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Stadium project missing diversity goals: Building authority might look beyond city to meet mandates for contracting with minority-, women-owned firms

March 27, 2006

The director of the entity in charge of the Colts stadium project conceded it will need to reach beyond central Indiana to fulfill aggressive minority-contracting goals attached to the structure's construction.

The General Assembly passed legislation last year directing the Indiana Stadium and Convention Building Authority to grant 15 percent of contracts to minoritybusiness enterprises and 5 percent to women-business enterprises.

With one-quarter of the contracts awarded, the ISCBA is close to achieving its minority goals, but is only about halfway to meeting female expectations.

"We cannot be absolutely certain that the goals will be met," said John Klipsch, executive director of the ISCBA in an e- mailed response to IBJ questions. "We can only be certain that every effort will be made to achieve the goals."

Construction contracts through February total nearly $122 million. MBEs had received $14 million worth of work, or 11.5 percent of the construction contracts, while WBEs amassed $3.2 million, or 2.6 percent.

MBEs and WBEs providing professional services, the other contracting opportunity, so far have fared slightly better. Minority contractors had been awarded $10.3 million worth of work, or 15 percent of the services contracts, while womenowned businesses received $2.8 million, or 4 percent.

Combining construction and professional services contracts, minority-owned firms have garnered 13 percent of the work, and women-owned firms, 3 per- cent-still short of the contracting goals.

Klipsch cited several factors contributing to the difficulty. The massive size of the $625 million project is resulting in large contracts, which is stretching the Indiana construction community beyond its limits.

Concurrently, there are many specialty items that need to be purchased of which there are no MBE or WBE suppliers. Manufacturers of scoreboards and installers of retractable-roof mechanization systems are a few of the examples he provided.

Other large undertakings such as the $1 billion midfield terminal project and the Indianapolis Public Schools system's 10-year, $832 million capital improvement project are competing for the same MBE and WBE contractors as well.

To meet the challenge, Klipsch said, the ISCBA will expand its search and recruitment of contractors to other Indiana communities outside the central part of the state.

The efforts to attract firms include emphasizing the goals at outreach meetings and including them in notifications sent to prospective bidders and in all public notices issued for bids. The aspirations also are specified on the Indiana Department of Administration's Web site.

Moreover, the ISCBA is communicating and networking with organizations that specialize in facilitating MBE and WBE participation. They include the IDOA Minority and Women's Business Enterprise Division, Indiana Business Diversity Council, Indiana Construction Roundtable and the city of Indianapolis Department of Administration and Equal Opportunity.

Jesse Moore, Purdue University's manager of supplier diversity development, concurred with Klipsch's sentiments that construction managers will need to reach outside the center of the state to fill the gaps.

"I would hope that as they begin to use more out-of-state firms, that they look to use MBEs and WBEs from out of the state and out of the area, too," Moore said. "I think if they do that, they should be able to meet those goals."

Smoot Construction LLC and Mezzetta Construction Inc., both in Indianapolis, are serving as project associates alongside Indianapolis-based construction manager Hunt Construction Group

As the WBE, Mezzetta received a $1.4 million contract to help manage the project. Smoot's MBE contract is worth $5 million. Those amounts, however, pale in comparison to Hunt's take of $29.3 million.

Mary Jane Gonzalez is Mezzetta's president of business development. She, too, agreed there might not be enough minority- and women-owned firms in the region to fulfill the ISCBA's obligations. Gonzalez is receiving inquiries from companies in Fort Wayne, northern Indiana and the Chicago area.

Those that meet the requirements are referred to the ISCBA.

"They know that we are part of the construction-management team," Gonzalez said. "The word is out on the street that there are opportunities."

Several local firms are benefiting so far, though. Subcontractor Circle City Rebar, for instance, received a $5.1 million contract to furnish steel. The award is the largest received to date by an MBE or WBE.

Owner Frank Davis founded the company in September after a career at General Electric Co. and a four-year stint at locally based Gate City Steel Corp., which sold to a competitor.

While there, he was involved in work at Cardinal Stadium in St. Louis, in which Hunt was the construction manager. Hunt also is overseeing work at Lucas Oil Stadium. That previous relationship helped Davis get his foot in the door. But, he said, a company still needs to perform.

"When you can participate in a project with this kind of a high profile, it doesn't hurt your company to be associated with it," he said. "All anyone can ask in business is an opportunity, and a fair opportunity."

The ISCBA does not face any repercussions if it does not meet the contracting goals. But Klipsch said the authority takes the mission "very seriously" and expects to meet or exceed expectations.

The stadium at Capitol Avenue and South Street south of the RCA Dome is expected to be finished in 2008.
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