For upstart or otherwise small construction firms, navigating the world of subcontractor work with large companies can be an ordeal. The application process, understanding bonding, and submitting an appropriate bid can all be confusing; networking alone can be a formidable obstacle.
Sometime in 2008, executives at the Beaverton, Oregon office of Skanska USA, the American subsidiary of the multi-billion dollar global construction firm, recognized a dearth of diversity among its many subcontractors. As one senior project manager put it in the 2010 issue of company magazine Coast To Coast, they were repeating business with known low-risk contractors to the detriment of a stated core company value.
The solution was the Boost Program, an education and outreach program for small construction firms, emphasizing female-owned and minority-owned firms.
“For public contracts, we really want to make sure women and minority subcontractors have a piece of the pie,” Skanska Diversity Manager Mel Jones said.
Of course, upstart firms can run into a host of problems rooted in inexperience. Sometimes that results in losing a contract before its won.
“One of the common things we see (with small subcontractors) is bids often come in really high, or—in the worst case scenario—really low,” Jones said. “And when a bid comes in too low, they’ll find themselves racking up higher costs that have to be handled with the client through change orders, and that may hurt their business later.”
The Boost program is a series of hands-on classes that cover the responsibilities of a subcontractor from start to finish. Bids, safety standards, cost estimation, and insurance are all topics covered by the program. The course isn’t a cakewalk. In one graduating class cited by Jones, 40 students started the program, 33 stayed to the end, and 22 graduated; a 55 percent pass rate.
TITAN Earthwork—a Sumner-based construction firm specializing in demolition, earthmoving, and underground utility infrastructure—went through the program this summer with positive results.
“Bonding, bidding, scheduling, resources,” TITAN program manager Josh Vogt said. “They took us step by step through everything a mega company like (Skanska) expects from a subcontractor.
“They approach the question, if you’re a firm who’s frequently submitting bids to Skanska, why aren’t you winning bids with them?”
The key to the program was to provide subcontractors with the tools to establish staying power as a subcontractor, he said.
TITAN Earthwork was formed as an LLC in 2007 and has since expanded its market presence to Seattle. Long term, management would like to take the firm global. They weren’t as concerned with falling short of muster on bids, Vogt said, but they believed the Boost program would lend them greater credibility with potential business partners and an opportunity to network.
“Primarily (the Boost program) benefitted us for our networking,” Vogt said. “A lot of people, and clients, see our work firsthand. They know we do good work. But having our people go through a rigorous program like Boost and being able to tell that to potential clients gives us that much more of an edge.”
Jones agreed that networking was a major advantage of the program.
“The success they find with us, they can carry over to other companies they subcontract for,” Jones said. “(For us), we get to meet these guys and learn their capabilities. We get to build those relationships for the future.
“We do have some graduates who have found success with other companies, and not necessarily us. Relationships with multiple companies are common in this industry, and that diversity is a good thing.”
In the Portland/Beaverton region, 73 percent of Boost graduates are on their second contract with Skanska, he said. Of the graduates from the younger Seattle chapter of Boost, 63 percent are on their first contract with Skanska.
