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Seven Ways to Solve Philly’s #ConstructionSoWhite Problem

We are a society that has, for the most part, respected the rule of law and has used facts, mixed with some sense of human emotion as a basis for all decision making. The facts are discouraging as they relate to diversity and inclusion in real estate and construction in the City of Philadelphia, and yet our sense of human decency towards one-another remains stagnant. Except for a few examples such as Comcast, LF Driscoll, and the Pennsylvania Convention Center, we have come to accept failure as the norm.

Here are the facts: There are a handful of Minority Developers struggling to get in the stream of projects as it relates to impact; there are two or three Black general contractors with significant capacity, Perryman Construction, Pride Enterprises, and McKissack Construction; and there is one woman general contractor with capacity in the City of Philadelphia – Bittenbender Construction. There are more successful minority trade vendors in Denver, Oklahoma City and Portland respectively, versus Philadelphia, whose total minority population hovers at 55%. The 50 Trade Unions in Philadelphia refuse to disclose demographic data except for Laborers Local 332, because they know how telling that data would be as it relates to inclusion. Yet, there is now a labor shortage within the current boom.

To engender positive change, the city, project owners, schools and institutions, developers, and the general contracting community should work collectively to address the crisis of exclusion, while being true to our written core value of inclusion, which we all have in our annual reports.  Here are some immediate steps that we could take to change the narrative in 2020:

  1. Diversity As A Way of Doing Business – Project Owners (institutions, schools, churches, non-profits, government, and private developers) should make a commitment to diversity as a way of doing business. This means adding diverse and smalls firms to the pre-development, professional services, architect, and engineering teams. It is more likely that an all-White predevelopment team will lead to an all-White construction team.
  2. Diversity as a Dashboard Metric – Owners should utilize a request for proposal (RFP/RFQ) bidding scoring process that encourages and rewards joint/venture arrangements between general contracts and minority firms; and joint venture arrangements between majority subs and minority subs.
  3. Create Support Structures – Owners should encourage mentor/protégé relationships between large and small vendors as an acceptable way to boost inclusion. All the above could be made part of the selection metric in choosing vendors.
  4. Forego Low Bids – Owners should avoid the low-bid contractor selection process where studies have shown that low bid is never actually the low bid. Owners should instead utilize a best overall qualified bid/scoring system that rewards qualified contractors on price, quality, and inclusion.
  5. Actionable Consequences – Owners should adopt a posture that rewards firms that adhere to their inclusion guidelines and shun firms that don’t. The markets will automatically respond to inclusion based on Owner/Developer demands.
  6. Create Carve-Outs – Owners can dictate carve-outs at the onset of project planning including, project management, material testing, quality control, project safety, scheduling and project controls. During the construction, Owners and general contractors should seek to carve out smaller parts of large projects and sub those areas to diverse vendors.
  7. Create Support Structures – Owners, developers and general contractors should make a commitment to diversity and adopt a mixture of risk mitigation and rewards to gain internal organizational support. Possible examples:
    • Include diversity in personnel job descriptions, promotions, and raises.
    • Proactively seek ways that mitigate risks such as low-cost, bonding, co-bonding, and insurance programs.
    • Large Owners and Institutions should seek ways to establish/support financing and insurance/bonding programs with intermediaries such as PIDC and The Enterprise Center.

More government regulations that force desired contractor behaviors will fail. Instead, we are in desperate need of Board-Room, C-Suite, and Public Sector leadership from businesses, schools, colleges and universities, churches, institutions, government, quasi-government (PWD, PGW, airport and school district), non-profits, and private developers in the Greater Philadelphia Region to address this glaring issue. Focused leadership in the areas of diversity and inclusion is the only possible solution to the OhSoWhite exclusion crisis.

 

An edited version of Blane Fitzgerald Stoddart’s article was originally published by PlanPhilly, which can be viewed here.

 

Blane Fitzgerald Stoddart

Blane Fitzgerald Stoddart is a Senior Advisor for Econsult Solutions, Inc. and President and CEO of the BFW Group.  With over 26 years of real estate development and construction experience, Mr. Stoddart provides construction project management, program management, owners’ representation, LEED Administration, and development consulting services to non-profit and for-profit developers, government, contractors, schools and institutions in the Mid-Atlantic region.

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