Trustees alarmed at exclusion of minority-owned businesses from middle school renovation

In the bidding for 2013 bond improvements to the Dobie Middle School campus, two minority-owned firms were passed over in favor of a company that included a few minority-owned subconsultants as part of its proposal. The Austin Independent School District approved the selection at its Nov. 27 board meeting, but only after trustees took a serious look at the Historically Underutilized Business Program.

The Dobie project is wide-ranging, with jobs including the installation of technology upgrades, new heating and air-conditioning systems, and additional disability-accessible ramps within the building. Proposals were solicited at the end of the summer this year, and six proposals were evaluated by school district staff, with Royce Construction Inc.’s $1.2 million proposal rising to the top as the most qualified.

The contract was set to be approved as part of the consent agenda, but it was pulled by Trustee Amber Elenz. She said that she was confused how, according to the tabulation results, all the other contractors had been disqualified for not meeting HUB compliance, especially considering that two of them, DKC Construction Group and HCS Commercial General Contractor, had proposed better deals according to their scores. Moreover, two of the other firms that applied, the Barr Company and Unity Contractor Services Inc., were minority-owned themselves.

Choosing the highest score in the tabulation had formerly been the process, explained Chief Financial Officer Nicole Conley Johnson, but changes to the HUB program last November had put in place stricter standards for HUB compliance in relation to proposals. It is no longer enough for a company to represent one minority category, but it must try to include as many different categories as possible, through its own firm’s participation or that of subconsultants.

If a company cannot demonstrate a diverse representation that exceeds goals set by the district, it must illustrate a “good faith” effort showing that it at least tried. In this case, Royce exceeded representation for the category of women-owned businesses, but not for the other categories: Hispanic, African-American and Asian/Native American. However, the firm did meet the criteria for making a “good faith” effort to recruit businesses owned by these ethnicities.

Gordon King, the district’s executive director of construction management, said that firms must present documentation as part of their proposals that proves they attempted to contact every firm on the HUB list in at least two ways. “If there are no firms that are available to do a certain type of work, we don’t pose unattainable goals,” Conley Johnson said, “but if we know that there are providers that do a certain level of work, we do anticipate that there is participation, that there is some compliance with the HUB program.”

“I don’t think it’s written anywhere that the way you’re implementing this policy is what we approved. I could be wrong, but it is my understanding that this is different,” Elenz said.

Conley Johnson said that the district was willing to adjust this policy based on the board’s direction, but Elenz said it was hard for the board to give feedback when it did not understand what the parameters of the program were now. She requested that the district put into writing what exactly the HUB program dictates and return for consultation.

“My whole point in all this is to comply with our policy. Before I can approve this I just need to know that we’re doing what we’re saying we’re doing and what this board has approved,” Elenz said.

Trustee Geronimo Rodriguez suspected that the minority-owned firms had been discounted primarily because their proposal cost amounts were more expensive than the district was willing to consider. He wondered how much education HUB businesses were receiving as to what the criteria were. Trustee Jayme Mathias agreed, urging the district to clarify expectations for HUB compliance as soon as possible. There is $1 billion of work available since voters approved the 2017 bond package, and it would be a disappointment if minority-owned businesses could not take advantage of those opportunities, he said.

The motion to approve the contract with Royce passed 7-1-1, with Elenz dissenting and Trustee Julie Cowan abstaining.

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