Chatter Class: Minority-owned not easy to define

Monday, May 5, 2008 at 1:12am

Since Mayor Karl Dean was elected, the issue of minority, women-owned and small businesses landing their share of government contracts has been center stage.

Bidding on the new downtown convention center has heightened awareness as the large contractors build their teams for work on the project.

Despite all of the attention, “diversity business enterprises” aren’t convinced that life will become any easier for them when it comes to winning contracts, even with the mayor’s new Office of Minority and Women Business Assistance.

The diversity contracting effort is supposed to be a way to help give companies owned by minorities or women a leg up. It works to a degree because there are contractors doing business with the government.

These business owners have long been critical of the diversity business efforts, however. They say that certification is a long, cumbersome, grueling process that deters more from seeking the work.

Certification apparently is inconsistent. Each government agency has varying rules and definitions for minority and women-owned businesses.

The Metro school system has one process. Metro Transit Authority has another. The Metropolitan Development and Housing Agency has another.

At the state and local level, contractors say certification at one apparently doesn’t work at others.

“If you have a school board certification, you can pee up a rope,” one contractor said.

If you have a federal certification, you can work anywhere.

Attempting to close loopholes to prevent abuse gets part of the blame.

That is, there have been times here as in other parts of the country and at the federal level in which a minority-owned company is pretty much a front to land government contracts. Minorities or women are listed as the owners but they have little to no involvement in running the day-to-day operations.

Certification is supposed to be able to weed out these types of operations.

But lately, the construction industry has been abuzz with questions about Pinnacle Construction Partners. Nobody wants to ask the question publicly for fear of some backlash.

Darrell Freeman and Michael Carter, both African-Americans, started the company with help from Skanska and American Constructors to chase the convention center work.

The company is chasing the convention center work with the two companies as the diversity partner.

Neither has construction experience, an MDHA requirement. The point of starting the company was to give them experience so they could get experience and build into being a viable diversity partner.

But is the convention center the place to start?

According to the construction industry folks, the answer is a resounding “no.” In one industry official’s view, Pinnacle isn’t even that close to being able to qualify under MDHA’s rules.

There’s the question of experience. The industry official noted that Metro’s criteria states that a business must have done an average of at least $100,000 in work in the two most recent calendar years.

Pinnacle just formed a year or so ago.

Pinnacle recently won a $64-million contract teamed with Messer Construction to build Middle Tennessee State University’s new student union and convert a building into a student services facility. Construction doesn’t start until September 2009.

Is that enough? Is winning other contracts enough? Are Freeman and Carter involved enough in their business to qualify?

There’s a good bit of sniping at each other in the construction industry, each questioning the other team’s true qualifications. That’s part of the process, especially when there’s hundreds of millions of dollars in contracts on the line.

A selection committee with MDHA, obviously, will evaluate and answer the questions on qualifications with respect to Pinnacle and all the teams who submitted proposals.

To the broader questions surrounding the minority contracting process, it seems there are no easy answers or solutions. Each time government “fixes” the process, contractors grumble that it never gets any easier, just more difficult.

The Chatter Class appears Mondays in The City Paper. Comments may be sent to

Filed under: City Business
By: BigPapa on 12/31/69 at 6:00

Don't you see a shake down operation when it jumps up and bites you in the @ss???These guys form a "construction business" then a real construction company does all the work and they skim off the top. The real business that actually know something about how to build somehting have to sign on with them or they can not get the contract.What ever happened to being judged "by the content of character and not by the color of the skin"?

By: dnewton on 12/31/69 at 6:00

Real minority construction businesses are hard to find. On the federal level, a minority construction business rarely last more than three years. It is hard to attract and keep talent if the life span of the company is only three years. In the construction business, experience is very valuable, if it does not run you out of business. There are some specialty construction businesses that make decent profit levels but you can make more money operating a fast food restaurant or convenience store. There should be more good minority businesses in the construction business. I suspect that the lack of them has a lot to do with the government running the "opportunity" program. This is just another government program that does not work except for the appearances. I know a minority individual who had several successful businesses in Atlanta and he created a construction company because of the federal incentives. This man was not a poor minority and he was above what would be considered middle class. The company went bust in three years because he could not put together a critical mass of management talent before all of the mistakes ate the company.

By: BigPapa on 12/31/69 at 6:00

The corruption surrounding the new convention center is palitable.