Diverse Directions

Minority, Women-Owned Contractors Flourish throughout Southwest

ByTony Illia

As The Southwest becomes more diverse, owners are increasingly mandating that their construction teams reflect the diversity of their building's end users. Two of the region's largest projects, CityCenter and Phoenix Convention Center, are also among the most diverse.

Hunt Construction Group’s contract manager Tim Smith (left), general superintendent Mike Moses (middle) and project manager Cori Anderson (right), reflect the broader diversity of the Phoenix Convention Center construction team. Photo courtesy Hunt.

The fast-growing Southwest is becoming more ethnically and culturally diverse, prompting many owners, developers and public agencies to look toward minority and women-owned businesses to meet their contracting needs.

MGM MIRAGE, for instance, now mandates that a minimum portion of all of its contract work goes to Hispanic, African-American, Asian-American, American Indian and women-owned businesses.

In 2006, roughly 56.2% of the company’s 70,000 employees were from underrepresented groups, with 32% serving as MGM MIRAGE managers and executives.

The gaming giant is currently building the $7.6 billion CityCenter on the Las Vegas Strip between the Monte Carlo and Bellagio resorts. The 76-acre, 18.67-million-sq-ft, mixed-use complex is billed as the largest privately financed development in U.S. history.

Phoenix-based Perini Building Co., the project’s general contractor, has awarded $480 million in CityCenter contracts to minority and women-owned businesses since 2005.

“There are over 90 minority and women-owned firms now working at CityCenter, with more contracts yet to be awarded,” says Lorrinda Gray-Davis, Perini’s director of diversity development. “To effectively advertise its economic opportunities, we invested in a 10,000-piece nationwide direct-mail and film campaign.”

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CityCenter’s massive size and scale can be daunting for even the largest contractor, prompting Perini to undertake a multifaceted education and outreach program. The firm participates in several local and national conferences and associations, recruiting and encouraging minority and women-owned businesses to bid its work.

Last year, Perini formed a strategic alliance with the federally funded Nevada Minority Business Enterprise Center. The company also holds a one-day, intensive workshop entitled, “How to Do Business with Perini.” The crash course outlines finances, paperwork, performance expectations, contract administration and scheduling.

Perini is a 114-year-old, publicly traded company listed on the New York Stock Exchange (NYSE: PCR), with a $7.8 billion work backlog at the end of 2007.

“It has made a big difference and definitely helped us get our foot in the door,” says Quinette King, president of Las Vegas-based supplier QFK Consulting Services. “It’s an opportunity as a minority business to get in and show what we can do. It has been a pretty smooth experience. The process has been streamlined, and payment has been quick.”

Bonding, a construction essential, is a roadblock for many minority and women-owned businesses, but Perini assists with a “Subguard” program in lieu of payment and performance bonds that might otherwise preclude many smaller firms from project participation.

The firm additionally makes subcontractors and vendors aware of minority and small business financing opportunities and loans through various programs and agencies.

“We were provided with an opportunity to do the work with the bonding provided through the Subguard program that we wouldn’t otherwise get,” says Dong Min, president of IMG Mechanical Group, a Las Vegas-based minority-owned contractor working on CityCenter. “We’re glad to be a part of the project.”

“Cash is the lifeblood of construction, which is why we make sure our subcontractors are paid promptly,” Gray-Davis says. “It’s the upfront costs that really hurt contractors. We’ve met with banks and asked them to think ‘outside-of-the-box’ if a minority or women-owned business has a contract with us.”

Large-dollar work can sometimes intimidate and scare off potential bidders. Perini consequently unbundles many of its contracts to create more opportunities for more businesses. It additionally works closely with smaller, less-experienced subcontractors to educate them on how to successfully work on multimillion dollar projects like CityCenter.

The seven-building project will see 350 subcontractors and 7,000 tradespeople onsite during the peak of construction activity.

New hires undergo a two-day training program that reviews scheduling, construction law, technology, finances, estimating, employment laws and management skills. Perini additionally does job mentoring where employees work side-by-side with company personnel for a period of one to six months, learning how it conducts meetings and business in the office and field.

The company has conducted 50 various training seminars since 2005 and has expanded its diversity department to six full-time employees.

Hunt Construction Group similarly takes its commitment to diversity seriously. The Scottsdale-based firm is presently working on a $600 million Phoenix Convention Center expansion at 100 N. Third St. in downtown that will nearly triple the facility’s size to 1.9 million sq ft.

“The city of Phoenix requires that construction managers meet subcontractor minority hiring goals on all projects,” says Joann Thomas, Hunt’s diversity affairs coordinator. “But we far exceeded that goal by reaching 20% participation on phase one.”

The 700,000-sq-ft West Building - a joint Hunt-Russell-Alvardo effort - opened in July 2006. Phase two, meanwhile, is scheduled to finish in December. Hunt puts its new hires through a preconstruction meeting that reviews company procedures for payroll and scheduling, safety and daily reporting.

Like Perini, Hunt does outreach meetings with local minority contractors, associations and groups, while downsizing contracts to generate more diversity involvement.

Hunt had awarded $288 million in phase two contracts as of January, with 59.1% going to minority and women businesses. It assists firms with establishing formal safety programs and meeting Occupation Safety and Health Administration standards, as well as expediting payment upon receipt of invoice and helping with change orders.

“We are coming up with some creative ways to get firms involved,” Thomas says. “We ask that our minority subcontractors participate in our diversity efforts by hiring minorities themselves. We want them to meet our 20% goal as well.”

Key Players

CityCenter
Developer: MGM MIRAGE
General Contractor: Perini Building Co.
Select WBE/MBE Subs & Suppliers: Azteca Steel; QFK Consulting Services; Dumas Concepts & Building; IMG Mechanical

Phoenix Convention Center
Owner: City of Phoenix
General Contractor Hunt-Russell-Alvarado
Key WBE/MBE Subcontractors:  RBG Construction; Ground Level; Hernandez Cos.; Metro Steel; RJC Contracting; Yale Electric; T F Valdez

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