Michigan Department of Transportation, Office of Business Development
July, 2007 to March, 2012
Michigan Department of Transportation
Approach: Then Governor Jennifer M. Granholm appointed Terrence M. Hicks as the Director of MDOT’s Office of Business Development with oversight over the federally-mandated Disadvantaged Business Enterprise (DBE) program. Mr. Hicks recognized that the DBE contractors faced a host of problems that prevented them from participating in the MDOT bid process; lack of bonding, workforce and accounting capacity, the understanding of the MDOT bid process, inadequate prequalification levels, etc. However, Mr. Hicks’ research revealed that mid-level contractors in particular work categories including; concrete (curb and gutter), landscaping, trucking, and demolition were able to perform work successfully at mid-level contracts. With that, Mr. Hicks led a team that developed a number of policy-oriented initiatives aimed at mid-level DBE contractors. In an effort to increase the number of DBE’s who actually bid on MDOT projects, Hicks and the Office of Business Development combined with the Metro Region Engineers developed a pilot process focusing on $1 million to $2 million projects within the Metro Region only.
The underlying premise of this small pilot process is that DBE firms will have greater success obtaining practical road building experience and increasing bidding capacity on smaller projects which have less pressure than the large high impact projects which receive most of the public attention. Over time, as more DBE firms gain experience in core MDOT work items, the DBE industry will be better prepared to bid on and successfully perform larger amounts of work on the larger high impact projects. Included in this process was the fact that the DBE commitment sheets were required at time of bid. After considerable success on the pilot process the name was changed and process institutionalized into Capacity Targeted Projects.
Outcome: In this year-long pilot process, 10 of 13 small pilot project contracts met the goal at time of award, including one contract which was awarded to a DBE prime. Additionally, some DBE’s felt they obtained work they would not have otherwise received due to the high DBE participation goals. 8 of 13 bids were lower than the engineer’s estimate and a total of 31 DBE firms worked on small pilot project contracts.