Building a Successful Diversity Contractor Program

Responding to trends in increased diversity spend targets in contracts with key customers,
including LDCs, ENTRUST Solutions Group recently implemented a focused, nationwide
Disadvantaged Business Enterprise (DBE) initiative across our entire portfolio of engineering
services. This article discusses how ENTRUST Solutions Group crafted a program that is
mutually beneficial for customers, partners, and ENTRUST Solutions Group.
Last year LDC customers began increasing
the targets for second-tier diversity spends
in their contracts. These increases were
driven, in part, because of 2015 updates
to reporting practices by the Public Utilities
Commissions in both Illinois and California.
Utilities in these states are now required
to include dollar amounts of contracts in
force with diversity contractors in reports.
At the same time, ENTRUST Solutions
Group started taking a closer look at our
relationships with all contractors, not just
diversity firms. We believe that building long-term relationships with qualified partners is a good business
practice. Such relationships present opportunities not only for ENTRUST Solutions Group to grow our
project portfolio, but also provide new business opportunities for our partners.
“We’re definitely seeing a shift in natural gas and utility industry contracts,” indicates Adam Biggam, Vice
President, Distribution at ENTRUST Solutions Group. “The target increases also seem to be regionally
driven, with utilities in highly urbanized environments and utilities that receive state-supported program
funding including stronger language in their contracts,” Biggam adds. Stronger language can vary by
client. In some cases, the actual targets have increased. Contracts with diversity spend targets can range
from 5-45%. In other cases, the wording of the contract has changed from a target ‘recommendation’ to a
target ‘requirement.’ Clients are even increasing the level of details for, and frequency of, documentation
substantiating DBE participation levels.
Building a Successful Diversity
Contractor Program
By Dave Klimas & Allison Hassig
As published in
PIPELINE & GAS JOURNAL April 2016
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Building a Successful Diversity
Contractor Program
CRAFTING THE PROGRAM
At ENTRUST Solutions Group, our DBE program
sets out to meet client goals while also developing
our DBE partners and ensuring our quality
performance on contracts. There are three aspects
of our robust DBE program: Mentoring, Embedding,
and Tracking. To manage these details we hired a
DBE program manager to drive diversity activities
and promote the program both internally and
externally. Using subcontractors for specialized
services is common in many industries, including
pipeline engineering. Typical outsourced services
include structural engineering, surveying, drafting
and design, geotechnical services, construction
inspection, and pipeline locating. Our comprehensive
DBE program identifies contractors with these and
other skills; exceptional knowledge in their field;
previous work experience on similar projects; and
current DBE, WBE (woman-owned), MBE (minorityowned), or VBE (veteran-owned) status.
BEST-IN-CLASS
One challenge in identifying DBE partners is
selecting firms that deliver similar levels of quality.
Rubinos & Mesia Engineers, Inc. (RME), a Chicagobased engineering firm with MBE certification,
has provided structural engineering services for
projects like the O’Hare Airport expansion, Navy Pier
renovation, etc. “We recognize that we are a MBE
firm, but we don’t want to be a partner just because
of our MBE status. It is important that we are hired
because of the level of skills and performance we bring,” explains Farhad Rezai, Executive Vice President
at RME. His firm is currently working with ENTRUST Solutions Group on main replacement projects in the
Chicago area.
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HOW TO GET THE MOST FOR YOUR
SECOND-TIER DIVERSITY SPEND
TARGETS
Developing a successful diversity program
takes the thoughtful participation of both
clients and Disadvantaged Business
Enterprise (DBE) firms. More importantly,
a successful program requires a structure
and process that meets customer spend
targets while assuring high quality
engineering services, regardless of
provider. Here is our advice on what LDCs
should look for from their master service
agreement partners to get the most out of
their second-tier diversity programs.
1. A dedicated DBE program
2. A commitment to the highest
quality, regardless of diversity
status
3. A program with mentoring
opportunities for DBE owners and
employees
4. A seamless approach to service
delivery, regardless of provider
5. A software system to monitor DBE
activity
Building a Successful Diversity
Contractor Program
Adam Biggam, who first met the RME team at a client seminar on diversity, recalls a similar conversation.
“After my presentation at the client seminar, I was approached by Matt Whisler, Project Manager at
RME. Initially we talked about RME’s structural engineering services and our needs in this area. I was
confident that they could add value in structural engineering. And Matt stressed, ‘yes, we are a diversity
business, but you should hire us because we deliver high quality engineering.’ That’s the kind of partner
we look for,” Biggam asserts. The partnership that started nearly a year ago has grown beyond structural
engineering services. “RME team members are helping with base line drafting, detailed drafting, DOT
analysis, and pipeline design,” notes Tiffany Hopkins, Senior Project Manager for the Distribution team at
ENTRUST Solutions Group.
“I consider everything we do at ENTRUST Solutions Group to be at the highest quality,” Hopkins says.
“This means our DBE partners have to match our quality level in a way that is transparent to the client,”
Hopkins adds. Matching quality expectations is a given for the RME team as Rezai explains, “We have
always firmly believed in high quality performance. At the end of the day, our diversity status only means
so much. The quality of our work stands above this.”
MENTORING DBE PARTNERS
Knowledge and relationship-building are critical to successful diversity programs. Developing close
relationships with all stakeholders, gaining a strong understanding of DBE skill sets, and integrating
the firms into the professional team at a master service agreement provider takes time and patience.
We recognize that some DBE firms are small businesses that can benefit from mentoring with a master
service provider. ENTRUST Solutions Group’s mentoring can range from financing tips to reminders
about what certifications are up for renewal. Mentoring might also include conversations about project
forecasting, which can help DBE partners better plan their finances. Some of our diversity partners
also benefit from exposure to new business opportunities outside their core area of expertise. RME,
with extensive experience in structural engineering on projects like roads and buildings serving public
enterprises, sees the advantage in working as a DBE partner. “We see the benefits of diversifying our
business beyond the public sector, for example, into the private sector such as gas pipeline companies,”
cites Rezai.
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Building a Successful Diversity
Contractor Program
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SEAMLESS TEAMS
To ensure that clients have a seamless experience as it relates to meeting diversity spending targets,
our DBE program strives to “embed” DBE employees with the ENTRUST Solutions Group workforce.
At ENTRUST Solutions Group, DBE-firm embedded employees are treated like they are staff members.
“They operate just like any other team member. They attend team meetings, are assigned the same
work, and participate in the same training programs,” describes Hopkins. “They also participate in our
extracurricular activities,” she adds, referring to company picnics, sports teams, etc. Hopkins is currently
managing an 11-person main replacement team at ENTRUST Solutions Group that includes four
embedded employees. “Our team is being mentored alongside the ENTRUST Solutions Group team in
preparing construction documents for Phase I gas line work,” highlights Whisler.
COLLECTING THE DATA
Keeping track of the qualifications and certifications of multiple DBE partners can be a daunting task.
In 2015, ENTRUST Solutions Group engaged Salem Managed Services Group (SMSG) as a business
solutions partner to integrate and coordinate the subcontracting and vendor services on behalf of
ENTRUST Solutions Group. “SMSG has provided vendor management and consulting services to clients
throughout North America for over 20 years,” notes Brian Shoemaker, Director, Strategic Solutions at
SMSG. We have had a strong relationship with The Salem Group (SMSG’s parent company) for many
years. They also just happen to be a certified WBE firm. Partnering with SMSG has allowed ENTRUST
Solutions Group to focus on our core business, while SMSG handles the details. “The primary objective
of this program is to create a centralized management tool and build relationships with ENTRUST
Solutions Group’s existing subcontractor partners, thus maximizing diversity subcontracting opportunities,
streamlining processes, and managing contractual compliance,” explains Shoemaker.
At ENTRUST Solutions Group, our database of 30-plus DBE partners extends beyond capabilities to
include all certifications, timesheets, industry qualifications, and customer qualifications. The database
is accessible by clients, DBE partners, and ENTRUST Solutions Group staff including project managers,
who access the database when they need a specific skill set for an upcoming project. Having a robust
software program to track DBE activity also makes it easier to provide documentation to clients regarding
spend levels on specific contracts—which can in turn be shared with regulators, if necessary. “As
spending targets and reporting frequency have increased, we have found a need to be even more diligent
with our documentation,” comments Biggam.
Building a Successful Diversity
Contractor Program
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LONG-TERM OPPORTUNITIES
As client diversity spending targets continue to increase, DBE programs will need to be flexible in the
future with an eye toward long-term investment by all parties. “We are looking for long-term partners,”
notes Hopkins. “We don’t want to train someone and lose them within a year.” But finding partners with
complementary skills, consistent quality, and similar customer service philosophies requires a strategic
approach. At ENTRUST Solutions Group, for example, we look for partners with experience in highways,
water, and sewer engineering. Projects in these areas likely run over long distances and in all types of
environments (rural, suburban, urban), all factors in common with our pipeline engineering projects.
But not every DBE firm is a good fit. Beyond finding relevant work experience and common philosophical
ground, finding partners with similar structures and work pace are also important. “One of the many
services we provide ENTRUST Solutions Group is structural calculations for main replacements,” reports
Whisler. “These are critical elements, with a 24-36 hour turnaround because most of the calculations are
for projects already under construction. So they need the results right away.” With over 75 people on staff,
RME can deliver. “We are a good size firm, so we are able to engage a couple of our engineers to meet
this turnaround,” assures Rezai.
“As a result of the mentoring and embedding process, ENTRUST Solutions Group has come to us
with other project opportunities where we can partner with them to secure larger projects. Through our
participation in ENTRUST Solutions Group’s DBE program, they now understand our capabilities and
this is leading to other projects outside Illinois. We look at this as a valuable long-term relationship,”
notes Rezai. “Both sides have invested a lot,” Whisler adds. Taking the long-term approach bodes well
for all parties involved—whether it’s the client, the first-tier contractor, or the DBE partner. “I expect the
trend in increased diversity spend will continue to grow,” predicts Biggam. “I only see these initiatives
expanding to new companies or companies with existing programs modifying the language to increased
requirements,” he says. With the trend increasing, it is not just a business requirement, but a good
business practice to partner with qualified diversity partners. At ENTRUST Solutions Group, we consider
such partnerships a win-win for all parties involved.
RESOURCES
Authors: Dave Klimas, Senior Vice President and Chief Engineer at ENTRUST Solutions Group, LLC and
Allison Hassig, DBE Program Manager at ENTRUST Solutions Group, LLC.