States aim to boost minority firms on St. Croix Crossing project

By Brian Johnson
Dolan Media Newswires

The departments of transportation in Wisconsin and Minnesota are developing a reciprocity agreement to increase participation of minority- and women-owned businesses on the St. Croix Crossing project. (Illustration courtesy of the Minnesota Department of Transportation)

The Minnesota and Wisconsin departments of transportation are working on a reciprocity agreement to boost participation of disadvantaged contractors on the St. Croix Crossing project.

The estimated $626 million project, which calls for a new bridge between St. Joseph and Oak Park Heights, Minn., as well as approach work, will have goals for participation of women-owned and minority-owned businesses.

To count toward those goals, businesses must be certified as “disadvantaged business enterprises,” or DBEs. Individual states have their own certification processes.

Reciprocity agreements such as the one considered for the St. Croix Crossing make it easier for firms certified as DBEs to seamlessly work in other states.

Essentially, a firm certified in Wisconsin would be able to bid on construction on the Minnesota side as though it were Wisconsin construction, said David Solberg, project development supervisor for the Wisconsin Department of Transportation.

On projects that involve multiple states, such as the St. Croix Crossing, such agreements essentially enlarge the pool of eligible DBE firms, thus making it easier to meet the contracting goals.

Alex Tittle, deputy director of the Minnesota Department of Transportation’s Office of Civil Rights, said the Minnesota and Wisconsin DOTs are drafting a “memorandum of understanding” to “hopefully streamline the use of DBEs” from both states.

The goal is to maximize DBE participation, he said.

“National DBE percentages vacillate around 10 percent,” Tittle said. “We want to surpass that. … The expectation from the Federal Highway Administration is for us to knock the ball out of the park on this one.”

Tittle said the St. Croix Crossing project hadn’t advanced far enough for a specific DBE goal to be established. The Office of Civil Rights can’t set a goal until more refined estimates come out about the cost of certain scopes of work.

Reciprocity agreements aren’t exclusive to the St. Croix Crossing. A similar agreement is in place for the upcoming Interstate-90 “Dresbach Bridge” project between La Crosse and Dresbach, Minn.

The agreement for that project includes Iowa, Wisconsin and Minnesota, said Kristin Kammueller, a spokesperson for MnDOT’s District 6 in Rochester. The tentative DBE participation goal for that project is 14 percent, she said.

In May, WisDOT asked DBE firms about their interest in the Dresbach bridge project and 42 of the 243 businesses surveyed “gave positive responses,” according to a July 2012 WisDOT newsletter.

DBE subcontracting opportunities will be available for lighting, public relations, landscaping, fencing, concrete placement, retaining walls, rebar placement and other tasks on the Dresbach project, according to MnDOT.

Not everyone is sold on the reciprocity concept.

One criticism is that the “integrity of the [DBE] program would be compromised, as questionable firms certified by one state would slip into the directories of other states without adequate vetting,” reported the Federal Register, the daily journal of the U.S. government.

Dianne Holte, president and CEO of Ramsey, Minn.-based Holte Contracting, said Minnesota doesn’t have reciprocity agreements with North Dakota or South Dakota. She questions the idea of setting up reciprocity agreements for specific projects.

“To me,” she said, “you can’t just pick and choose.”

Applying for DBE certification requires jumping through some hoops and no small amount of paperwork.

LouAnne Berg, CEO and owner of J&L Steel and Electrical Services in Hudson, said the process includes submitting business and personal financial information and details about how you are going to run the job.

But it’s all part of doing business, she added.

“If you are in business and you want to do business with someone, you have to be willing to provide them with the information they want,” she said. “It’s not as bad as some people say.”

Other strategies for increasing participation of disadvantaged businesses include “mandatory subcontracting” and “de-bundling” projects, or breaking contracts up into smaller pieces so small businesses are able to bid on them, Tittle said.

A $42.48 million reconstruction of Interstate 694, awarded in June 2011 to Shafer Contracting, included a mandatory subcontract for excavation, loading and hauling. The $560,736 mandatory subcontract was awarded to Holte Contracting.

Kammueller said the Dresbach bridge project will be let this fall and most of the construction will start in 2013. The project is expected to cost between $165 million and $180 million, she said.

St. Croix Crossing construction also is scheduled to start next year, although some project-related load testing already is under way. The load testing is designed to provide information about soil conditions in the river.