Minority Contractors Seeking a Fair Shake in Guilford County’s Public Projects

by August 3, 2020

Gerry McCants, Chair of the NAACP Economic Development Committee

GREENSBORO — Local contractor Derek Miller’s G.I.A. Painting Co. has been in business for more than 25 years.

Miller has worked on numerous jobs sites throughout the area, sometimes qualifying for the work under his company’s status as a certified “minority and women’s business enterprise.”

Even after all those years, he still finds it surprising how often his is the only Black-owned business on a job.

“I’ll be totally frank with you, that’s the way it is 99.9% of the work sites we go out on,” Miller said.

He would like to see that change. And he’s not alone.

Several decades after governments throughout North Carolina and beyond adopted so-called MWBE initiatives, there’s a growing chorus of criticism that it’s not working out so well for all minorities, particularly Black contractors.

“It’s not like we’re making this stuff up,” said Gerry McCants, the owner of an MWBE-certified consulting firm and a co-chair of the Greensboro Business League civic group, which is lobbying to improve the odds for minority-owned companies to be part of a government-contracted project.

McCants said that after decades of MWBE programming, big-name general contractors still get away with the “we couldn’t find any” excuse.

“Wait a minute, after 20, 30, 40 years, you’re not able to find anybody? Come on,” McCants said. “After a while, you begin to say, ‘What’s going on here?’ ”

That’s the question that prompted the Guilford County Board of Commissioners to put a hold recently on two contracts covering a total of $1.6 million in repairs to several public buildings in High Point.

Instead of awarding the contracts July 16 as they were scheduled to do, the county commissioners delayed voting until Thursday so county administrators could gather more details about why the projects included such low participation by minority contractors.

County administrative staff had affirmed that the two major contractors in question made the required “good faith” effort to solicit and include minority subcontractors as part of their work plans, but had come up relatively short.

Winston-Salem general contractor Frank L. Blum Construction had no Black subcontractors participating in a proposed $907,059 contract for roof work and other repairs at the Guilford County Courthouse in High Point and a nearby county office building.

Blum’s bid allotted just less than 4% of the work, worth about $35,000, to a painting and masonry company owned by a white woman.

The bid also included a significant amount of work for a roofing company owned by a white disabled veteran, but county officials later determined that did not count toward Guilford’s contractual MWBE goal.

Black-owned businesses

The second general contractor whose bid was held up after being flagged last month, Bar Construction of Greensboro, submitted the low bid of $703,000 to replace the High Point Mental Health Building’s heating and cooling system, including $3,000 to two Black-owned businesses.

Miller’s company was included for $1,500 in painting and Black-owned GP Supply of Greensboro was to provide $1,500 in HVAC pipe.

That adds up to less than 0.5%, although the bid also included 1.4% — $10,000 — in insulating work for an approved MWBE firm under Hispanic ownership. Another 2% of the contract went to drywall and disposal companies owned separately by white women.

The county has an official, but nonbinding goal for its contracts to include 10% participation by MWBE contractors , which equates to about $90,000 for Blum’s bid and $70,000 for Bar’s.

County records indicate Blum reported its efforts to increase minority participation included having “contacted 200 MWBE subcontractors and suppliers; emailed plans and specifications out, and made follow-up phone calls to certified subcontractors and suppliers asking about their intent to submit a proposal.”

Bar told county officials it alerted 23 MWBE subcontractors to its pending bid on the High Point Mental Health Center improvements. The company said it also succeeded in getting a major mechanical subcontractor to carve out some of the work for a smaller MWBE company.

Efforts to reach Blum for comment were unsuccessful.

A Bar executive did not want to discuss specific cases but said in general that the company views the county’s MWBE program as “an important tool.”

“We are in agreement with the philosophy and we do our utmost best to select and encourage women- and minority-owned businesses,” said Bruce Guarini, the company’s senior estimating manager.

But he said that public projects go to the lowest bidder and competing firms can only include those minority contractors who have stepped forward to offer their services

“We can only use what we have on bid day,” Guarini said.

Cynthia Barnes-Phipps, the director of Guilford County’s MWBE program, said late last week that she had reviewed additional information provided by Blum and Bar and plans to recommend that commissioners proceed with both contract awards at this week’s board meeting.

Commissioners said last month they wanted more proof that the companies had made sincere efforts to include MWBE subcontractors and had not excluded them in situations where an MWBE might have made the best offer.

Commissioner Melvin “Skip” Alston said county staff members shared their recent findings with him, but he is not persuaded.

Alston said it’s understanding that Bar received bids from several Black subcontractors but they were all rejected. County staff has simply taken Bar’s word that those bids were not competitive, said Alston, who has been the most outspoken commissioner on the issue.

“So we don’t really know whether the minority contractor was higher or lower,” Alston said.

While acknowledging it was not ideal for Bar’s bid to allot less than a half-percent of the mental health building project to Black-owned businesses, paint contractor Miller said that he has allied with the Greensboro-based company for years as a subcontractor and has “nothing negative to say.”

“I believe they bend over backwards to include minorities,” Miller said of Bar, adding that the process requires each partner to perform up to expectations.

“Your price has to be right. You have to bring the quality with you, too,” he said.

The idea behind MWBE efforts stems from a traditional pattern at all levels of government that prevented companies owned by minorities and women from getting a fair share of the public’s business, whether it’s construction work or other contractual dealings.

Critics link that pattern to systemic racism and sexism. But it also comes from laws intended to save taxpayer money by requiring city, county and state officials to award their projects to the lowest bidder.

Better-established companies that are more likely to have white ownership often have such advantages as greater financial reserves and suppliers that give them better prices on raw materials because they are heavy volume customers.

So it’s not surprising who is likely to be more competitive when a general contractor puts the bid together for a project with work for subcontractors in the electric, painting, masonry, concrete, plumbing and other trades.

“You can look at the numbers all day and the numbers are going to tell you the same story,” said Danny Brown, a Black local contractor who owns United Maintenance Group.

Brown applauds the commissioners for red-flagging the two High Point contracts, adding that it’s high time for reform.

“My hat is off to the commissioners for taking the bold move to hold back the contracts,” said Brown, whose local company provides a variety of services in the construction industry, from rock removal to landscaping and design.

Brown said the weakness he sees in MWBE programs involves their subjective standards, which only require a good faith effort by the general contractor to include minority subcontractors.

“They can say that they asked numerous minority contractors and none of them had the capacity to do the work,” Brown said.

But he said it’s not disclosed that “they reached out to you 24 hours before the bid,” failing to give him enough time to put together his best offer.

In business since 1990, Brown has partnered recently as a subcontractor with Samet Corp. in building a new fire station for the city of Greensboro.

“At the end of the day, minority contractors are taxpayers just like everyone else,” Brown said.

Samet reaches out to minority- and women-owned businesses through an in-house program that dates to 2006, according to Johnny Sigers, the general contractor’s diversity project manager.

Samet makes it easier for minority contractors to participate through a “second tier” strategy that breaks out a project’s major subcategories into pieces that a smaller company can tackle.

As an example, Sigers cited a school project that might include $5 million of masonry work and an MWBE contractor who could not tackle the whole job “because he doesn’t have the capacity to keep 25 to 30 masons working on that school.”

So Samet might include the smaller company by creating a separate subcontract for the new brick-and-mortar sign at the front of the school that a smaller company could handle successfully, Sigers said.

Samet also has a “quick pay” program that cuts checks to subcontractors on a more frequent cycle so they can pay their workers on time. That compensates for the possibility an MWBE company might not have financial resources to make payroll from its own reserves while waiting for a larger or lump-sum payment from the general contractor, Sigers said.

He said it is also important for companies to actively reach out to smaller MWBE companies and do their best to assure the subcontractor has a successful experience.


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