our direct relationships with clients with a goal of having 75 percent of our business directly with owners,
instead of the majority coming from being a sub-consultant to architectural firms. We also want to do more infrastructure projects such as system upgrades. This gives us total control of the relationship, and better ability to manage and control our cash flow and project schedules.” When asked the advantages his firm has received from being a Disadvantaged Business Enterprise, Griffin said, “There are a lot of cases where our diversity is a plus. Some potential DBEs are afraid to reach out for diverse opportunities because they are smaller. But we try to get a smaller opportunity and then hit it out of the park so they will want to use us again.”
There are a lot of cases where our diversity is a plus. Some potential DBEs are afraid to reach out for diverse opportunities because they are smaller. But we try to get a smaller opportunity and then hit it out of the park so they will want to use us again.
Colette Holt
& Associates YOUR EXPERT ON AFFIRMATIVE ACTION AND CONTRACT COMPLIANCE • Disparity and Availability Studies • Review, Design and Implementation of Disadvantaged/Minority/Women/Small /Local Business Programs • Litigation and Expert Witness Services • Contracting Fraud Detection and Evaluation • Community Benefits Agreements and Project Labor Agreements • Trainings and Presentations
Colette Holt & Associates Attorney at Law
3350 Brunell Drive Oakland, CA 94602 Telephone - (773)-255-6844 Email - colette.holt@mwbelaw.com www.mwbelaw.com http://twitter.com/mwbelaw
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Business Development
7 Things That Are Killing Your Business Very often the things that DBEs do NOT do have more effect on their revenue than what they actually do. These things include: • Not knowing who their real customers/clients are • Not following up • Not seeking out subcontracting opportunities • Not networking with their true prospects and customers/ clients • Not focusing on the needs of their prospects and customers/clients • Not getting their messages to the proper people • Not maximizing their opportunities for revenue These are the things that are said by bankers, government purchasers, corporate buyers, small business development counselors, and prime contractors. The dilemma for DBEs is how to spend the small amount of time and money they have for Marketing in the most effective manner. Another complication is that for most DBEs, marketing is not comfortable or enjoyable and is way too complex. However, marketing is absolutely necessary to keeping a business alive and making it grow. Here are a few simple steps that you as a DBE can take to improve the health of your business and increase revenue. Identify your real customers/clients Look at your existing customers/clients and determine why they buy from you. Look at the people you think should be your customers and try to find out why they do not purchase from you. Look at the customers/clients of your competitors and figure out why they buy from your competitors. Compare the results of the three groups. You will see differences and commonalities that can lead you to the real reasons these customers/clients buy – needs/desires, purchase patterns, requirements, obstacles. Those reasons help you determine: • Who your real customers/clients are. • What they expect of their suppliers/vendors. • Ways to show them how your products/services meet their needs and requirements. Be where your real prospects, customers, and clients are Find out where they are: What organizations do they participate in? What events do they attend? Do they operate on a job site or in an office? What blogs, websites, magazines, or other publications do they read? What social media do they use? The answers to these questions will tell you where you need to spend your networking time and marketing efforts. Since you do not have unlimited time or money, you need to spend
it on things that will reap the best revenue results, including: • Places to meet and relate. • Places to learn about relevant trends and issues. • Places to make your business known. Follow the processes and directions of your prospects, customers/clients Remember the phrase “The customer is always right”? Well, they are. It is extremely important that you do things the way your prospects, customers, or clients want them done. If they want you to register on a website – then register. If they want you to provide them a one-page summary of your business, then do not give them a folder with brochures, company history, and pretty pictures. If they want information electronically, don’t give them paper. If they tell you that they need for you to follow-up (remind them) then don’t expect them to remember your business after meeting you at one trade show. How closely you follow their procedures and preferences is part of the test to determine if you would be a good and responsive vendor/supplier. Don’t wait for the phone to ring As a DBE some of your best opportunities are as a Subcontractor. But you must do more than just getting on the list of DBEs for a DOT, airport, or other transportation agency. You must be proactive and market yourself to the prime contractors. Prime contractors are your real prospects, customers, and clients. So you need to treat them like customers and do the things in the three previous sections of this article to be sure they know your business and remember it. Being on a list of DBEs says you are certified; being on the potential subcontractor list of a prime is what gets you opportunities. Becoming a preferred subcontractor is almost like hiring a marketing firm because the prime does most of the marketing —allowing your company to reap the benefits. Do not rely on your DBE status to get business There are advantages to being a DBE. However, if no one knows about your business, then being a DBE gets you nothing. Marketing is just as necessary for a DBE as any other business. Janet W. Christy is a marketing consultant to Small Businesses, especially DBEs, MBEs and WBEs. She is the author of two business books 101 Winning Marketing Actions for Small Businesses and Capitalizing On Being Woman Owned. Her consulting firm, Leverage & Development, LLC, (www.leverageanddevelopment.com) has been operating since January 2003. She can be contacted at janet@leverageanddevelopment.com.
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Full Steam Ahead
for Charlotte’s Blue Line Extension
Charlotte Area Transit light rail train makes a stop uptown.
B
Davidson and University areas, terminating on the UNC Charlotte campus. Last October, Federal Transit Administration (FTA) official Peter Rogoff, City of Charlotte Mayor Anthony Foxx, Metropolitan Transit Commission Chair Harold Cogdell, CATS CEO Carolyn Flowers, state and local leaders celebrated the receipt of a Federal Full Funding Grant Agreement (FFGA) for the BLE. The Federal FFGA will provide 50 percent of the project costs for the BLE and is the last macended to the level of CEO of a major transit sysjor funding source needed to advance the project tem with no signs of slowing down now. This is toward construction. evident as she leads CATS through the Northeast The $1.16 billion LYNX BLE project is the largCorridor Light Rail Project, called the Blue Line est capital project in the city of Charlotte’s histoExtension (BLE). Flowers will rely on her years ry. The project is funded 50 percent by the FTA, of experience rising through the ranks of the pub25 percent by the North Carolina Department of lic transit industry to lead CATS through another Transportation, and with remaining funds from successful venture. Carolyn Flowers, Charlotte Area Transit System (CATS) CEO the local half-cent sales tax dedicated to public transit (including 2.7 percent from the City of The Blue Line Extension The Blue Line project is an extension of the successful LYNX Charlotte through in-kind right-of-way, and donated right-ofBlue Line light rail service. The 9.3-mile alignment extends way from UNC Charlotte). Construction is scheduled to begin from Ninth Street in Center City Charlotte through the North fall 2013 with operational service expected in 2017.
EFORE TAKING THE REIGNS AS CEO of the Charlotte Area Transit System (CATS) in 2010, Carolyn Flowers was chief operating officer of the Los Angeles Transit System, where she presided over a $900 million operating budget and 6,000 employees. Flowers has as-
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“We are pleased that President Obama, Secretary LaHood and Administrator Rogoff have provided the funding partnership to allow CATS to expand the state’s first light rail line connecting one end of the county to the other,” Flowers said. “Once completed in 2017, the LYNX Blue Line will provide the region with a congestion-free, consistent travel time from south Charlotte to northeast Charlotte.”
tractors, and the community at large the importance CATS places on the inclusion of diverse businesses in this project. As a part of this effort, CATS placed a 9 percent DBE goal on
Extending a Line to DBE Firms Flowers said, “It takes a community to build a light rail line.” She knows this reality from her previous experience with both the Los Angeles Transit System and her CATS experience after the previous Blue Line South Corridor project. She also knows that the small and disadvantaged business community anticipates a strong effort by CATS to make contracting opportunities available on the upcoming work to build the BLE project. “I learned a lot from my experience in Los Angeles and from the first Blue Line Light Rail project about making sure the community is involved in Charlotte Mayor Anthony Foxx and FTA Administrator Peter Rogoff celebrate funding of light rail extension. the process. So we have reached out to the community through a series of events to let DBEs know about the the $37 million construction management contract held by project alignment and the contracts that will come available as HNTB Corporation. HNTB has committed to this goal and we move through the process.” has included several DBE firms as sub-consultants. Flowers also recognizes that involving the DBE community in the BLE project will involve more than outreach events, it Leadership will take her vision, leadership, commitment, and a well-exeRecently, CEO Flowers has met with community leaders cuted plan. and minority contractor organizations to understand their questions and concerns about the project. “The community The Vision expressed concerns after the first Blue Line project for the Flowers’ vision regarding the involvement of DBEs in the South Corridor,” she said. “We listened to these concerns and project is clear. She said, “This project will generate jobs, and incorporated their ideas into the BLE project. For instance, we want to make sure that the community that invests in the we are breaking down the project into smaller bid packages to project will be able to reap benefits from the project.” Her vi- allow DBEs the opportunity to participate in the work.” Flowsion communicates with clarity to CATS staff, potential con- ers added, “Although there were concerns due to the project’s complexity that having too many packages will hurt the project, I felt this was a risk we needed to take to provide opportunity to DBEs in the community. This strategy has also created an opportunity for another DBE firm to provide project management oversight as a contractor for the Federal Transit Authority.”
Signing ceremony for CATS Blue Line Extension. From left, Charlotte City Attorney, Bob Hagemann; Charlotte City Manager (retired), Curt Walton; FTA Administrator, Peter Rogoff; CATS CEO, Carolyn Flowers.
Commitment Sometimes it is difficult for a CEO to translate his or her commitment and desire to subordinate staff who may not share the same ideas on how a project should proceed. Flowers said,
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“I believe that if we put a plan in place (that prioritizes DBE inclusion in the project) and then execute on that plan, then everyone should be on the same page regarding what we are trying to accomplish.” To begin executing the plan, Flowers engaged staff from the Civil Rights Office, Marketing/Communications, and the project management staff for the BLE to
Charlotte Blue Line Extension University City Blvd. parking garage, designed by DBE firm Neighboring Concepts
maintain a coordinated approach for outreach on the project. Marketing Manager Kim Taylor said: “Ms. Flowers empowered staff to do more in the way of DBE outreach. Once that occurred, employees within the organization got together and worked on implementing several outreach initiatives. So far CATS has hosted events like the ‘Business Opportunity Symposium’ and ‘Meet the Primes’ to educate small and disadvantaged businesses on how to do business with CATS and the City of Charlotte overall. CATS also sponsors and participates in numerous events with the Metrolina Minority Contractors Association, the Carolina Minority Supplier Development Council’s Pro Forum, and the Carolina Association of General Contractors. Our outreach is on-going.” Results CATS is already experiencing success in engaging DBEs on the design portion of the project. At least 10 DBEs have participated in the project’s design with more than $3 million in contracts thus far. One of the firms participating in the design work is Neighboring Concepts Inc., a Charlotte-
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based architecture firm. As part of the project, Neighboring Concepts is lead architect on two parking structures as a subconsultant to STV Incorporated, the lead design firm. Neighboring Concepts was contacted by STV to provide a quote on designing two parking structures. Neighboring Concepts CEO Darrel Williams, FAIA said, “This is really how the DBE program should work. Our company designed our first parking structure on the first Blue Line project nearly 10 years ago. Since then we have designed around 12 or more parking structures and it has become one of our specialties. Now we have this expertise and STV was able to reach out to us based on the past work we have done in designing parking structures.” David Simpson, CEO of the DBE firm Simpson Engineers & Associates shares a similar story. He said, “STV reached out to us through their sub-consultant U.S. Infrastructure of Carolina Inc., based on our expertise in designing specialty drainage structures, culverts, and inlets that are not typically found in the North Carolina Department of Transportation’s Standard Drawings. It’s been a nice project for us.” Moving Ahead CATS Civil Rights Officer Arlanda Rouse is seeing a great deal of interest from the DBE community and said, “It’s going great so far. We are getting a lot of interest from new firms that are moving into the area and getting DBE-certified.” The major construction contracts are scheduled to be advertised in the fall of 2013. Two Civil Construction segments estimated at more than $250 million will advertise in October, and the Track & Systems contract will advertise in November. When asked what demonstrates success on the Blue Line Extension Project, Flowers said, “Success means that we provided opportunity for businesses here in our community and are able to see the long-term effects of the project leading to economic development here in Charlotte; and we will have retained that experience for use on more projects in the future.”
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.
Ohio River Bridges Opportunity for DBEs 14
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Aerial view of new downtown bridges next to Kennedy Bridge with Slugger Field and Louisville’s Riverfront Park in the background.
The Ohio River Bridges Project is one of the largest transWhile projects of this size usually create excitement in the portation projects in United States History. The $2.6 billion small and disadvantaged business community, the excitement project is a joint effort between the Kentucky Transportation can be short-lived when firms discover limited opportunities Cabinet (KYTC) and the Indiana Department of Transporta- for small businesses given the scale of the project and complex tion (IDOT) and is considered one project with two procure- contracting requirements for participating in the work. Howments. The two procurements represent two separate bridge ever, the Ohio River Bridges project strives to be different. projects; the $1.3 billion Downtown Crossing and the $1.3 Tyra Redus, Esq., Director of the KYTC Office of Civil Rights billion East End Crossing. The two states have divided respon- and Small Business Development said, “All of our leadership, sibility for the procurements including Kentucky Governor by making KYTC responsible Steve Beshear, Kentucky Transfor the Downtown Crossing, portation Cabinet Secretary and IDOT responsible for the Mike Hancock, and Louisville East End Crossing. Mayor Greg Fischer all expressed A project of this size has a desire to make sure this project garnered much interest and offered opportunities to all seganticipation by the DBE comments of the community. While munity in the Louisville area, we handle all of our projects as firms are anticipating the planning for the participation of opportunity to win sizeable DBE firms, this project received contracts that can take them special attention from our leadto the proverbial “next level.” ership given the size of the opChuck Wolfe, director of the portunity.” Melvin Bynes, KYTC KYTC Office of Public Af- Kentucky Governor Steve Beshear launches Bridges to Opportunity Program DBE Program Branch Manager for the Downtown Crossing Project fairs, said, “This is the largest added, “Our goal is for everyone transportation project in the in the community to know somehistory of Kentucky by a factor of 10.” The project has created a one working on this project in some capacity.” buzz throughout the civil contracting industry in the area, and This admirable goal is encouraging for DBEs in the local comDBE applications are at an all-time high as the mega project munity. But the cynical DBE may be a little less encouraged. prepares to break ground during the summer of 2013. Some naysayers will say that they have heard it all before. HowThe project primarily consists of replacing two bridges over ever, KYTC is striving to turn cynics into believers and make the Ohio River connecting southern Indiana and Kentucky the Ohio River Bridges project a success for DBE participation in Louisville, and a redesign of the Kennedy Interchange in and community involvement. Here is how KYTC plans to do it: downtown Louisville, which connects Interstate Highways I-64 and I-65. The KYTC-administered Downtown Crossing Building Bridges to Opportunity—10 Steps will break ground on July 1, and the IDOT-managed East End Just as the Walsh Construction-led Design Build team will Crossing also will break ground this summer. complete construction of the actual Downtown Crossing projTo demonstrate the size, scope and scale of the Ohio River ect, the KYTC Civil Rights & Small Business Development Bridges project, consider that the Downtown Crossing re- Team is planning to simultaneously design/build “bridges to quires 21 retaining walls, 40 overpass and ramp bridges and opportunity” for DBEs and the local community workforce. 300,000 tons of asphalt. The new bridge is scheduled to open While not characterized as a 10-Step plan by Director Redus, in April 2016, with the entire project scheduled for comple- her team essentially has engaged in a 10-step strategy to ensure tion just eight months later. Along with the new bridge, which that both DBE firms and the local workforce gain meaningful will carry traffic northbound on I-65, the work in Louisville in- access to opportunities on this project. cludes: upgrades to the Kennedy Bridge that currently carries the interstate across the river – and converting it to the south- Leadership Engagement —In addition to preliminary bound passage; new on-ramps in southern Indiana; and a re- discussions and communications with Governor Beshear, design of the popular “Spaghetti Junction” bridge in Louisville. Transportation Secretary Hancock, and Louisville Mayor
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Fischer about the importance of community involvement in the project, KYTC launched the “Bridges to Opportunity” program in April 2013. The program was introduced by the Governor and Secretary Hancock at a community meeting. Warren Whitlock, FHWA Associate Administrator for Civil Rights, also attended from Washington, D.C. The Bridges to Opportunity Program will provide outreach, training and workforce development to the local community through a partnership with Kentucky State University, a local historically black university. Planning and Strategy—KYTC engineering staff and civil rights staff met several months before the bid solicitation process began to set a reasonable DBE project goal of 8 percent on the project. This goal was based on internal discussions regarding the types of subcontracting opportunities available on the project and the availability of DBE firms with the skills necessary to participate. In addition, internal staff created the DBE program evaluation criteria to be included in the Request For Proposal process, determined how DBE participation will be evaluated during the selection process, and designated a member of the Civil Rights team to participate on the selection committee. Procurement—KYTC required that each firm responding to the RFP submit a detailed DBE subcontracting plan describing how they plan to achieve the DBE goal of 8 percent. Each proposer’s plan was reviewed and scored by the committee and became part of the overall evaluation of each team’s bid package. Also, each proposer’s on-site interview included questions about their DBE subcontracting plan. Partnering—Since the Ohio River Bridges project is a joint effort between the Kentucky Transportation Cabinet and the Indiana Department of Transportation, it was important that the two state DBE Programs work together to facilitate DBE participation. “We entered into a DBE certification reciprocity agreement with IDOT for this project,” said Director Redus. “This means any firm certified in either Kentucky or Indiana can work on the East End Crossing or the Downtown Crossing as a DBE firm. We also maintain ongoing contact with IDOT to make sure we share information about outreach meetings, training and other project information.”
Selection—After evaluating each contractor’s subcontracting plan during the proposal process, KYTC selected a team led by Walsh Construction, a contractor demonstrating previous success in administering DBE program compliance, and offering a strong commitment to running an effective DBE Program effort on the Downtown Crossing project. The Walsh team committed to reach DBE participation of 8.22 percent, which exceeds the project’s goal of 8 percent. Walsh Construction’s Director of Corporate Diversity and External Affairs Doug Cunningham participated heavily in the development of the team’s proposal, presented the team’s DBE plan during the interview, and pledged the commitment of Walsh to making this project a success from both an Equal Employment Opportunity and DBE participation perspective. The Walsh team consists of Walsh Construction, Milestone Contractors, Jacobs Engineering Group Inc., Buckland & Taylor Ltd. and Guthrie/Mayes Public Relations. Outreach—KYTC engaged in a robust outreach strategy to ensure that the local community is fully aware of the project and its opportunities for DBE firms. Two DBE outreach meetings have taken place to date, with others planned by both the Walsh Design Build Team and KYTC in the upcoming months. In addition, KYTC partnered with the Tri-State Minority Supplier Development Council and the local minority contractors association to publicize opportunities to firms that are not currently certified as DBEs in Kentucky. Business Development—Realizing that some DBEs will need assistance preparing for the large scale opportunities the project will present, KYTC has engaged the services of two DBE Supportive Services consultants to provide technical training and assistance to DBE firms. TKT & Associates and Mo Better Marketing are currently engaging in contractor training programs including the recent completion of an Entrepreneurial Development Institute. In addition, KYTC partnered with the USDOT Small Business Transportation Resource Center to offer the Bonding Education Program to DBE firms. Finally, in January 2013, KYTC worked with the USDOT Short-Term Lending Program to enlist Metro Bank, a Louisville-area community bank, into the program as an approved program lender.
“This is the largest transportation project in the history of Kentucky by a factor of 10.”
Chuck Wolfe, director of the KYTC Office of Public Affairs
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Ready, Willing and Able—Despite all of the strategies mentioned previously, the success of this project in exceeding the DBE goal, providing profitable business opportunities to DBEs, and reaching the community depends on the availability of ready, willing and able firms to work on the project. KYTC and the Walsh team are aware that this challenge is the “elephant in the room” when it comes to meeting the DBE goal on a project of this size. Cunningham said, “We are already analyzing the interested DBE firms to make sure we put packages together that DBE firms can successfully complete. Our first goal will be to use DBEs Tyra Redus and Melvin Bynes from the local community, but if the expertise doesn’t exist locally, we will also solicit DBEs from outside the area to make sure we meet the goal. But even if we use firms from other areas, we are going to encourage
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them to hire local workers on the job.” Monitoring—KYTC was proactive in planning for ongoing compliance and monitoring on the project by Walsh. Director Redus said, “The Walsh team is required to report monthly on the utilization of DBE firms, and must also submit an annual DBE plan each year during the life of the project. There are financial disincentives built in for not meeting the DBE goal.” To comply with these requirements the Walsh team has already hired a full-time DBE/EEO program manager for the project. Collaboration—Finally, KYTC has taken an additional step to ensure the success of this program. KYTC DBE Program Branch Manager Melvin Bynes will move his office from the KYTC administration building to the Walsh team continued on page 33
Brenda R. Nnambi, Director WSDOT Office of Equal Opportunity
versity Leadership Award from the Women Transportation Seminar, International (WTS). She also serves on several boards and committees including the National Association of State Minority, Women and Disadvantaged Business Enterprise (M/W/DBE) Directors; and she is a past president of the Puget Sound Chapter Women’s Transportation Seminar (WTS) International. Under her department’s leadership, WSDOT just completed a disparity study that Nnambi said, “clearly demonstrates a need to continue to have a race conscious/race neutral combination program.” She said WSDOT now has the largest transportation program in the state’s history. The organization is currently seeking funding to replace a major bridge –the Columbia River Crossing –that will connect Washington and Oregon. Three entities (WSDOT, Oregon DOT, and “Tri-Met,” Portland’s Transit Authority) will come together to discuss reciprocal certification, how to create a single DBE goal, and how to best manage the project since all three groups have different processes. “This is not easy work, and it can be very political in nature. You have to stay professional, above board, and ethical in everything that you do,” Nnambi said. Some of the WSDOT agency’s notable recent accomplishments include: • Hosting a Business After Hours event in partnership with Sound Transit and the Port of Seattle, which is attended by hundreds of people. DBEs get to network with prime contractors, and “Champions of Inclusion” awards are given out to acknowledge the primes for their efforts. • Serving as lead host for the 2014 Regional Contracting Forum, a one-day event that attracted more than 1,200 participants in past years. The event offers speed networking, exhibitors, a reverse tradeshow, and a platform to discuss contracting opportunities. • Sponsoring a DBE Advisory Group where all participants on the advisory council represent an organization other than their own company. Members include organizations such as the Washington Asphalt Pavement Association, National Association of Women in Construction, the Puget Sound Chapter of the Women’s Transportation Seminar and the American Council of Engineering Companies. Nnambi said the key to effective results for any DBE program is to get out of the office and get to know businesses in the program and the people within the agency who help make it successful. “It can’t be your program,” Nnambi said. “Even though the DBELO may lead the effort, it takes a lot of people in the agency to make it work.”
DBE Liaison Officer Spotlight BRENDA R. NNAMBI
Brenda Nnambi lives by a very simple philosophy: “Do the right things right.” From the time she was 11 years old, Nnambi had a profound interest in civil rights and social justice work and ultimately found her professional niche right out of college at her first job with the Ohio Civil Rights Commission. As a self-described “peacemaker,” her passion for helping minority businesses develop and making a positive difference in the lives of people has grown over the years. “It’s nice to be able to say you made a difference in people’s lives and be able to get paid for it,” Nnambi said. For more than 21 years, Nnambi has served as director of the Office of Equal Opportunity for the Washington State Department of Transportation (WSDOT). During her tenure with WSDOT, Nnambi has held statewide responsibility for all civil rights programs at WSDOT, which include affirmative action, Americans with Disabilities Act, workforce diversity training, discrimination complaint investigations, Title VI, environmental justice, Limited English Proficiency, On-the-Job Training, Equal Employment Opportunity contract compliance, and the state and federal Disadvantaged Minority and Women’s Business Enterprise programs. She is currently responsible for all external civil rights programs throughout the state of Washington. Nnambi is the 2012 recipient of the Civil Rights Trailblazer Award from the American Association of State Highway Transportation Officials (AASHTO) and the Rosa Parks Di-
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HMSHost Seeks Win-Win Partnerships with ACDBEs Partnering with a large, established and successful company doing business is key to building your own solid foundation. is a life that many DBE firms dream about. It is the best of Also, the ACDBE must get involved and stay involved, because both worlds; the autonomy of having a business, while at the who is better to look after your own interests but you?” same time having access to the expertise Gomes said, “Sheldon has been a great and resources of a major corporation. partner for us. He brings a lot of talent to What could be better? our joint venture in Raleigh, having been an Ron Gomes, vice president of strategic independent operator for years. He also has alliances at HMSHost (Host) leads the strong ties to the local market, is financompany’s Airport Concessions DBE cially savvy and pays very close attention Program efforts and is charged with to all our business dealings in Raleigh.” creating successful partnerships between Gomes has also developed some inHost and ACDBE partners across the novative and creative approaches to United States. Host currently has approxengaging ACDBE partners. “Securing imately 115 partners, generating around financing is difficult for many ACDBE $350 million in revenue. These alliances firms,” he said. “Our ACDBE partners in include joint venture partnerships and Phoenix experienced this challenge, but sub-tenant partnerships. we were able to work with a Phoenix“We try to engage with partners who area community development financial are a good strategic fit, have a solid uninstitution (PCDIC) that was able to derstanding of the concessions business, arrange financing for several of these 42nd Street Oyster Bar location at Raleigh Durham who maintain a positive image in their ACDBE firms that needed to build out International Airport operated as a joint venture respective communities, and who are their locations. The PCDIC partnered between ACDBE firm J.Q. Enterprises and HMS Host. serious business people,” Gomes said. with Mutual of Omaha Bank to provide However becoming an ACDBE partner with a prime financing and Host entered into sub-tenant agreements with concessionaire such as Host is not a path to easy street. “It’s the ACDBEs. Since we opened in 2012, all of the locations not easy at all!” said Gomes. “A successful partner for Host are doing well and it has been a great partnership for us.” must have a thorough understanding of the airport industry, a While working in an airport environment can be very strong handle on the financial aspects of the business, and be demanding and require long hours to operate successfully, willing to get down and dirty in the operation. This industry Gomes says that operating a business in an airport can cretakes a ‘hands on’ approach to being successful.” ate a greater degree of success than on the traditional street An engineer by training and a former real estate developer corner. “People are getting to the airport much earlier these in the Host organization, Gomes brings a business focus to days given all of the security restrictions; sometimes we will the recruitment and engagement of DBE partners. “I look for feed customers two meals before they leave the terminal, so alliances with ACDBE firms that want to become an integral business can be pretty good.” part of the management team; not just an observer. They also need to be positive and creative to develop win-win situations for both their firm and Host.” Sheldon Poole, president of J.Q. Enterprises, is a joint venture partner of Host at the Raleigh Durham International Airport in North Carolina. The joint venture operates several restaurants including a 42nd Street Oyster Bar, California Pizza Kitchen and Starbucks Coffee. Poole said, “Operating as a successful joint venture partner depends on the ACDBE having their own operational skill set and developing relationships throughout the prime’s organization. Learning the business of Sheldon Poole, president of ACDBE firm J.Q. Enterprises, Inc.
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Ron Gomes, Vice President of Strategic Alliances at HMSHost.
June 2013 Volume 1, Issue Number 1 Publisher: Shelton A. Russell Managing Editors: PR PROS, LLC Creative Director: William Cash
Because “That’s The Way We’ve Always Done It” Doesn’t Work Anymore.
Digital Media: Toinette Rorie Editorial: Janet Christy Melvin J. Gravely II, Ph.D. D. Keith Pigues, Ph.D. Philip Russell Amikka Smith Jordan Taylor Headquarters: 514 Daniels Street, #186 Raleigh, NC 27605 Web site: www.AmericanDBE.com Social Media:
About American DBE Magazine: American DBE Magazine is the premier PublicRelationsCopywritingSocialMediaManagementCrisisCommunicat industry resource for individuals and stakeholders work within the federal nnect Blog Link who Pin Hangout Share—REPEAT—Post Tweet Publish Email Connect Blog Link Pin Hangout Share Disadvantaged Business Enterprises program administration. American DBE Magazine is alMediaManagementCrisisCommunicationsMediaCoachingBrandEnhancementMediaMonitoringDigitalMedia published quarterly and distributed in all 50 states—plus Puerto Rico and the U.S. Virgin Post Tweet Publish Email Connect Blog Link Pin Hangout Share—REPEAT Islands—to DBE program administrators, business owners, and professionals in the PublicRelationsCopywritingSocialMediaManagementCrisisCommunicationsMediaCoachingBrandEnhancementM Aviation, Highway Construction, and Public Transit industries. Post Tweet Publish Email Connect Blog Link Pin Hangout Share—REPEAT—Post Tweet Publish Email Connect B Subscriptions: American DBE Magazine is published quarterly in March, June, September, and December. The annual subscription rate is $19.99 including online editions, special industry reports, and four issues; single copy list price is $5.99 plus postage originating from Raleigh, North Carolina.
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Advertising Sales: editor@AmericanDBE.com (919) 234-6429 office
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California’s $68.5 billion high-speed rail line is set to begin construction this year. (Photo: California High Speed Rail Authority)
Has High-Speed Rail Been Derailed? by Ryan Holeywell
During a congressional hearing late last year, Transportation Secretary Ray LaHood and Rep. Jeff Denham, a Republican representing California’s Central Valley, got into a testy exchange. At issue was the administration’s much-ballyhooed High-Speed Intercity Passenger Rail (HSIPR) program, and more specifically, its marquee project: the federally supported San Francisco-Los Angeles line set to begin construction this year. At speeds of up to 220 mph—the whole trip would take just two hours and 40 minutes—it would be this country’s first bullet train. In the hearing, Denham was skeptical of the state’s business plan. The project costs $68.5 billion, and California officials expect the feds to pick up $42 billion of that total. Where, Denham asked LaHood, would that huge amount of federal funding come from? “We’re not going to get one dollar as long as there’s language in appropriation bills that says no federal money can be spent on California high-speed rail,” replied an agitated LaHood, referring to an amendment Denham had championed last year.
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“That doesn’t help us.” That amendment, Denham replied, is “not meant to help you.” That tense exchange is emblematic of the paradoxical position in which high-speed rail finds itself today. True high-speed rail is closer than ever, but its long-term future is in a decidedly precarious position. In a bitterly divided Congress focused on deficit reduction, HSIPR hasn’t received funding since 2010. Even staunch rail advocates concede that another huge infusion of high-speed rail cash remains unlikely anytime soon. Four years after President Obama declared high-speed rail a major national priority, the financial hurdles seem higher than ever. A recent Government Accountability Office (GAO) report illustrates the challenges. In California, for example, if the feds were to pony up the rest of the $42 billion the state is expecting, it would be more than the federal government spends nationwide on grants for new subway, light-rail and bus rapid transit lines combined. Or take Amtrak’s new plan outlining high-speed rail in its Northeast Corridor. The cost is pegged at $151 billion. For Amtrak to do significant work, the feds would likely have to pick up 50 to 80 percent of the tab, according to the report. At a time when Congress has canceled White House tours in order to reduce spending, it’s hard to envision Washington lawmakers making that sort of long-term commitment anytime soon. “In this environment, the money isn’t there,” says Emil Frankel, a visiting scholar at the Bipartisan Policy Center who served as assistant secretary for transportation policy under George W. Bush. “Where’s the money going to come from? In balancing the demands of the federal budget -- let alone state budgets -- it’s just impossible to imagine.” But the administration did imagine a robust high-speed network just a few years ago. Within 25 years, the president frequently proclaimed, 80 percent of Americans would have access to high-speed rail. As part of the federal stimulus package in 2009, about $8 billion went to HSIPR. (The administration says it’s invested $12 billion in high-speed rail, a total that includes other appropriations in 2009 and 2010, as well as separate Amtrak funding.) Supporters touted high-speed rail as a way to create jobs, support the economy, protect the environment and ease traffic congestion in a country whose population is projected to grow by 100 million by 2050. Today, those high hopes are a dim memory. Last month, Obama released his latest budget touting high-speed rail, which provides $40 billion over five years to fund the development of high-speed rail and other passenger rail programs as part of an integrated national transportation strategy. It’s become a routine occurrence, but such grand proposals for rail expenditures
have increasingly rung hollow. In a budget deal struck with Republicans in April 2011, the administration lost funding for its HSIPR program, and it hasn’t come back since. Denham, the staunch critic of the California project, now chairs the House subcommittee overseeing rail. And the recently passed House budget specifically criticizes the administration’s approach to high-speed rail. Meanwhile, despite all his calls for high-speed rail spending, Obama hasn’t developed a concrete proposal on how to provide an ongoing, dedicated revenue stream for those projects, which advocates say is key. Even the nonpartisan GAO warns that counting on future federal funding for projects like the one in California is highly speculative. Joshua Schank, head of the Eno Center for Transportation, says it’s unlikely at this point that the administration will continue to throw its full weight behind high-speed rail because so far the program “hasn’t yielded much dividend politically. Nor,” he adds, “has it yielded much in terms of high-speed rail.” Still, those involved with the program say the work up until now hasn’t been for naught. In fact, they say, 2013 will likely prove to be a banner year for high-speed rail. Nearly $3.6 billion in federal funds are being spent on projects under construction or scheduled to be within the next six months. Close attention is being focused on the Midwest, where trains on the Chicago-Detroit and Chicago-St. Louis routes already have reached 110 mph on some stretches, and those sections will be extended over the next few years. “Significant progress is being made with these initial investments,” says Joseph Szabo, head of the Federal Railroad Administration. And in the Seattle-Portland corridor, there will soon be six round-trip trains per day, up from four; officials there say the uncertain future of federal funding won’t undo that work. “It’s not to say we don’t want or need federal money,” says Paula Hammond, Washington’s former Department of Transportation secretary. “But our system and service isn’t at risk. We’ve already made the commitment within our state.” Critics point out that these projects, like the majority of the HSIPR lines, aren’t truly “high speed.” In fact, of all the planned routes in the near future, only the San Francisco-Los Angeles train would hum along at speeds comparable to bullet trains in Europe and Asia. Nonetheless, rail advocates say the proposed network is a good start, and that progress -- however slow—is being made. But is the bigger dream dead? Is the vision of a national highspeed network still a possibility? Advocates say not to count the program out. Once the current batch of projects is online, they believe, passengers will witness the advantages of highspeed rail and pressure elected officials to invest more dollars.
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In other words, they think rail will speak for itself. “We’re in the early stages of still fighting and debating this,” says Andy Kunz, president and CEO of the U.S. High Speed Rail Association. “That’s going to be a limited time. We’re going to get past this.” Schank says he expects states and localities to start picking up an increasingly large share of high-speed rail work that might have otherwise been funded by the feds. Such a move would mirror a larger trend in transportation, as lower levels of government are working to improve—or at least preserve— infrastructure by finding their own revenue sources. Indeed, many rail officials say the stimulus’ greatest legacy might not actually be the work done with this round of funding, but instead the role it played in prompting states to start seriously thinking about improving rail service. (About 100 planning and environmental studies were funded at least in part by the stimulus.) In Washington state, for example, officials are developing a long-term rail plan that will be complete later this year. It could call for as many as 13 daily round trips between Seattle and Portland. “We just want to be ready for when [funding] ebbs and flows our way so we can be in position,” says Ron Pate, the state’s acting rail director. Szabo, for his part, says federal leaders tend to follow the lead of state and local leaders. That’s why he thinks the program could be revived in the future. “I’m still very bullish and optimistic,” he says. John Robert Smith, a former member of Amtrak’s board, sees another dynamic that could encourage federal investment in rail: aging baby boomers. “We’re going to be mobile,” Smith says. “We’re going to be engaged in life and with our families. You don’t want us all on the interstate in the next 20 years.” (Some observers say the calculus of federal rail funding is even simpler: If Democrats take control of the House, or at least shrink the Republicans’ majority, the high-speed rail program is likelier to gain support.) More immediately, the federal legislation that deals with rail, the Passenger Rail Investment and Improvement Act, expires this year. Many in the rail community believe that will force a more serious discussion about how -- or whether -- highspeed rail gets federal support going forward. Robert Healy, vice president of government affairs for the American Public Transportation Association, says nobody “expects to have manna from heaven in the next six months.” But, he says, that’s OK for now. “Even if you don’t soon get the kind of investment levels that we’d like to see, we believe there’s an opportunity to continue the program and continue to move it ahead. If it’s more modest than we’d like, we’ll do our best to build on that.” Talk to an advocate of high-speed rail, and at some point he or she invariably will invoke the parallel between rail today and
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the early days of the interstate highway system. The interstate system didn’t take years to build—it took nearly four decades and eight presidencies. California in 2013, they say, is merely like Kansas in 1956, when the first pieces of the highway system were paved. “Let’s pretend we’re Dwight Eisenhower and we’re just beginning to build the interstate highway system,” says Rod Diridon, executive director of the Mineta Transportation Institute and a former board member of the California High-Speed Rail Authority. “There’s no money. You don’t know where to start. But you now need to link this huge nation together, so you scrap together a few bucks ... and you get it started with no expectation there’s going to be a huge grant of funds.” That’s where the country is today with high-speed rail, he says. “Sometimes great, extensive portions of it were built. Other times, when there wasn’t as much money, nothing was built or only small portions. They built what they could when they got the money. What we have is a start.” [Source: http://www.govtech.com/transportation/Has-High-Speed-Rail-BeenDerailed.html - originally published by www.governing.com ]
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AMAC
Airport Minority Advisory Council Connects DBEs With Rental Car Companies
New Rental Car Operators Procurement Series Paves the Way for DBE Opportunities By Amikka Smith
Right: AMAC Executive Director Shelby Scales, second from left, meets with fellow staff members (from left) Kenneth Weeden, Julia Pagan and Chuck Covington.
Above: The U.S. rental car industry has annual revenues of more than $23 billion, presenting significant opportunities for DBE firms. Photo: Kenneth Williams Caleno/Shutterstock.com
If you’ve ever rented a car, then you’re already a consumer of the rental car industry. But, have you ever considered becoming a partner, a vendor, or a supplier? The Airport Minority Advisory Council (AMAC) is working to get more disadvantaged businesses involved in the supply chain process for the rental car industry. AMAC is the only national non-profit trade association dedicated to promoting full participation of minority-, women-owned, and Disadvantaged Business Enterprises in airport contracting. Now, through a new series called the Rental Car Operators Procurement Forum, AMAC will promote efforts to increase minority-owned and women-owned business participation in the rental car industry. Shelby Scales, executive director of AMAC, said, “All the rental car operators are growing in terms of their business. What we are not seeing is that distribution of growth in terms of dollars spent with minorities and women business owners.” The Rental Car Operators Procurement Forum kickoff was held April 18 at the Charlotte Douglas International Airport in Charlotte, North Carolina. The event was hosted by the airport, AMAC, and official sponsor Enterprise Holdings.
Business owners throughout the region attended to network and connect with all of the major rental car brands. Future plans for the forum include expanding the event into a nationwide effort, with a goal of having one in each of AMAC’s eight regions. All airports that receive federal grants totaling $250,000 or more must have an Airport Concessions DBE program for rental car concessions. Each airport sets a goal for ACDBE usage based on total revenues from the rental car operators located at the airport and the percentage of goods and services procured from certified ACDBEs. Typically, ACDBE usage goals average about 10 percent based on the size and location of the airport and the number of eligible ACDBEs. Although the DBE goal-setting process is consistent throughout the airport and rental car industries, the results have varying level of success. According to AMAC Board of Directors Co-Chair, Sean Fitzgerald, who is also the vice president of airport properties and relations for Enterprise Holdings, the current goals rental car operators are required to meet are unobtainable. Fitzgerald said: “Unfortunately, with the way we do busiAmerican DBE
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ness, our biggest purchases are vehicles and fuel. There isn’t a minority dealer that we are aware of in the entire rental car industry, and rarely do you have a minority dealer that qualifies as an ACDBE; and the reason for that is the personal net worth limitations. So when you think about us purchasing vehicles—anywhere from $20,000 up to $50,000—and we take the goals for the rental car companies, which is 10 percent of our revenue [that] needs to be purchased with ACDBEs, it’s impossible for us to maintain that goal. “We understand that problem, airports understand that problem, AMAC understands that problem, and the FAA understands that problem. Since we all understand that problem and understand these are goals we can’t obtain, we’re working with all the stakeholders to come up with goals that are reasonable, obtainable, and provide transparency of the Shelby Scales, AMAC Executive Director purchases we’re making, and we’ll really set goals that we can be held to.” In 2012, the publication Auto Rental News reported that the rental car industry had revenues in the United States of approximately $23 billion, presenting a significant opportunity for minority- and women-owned businesses. With successful implementation, even a modest DBE program goal of 6.5 percent could potentially generate more than $1 billion in spending with DBE firms across the country. According to Debi Combis, formerly the ACDBE/DBE program manager for Charlotte Douglas International Airport, setting goals is only one aspect of the problem. “The rental car companies have a hard time finding vendors because they don’t know where they’re located and the services they provide, and that’s where AMAC comes in,” Combis said. Through one of its strategic partnerships, AMAC has a directory of more than 40,000 DBEs in a searchable database. The Rental Car Operator’s Procurement Forum event addressed several issues that DBEs face. To start, the program included a panel discussion on rental car procurement opportunities by rental car representatives, and a panel discussion regarding the DBE certification process. After a networking lunch, participants learned about business financing alternatives and upcoming AMAC initiatives to create more opportunities for DBE firms. “To me it opens up the opportunity for small businesses to grow. If we as a corporation can assist small businesses, it’s a great thing,” said Maria Brooks, central back office administrator/DBE coordinator for Hertz Corporation. “Small businesses have to fight the larger people to make everything work; to me they’re the bread and butter of America.”
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In addition to the rental car opportunity forum, AMAC also used the event to introduce a new initiative to conduct research and publish a whitepaper concerning DBE participation in the rental car industry. The initiative was introduced by AMAC independent consultant Genelle Allen. An experienced airport diversity professional, Allen will lead the project by working with DBE firms, DBE program administrators, and rental car companies to develop strategies to improve DBE involvement in rental car opportunities. The whitepaper is a proposal with specific recommendations on how to revamp the ACDBE/DBE program for airport rental car operations. It will focus on: certification, introducing the concept of national and regional suppliers, and addressing issues with personal net worth. “I see it time and time again. If you do not put goals in contracts, if you don’t make people use ACDBEs, they don’t use them--though they’re available, ready, willing, and able,” Allen said. “Advocacy is so important, and I think AMAC plays such a key role in promoting why it’s so important to have women and minorities in aviation.” Further discussion of the whitepaper and other initiatives will be presented to the general public for feedback during the 2013 AMAC Airport Business Diversity Conference taking place June 8-11 in San Diego, California. For more information, visit www.AMAC-org.com.
Representatives from major rental car companies discuss their business opportunities for ACDBE firms at the AMAC forum.
AIRPORT MINORITY ADVISORY COUNCIL
Promote, Prepare, Influence, Advocate
Airport Minority Advisory Council The Airport Minority Advisory Council (AMAC) is the only national, non-profit trade association dedicated to promoting the full participation of minority-owned, women-owned and disadvantaged business enterprises (M/W/DBEs) in airport contracting and the inclusion of minorities and women in employment. We have two primary goals: to eliminate the barriers to minority and women participation in the airport industry and to capitalize on the opportunities available in this multi-billion dollar industry. contracting opportunities throughout the aviation industry.
2013 Airport Business Diversity Conference. June 8-11, 2013 San Diego, CA
19th Annual Airports Economic Economic Opportunity & Opportunity Policy Forum& Policy Forum Decenber 2-4, December 8-10,2012 2013 Houston,FL TX Orlando,
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Project LIFT Leaders Inspiring Future Talent and AMAC Gateway Scholarship Programs in aviation
Most transportation officials, DBE program administrators, and other stakeholders for minority/women business initiatives can agree that the purpose of all DBE programs is to “level the playing field” and present equal opportunities for economic development through commerce. However, there is much disagreement about whether the DBE programs actually accomplish or approach the goals of equal accessibility and By Jordan Taylor economic parity. Enter… the Disparity Study, a document used to provide strong, defensible evidence for the creation, development, and administration of Minority/Women Business Enterprise programs. Defining Disparity Studies First, what is a disparity study, and what do the results of a disparity study mean to the average Disadvantaged Business Enterprise? Last, how do the findings and recommendations of a disparity study ultimately impact business climates at the local, state, and national levels? A disparity study is a comprehensive overview that measures participation by DBEs on contracts in comparison to the percentage of work awarded to majority firms. The purpose of disparity studies is to provide an objective assessment of whether or not race- and gender-conscious Disadvantaged Business Enterprise programs are needed to assist minorityand women-owned firms seeking public sector work. In practice, disparity studies examine whether and to what extent there are disparities between the availability of DBEs and their utilization on public and private sector contracts and subcontracts. This is known as the “disparity index” or “disparity ratio,” which is calculated by dividing the utilization of DBEs by the availability of DBEs [NCHRP Report 644]. Utilization by the contracting agency is assessed by previous DBE contract awards and actual payments to DBEs. Availability is defined as the number of qualified minority contractors “willing and able” to perform a particular service for the state and/or local government. Henry M. Lancaster II, president of the public policy and association management firm Lancaster Craig & Associates said, “Disparity studies identify the potential business enterprise participants in a given profession or service area and the potential of the market to engage their services if given a level playing field for access and participation to opportunity. The
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DECIPHERING the DBE ‘Disparity’ information can be used to improve business opportunities by affording the public contracting entity to structure opportunities and goals in areas where disadvantaged business opportunity is statistically likely to occur. It also reveals areas of business opportunity where the disadvantaged business entities may be lacking and thus could focus their efforts to participate in a given industry area.” How is DBE Disparity Determined? Disparity is an age-old discussion. Similar to the “digital divide” of the 1990s that highlighted the disparities between technology haves and have-nots, states and local municipalities continue to face the ever-increasing challenge of monitoring and addressing DBE contracting inequities for women and minority groups. In almost every aspect of business and industry, American capitalism is the proverbial tale of two cities; historically characterized as David versus Goliath, and politically defined as the 99 percent versus the 1 percent. Although there is nothing new about the “big guys versus the little guys” debate, there is an ongoing conversation about what’s referred to as “reme-
dial” solutions; DBE programs, legislation, and policies that seek to “remedy” the sources and symptoms of discrimination, inequality, and disparity in federal contracting. Typically, the process used to set goals for DBE participation includes compiling bidder’s lists, data from recent disparity and availability studies, DBE directories, U.S. Census data, and alternate methods such as previous contract responses and databases. Research collection methods also include individual interviews, focus groups, online surveys, public hearings, mail surveys, telephone surveys, and solicitation of written comments about the bidding process. In terms of disparity, DBE availability, and DBE utilization, the issues of qualifications and capacity often dominate the conversation. Questions are posed regarding the metrics of what makes a firm—DBE or otherwise—qualified to bid on certain types of work. Additionally, are there barriers to qualifications and capacity that have to be considered for their impact on disparity, such as bonding limits, access to working capital, and access to knowledge about the bidding and decision-making process? Once this data is collected, disparity study analysis presents
a comparison of DBE utilization to DBE availability. But as the adage goes, the devil is in the details. How can a consultant accurately measure DBE utilization on bid packages often constructed with layers of subcontractors, consultants, temporary, and part-time labor pools, which aren’t tracked? And furthermore, how does a contractor effectively estimate a true representation of DBE availability when companies frequently move, merge, close, expand, and overlap within standardized industry codes? It is generally accepted among DBEs that disparity studies should reflect and address the obvious: the amount of dollars spent (or lack thereof), the number of contracts awarded, the absence of a competitive field of minority bidders, and the persistent inequality in economic gains for women and ethnic minorities in business. But it’s important to note that a basic review of contracting data alone is not sufficient to determine the absence or presence of disparity – as defined by the federal government. Some disparity studies find that there is no actual disparity in how public sector work or bids are awarded. In those cases, what happens when there is no statistical data to support what general observation confirms? Since disparity study results can make or break the existence or continuance of M/WBE programs, the stakes are relatively high. Attorney Colette Holt, principal of Colette Holt & Associates said that there are many ways to evaluate evidence of discrimination. Focusing solely on the agency’s spending patterns—especially if it has been running a DBE program—is insufficient and can mask the —Attorney Colette Holt, continuing efColette Holt & Associates fects of marketplace discrimination. She said other data used to assess the
“Federal courts require us to prove the continued existence of discrimination. A bad study is a disaster. The DBE programs are critical, and a good disparity study is critical to a strong program.”
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overall performance of women- and minority-owned firms include using U.S. Census data on minorities’ business formation and earnings rates; reviewing business credit and business loan approvals through the Federal Reserve Board and U.S. Small Business Administration; and compiling anecdotal data from minority and majority firms to identify patterns of discrimination. In addition, she noted that regions and markets have both geographic and product dimensions, so accurate utilization of disadvantaged Colette Holt collects input from participants at a focus businesses needs group in Raleigh, North Carolina regarding the N.C. to incorporate Department of Transportation DBE program in May. both of those perspectives to determine actual availability of minority- and women-owned firms. According to Holt, a well-researched and well-written disparity study breaks out data by race, ethnicity, and industry, which then leads to the question of what to do with the information. “Federal courts require us to prove the continued existence of discrimination,” Holt said. “A bad study is a disaster. The [DBE] programs are critical, and a good disparity study is critical to a strong program.” DBE Program Objectives & Definitions The federal statute that defines the Disadvantaged Business Enterprise program states: The purpose of the overall goal— and, in fact, the DBE program, as a whole—is to achieve a “level playing field” for DBEs seeking to participate in federalaid transportation contracting. To reach a level playing field, recipients need to examine their programs and their markets and determine the amount of participation they would expect DBEs to achieve in the absence of discrimination and the effects of past discrimination. The primary objectives stated within the U.S. Department of Transportation (DOT) DBE Program are to: • Ensure “nondiscrimination in the award and administration of DOT-assisted contracts in the Department’s highway, transit, and airport financial assistance programs”; • “To create a level playing field on which DBEs can compete fairly for DOT-assisted contracts”;
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• “To help remove barriers to the participation of DBEs in DOT-assisted contracts”; and • “To assist the development of firms that can compete successfully in the marketplace outside the DBE program. In summary, the DBE program seeks to increase the number of firms that are certified to compete in transportation and highway construction projects, while also encouraging prime contractors to subcontract to DBEs and meet pre-determined participation goals on specific projects. But in order to understand federal rulings and how subsequent laws and DBE program guidelines are formulated, it’s important to speak the language and know how the terminology is defined. The U.S. Commission on Civil Rights 2006 “Disparity Studies as Evidence of Discrimination” report offered the following definitions: • Disparity is simply a measured difference between two groups on an outcome of interest, such as a difference in the number of contracts awarded to women-owned or minorityowned small businesses and other businesses. • Underrepresentation is a disparity in which the difference goes against a particular group—for example, a lower number of contracts awarded to women-owned or minority-owned small businesses than to other businesses. • Discrimination involves differential adverse treatment of a group compared with others based on membership in the group, such as failure to award a contract to a minority-owned firm because of a prejudice against minorities. DBE programming has been significantly impacted by the landmark court case of the City of Richmond vs. J.A. Croson Co., where the U.S. Supreme Court found that racial quotas for awarding government contracts are not justified by general evidence of society-wide inequality. The court went on to say that because the city of Richmond did not investigate any race-neutral methods to correct the imbalance, its 30 percent contracting quota did not correspond to any actual measured injury suffered by M/WBEs. The Croson ruling also that stated, “Where there is a significant statistical disparity between the number of qualified minority contractors willing and able to perform a particular service and the number of such contractors actually engaged by the locality or the locality’s prime contractors, an inference of discriminatory exclusion could arise.” It has been documented at the federal level that to justify race-based programs, data must provide evidence of “patterns of deliberate exclusion,” while noting that statistics can only provide an inference of discriminatory exclusion. In other words, numbers don’t necessarily make the case for the creation or advancement of race/gender-focused programming. And although discrimination typically results in disparity, not
all disparity occurs as a result of discrimination. Hence, there are strict standards and guidelines that govern the development of DBE programs, with the intent to prioritize race-neutral and gender-neutral solutions to contracting inequities. A report produced by Colette Holt & Associates for the National Cooperative Highway Research Program on disparity study guidelines lists a number of barriers that continue to challenge DBEs, including: exclusion from the existing network of general contractors, short-term presence or the absence of longevity in the industry, limited access to union membership, race-based denial of access to start-up and working capital; non-solicitation of DBEs in the absence of DBE goals; bid shopping of DBE quotes to non-DBEs; industry domination by “informal, racially exclusionary business networks”; discrimination by surety bonding companies; and price and delivery discrimination by suppliers. The report also lists drawbacks of existing disparity studies, many of which fail to accurately measure DBE availability, and use incomplete or obsolete data. DBE ‘Good Faith Efforts’ Part of the federal requirements for leveling the playing field include a “good faith effort” by prime contractors to proactively reach out to underrepresented groups and promote higher minority and DBE participation, and to meet contract goals. However, it’s important to acknowledge that good faith efforts may result in different levels of outreach from different contractors. For this article, a review of multiple disparity studies, DBE and M/WBE policies identified a number of recurring activities that qualify as demonstrations of “good faith” to actively solicit DBEs to perform specific scopes of work. Such actions include hosting outreach meetings, offering technical training assistance or support, collaborating with local minority economic development organizations to attract DBEs, advertising in minority/women-owned media or trade publications, networking with minority business owners, providing bonding or insurance to encourage DBE participation, and segmenting work requirements to encourage maximum project participation. What Role Can DBEs Play? Across the country, the investment by states and municipalities to acquire disparity data ranges from several hundreds of thousands for availability studies to more than $1.5 million for yearlong disparity studies. In many instances, disparity studies have been used to demonstrate a lack of discrimination in the bidding process, overrepresentation of minority utilization, and the unsubstantiated need for race- and genderrelated contracting goals – making the case for dismantling or
limiting DBE or M/WBE programs. DBEs in pursuit of federal or state contracting opportunities would be well advised to actively participate in the disparity study process to ensure full par ticipation and fair representation. Holt suggests that DBEs focus on becoming more educated about disparity studies and proactively organizing to build political power and strong coalitions to ensure that their —Melinda Carter, Director concerns are of the City of Columbus Equal voiced and Business Opportunity Office their needs are addressed. Melinda Carter, Director of the City of Columbus Equal Business Opportunity Office said that for the public sector, data derived from a disparity study provides guidance for the creation of policies that will positively impact the ability and likelihood of minority-owned and disadvantaged businesses to successfully compete for contracts. Information regarding the number of available firms (majority and minority), the potential contract opportunities and ultimately the amount of dollars awarded to all firms (majority and minority) is usually an eye-opener. Carter said, “The disparity study is critical to the explaining how our past and current contracting policies affect a public entity’s ability to attract and retain a large pool of diverse contracts and suppliers. Ultimately, I think the most important role the disparity study shows is that minority and disadvantaged businesses are just not ‘belly aching’ and there really are some groups that have been historically underrepresented through no fault of their own.”
“Ultimately, I think the most important role the disparity study shows is that minority and disadvantaged businesses are just not ‘belly aching’ and there really are some groups that have been historically underrepresented through no fault of their own.”
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Business Development
What It Takes To Win With Customers Amazing things happen when an organization begins to think first about how it can make its customers better off. Really. The days of defining winning by only considering your own P&L are over. Leading B-2-B companies are focused on making their customers more money than their competitors and getting their fair share… otherwise known as “winning with customers.” So how can you tell if your organization is focused on winning with customers? Let’s begin with the all-important question: Do your customers make more money doing business with you? As you ponder this question, consider the following four statements that describe a company on the right path— how many describe your organization? • We know specifically how we help customers make more money. • We understand how we will make our customers more money in the future. • We measure and track how much money customers make doing business with us over time. • We measure and track how much more money our customers make doing business with us relative to our competitors. After polling people in hundreds of companies, less than 5 percent agreed that all four statements fit their company. The good news: There is a big opportunity for companies to create real competitive advantage by investing time and energy to understand and execute the winning formula. So what does it take to win with customers? There are six important ingredients: 1. Help customers make more money by having a different conversation—one that focuses on the ‘measurable’ financial value you create for them today and the specific opportunities to create more value in the future. This new conversation is guided by a new method of gaining customer insights, known as Customer Value Creation (CVC), and identifies the specific parts of your offering that customers value – no more guessing or gut feelings. 2. Inject quantitative, ‘outside-in’ information regarding what customers value into your decision-making. (Yes, sometimes we don’t know as much about our customers as we think we do). There is a new financial metric in town that cuts through the rhetoric and opinions to truly provide a measure of how 32
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much more (or less) money your customer makes doing business with you. This metric is called the Differential Value Proposition or DVP, and measures the incremental operating profit your customer earns doing business with you versus a competitor. Finally, there’s a measure of competitive advantage to provide the complete picture of winning. 3. Develop and execute plans with customers that deliver value and clearly outline what is expected in return. The plans that emerge are a result of true collaboration with customers to identify the opportunities that are financially attractive to the customer, within your ability to execute, and that allow you to make an attractive profit. The plans are shaped by what is called “The List” – the Top 3 to 5 opportunities that truly create value for the customer, along with the specific requirements for success and the estimated financial impact on the customer’s business. 4. Predict future profit growth for both you and your customers by aligning your investments with their impact on customers’ profits. After operating the business with this approach for several periods, the organization learns what works and what doesn’t, which opportunities deliver more or less value, and the types of offerings your organization develops and delivers better than your competitors. 5. Build your organization’s winning capability by shaping a culture that focuses on making customers more money, where every employee knows how he or she can contribute to creating value for customers. Organizations that are doing this well have discovered that this shift in the way you win with customers requires a new approach to engaging employees by re-orienting their work and measures of success around what creates value for the customer. 6. Systematically use a Customer Value Creation (CVC) playbook to keep your organization on the winning path, using training and software tools to equip and mobilize the entire organization. There is no silver bullet to win with customers, but there is now a proven approach with supporting tools to help companies win and win big. D. Keith Pigues, Dean of the School of Business at North Carolina Central University, is co-author with Jerry Alderman of “Winning with Customers: A Play book for B2B,” which was published in 2010 by Wiley & Sons. He can be reached at keith@dkeithpigues.com or dkeithpigues.com.
President Obama Nominates Anthony Foxx as Secretary of Transportation President Barack Obama announced Mayor Anthony Foxx, of Charlotte, N.C., as his nominee for Transportation President Barack Obama Secretary, in the announced Mayor Anthony East Room of the Foxx, of Charlotte, N.C., as House, his nominee for Transpor- White April 29, 2013. tation Secretary, April 29, 2013, at the White House. Since taking of[Source: White House fice in 2009, Foxx photo by Pete Souza] has helped turn around the city during what President Obama described as a “bruising economic crisis.” “The economy is growing. There are more jobs, more opportunity,” Obama said. “And if you ask Anthony how that happened, he’ll tell you that one of the reasons is that Charlotte made one of the largest investments in transportation in the city’s history.” Obama shared that since Anthony took office, “The city of Charlotte has broken ground on a new streetcar project that’s going to bring modern electric tram service to the downtown area. They’ve expanded the international airport. And they’re extending the city’s light rail system. All of that has not only helped create new jobs, it’s helped Charlotte become more attractive to business.” President Obama said that one of the best ways we can grow our economy and rebuild opportunity for the middle class is by putting more Americans back to work by investing in rebuilding our infrastructure. In his State of the Union address, President Obama proposed a “Fix-It-First”
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office to share space with the Walsh DBE/EEO project manager. “This will allow me to work very closely with the Walsh staff to proactively engage DBE Program and EEO initiatives. This will make the process seamless and increase our probability of success on this effort. I’m looking forward to it!” Building a bridge is a complex and detailed undertaking that depends on numerous components coming together seamlessly to complete the project successfully. The same holds true for building bridges to opportunity for DBE firms on a mega-transportation project. Government and community leadership, transportation agency staff, DBE firms, prime contractors, and resource providers all have a part to play to make the project successful. Arik Quam, project manager for the Ohio River Bridges job, said, “Walsh will succeed by identifying scope packages for DBE participation, unbundling those packages to provide more DBE opportunities to bid, hosting outreaches to inform DBE of the opportunities, and transparent communication with KYTC. Additionally, Walsh is encouraging our larger sub-contractors to provide opportunities for KYTC-certified DBE contractors. The Walsh DBE Program Team working alongside KYTC and FHWA will succeed in making the Downtown Bridge a great opportunity for qualified DBE contractors.”
program to put more people to work as soon as possible on our most urgent repairs. “We need to modernize the infrastructure that powers our economy. We need more high-speed rail, and Internet, and high-tech schools, and self-healing power grids, and bridges, and tunnels, and ports that help us ship products all around the world stamped with three proud words: Made in America. That’s how we’re going to attract more businesses. That’s how we’re going to create more jobs. That’s how we’re going to stay competitive in this global economy,” Obama said. During the announcement, President Obama also thanked current Secretary of Transportation Ray LaHood for his hard work and dedication to public service. “Over the past four years, thanks to Ray’s leadership, we’ve built or improved more than 350,000 miles of road—enough to circle the world more than 14 times. We’ve upgraded more than 6,000 miles of rail—enough to go coast to coast and back. We’ve repaired or replaced more than 20,000 bridges, and helped put tens of thousands of construction workers back on the job. He is a good man, and has been an outstanding public servant and a model for the kind of bipartisan approach to governance that I think we need so badly in this town,” President Obama said. [Source: The White House]
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Coming this fall! American DBE Directory Make sure your organization or business is featured in the September 2013 issue of American DBE Magazine with a Classified Ad and Directory Listing. The Directory will highlight: Disadvantaged Business Enterprises Transportation Agencies Prime Contractors and Consultants Concessions Suppliers Promote your products and services to American DBE Magazine readers with a Classified Ad: 44,000+ DBE firm owners and employees 1,000+ transportation agency executives and project managers 1,000+ prime consultants, prime contractors, concessionaires, and suppliers 1,000+ DBE program administrators and staff Visit us online at www.AmericanDBE.com to publish your Classified Advertisement and to update your Directory Listing. American DBE Magazine wants to hear from you! Share your ideas, insights, DBELO ‘Best Practices’ and DBE Success Stories with industry colleagues across the country. Submit Letters to the Editor via email to: editor@AmericanDBE.com. Call. Click. Connect. (919) 234-6429 office www.AmericanDBE.com editor@AmericanDBE.com Facebook, Twitter, Pinterest, and LinkedIn
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