A settlement between Massachusetts and a company accused of ignoring rules for hiring minoirty and woman subcontractors highlights how hard it is for these firms to participate in state contrcts even when they are written into the requirements.
Attorney General Maura Healey has reached a $380,000 settlement with a Canton-based building contractor accused of falsely claiming they had hired minority- and women-owned subcontractors as required on a $15 million dollar state project.
The company, ENE Systems, Inc. — a systems engineering firm that has worked on major building projects across the region — denies any wrongdoing, and said it tried to meet the hiring goals, but it agreed to pay $300,000, give up another $81,000 remaining on the contract and conduct an annual review of its own compliance with state requirements for hiring minorities and women. The settlement is the seventh "false claims" case brought by the AG's office over the past decade against companies accused of failing to meet minority hiring commitments, and is the second largest. Six of these cases have been brought by a new false claims division created by Healey in 2015.
Mark D. Smith, a Boston attorney representing ENE, said his client did nothing wrong and fully cooperated with the Attorney General’s investigation.
“ENE did not knowingly violate any laws,” Smith said.
Earlier this year, an investigation by WGBH’s New England Center for Investigative Reporting showed that minority-owned businesses — black owned businesses in particular — receive only a tiny fraction of the billions of dollars state agencies spend each year on contractors, and their share of state contracts and discretionary agency spending has declined over the past 20 years.
Despite the high marks Massachusetts government gives itself year after year in its annual report on diversity hiring, minority business owners competing for state contracts were awarded $135 million less in 2018 than they were in 1998 based on inflation-adjusted dollars, state records show. That’s a drop of 24 percent.
While the state requires prime contractors to hire a percentage of minority and women owned subcontractors on any big job, state agencies have provided little enforcement to ensure these goals are met.
Healey told WGBH News she wants to change that.
“The more cases we do, the more we hope we’ll have an impact on educating the industry about the importance of these requirements, which are there and intended to create more opportunities for minority and women-owned businesses to participate in state contracting,” she said.
But the state’s dispute with ENE highlights just how little money trickles down to minority firms even on a job where their participation is written into the contract.
According to documents obtained by NECIR, the state's Division of Capital Asset Management and Maintenance (DCAMM) — the state's major construction agency — initially signed a $9.4 million contract with ENE Systems to do mechanical work at several state buildings in 2014. The contract included an agreement that ENE would spend $470,000 hiring minority-owned and women-owned subcontractors, which was 5% of the total.
Over the course of several years, the value of the contract ballooned to "more than $15,000,000," but the baseline targets never changed and ENE ended up spending less than $100,000 with minority and women owned businesses — less than 1% of the contract.
In a February 2019 memo, DCAMM documented a long list of failures by ENE to hire minority contractors or to even respond to DCAMM requests for information dating back several years. ENE kept shifting the names of minority and women-owned businesses it said it was doing business with and failed to document payments, the agency said.
But even after a five-year dispute with ENE, the only penalty DCAMM imposed was withholding $81,700 in payments to the company. Meanwhile, in February 2018, DCAMM announced ENE was getting a new contract to upgrade the control systems at its McCormack Building headquarters.
According to the DCAMM memo, at the end of 2018, ENE submitted documents showing payments to three minority- and women-owned businesses, including one called Total Mechanical, but DCAMM found "the work to be performed by Total Mechanical appears to have been subcontracted out in full to a non-MBE/WBE firm."
Darin Yee, the owner of Total Mechanical Service Corp., told WGBH News,"I take the blame for that part." Yee said that after he had accepted a plumbing contract from ENE, his nephew — who was the plumber in his shop — decided to retire, and “I didn’t have any people behind him.” So he hired one of the other contractors that was already on the site to do the plumbing work.
“It was my fault. I was between a rock and a hard place,” Yee said. "I needed to fulfill the job."
By February 2019, DCAMM had confirmed only $6,654 in payments to a minority owned business out of the contract valued over $15,000,000. Healey’s office said they were able to document about $28,000 in total payments to minority firms.
The settlement with the Attorney General's office requires the company to pay $300,000 on top of the $81,700 DCAMM withheld and mandates that each time ENE makes a bid for government contracts in the future, the company must have a bid manager overseeing the process to make sure ENE can meet its minority and women hiring commitments. The company has also agreed to annually audit its own compliance with minority and women hiring requirements.
Priscilla Flint-Banks, co-founder of the Dorchester-based Black Economic Justice Institute, said she applauds the attorney general for pursuing the case, but says any money from the settlement should go to the minority contractors that never got paid.
“This is the stuff we’re fighting,” she said. “We are not getting the contracts that we are supposed to and we are not getting the jobs that we are supposed to and there seems to be no accountability.”
Flint-Banks also said the fine is not large enough to change a contractor’s behavior. “$300,000 — that’s just like a drop in the bucket. I mean ... it’s pennies. Out of $15 million? That’s nothing.” And since the fine is going into the state’s general fund instead of to minority businesses, she said, “How is it helping? It’s not helping the contractors.”
But Albert Shen, the former deputy chief of the federal Minority Business Development Agency under President Obama, praised Healey’s action, saying that several states have actually overturned their statutes requiring affirmative action in public contracting.
“It is very encouraging that a state A.G., such as the Massachusetts one, is taking these type of punitive financial measures against companies that are, in essence, falsifying and defrauding equality and diversity and inclusion practices for minority businesses,” Shen said Thursday.
Shen also said state leaders need to consider new laws that would make such fraud cases criminal acts and send a message that public spending needs to target longstanding inequities in minority communities.
Paul Singer is the Investigations Editor and Chris Burrell is an Investigative Reporter at WGBH's New England Center for Investigative Reporting.
Lionel Henry, who works for a minority-owned contracting firm, repairs the roof of an outdoor hockey rink at Philadelphia’s Fishtown Recreation Center in December 2019. The project was part of a Philadelphia effort to expand participation of minority contractors in city-funded construction jobs.
This article is the second installment in an ongoing investigation by WGBH News' New England Center for Investigative Reporting into racial disparities in government contracting. Read part one here.
PHILADELPHIA, Pa. — On a raw December afternoon in North Philadelphia, a dozen kids holler as they kick and chase a soccer ball on a blacktop basketball court. The city-owned playground and three-room recreation center are slated for renovation, part of a $400 million initiative aimed at fixing up recreation centers, parks and libraries in low-income neighborhoods like this one.
That’s just one goal. The city of Philadelphia also intends to spend a third of that money hiring businesses owned by minorities to do the work.
“These poor communities that are mostly minority in the city of Philadelphia: It makes a lot of sense that if you have people coming in and working and fixing things and designing things, let them look like [local people],” said Cappy Sabir, an engineer and minority business owner whose company is working a new vision for this playground. “You're giving a level of motivation and pride to the community. ‘See? I can be an architect. I can be an engineer, I can be a contractor.’”
Sabir is a co-owner of SRW Engineering & Architecture, which has landed five contracts with the city worth almost half a million dollars through this year-old pilot program called Rebuild. City-wide, minority-owned businesses landed 23 percent of Philadelphia city contracts last year, totaling $166 million.
It’s a much higher rate than either the city of Boston or the state of Massachusetts has achieved — though both places also have lower proportions of minorities than the city of Philadelphia.
Government agencies in Massachusetts spend billions of dollars a year on contractors for everything from road repairs and office supplies to building construction and design. But data obtained by WGBH News shows that just a small percentage of those state contracts go to minority-owned businesses, and the value of those contracts is now about $135 million less per year than in 1998, in inflation-adjusted dollars.
Critics in Boston have pointed to places like Philadelphia as a role model that leaders back in Massachusetts should emulate.
Iola Harper, who heads up Philadelphia’s office of economic opportunity, said Philadelphia’s mayor — now in his second term — has prioritized contracting with minority businesses.
“You really have to have buy-in from the top,” Harper said. “The boss of the city, not their boss, but their boss’s boss, expects that there's going to be some inclusion. They know that part of my evaluation or part of what my boss is looking at is my ability to be inclusive and be equitable.”
Underlying this mandate is simple economics, said Harper, especially in a city with a poverty rate at 26 percent — one of the country’s highest for a big city.
“Businesses that are owned by people of color hire people who look like them,” she said. “That’s people that are going to be employed and that's going to impact the poverty rate.”
Harper’s office also sets minority hiring goals and takes compliance and enforcement seriously. Since 2017, Philadelphia has disbarred three vendors from working with the city that violated minority contracting regulations. Philadelphia’s contractor diversity office also has a staff of 16 and a budget that’s grown by 38 percent in the last four years.
The comparable department in Massachusetts, the Supplier Diversity Office, has seen its budget cut by more than half over the past decade. But the head of that office, William McAvoy, told WGBH News that other parts of the government provided funding to offset those cuts.
Critics of Massachusetts’ track record of doing business with minority vendors have pointed to spotty enforcement and compliance efforts by the state.
Documents WGBH News obtained from the State Division of Capital Asset Management and Maintenance showed only four contractors in the past decade have been penalized for failing to meet promised minority hiring goals.
The state also informs prime contractors that they will be fined or punished if they don’t meet such commitments. But the state attorney general’s office has pursued only six contractors in the last decade for making false claims about using minority subcontractors.
“There really isn't a watchdog,” said JoAnne Thompson, former head of the State Office of Minority and Women’s Business Assistance, a precursor of the Supplier Diversity Office. “There's no one at the helm who's making sure that these things happen.”
McAvoy said his office is hiring a new investigator to look into allegations of fraud.
Philadelphia’s different approach is also evident in the pre-bidding process. The city has lowered barriers that have historically favored big contractors by offering assistance to smaller, minority-owned and women-owned firms before they even bid on projects.
Sabir’s company — with just 20 employees — took advantage of the city’s new rules and is now treated as a prime contractor, not just a subcontractor that has to lobby other private businesses for a share of the work.
“Opportunities come out from the city, and they'll be worded in a way, structured in a way that is impossible for either for any minority, or woman-owned business to even have a chance,” Sabir said. “Offering the opportunity for minority firms to be primes? To us, that’s like Obama becoming president. It's huge.”
There’s barely been any shift like that back in Massachusetts, but some projects show promise. The Massachusetts Gaming Commission set high minority contracting and hiring goals for the state’s two new casinos in Everett and Springfield.
And the Massachusetts Port Authority — the quasi-public agency that runs Logan Airport and owns lucrative real estate in the Seaport district — decided to throw out the old paradigm of how to get minority participation on big development projects.
Instead of asking real estate developers to set aside small portions of their projects for minority businesses, Massport demanded that proposals have diverse ownership baked in to the pitch. Massport instantly downgraded development proposals that lacked that minority partnership.
“This is not about crumbs on the floor. This is about really, truly building capacity,” said Kenn Turner, who’s been in charge of bringing more minorities into the Massport system since 2013. He said minorities had been left out of the Boston real estate boom, and it needed to change.
“There had not been minority ownership in a major commercial development project in the city of Boston in almost 40 or 50 years,” he said.
For one parcel, Massport picked a development group that had teamed up with black- and Asian-owned architecture firms and a black-owned construction company to build the Omni Boston Hotel at the Seaport.
Turner said the payoff for these companies isn’t just participating in one big contract but the experience of scaling up and then being able to land the next big job.
“If you truly want to build experience and capacity, the way you do that is you take a smaller firm and you expose that firm to all of the technical information and experience that they'll need so that the next project that comes along, they'll be able to scale up and do a bigger project,” he said.
That’s what happened for Greg Janey, who is black and owns Janey Construction Management in Boston. Janey was part of the joint venture team that Massport chose to design and build the $550 million Omni.
“This glass ceiling I won't say broke, but cracked. It really is a cultural change,” Janey said. “We have not only just participated [in], but were a contributing factor in constructing a large hotel which led to another opportunity on the Seaport for us.”
Janey’s new opportunity is in the private sector, teaming up with a national construction company to build offices for Fidelity in the Seaport.
Turner said he has talked with other state officials about following Massport’s model for setting up deals with real estate developers and state-owned property. But so far, that hasn’t happened.
The question that frustrates people like Janey is: If Massport can move the needle on minority participation in public sector contracts and so can Philadelphia, what’s stopping the state and Boston from doing it?
“If we all think about and say, ‘We need to do things better’ — why is it that you need either some legislation, a policy to do something better?” he said. “This response is just do it.”
Thompson, the former head of the state’s efforts on minority contracting, pointed to the tax breaks Massachusetts offers corporations as an example of the kind of support minority businesses need from the state.
“We give all the tax concessions to try to lure business here. We bent over backwards for GE,” Thompson said. “It would be wonderful if we could take those same resources and help a business that’s been in existence for years and help them get a jump start.”
State and local government agencies in Massachusetts pay billions of dollars to contractors every year. But minority businesses see only a tiny fraction of this money.
This article is the first installment in an ongoing investigation by WGBH News' New England Center for Investigative Reporting into racial disparities in government contracting. Read part two here.
State and local government agencies in Massachusetts pay billions of dollars to contractors every year for a vast array of goods and services. But minority businesses — and black owned businesses in particular — see only a tiny fraction of this money.
And their share of state contracts and discretionary agency spending has actually declined over the past 20 years, according to documents obtained by WGBH News' New England Center for Investigative Reporting.
Despite the high marks Massachusetts government gives itself each year for hiring a diverse mix of contractors, minority business owners competing for state contracts were awarded $135 million less in 2018 than they were in 1998 based on inflation-adjusted dollars, state records show. That’s a drop of 24 percent.
NECIR also analyzed 13,000 large construction and services contracts publicly announced by state and local agencies between 2008 and 2018 and found only about 250 were awarded to minority-owned business.
Two years ago, a $1 million study paid for by the State Division of Capital Asset Management and Maintenance (DCAMM) found that just one percent of design and construction spending by the state agency between 2010 and 2015 went to African-American contractors, down from about four percent in a previous study of spending between 1999 and 2004. DCAMM handles the state’s major public construction projects and manages state facilities.
By comparison, women-owned businesses were awarded 11 percent of the state dollars for design and construction, according to the more recent DCAMM study.
The studies confirm what DCAMM and policymakers already knew: Minority- and women-owned enterprises are struggling to overcome discrimination in the statewide marketplace. Such a finding is actually required before state and local government can create programs aimed at reducing racial and gender discrimination.
Massachusetts’ leaders began decades ago trying to fix economic disparities facing minority business owners -- passing laws, creating agencies and signing executive orders meant to even the playing field. The state sets percentage goals for contracting with minority contractors and other groups experiencing discrimination. These goals can vary by program, and even by individual contract, based on what minority businesses are available.
Top state officials say they’re doing a great job year-to-year increasing minority spending by government agencies, setting higher goals and winning national praise for their diversity inclusion record. Critics and minority business owners say a lack of political leadership and poor enforcement have led to paltry rates of minorities landing state contracts and helped create a wealth and earnings gap between nonwhites and whites in Massachusetts.
“I'm very proud of the success we have had in this program,” said William McAvoy, head of the state’s Supplier Diversity Office. “The fact that we have expanded our program to include veterans, LGBT and disability-owned businesses really puts us at the forefront of supplier diversity offices across the nation.”
Data compiled by his office show executive agencies exceeded their goal of spending seven percent of their 2018 discretionary budgets with minority contractors. But the report is unclear about how much of that money went specifically to black-owned companies, Hispanic-owned companies or other minority-owned businesses.
The totals also include both what agencies spent directly and what agency-funded prime contractors spent on minority subcontractors.
Cole said that the state isn’t doing enough to make sure prime contractors actually meet their commitments to hire minority subcontractors like himself.
Cole, 72, hauls construction materials and said most of his work relies on jobs funded by the state. In 2009, he blew the whistle on a Pittsfield construction company that committed to hiring him for 225 hours of work as a minority contractor. He received only a fraction of the work despite showing up with five trucks and employees.
“At that time, I had three kids in college,” said Cole, remembering how he challenged the construction company when they turned him and his dump trucks away. “I said, ‘Wait, I’m supposed to be doing all the trucking here.’ Well, next thing you know, you’re not doing it.”
Court records show the Pittsfield company told the state it had paid Cole more than $40,000 and had met its minority hiring goals. The State Attorney General took up the case but it dragged on for five years and more than 30 court hearings, ultimately getting Cole a settlement of just $19,800.
His trucking company shrank, he said, partly because of the challenges like these in public sector contracting.
Calvin Brandford, center, is a certified minority contractor who has run an excavation business north of Boston for almost 30 years. Taking a break from a drainage job in Lowell, Brandford said getting state-funded work as a subcontractor is very hard and often comes with a serious drawback: not getting paid for 60 to 90 days.
James Jennings, an expert on race and politics and an emeritus professor at Tufts University, said the state’s efforts to increase fairness and equity for minority business owners like Larry Cole aren’t cutting it.
“The pushing has been going on for 25 to 30 years now,” said Jennings. “I think leadership has to be more aggressive in saying we're going to do something about this.”
The state’s commitment to helping minority businesses get a bigger share of state spending has waned, said JoAnne Thompson, who led the State Office of Minority and Women’s Business Assistance from 1999 to 2004. Her office was a precursor of McAvoy's Supplier Diversity Office.
“I know the commitment has to be there,” she said. “We understood the mandate. We knew that there were sanctions. We wouldn't get a merit increase -- I wouldn't get a raise -- if I didn't meet my goals.”
Documents show that in 1998, Thompson’s agency gave letter grades to each of the 91 state agencies, rating them on their progress in meeting minority contracting goals. More than a third of them got D’s. That system has since been scrapped.
One tool Thompson uses to gauge progress on minority hiring in the state isn’t found in any documents. As she drives her car to and from her home in Dorchester, Thompson scans roadwork sites looking for people of color working on the crews.
“Now if there are minorities working on those construction sites, I haven't seen a one, not a one,” she said.
After DCAMM released the study showing just 1% minority participation, it was supposed to develop a response showing how it would increase that rate. But more than two years later DCAMM says it is still working on that response. The agency did issue a report last June laying out its plans for $4.7 billion in capital projects over the next 5 years, but it made no mention of attempting to hire more minority contractors.
“I'm not saying you can fix everything because there aren't that many minority businesses who can meet the guidelines for these contracts,” said Thompson. “But (the state) could do a better job in making sure that they have access to these opportunities. And no one is doing that.”
McAvoy said his agency recognizes the state could do more and is hiring for a new position dedicated to reaching out to African-American and Latino communities.
Jennings said the goal is a wider, more equitable distribution of wealth. African-Americans in Massachusetts on average earn 39 percent less than white males, according to the state survey commissioned by DCAMM.
Jennings said that investing in minority business enterprises – called MBE’s by policymakers – can bring wealth back to communities long hurt by discrimination
“This is a major resource if we can bring MBE’s to the table in a substantive way,” he said. “You bring jobs into the community. You have greater levels of disposable income which then helps the broader economy because you have more consumers spending more money.”
The state’s own annual diversity reports say their goal is to do just that – increase business opportunity for minorities. But critics like Mukiya Baker-Gomez say what’s missing is consistent accountability.
“Compliance sucks right now. It's not as forceful as it needs to be. It's not as technical as it needs to be. And it's not as helpful as it needs to be,” said Baker-Gomez, who worked for decades as an affirmative action officer for state agencies before retiring in 2016.
Baker-Gomez said the state’s system of holding big contractors accountable for affirmative hiring goals needs to be consistent across all agencies.
Documents NECIR obtained from DCAMM showed only four contractors in the past 10 years have been penalized for failing to meet promised minority hiring goals. The state also says contractors who win bids will be fined or punished if they don’t meet their commitments to bring on minority and women-owned businesses as subcontractors. But the State Attorney General’s Office has prosecuted only six contractors in the last decade for making false claims about using minority subcontractors.
Cole said state officials are never on job sites monitoring whether contractors are meeting their commitments to hire minority subcontractors, a criticism that Thompson echoed.
“There really isn't a watchdog,” said Thompson. “There's no one at the helm who's making sure that these things happen.”
McAvoy said his office is hiring a new investigator to look into allegations of fraud.
For Calvin Brandford, a black business owner who’s run an excavation business north of Boston for 35 years, the whole system of getting state-funded jobs is fraught with trouble.
“Even though the work’s out there, it's very challenging to get it,” he said, during a break from a drainage project he was doing at Middlesex Community College in Lowell. “It's 'old boy network' as far as most of the work that goes on.”
Only about ten percent of his work comes from public jobs partly because as a subcontractor, he has to wait 60 to 90 days for one of the big prime contractors to pay him.
Black-owned businesses complained about late payments on state jobs at almost double the rate of Latino and women-owned businesses, the DCAMM survey found. In interviews with more than 1,000 contractors, the survey also found significant discrimination is just part of the marketplace -- a finding that rang true with Larry Cole.
“You walk into a foreman's office, they’re talkin’ the N-word and everything else in there,” said Cole. “I've been there.”
Data collection and analysis for this series was provided by computer science students at Boston University’s SPARK! Program. Participating students were Steven Brzozowski, Gur Asees Chandok, Keval Khara, Nicole Mis, Brooke Mullen, Pranav Raikundalia and Vaibhav Sharma, with the assistance of technical director Dharmesh Tarapore.
NECIR interns Sophia Brown, Anastasia Lennon, Brianna McKinley and Hannah Reale contributed to this report.
Correction: A previous version of this story incorrectly reported Cole's winnings in his lawsuit.
Mayor calls on construction firms to hire more minorities, women, residents
Boston Mayor Martin J. Walsh is proposing to raise the city’s goals for construction company hiring of residents, minorities, and women.
Since 1979, a city ordinance has required construction companies to demonstrate good faith efforts to guarantee that 50 percent of all hours worked go to Boston residents, 25 percent to minorities, and 10 percent to women. The companies must report to the city the progress they’ve made.
Walsh’s proposal, filed Monday, calls for increasing those goals so that 51 percent of hours to go to city residents, 40 percent to minorities, and 12 percent to women. The proposal would also apply the same goals to hours worked by apprentices.
The goals are intended to ensure that highly desirable building trade jobs are spread around to reflect the city’s diverse demographics.
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Forget yesterday's news. Get what you need today in this early-morning email.“The success of Boston’s growing economy relies upon our ability to open the doors of opportunity to all our residents, and remove barriers causing economic inequity throughout our city,” Walsh said in a statement Monday.
“We must work to ensure that the construction industry reflects both the great talent and the great diversity Boston has to offer,” he added. “By setting new goals for ourselves, we honor our commitment to creating a more prosperous, more inclusive city.”
The heavy reliance on white men and on workers from outside the city has raised concerns as real estate development across Boston reaches historic highs.
“We’re in the third-largest economic boom in the city’s history and it’s important that Boston residents are a part of that movement and that the construction industry reflects the demographics of Boston and its diversity,” said John Barros, the city’s chief of economic development.
Construction is an industry that can offer people in disadvantaged communities a path out of poverty. Its workers in the Boston area make about $66,000 per year, or nearly $32 per hour, on average, according to data from the US Bureau of Labor Statistics.
For years, the industry as a whole, and most companies individually, have failed to meet Boston’s targets for hiring residents and women. Even the city itself has failed to meet those targets on projects in which it was the developer.
There has been more success in recent years in meeting the goal for hiring minorities, but progress in that area has stalled.
For example, according to city officials, residents have accounted for about 29 percent of hours worked so far in 2016 and women for 5.6 percent, both well shy of the current goals.
Minorities have accounted for about 31 percent of hours worked so far this year, which is above the city’s existing goal, but shy of Walsh’s proposed target.
Advocates have argued that the 25 percent target for minority work hours is seriously outdated, given that, in the city’s overall population, minorities outnumber whites 53 percent to 47 percent, Census data show.
The mayor’s proposal also calls for having just one city agency — the seven-member, mayoral-appointed Boston Employment Commission — handle compliance.
Previously, compliance was handled by either that commission or the Boston Planning and Development Agency, formerly known as the Boston Redevelopment Authority.
The proposal also would have the City Council review the work of the employment commission twice each year.
The existing ordinance already allows the city to discipline noncompliant companies, including by suspending payments for any municipal funding tied to the project, removing the company from the project altogether, and banning them from future projects that involve city funding or require city approval.
However, such drastic steps have rarely been taken. Noncompliance has typically resulted in a meeting where city officials urge the company to develop plans to get into compliance.
Barros said the city hopes to work with construction companies and other stakeholders to gain compliance. “The city is very serious about these goals,” he said.
Officials from Walsh’s office said the proposal to update the ordinance, called the Boston Residents Jobs Policy, was drafted after consultation with community advocates and stakeholders in the construction industry.
Chuck Turner, a former city councilor who now works as a consultant for the Boston Jobs Coalition advocacy group, said the proposed revision of the ordinance would create “a significantly stronger tool in our fight for equity for Boston workers of all races, workers of color, and women in Boston’s booming construction industry.”
“It also strengthens our fight against this region’s escalating income inequality,” Turner added in a statement provided by the mayor’s office.
Local leaders in the construction industry, including union officials, have said that they have taken steps in recent years to try to promote construction careers to minorities and women, including by launching training programs.
One hurdle to increasing diversity, industry officials have said, is that many of those who have started careers in construction did so because a parent or another close family member worked in the field.
Walsh’s proposal will now go before the City Council for approval. If the council passes it, the changes would go into effect immediately.
The city will likely proceed cautiously in updating the ordinance. Taking a stricter stance could prompt legal challenges that could jeopardize the existence of the policy. In other Massachusetts cities, including Worcester, Fall River, and Quincy, similar policies have been overturned after legal challenges within the past 15 years.
Builders in Boston missing diversity targets for jobs
City itself not fully in line with goals for developers
By Matt Rocheleau GLOBE STAFF AUGUST 28, 2015
Most developers in Boston failed to meet the city’s goals for hiring Boston residents and women for construction jobs last year. That includes the second-busiest developer, the city itself, according to a Globe review.
A longstanding city ordinance requires developers to demonstrate good-faith efforts to ensure that 50 percent of all hours worked go to Boston residents, 25 percent to minorities, and 10 percent to women — and to report their performance to the city. The goal is to ensure that highly desirable building trades jobs are spread around, to reflect the city’s diversity.
The city, like most local companies, failed to meet at least two of those hiring targets. Thirty-three percent of the hours worked on city projects in 2014 were worked by Boston residents, rather than the desired 50 percent. And less than 5 percent of the hours were worked by women, short of the goal of 10 percent.
But in the hiring of minorities, the city surpassed its 25 percent goal, with 33 percent of hours worked going to minorities.
Boston’s performance was generally in line with the industry as a whole. The pattern of meeting the goals for hiring minorities, but lagging in hiring residents and women, has held for years.
Construction hiring goals not met in Boston
Companies building in the city continue to lag behind goals created to ensure that work goes to city residents and women.
“While we know there is more work to be done, we are proud of the progress the city has made,” said Bonnie McGilpin, a spokeswoman for the mayor, in an e-mailed statement. She said the available pool of skilled workers in the building trades has not kept pace with the recent building boom.
She praised the ordinance, saying it had “proven to be a successful resource to increase employment opportunities for Boston residents, workers of color, and women . . . and to help ensure that Boston’s workforce reflects the makeup of our city.”
Mayor Martin J. Walsh, in comments earlier this year, said that he was surprised and concerned by some of the industry’s low numbers, and that the city plans to push for improvement.
Overall, the city hired for 488,000 hours of development work in 2014, making it the second-most active developer.
The city’s busiest developer, National Development, employed Boston residents for 26 percent of hours worked, minorities for 24.5 percent, and women for 4.4 percent — like the city, short of the goal for local residents and women.
National Development spokeswoman Kathy McMahon said the company supports the hiring goals suggested in the ordinance, but “with so much construction happening in the city right now, it is often difficult for subcontractors to supply labor that fully meets the established goals.”
Samuels and Associates, the third-busiest developer, hired residents for 32 percent of hours worked, minorities for 29 percent, and women for 4.7 percent, repeating the pattern of being below target for hiring residents and women.
The company said in a statement that it was committed to complying with the city’s policies, and that it requires the general contractors and subcontractors it hires to demonstrate their best-faith efforts to meeting the goals.
Among the top 50 developers in the city, Genzyme, a biotechnology company that is upgrading its Allston facility, was a notable outlier. It posted by far the lowest percentages of Boston residents — 6 percent — per hours worked in 2014.
Minorities accounted for 20 percent, and women just 0.5 percent, of hours worked.
Officials at Genzyme, the 23d-busiest developer in 2014, declined to comment, referring questions to the project’s general contractor, Turner Construction Co.
Turner spokesman Chris McFadden said the construction at Genzyme’s Allston facility requires highly specialized skills that are in short supply. The project is retrofitting pharmaceutical manufacturing systems at the plant, while the facility remains fully operational, he said.
“As the project progresses, we continue to work with our subcontractors to ensure that they continue with their best-faith efforts to build upon these numbers,” McFadden said in an e-mail.
He said Turner has for years worked with programs and organizations that promote increased resident participation and diversity in the construction industry.
Norwich Partners, which is building a luxury hotel in the Seaport District, delivered the worst performance among the top 50 in terms of hiring minorities, at 19 percent. Residents accounted for 24 percent of hours worked, women for 3.1 percent.
Chief executive David Leatherwood of Norwich Partners, the city’s 24th-busiest developer last year, referred questions to the project’s general contractor, Lee Kennedy Co., and said he planned to raise the issue with officials there as well.
Officials at Lee Kennedy did not respond to a request for comment.
The data also identify several developers that delivered strong performances in reaching some of the hiring goals.
Dorchester Bay Economic Development Corp., the 22d-busiest developer in the city, hired residents for 58 percent of work hours and minorities for 69 percent, though it still faltered in hiring women, logging 5.6 percent.
Madison Tropical LLC, a partnership of Madison Park Development Corp. and Tropical Foods grocery company, the 37th-busiest developer, also performed well.
It hired residents for 43 percent of its work hours and minorities for 53.5 percent. The company lagged behind the goal for hiring women, at 3.7 percent.
Brooke Woodson, vice president of programs at Madison Park, said that for developers to meet or exceed the city’s hiring goals, they must wholeheartedly buy in.
“You have to see the value in it,” Woodson said. “And you need to put resources into it.”
He said Madison Tropical had adopted measures to try to meet the city’s hiring goals, including staffing a full-time compliance monitor to keep close track of the project’s hiring statistics and establishing an applicant-friendly system for people who walk onto the project site looking for work.
Woodson said many companies focus solely on completing the project at hand as efficiently as possible.
“But we’re here not to just build buildings,” he said. “We’re also here to build communities.”
City Councilor Tito Jackson, meanwhile, called on the city and other top developers to “lead by example” to improve performance.
“No more excuses,” he said. “It can be done, if there is a value placed on diversity inclusion. It has happened in the city of Boston, and the projects have come in on budget and on time.”
DATA: City of Boston
Matt Rocheleau / Globe Staff
Matt Rocheleau can be reached at matthew.rocheleau @globe.com. Follow him on Twitter @mrochele.