Wisconsin beat its minority contracting goal in 2008 for the first time because a Minnesota contractor won the $29.5 million University of Wisconsin-Stout Jarvis Hall project.
The contractor, Shaw-Lundquist Associates Inc., St. Paul, Minn., won the job even though its bid was not the lowest because it received a 5 percent cost preference from the state.
Randy Crump, a senior associate for Milwaukee’s Prism Technical Management and Marketing Services LLC, said it’s easy to attract out-of-state bidders with the enticement of a 5 percent preference. He said he does not want the state to rest on its laurels because the Shaw-Lundquist contract meant 5.87 percent of Wisconsin’s fiscal year 2008 contracts (PDF) went to minority business enterprises.
“I would rather that $29 million not been there,” Crump said. “Because it does make it look like something really happened.”
Excluding the Jarvis Hall contract, 4.11 percent of Wisconsin’s contracts went to minority-owned firms, a slight increase from 2007’s (PDF) 4.02 percent. The UW-Stout contract accounted for most of the $40.5 million in construction contracts let to minority companies by the Wisconsin Division of State Facilities.
State Sen. Spencer Coggs, D-Milwaukee, said Shaw-Lundquist’s contract could rekindle a debate over whether out-of-state builders should benefit from minority certification. But, he said, it does not cheapen the state’s achievement.
Out-of-state contractors will help Wisconsin if they establish full-time offices in the state and build relationships with Wisconsin minority contractors, Coggs said.
“I do expect MBEs (minority business enterprises), in state or out of state, to hire more people of color,” he said.
If the state doesn’t give out-of-state minority contractors the same bidding preferences as Wisconsin companies, neighboring states will follow suit and hurt local contractors’ chances of crossing the border, he said.
Shaw-Lundquist is trying to break into the Wisconsin market and is working on a project in Franklin, said Vice President Hoyt Hsiao. The company set up a full-time office in Hudson, he said.
He said about 80 percent of the subcontractors on Jarvis Hall are from Wisconsin, and one of them is a minority-owned company. Hsiao said Shaw-Lundquist will invite its subs in Wisconsin to participate on Minnesota projects.
But Crump and Coggs said the state must improve its minority certification and contracting programs if it wants to grow large Wisconsin-based, minority-owned general contractors such as Shaw-Lundquist. The state Business Opportunity Advisory Commission, of which Coggs is co-chairman, on Monday released a list of recommended improvements (PDF) to the state MBE program.
The commission said the state should tally its participation percentages numerous times a year and more closely monitor participation on contracts.
“I want to build into the infrastructure of the state that we use best practices, that we use monitoring or insight,” Coggs said. “It is my expectation that by this point we — not just by a little, but by several percentage points — exceed the state goal from this point on.”
Crump said the state should spend more time monitoring its certification program to weed out companies that sign onto projects as minority contractors but don’t actually perform work. He said the state also should create a system to help small minority contractors compete with larger minority-certified companies.
“You can’t have these big minority companies lapping up at the table taking all of the participation,” Crump said.