The First State spends billions of dollars on commodities, services and construction. However, both in Delaware and nationally, the construction industry is facing challenges due to an aging workforce, rising labor demand and a lack of skilled workers.
Despite the need for a larger labor pool, the construction trade in Delaware continues to be largely controlled by a small workforce consisting mainly of white males. A 2022 state-commissioned disparity study revealed that women-owned and minority-owned businesses accounted for less than 9% of the state construction contracts awarded in the last five years.
State officials reacted to the report by allocating funds and creating measures designed to increase the participation of underrepresented groups in state-funded infrastructure projects. One key initiative was to involve certified Disadvantaged Business Enterprises, or DBEs, into these projects. A DBE is a for-profit business that is at least 51% owned and operated by someone who is socially and economically disadvantaged.
Last year, as a part of a trial run for implementing diversity goals, DBEs certified as minority-owned, women-owned and veteran-owned businesses were invited to bid on the $217 million reconstruction of Hodgson Vocational Technical High School in New Castle County. Parties involved report that the DBE pilot has been successful, offering promising opportunities for Delaware's construction industry and Hodgson VoTech students.
DBE participation exceeds pilot goals
Construction management firm EDiS was selected by the New Castle County VoTech School District to oversee the Hodgson construction project. The pilot, developed by the Office of Management and Budget, aimed for a 7% participation rate from DBEs — either through contractors' DBE status or by engaging DBE suppliers, vendors or subcontractors. The company supervised the pilot's execution.
Kevin Lucas, vice president and senior project manager for EDiS, explained that historically, the biggest challenge to DBE participation was connecting with DBE firms to inform them about bidding opportunities. He said despite good-faith efforts to involve DBE businesses in the past, results were minimal. However, due to the pilot, evaluations for contract awards included stipulations that incentivized contractors to actively engage the DBE community.
EDiS organized several networking events between prospective contractors and DBE businesses. Chris McCone, executive vice president and operations manager for EDiS, said he was "pleasantly surprised" by the high level of participation under the pilot.
Overall, 37 individual contractors or nearly 39% of all contractors are participating as certified minority-owned, women-owned and veteran-owned businesses. "I think the outreach was much stronger because [of the] pilot program," Lucas said.
Preparing DBEs has potential to expand labor pool
McCone, a former engineer for the U.S. Army Corps of Engineers, said the pilot and support EDiS offered has helped many DBEs to improve their readiness to compete for future projects.
Some DBEs took part in the pilot program with the goal of scaling their operations while others aimed to enrich their opportunities without expanding their workforce. Overall, the program offers the potential to resuscitate a stagnant workforce.
McCone said that diversifying the workforce and increasing participation from subcontractors, suppliers and vendors could significantly benefit the construction industry, especially given the expected shortage of contractors in the next 5 to 10 years.
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"There's just not enough, workforce out there. So we're always competing out of the same labor pool," McCone said.
As of now, 90% of the trade contracts for the project have been awarded, but more opportunities are available. Approximately $15 million worth of work remains to bid on for the next phase of the construction, set to start next year.
Pilot offers Hodgson students on-the-job training
The pilot at the Hodgson construction site isn’t just benefiting entrepreneurs. It also provides opportunities for 10 co-op students in Hodgson's masonry, carpentry, plumbing, electrical trades and technical drafting programs.
The initiative enabled five employers to provide paid on-the-job training to 11th grade students, which helps them fulfill their high school graduation requirements. The students will continue working on-site throughout the summer and into their senior year.
According to Assistant Principal Michael Paoli, the classroom setting limits how much a teacher can demonstrate, making the construction project a rare opportunity. He said that this experience will give students the chance to build relationships with employers, significantly increasing their chances of establishing a career in the construction industry post-graduation.
New bill now requires use of DBEs
Lawmakers were so impressed by the opportunities the pilot created for students and DBEs that they recently passed legislation that requires the inclusion of DBEs in large state-financed projects.
Introduced by state Rep. Sherry Dorsey Walker, House Bill 387 mandates that state agency projects exceeding $30 million incorporate DBE utilization rates between 10% and 30%. "What this [legislation] can do is level out the playing field and create equity, inclusion and opportunity for people who have not always had that access," Dorsey-Walker said.
Approved by the House and Senate, the bill now goes to Gov. John Carney for his signature.
You can contact Anitra Johnson at ajohnson@delawareonline.com.
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