Minorities, women get $82.5 million in CTA Red Line contracts
The Chicago Transit Authority says the massive Red Line reconstruction on the South Side isn’t just improving ridership for African Americans who live there – it’s also giving them jobs.
Amid pressure to be inclusive with millions of contracting dollars at stake, CTA has awarded 32 percent of Red Line contracts to businesses owned by minorities and women – totaling $82.5 million.
African-American groups have long complained about being shut out of city contracts. They were particularly sensitive to the Red Line renovations because the stations under construction are in predominantly black neighborhoods.
The five-month CTA project is between Cermak-Chinatown and 95th/Dan Ryan. The contract portion of the renovations is $259.4 million with two prime, or main, companies. Kiewit Infrastructure Company, an international firm, is completing the track work to the tune of $215.6 million and F.H. Paschen, S.N. Nielsen and Associates is in charge of station work for $43.8 million.
According to the CTA, Kiewit’s minority/women contract amount is $65 million and Paschen’s is $17.5 million. CTA officials told WBEZ they don’t have final numbers regarding the racial breakdown of on-site workers, but they set a mandatory goal for prime contractors: 15 percent of all man-hours must go to the economically disadvantaged.
The federal program in which these subcontractors qualify is called the Disadvantaged Business Enterprise (DBE). It must be 51 percent owned and controlled by a socially and economically disadvantaged individual. The CTA is actually governed by the federal designation, not the city of Chicago. However, there is overlap with DBE companies and city-certified minority/women businesses. Chicago’s contract program for minority and women businesses has, in the past, been marred by fraud, abuse and mismanagement.
“We believe that things have gone very well thus far. The companies that signed on as subcontractors, in particular the DBEs, are working well with the prime (contractors). We’re encouraged as we move into the completion of the first full month of construction that things will continue to go well until the Red Line reopens in October,” said Stephen Mayberry, a CTA spokesman.
One of the African-American subcontractors that works for another subcontractor is LiveWire Electrical Systems. The Oak Forest, Ill.-based company is receiving $1 million to retrofit lighting at Red Line stations.
“It’s difficult to get the prime contracts because bonding requirements are very high,” said LiveWire’s president Shon Harris. “It makes it difficult for smaller subcontractors. Right now you just have to cut your deal with the prime and demand that you get a proper share of the work and make sure you perform,” Harris said.
In the past, Harris said one of the biggest difficulties was getting the buy-in of prime contractors. The skepticism can often be cloaked in race, Harris said, pointing to trade unions that are dominated by whites.
“To be quite honest, a lot of times they feel you don’t have the wherewithal to do the work,” Harris said. But Harris said this time around the CTA has stuck to its commitment of making sure African Americans are represented.
Months before the Red Line tracks were ripped up, the Chicago Urban League organized meet-and-greets for minority contractors to sit down with major construction firms. The League also compiled a database of 2,000 skilled black construction workers. City contracts and construction jobs can be a boon, especially in areas starved for employment opportunities. Last year a report found that African-American unemployment in Chicago was 19 percent, the third highest in the country.
“We created real, meaningful opportunities for a range of African American businesses. We created opportunities and access for jobs for skilled workers to get onto the project. It’s not just token representation,” said Andrea Zopp, CEO of the Chicago Urban League.
Critics of city contracts have long said the process is a playground for the politically connected. Zopp said many small subcontractors don’t have access like the bigger players in town. The League also offers a 10-week contractor development program. Six of the businesses that graduated are currently CTA subcontractors – including LiveWire.
“We wanted to be involved because so far on many major building projects or construction projects run by the government, African Americans aren’t represented,” Zopp said.
One example that many often cite is the recent Metra Englewood Flyover rail project. Last year U.S. Rep. Bobby Rush loudly protested the paltry number of minority contractors involved.
“We are sick and tired of construction contracts in our communities that bring us all the dust, all the dirt, all the delay but none of the dough,” Rush told the Chicago Sun-Times.
The affirmative action program for city contracts started under Mayor Harold Washington’s administration in 1985. In 2010, the city inspector released a report critical of the program. The inspector’s investigation uncovered the use of front companies – businesses pretending to be minority firms to secure city contracts.
Bob Israel, president of Save Our Community Coalition, is on alert for front companies cashing in on the Red Line renovation.
“It ain’t the CTA – it’s the contractors I have my eyes on. Just because they’re certified doesn’t mean they’re legit,” Israel said.
His coalition is an advocate for African-American contractors and tradesmen and so far, he said, one Red Line subcontractor has caught his eye – Sandi Llano, a white female, received $250,000 to be a community liaison and outreach consultant.
“A Caucasian female?” Israel asked incredulously, referring to the fact that mostly black riders are affected by the shutdown along the southern portion of the Red Line. The CTA said it cannot dictate which firms the prime contractors hire.
Last fall, Israel marched with Ed Gardner and 1,000 others at 92nd and Western in the suburb of Evergreen Park to protest a lack of black construction jobs where a shopping center was being built. Gardner, a millionaire and founder of the iconic Soft Sheen hair care company, said he has met with CTA officials and wants proof of black workers.
“At least let us see what they’re doing and when they’re doing it,” Gardner said. “We should have a chance to see a result of their works. I don’t know when they [blacks] are supposed to earn these dollars.”
Zopp said the Chicago Urban League efforts show that minority hiring and contracting is feasible – even when it’s not a government project like the Red Line. And though they’re not always tied to city rules, she wants private developers to take note.
“If the private developers are truly committed to diversity, this shows that it’s doable. Many of those private developers have public support and tax incentives,” Zopp said. “What we’ve proven here is there’s no excuse. If private developers won’t support the community, we shouldn’t support their businesses.”
Natalie Moore is WBEZ’s South Side reporter. Follow her @natalieymoore.
Kiewit Construction Dan Ryan South Team
F.H. Paschen Construction Dan Ryan South Construction Team
Source: Chicago Transit Authority
- AA - African American
- H - Hispanic
- AI - American Indian
- C - Caucasian
- AP - Asian/Pacific Islander