DEI thoughts by Ron Unterreiner of PEOPLE of Construction

For all of us working in this segment of the industry we call Diversity, Equity, and Inclusion (DEI), the recent article involving management of HBD Company (now known as RHBD Company) was a swift kick in our collective sides.  This is not a story any of us want to read on the front page of the Post and it certainly raises the question once again as to whether this concept of MINORITY PARTICIPATION is working or are we simply placing too many burdens, financial and otherwise, on general contractors and prime subcontractors?  

Do we have a program that is out of the reach of success or does the lack of success of the program solely rest on the uncaring attitudes and lack of aggressive and caring management of public owners, cities, counties, government, and other private owners that claim to place a high value on DEI?  Or do we in this industry feel that we have a program that is working, and this story represents a unique situation that happens infrequently and is not worthy of further discussion?

I wrote a piece a few months back where I imagined myself at a board meeting of a fictitious organization called Greater St. Louis for DEI.  I made a motion that we cease and desist with our minority participation in that it is simply not working and too few people in our marketplace truly and honestly care.  I went on to discuss the reasoning for my motion and made some very valid points–an undue financial burden on the prime trade contractors; payment barriers that no parties want to address in a meaningful manner; jobsite cultures far less than acceptable;  unworkable and meaningless profit margins for the minority subs; and essentially an unwillingness for owners, architects, general contractors, construction managers, trade contractors and yes, minority contractors to truly care enough or take the tough steps necessary to make minority participation work.  This board meeting was only in my imagination and/or my dreams so my imaginary motion was never seconded.  The issue still lies in question.

I followed this up with a piece describing my idea of ” DEI best practices” to put in place by all the players and have been looking for the right audience to present my case for these best practices.  Maybe this HBD story will cause some discussion and give me an opportunity to make such a presentation.  I have no comment in general on the HBD story other than to say that I do not believe this sort of “front” activity is as rampant as it was years ago.  In my work, I very rarely encounter minority owned firms that could be defined as companies that have no purpose in life other than to use their race and their name to make a few bucks.  I will say that there are some firms that may skate the edge as they scrape together their life savings to start their company and get it to where they can actually afford their own labor; buy their own materials; install their own products; keep their own books; and manage their company in a manner that meets the full approval of all in the industry.  I will work with these firms and guide and mentor and help them the best I can to professionally succeed, but I have no tolerance, and neither should our industry, for the few minority players that game the system and lack the drive to make the effort to run a respectable business.

Maybe the least understood part of the HBD story is how little profit this supposedly certified minority firm known as “C.K.” earned for even lending their name and certification to the process of running the materials through his or her firm.  To pay this company $4,500 to run $560,000 of materials through their company is an injustice in itself.  If the minority “front” firm would have earned and collected $56,000 maybe this firm would be on their way and doing business the right way.  This is not to say that I condone the practice as discussed in the story, but it does emphatically point out how little we expect the minority firm to earn on our commercial projects, regardless of the contracting method.  Unfortunately, this part of the story is common practice; negotiate the smallest sharing of profit possible with the second-tier minority firm you are bringing to the table.

Until we adopt a welcoming and mentoring attitude with the minority firms we ask to join our team and until we openly and willingly share our wisdom and knowledge and help these firms overcome the barriers placed before them–most importantly the working capital needed to overcome the industry payment practices–and make sure we include these firms at the job site discussion table and seek their involvement, we will never advance the cause of minority participation.  We will be talking about deceptive practices within DEI twenty years from now, just as we have been talking about DEI and the lack of minority participation for the last twenty years.  We will read more stories; see more indictments; witness the failure of more MBE/WBE firms; and probably form more agencies and organizations to “study” the issue and make recommendations as to how we can improve and make some positive changes.

I say often that it takes a bucket full of “WANT TO” by all involved in our industry to make DEI work.  We are not there yet.  It seems that everyone involved thinks that someone else should be responsible for the success of DEI.  Certainly, there are only a very limited few in town that feel the financial obligation to do so is on them.  I challenge anyone reading this to sit down and name ten truly successful minority business enterprises in our marketplace and if you cannot, right off the top of your head, ask yourself WHY you cannot.

I have a lot of respect for Mike Perry and HBD. H.B. Deal and HBD has been a respected player in our industry since the first day I arrived in St. Louis in 1968.  None of us can condone what has been reported in the Post-Dispatch story and I am sure HBD does not condone this practice as well.  There are multiple general contractors in our area that can relate to this story and hopefully, will be reviewing and actively discussing their policies and procedures as relates to diversity, equity and inclusion in the days and weeks ahead.

May we all learn from this story and may we all accept our responsibility to make DEI work in our industry.  If not, someone please second my imaginary motion and let’s cease and desist the practice of minority participation.

PEOPLE of Construction

Ron Unterreiner