Title: Tri-Met's Successful Disadvantaged Business Enterprise Program on the Interstate MAX Light Rail Project

Phase(s): Pre - Preliminary Engineering

Category: Management

Date: May 17, 2002

1. Background

The Interstate MAX Light Rail Project is a $350 million, 5.8-mile LRT line extending north from central Portland along the I-5 corridor. The line branches off the existing Blue Line (formerly called the Banfield Line) in the Rose Quarter district and follows the median of Interstate and Denver Avenues before moving off Denver Avenue to terminate at the Portland Exposition Center just south of the Columbia River. Ten new stations are under construction, including two on the north end with park-and-ride facilities.

Tri-Met and the City of Portland have worked closely with north Portland neighborhoods and potential contractors to develop workable Disadvantaged Business Enterprise (DBE) participation programs and maximize opportunities for DBE’s. To this end, Tri-Met has an aspirational goal to direct 16 percent of capital spending certified DBEs. Non-DBE prime contractors are supportive of the programs and have experienced no evident schedule, cost, or other impacts from complying with the programs. With project civil construction over 50 percent complete, in most instances participation goals have been exceeded. All major civil contracts are anticipated to close with participation rates exceeding the initial goals.

Key elements of Tri-Met's program include:

Community Lessons Learned Sessions – Well in advance of beginning construction on Interstate MAX, Tri-Met sponsored three community meetings, in November 1999, February 2000, and May 2000, to determine what aspects of prior DBE programs were successful and what could be done to improve on prior programs. The sessions involved individuals with experience on major public works projects, contractors, community activists, and local leaders. Suggestions were incorporated into the Interstate MAX DBE program. Participants also developed five questions for potential prime contractors to answer at a public meeting.

DBE Program Approach in Contractor Evaluations - Much of the project's construction was awarded under construction manager/general contractor (CM/GC) and design-build contracts. Tri-Met found the request for proposal process provided the latitude and flexibility for including DBE participation in prime contractor requirements and selection. Prime contractor selection considered factors besides cost.

One of the non-financial criteria was the proposer's approach and success in DBE subcontractor and workforce outreach. Each potential contractor at the public question-answer meeting presented this information.

Prime Contractor Initiatives to Expand Opportunities – These have included:

1. Selecting a local firm as a DBE/workforce coordinator responsible for notifying DBE firms of project, networking and other related opportunities. Communications tools include holding networking and educational meetings in the community, advertising in local and minority-owned newspapers, one-on-one technical assistance with potential DBE subcontractors, and other activities to promote familiarity with bid opportunities and company representatives.
2. Creating smaller bid packages suitable for small subcontractors. This approach broadens opportunities for small businesses, enabling them to build their capacity. An indirect benefit is the education of the prime contractor about the realities of doing business with smaller firms.
3. Rotating contracts within a division of work. If a significant number of subcontractors are capable of bidding on an extended work activity (e.g., concrete flat work, traffic control/flagging, materials hauling), the prime contractor rotates contracting opportunities, issuing multiple contracts over the duration of the activity. This allows several subcontractors to obtain valuable experience.
4. Networking with DBE contractors. Tri-Met sponsored "get acquainted sessions" for potential subcontractors which featured prime contractors and introduced potential Interstate MAX contracting opportunities. Primes followed through in maintaining and expanding these networks.

Innovative DBE Initiatives - A group of local DBE truckers joined forces to secure a major trucking subcontract. By pooling resources, the Northeast Urban Trucking Consortium enabled small, independent businesses to compete for a large public works project. The consortium is seeking non-profit status, developing governing by-laws, and recruiting members based on financial and business criteria. Currently the consortium is comprised of seven independent trucking businesses with 15 trucks and is under contract to perform over $ 2,000,000 of work on Interstate MAX.

DBE Profile Form and Directory - Tri-Met developed a DBE profile form incorporating suggestions by prime contractors regarding information they find helpful in selecting subcontractors. Tri-Met compiled a directory of DBE contractors, highlighting each firm’s area of work, past experience on similar projects, insurance and bonding information, safety record, and business philosophy. Minority- or woman-owned businesses and emerging small businesses are included in the directory if working to obtain DBE status. Tri-Met also has published a series of DBE/workforce "Advertorials" in local minority-oriented publications.

Multi-Agency DBE Certification Initiatives - Tri-Met and other governmental agencies sponsored a daylong certification/consultation session for interested subcontractors. The State of Oregon Office of Minority, Women and Emerging Small Businesses provided assistance with the certification process.

Technical and Financial Assistance - An intergovernmental agreement (IGA) with the City of Portland provides ongoing assistance matching prime contractors with subcontractors and assisting subcontractors with technical and business needs. Tri-Met, in conjunction with other agencies, conducts workshops on topics such as contracting, bonding, building relationships, landing construction and professional services contracts. A line of credit program has been created to assist DBEs and other small businesses in meeting immediate financial obligations. Although Tri-Met does not participate in financing loans it actively supports the program.

Workforce monitoring and compliance - Through an IGA with the City of Portland, city staff monitor workforce commitments and actual utilization.

2. The Lesson

Tri-Met's Interstate MAX Light Rail Project DBE program has been successful for several reasons. These include:

• An agency committed to developing and implementing a successful program
• A well-defined and carefully implemented procurement process incorporating incentives for contractors to develop effective DBE programs
• Creativity in assisting DBE firms, ensuring that they find opportunities and are able to perform satisfactorily
• Hard work by Tri-Met, the City of Portland, and the numerous DBE firms that are contributing to the success of the Interstate MAX Light Rail Project.

Having contractors publicly present their proposed outreach and workforce participation programs prior to final selection both provided valuable information on potential DBE subcontracting opportunities and strengthened contractor commitments to their programs.

Monitoring performance and offering constructive support to both primes and subcontractors throughout the construction phase have been important in attaining DBE program compliance.

3. Applicability

The Portland Tri-Met DBE program is not unique in its objectives. What makes it successful in a region without large minority populations is the concerted efforts of the transit agency to make the program work.

On Interstate MAX, Tri-Met and its prime contractors have established partnerships to achieve the established DBE participation goals. They have taken a long-term view of the purpose of DBE contracting. Most of the elements of Tri-Met’s DBE program could be applied elsewhere, with appropriate tailoring to match special local circumstances.

4. References

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