With construction projects is expected to increase In the post-pandemic world, some minority contractors say two of the largest participation programs in the area do more harm than good to companies and workers from underrepresented groups.
However, union officials and other construction industry insiders say mandates are the best way to ensure that people from these groups are included.
The relevant courses are the city Milwaukee’s Residential Preference Program (RPP) and Milwaukee County’s Target Business Enterprise (TBE) policy, which set geographic or participation goals for members of under-represented groups working on publicly-supported projects.
The Milwaukee program requires certain percentages of employees in city-aided projects to be residents who are unemployed or understaffed. The idea is that because of the city’s diversity, most benefit from underrepresented groups.
The county’s program, meanwhile, requires an average participation of about 21% by a minority- or woman-owned company in any construction project that does not involve transportation.
The effectiveness of both programs can be scrutinized when the city completes a study of the tendering process for all city contracts – including construction – to determine if it leads to unreasonable results.
RELATED: Milwaukee’s minority businesses fear city contracting isn’t fair. A new study may provide the answer.
In addition to ensuring participation in specific taxpayer-sponsored projects, the goal of such programs is to help companies – and their employees – build capacity and experience to better compete for work on lucrative privately funded projects.
Critics say this does not happen, and instead such companies and workers are pigeon-holed and treated as workers only to help achieve the participation goals.
Mark Phillips, owner of Atlas-Phillips Plumbing LLC, calls such participation programs “a good idea that has gone bad.”
Phillips, a chief plumber, spent 18 years in the trade, four of which were as a contract compliance administrator at Milwaukee County. He said that the employees and companies are often stereotyped and unemployed for a long time – and when they have jobs to fill mandates, relationships with developers are strained.
“The way it is forced down contractors’ throats creates a bad taste in their mouths,” said Phillips. “ When someone says, ‘They’re working on RPP jobs,’ it’s like a knock on you. If you have experience in RPP jobs, those welfare jobs are you had to work on. RPP job means that’s cookie cutting stuff – I can do that in my sleep. “
‘We only get a job when it is welfare work’
The county’s program, and many like it, is based on whether a business or corporation – one that may employ many people – is owned by a member of a group considered historically disadvantaged in the industry .
The city’s program, on the other hand, is based on workers, an approach that may be suitable for the construction industry, as many workers essentially act as free agents and are picked up when there is a need for work on a large-scale project.
Employees must first be certified through the city program. They are only eligible if they haven’t worked in the past 15 days, worked less than 1,200 hours in the past year, or if they meet federal poverty guidelines.
“In theory, it should help people in the community acquire skills and become more employable as a result of publicly funded projects taking place in the community,” said Phillips. “That’s the theoretical part.”
In practice, he said, many of those certified by the city program are on the sidelines until a major publicly funded project comes along.
“There are a lot of people who they can only press a button because they have been sitting on the side waiting for a big project to come,” he said, underlining the idea that the workers are not building skills.
If work is available, the work environment may not be ideal.
“People on the track will say, ‘Oh he’s here because it’s an RPP job,’ which means you wouldn’t be here without the RPP,” he said. “We only get a job if it’s social work, and that’s essentially what RPP is because that’s the only kind of job you can get.”
Dan Bukiewicz, chairman of the Milwaukee Building and Construction Trades Council, said the union is actively encouraging its eligible members to take on RPP jobs.
Mark Kessenich, CEO of the Association of General Contractors of Greater Milwaukee, said its members – who are firms and corporations – have achieved success with such programs during long construction periods.
However, he said there simply aren’t enough of those government-backed contracts and the pandemic has slowed construction significantly.
This was reflected by the results of a survey conducted by the National Association of General Contractors, which cited frequent delays and higher material costs as reasons for the delay.
In the contracting world, developers usually work with a general contractor who then outsources work around the various professions, such as plumbing and electricity. The provincial program requires that a certain percentage of each trade work be done by eligible companies or employees.
That can turn those workers into a “fourth party”.
In his experience, Phillips said that employees and companies who meet an entry requirement are usually too far from developers, property owners, and even general contractors to make a good impression.
“Being a subcontractor, I rarely or never speak to the owner, as I know who owns it, ”he said. So how can I build a relationship with someone if they don’t know I exist?
“That’s where the problem is.”
Industry insiders say alternatives to encourage diversity are scarce
When the Milwaukee Journal Sentinel asked some of the state’s largest construction companies what could be done – beyond mandates through government programs – to boost the participation of underrepresented groups, only one responded.
No one agreed to interviews.
In an emailed statement, Tom Irgens, executive vice president of Irgens Partners, said his business had made inclusion a priority in itself a decade ago through a program to reach all types of construction specialists and subcontractors.
“Having more contractors who will compete for our business is good business practice,” he said in the statement.
Bukiewicz, chairman of the local trade council, noted that participation programs often force general contractors to change their practices, which can hinder participation.
“The reason contractors don’t like to use RPP is because it’s one more thing they have to track and arrange, it’s more paperwork for them,” he said. “In all fairness, the easiest thing they can do is the same thing they’ve always done and that won’t help diversify the trades.”
Kessenich, of the Milwaukee Area Contractors Group, called relationship development “a critical aspect” of how a new company enters the world of private contracting and said his organization is focused on providing more mentorship and networking events for new businesses.
Meanwhile, organizations such as the National Association of Minority Contractors are working to organize regular meet-and-greets to help build natural relationships between property owners, developers and minority businesses and employees.
For its part, Irgens works with Prism Technical Management & Marketing Services, a diversity and inclusion consultancy from the private sector.
Randy Crump, CEO of Prism, said his company regularly works with developers who have projects with participation requirements and helps them collaborate with minority businesses and employees.
He noted that the world of contracting outside of public means is complex. Some minority companies and individual specialists, he said, hurt themselves by overcharging when they are bugged to meet the eligibility requirements for major projects.
“Great contractors will have a long memory and will remember how you took advantage of a situation and may not give it a shot while bidding in the private sector,” Crump said.
He also said that racism has long been a problem: “In the construction industry, many white businesses think that minority businesses only exist through positive action.
“That’s what my life is all about: trying to get people to recognize that there are a lot of great people in this community and frankly they just need a chance,” he said.
According to the US Census Bureau, Wisconsin had 13,791 non-minority-owned construction companies, compared to 592 minority businesses in 2018.
It is difficult to determine the racial distribution of workers in the occupations, as no one currently keeps track of how many are left in the field after completing the apprenticeship scheme.
Bukiewicz said participation programs will always be necessary until the construction industry makes diversity a public priority and private contracts.
“There’s always a backlash that way as far as they go: ‘It feels a little bit forced.’ If you wouldn’t put it in writing in a contract, chances are they will do it voluntarily.As with anything that needs to be improved, you need to write down criteria and milestones to achieve, who else will come forward and do it ? “
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