Contractors have long complained that the DBE goals are arbitrary and too difficult to meet, and can result in higher costs for taxpayers.
C.S. McCrossan Construction Inc. in Maple Grove was the low bidder by nearly $6 million on a $52.3 million contract for the new St. Croix bridge but MnDOT officials determined the company hadn’t made clear it would comply with the goal of 16.7 percent participation by DBE firms in the project.
The company disputed that decision and sued. The case was settled last month.
Charlie McCrossan, who runs the business with his son, Tom, said firms like his struggle to comply with the demands of the program laid down by MnDOT, especially when the agency shifts the rules as he said it did in the case of the St. Croix bridge bid. The loss of a potential contract was disappointing, he said, but the state’s wasting of so much money is inexplicable.
The audit points to confusion and lack of direction on the part of those overseeing the DBE program, which only fuels his exasperation. “In a word, they’re dysfunctional,” McCrossan said.
MnDOT says the rules are clear.
“The DBE program and requirements are not new and have not substantially changed over the last 10 years” Gutknecht said in an e-mail.
The bridge contract is not the first low bid rejected over DBE issues, but it is the largest.
Over the past three years, MnDOT, the Metropolitan Council and the Metropolitan Airports Commission awarded 20 contracts to firms that didn’t submit the lowest bids but met requirements for giving work to women or minorities certified as disadvantaged. Those 20 contracts cost a total of $1.8 million more than the lowest bids of other contractors for the work.
One successful contractor won a job even though he charged 11 percent more — $380,000 — than the low bidder.
Gutknecht points out that the “DBE program is not a low-bid program. Instead, it is focused on increasing the amount of minority- and women-owned business participation on federally funded contracts, so long as the additional cost is not excessive or unreasonable.”
For Gilbert Odonkor, whose Yaw Construction Group on the north side of Minneapolis is a DBE-certified firm, the program is his lifeblood.
“One would ask, ‘Is this program necessary?’ ” said Odonkor, an immigrant from Ghana who started his business in 2006. “Absolutely. After all these years, you would think that there wouldn’t be a need for such programs.”
Odonkor, who also is president of the National Association of Minority Contractors’ Midwest chapter, agrees with McCrossan that there are frustratingly few minority contractors to choose from in the marketplace.
But inserting needed fairness into the construction bidding marketplace is why the DBE program needs to be strengthened, Odonkor said. From his perspective, the failure to quantify progress and compliance are damaging to firms like his.
“We want to grow our business outside the program,” he said, adding: “We don’t want the program to be the defining confines of our business. We want to be able to operate as a mainstream business.”
Until that time comes, though, Odonkor relies on a well-run DBE program. He fears the audit, and the problems it revealed, won’t be taken seriously.
“Without those goals, we don’t get called to the table,” he said. “And that’s wrong.”