QLINE Construction Brings Opportunity for Detroit-Based and Minority-Owned Businesses

M-1 RAIL Construction Creates a Model for Local and Minority Business Inclusion

By Darren Nichols

Three years ago, Tarolyn Buckles’ firm, Onyx Enterprise, Inc., had just two employees and a dream to lead a major civil engineering project in the Metro Detroit area.

Today, her dream has come to fruition and Onyx’s profit margins are on the rise due to her firm’s contributions to the M-1 RAIL construction development. The firm was hired among almost 200 construction companies to provide a variety of engineering, construction and technical services for the $180 million modern streetcar project that will begin passenger operations in May 2017.

The multi-phased construction project included the rebuilding of Woodward Avenue by the Michigan Department of Transportation (MDOT), installation of the rail, and construction of a streetcar maintenance hub.

“We were a part of history. If it wasn’t for the M-1 RAIL project we wouldn’t have gotten that experience,” Buckles says about the 6.6 mile streetcar project. One of 70 disadvantaged business enterprise (DBE) companies hired, companies like Onyx were able to participate in the project because of a vendor engagement and bidding processes that was established to make winning bids more attainable. (For simplicity in this this report, DBE is used to denote the aggregate of certified Minority-owned Business Enterprises (MBE), Woman-owned Business Enterprise (WBE), Detroit Based Business and Detroit Headquartered Businesses involved with the project).

M-1 RAIL, a nonprofit consortium of philanthropic and private donors established to build and operate the QLINE, was initiated to be a catalyst for a modern regional transportation system in the region. But as it relates to another goal – ensuring an inclusive construction project – the future is now.

It offered opportunities to participate in the project to owners like Buckles, and other certified DBEs such as small businesses and those owned by women and minorities, who have traditionally been overlooked by developers of major construction projects in Detroit and southeast Michigan. Statewide there are 306,986 minority owned and 158,946 women owned firms, U.S. Census data shows.

Over the course of three years and 700,000 workhours designing, planning and building the M-1 RAIL, DBEs represented 27 percent of the contracts – totaling roughly $50 million – for construction services. Those services spanned demolition to trucking, surveying to sewer work, welding to paving and everything in between.

Achieving an inclusive construction project starts at the top, and QLINE’s success was no accident. At the earliest stages of the project, M-1 RAIL leadership met with its two major partners – an owner’s representative and the construction manager and general contractor – to outline a path to comply with federal requirements which call for all projects receiving U.S. Department of Transportation funds to implement and enforce a DBE program. The goal is two-fold: first, to ensure there is no discrimination in awarding contracts; and second, to create a level playing field for MBEs, SBEs and WBEs to compete fairly.

But merely complying with DOT guidelines was not sufficient to the leadership group. Desiring to engage workers and services that fully represent the city and region, ownership established an inclusion goal to award 25 percent of construction contracts – twice the national average – to DBE companies, and strategized to determine how they would reach the self-imposed benchmark.

In 2013, M-1 RAIL selected owner’s representative HNTB – a global firm that specializes in managing large and complex projects for private owners – as well as construction manager and general contractor Stacy and Witbeck – one of the nation’s largest heavy civil contractors and top builder of light rail, commuter rail and streetcar systems – to oversee the streetcar development and related construction.

President & CEO Matt Cullen calls the QLINE a transformational project for introducing a new mode of transit to Detroiters, attracting new businesses and residents to the Woodward Corridor and growing the city’s tax base.

“But equally important, this project has been a game-changer for many Detroit-based, minority- and women-owned businesses and their team members that made this project a reality,” Cullen said. “We made it a priority that this project reflect our community from the first design concept to final construction. Our local businesses rewarded that commitment by building a system that will fundamentally change the heart of Detroit.”

The project is a great example of the unprecedented public-private partnership’s commitment to inclusion of Detroiters in the rebuilding of the city. That’s fitting given Detroit still has the highest percentage of African Americans of any major city in America at 83 percent.

Buckles joined a workforce development training and apprenticeship program, created by HNTB, that prepared workers for construction and other project jobs. She was trained for nearly a year in human resources, finance and MDOT regulations. Participation allowed the lifelong Detroiter and her company to serve as the quality control manager for the project’s required municipal utilities inspections.

After 28 years in the industry, the training was a godsend. Not only would her company work on the historic streetcar project, but the training expanded her personal opportunities. Onyx now has seven employees and a second office in Ohio.

“It was one of the highlights of my career with M-1 RAIL and is a highlight of my firm. It is the one I hold in high regard,” Buckles said. “It’s something in a pivotal time in our city to have this mode of transportation.”

In addition to the training and apprenticeship program, when it came time to let bids, the construction team reduced large, complex portions of the project (typically awarded to one prime vendor) into smaller parts. This allowed smaller firms – that may not be staffed, financed or insured at the same levels as their larger counterparts – to compete.

“We created packages they could actually win,” said M-1 RAIL vice president of external relations, marketing and communications Sommer Woods. “We built RFP’s that fit their scope. And instead of one contract, we split it up into several tier-one contractors. This was not popular because we were breaking up the usual method of work.”

The strategy resulted in doubling the number of contractors on the project. Detroit-based DBEs won bids ranging in size from $8,200 (Industrial Fence and Landscape Inc.) to $5 million (Blaze Contracting, Inc.). The average size of contracts awarded to DBE companies was approximately $714,000.

Still, most of the major contractors went through an extensive process to find minority vendors. Companies such as Stacy and Witbeck, the largest contractor on the project, began identifying potential bidders, particularly interested MBEs and WBEs, to provide assistance with MDOT Pre-Qualification, DBE certification, and bonding and insurance services.

Woods and the M-1 RAIL construction team conducted four project outreach events for prospective bidders. At the sessions, interested contractors were given lists of potential DBE subcontractors and suppliers and were encouraged to reach out to those companies to create bid packages that better matched the capacities, qualifications and experiences of potential local bidders. And the bid solicitation process was demonstrated online, where access to project plans, specifications, notices and bid documents were also housed for public access.

The efforts created several bid packages tailored to smaller and up-and-coming businesses. In addition, a vendor database was established so the construction manager could rapidly send out digital bid notices to all interested companies.

During bid solicitations, 11 group meetings and forums were conducted, along with 21 individual meetings. In all, the sessions attracted more than 650 representatives from subcontracting companies, suppliers, service-providers and trade organizations.

Ultimately more minorities, women and Detroiters worked on QLINE construction.

“This project gave many businesses the experience they needed to bid on other road projects,” Woods said. “And now they have rail experience which is not the norm in Michigan. Our hope is that we can use this project as an example for future projects that strong inclusion is possible.”

That meant a lot to longtime businessman and lifelong Detroiter Sharmyn Elliott, who calls the project a model for others to emulate nationally.

Elliott understands the significance of M-1-RAIL. He recalls his days riding city buses though a vibrant downtown.

As Vice President of Somat Engineering, he also remembers looking out his downtown office window in the mid-1980s and not seeing any pedestrian traffic during lunchtime.

So working on M-1 RAIL was personal to Elliott, whose company, a certified SBA, DBE and MBE, was hired for several technical engineering services dealing with soil evaluation, removal and replacement.
“This project means that we were a critical component of the construction of a project in Detroit – in downtown Detroit and midtown Detroit – that’s going to be the impetus of transit going forward and we put that on our resume. We can show rail experience. That’s critical for us because that’s the first question [developers] ask you. What kind of rail experience do you have? Now we have this.

“We have a project sheet. We have an owner that will support us in the effort … and the quality of our work … so that’s huge,” Elliott says.

For a company that worked on major city projects such as casinos, the Charles H. Wright Museum of African American History and Ford Field, the M-1 RAIL project still felt unique.

“It’s different in the degree and the amount of collaboration that went on,” Elliott said. “Everything was above board. You knew what the expectations were. It was, ‘Here are your expectations, you will deliver,’ and ‘Here’s the opportunities that are going to be forthcoming on the project,’ whether it was during design or during construction.”

Detroit Electrical Services LLC was a subcontractor to both Stacy and Witbeck and HTNB. The company attended one of the informational forums and submitted a bid.

Originally, the certified WBE, MBE and Detroit-based company was awarded a small bid package, but as the firm continued working, their engagement expanded. By the end of construction, DES had completed a significant portion of the necessary M-1 RAIL electrical work – and a contract for $1.1 million.

“It’s a great opportunity because it did open doors and things that don’t otherwise happen. Naturally it let us contribute and be a part of something historic for the city,” said Gloria Rhodes, president of Detroit Electrical Services, whose company has been around since 2013 providing electrical, electrical engineering and wholesale services.

Rhodes said the inclusion by larger firms helped to take her company “to another level.”

“It gives us the visibility we deserve because we are qualified and we can do the work. So we enjoyed the relationship and they believed in us. We were qualified and they saw that. Sometimes if it’s not required you don’t participate.”

“It has to be [larger] companies that look for qualifications and start focusing on the minority businesses that can produce the work. That poses a challenge and has always been a challenge for us,” Rhodes said.

“There’s been a lot of literally blood, sweat, and tears,” said Matt Webb, an HNTB project manager overseeing the M-1 RAIL development for nearly five years.

And it was complicated, requiring HNTB to assemble inclusive groups for design, construction, system integration testing and for federal safety and security compliance.

For Webb, it was all worth it. “It is a labor of love … across our [whole] team,” Webb said. “This project had a fixed budget [and] it was a project that we had to deliver [on time]. We had to deliver. That meant sacrificing and being out there night and day and weekends. We worked through winters, which is not typical in our industry. It should really shut down.”

The practice of regulating disadvantaged business inclusion in Detroit dates back to former Mayor Dennis Archer, who issued an executive order in the mid-1990s to increase participation of minority- and women-owned companies. Development agreements for each of the city’s three casinos required hiring practices that ensured that at least 51 percent of the workforce were Detroit residents and required casino developers to purchase 30 percent of goods and services from MBE, WBE, SBE or Detroit-based businesses.

For Lawrence Stevenson, M-1 RAIL did exactly what Archer wanted.

“They gave me an opportunity and with that opportunity I worked for three years,” said Stevenson, whose company performed multiple scopes of work involving brick paving and concrete hauling.

Stevenson Construction has been in business 13 years and he was able to hire seven employees during the three years he worked on M-1 RAIL.

“They didn’t know me and they gave me a chance,” Stevenson added. “[It meant a lot] for them to reach out and meet me and give me an opportunity to work on a major project at a time when all eyes are on Detroit. This opens up doors and trust that we can use the small guy or minority companies to work on major projects.”

And M-1 RAIL is opening doors for him that he hopes stretches nationally.

“This, to me, can be a blueprint for other entities and companies [to show] we can use small businesses. Small businesses move the economy,” Stevenson said.

For Buckles at Onyx, the vision for the M-1 RAIL project is timeless.

“We have to get more of our firms to have this [assistance and training],” Buckles said. “If we can have them do more partnering, you will see a lot more growth in Detroit. Nationally that’s a model for the entire nation to see that you can engage small businesses on these mega projects where they can get the training. [M-1 RAIL] should be commended for that effort.”

Darren A. Nichols is a Detroit-based freelance writer and was an award-winning journalist at The Detroit News. In his more than 20-year career, Nichols was a fixture in city hall and covered every Detroit mayor since Coleman A. Young.