Library construction misses contracting goals

$187 million building plan seeks more minority and Dayton-owned businesses.

Library’s contracting goals and actual awards:

Goal, Actual ($44.8 million in awards tracked)

Minority Business Enterprise: 17%, 3.9%

Women Business Enterprise: 5%, 15.2%

Dayton Local Small Business: 10%, 1.6%

Montgomery County Businesses: 60%, 41.5%

Local Business Enterprise*: 70%, 60%

Source: Library contractor monthly project diversity tracking

*Refers to businesses in Butler, Clark, Darke, Greene, Miami, Montgomery, Shelby and Warren counties

Dayton Metro Library construction project:

Total project cost: $187 million

Main library project: $63.6 million

Operation center: $7.8 million

Remainder of Segment 1 projects: $19.3 million

Segment 2 projects: $39.5 million

The Dayton Metro Library’s $187 million system overhaul has not met its contracting goals for minority and local businesses, drawing criticism from city leadership about hiring assurances made related to the project.

About 3.9 percent of contracting and subcontracting awards have gone to minority-owned firms, falling well short of the library’s 17 percent goal, according to library data. About 1.6 percent of spending has gone to small Dayton firms, though the library’s benchmark is 10 percent.

“The bottom line is what we have right now is not good enough and not working for the benefit of the city,” Commissioner Jeffrey Mims Jr. said.

Segment 2 of the construction project is beginning, and the library has adopted new practices intended to help local, small and disadvantaged firms get a larger share of the $40 million in awards.

Library officials, however, say meeting the business participation goals once again could be challenging since few minority firms have bid on the work and the library by law must select the lowest responsible bid, which restricts what it can ask of contractors.

“The disappointment (commissioners) have, we share that,” said Tim Kambitsch, Dayton Metro Library executive director. “We were really hoping to have higher results when we put the plan together.”

In January 2014, the Dayton Metro Library Board of Trustees approved a resolution creating a Community Inclusion Policy for the first segment of its county-wide construction project. The overall construction plan will result in the renovation and expansion of five branches and the creation of 11 new buildings.

In the resolution, the library states it is dedicated to equal opportunity, non-discrimination and prioritizing business participation from local, minority-owned and women-owned firms.

Through early July, the library awarded $44.6 million in construction work. But the library has struggled to achieve its contracting goals. According to its data:

  • 1.6 percent of spending went to Dayton local small businesses (10 percent goal);
  • 3.9 percent went to minority business enterprises (17 percent goal);
  • 41.5 percent went to Montgomery County businesses (60 percent goal);
  • 60 percent went to local business enterprises (70 percent goal).

Participation by women business enterprises has been a bright spot for the library, with about 15 percent of spending benefiting these firms, far surpassing its goal of 5 percent.

Also, the library has come closer to reaching its goals in the state-mandated bidding process. Subcontractor awards hurt its participation statistics.

At a recent commission meeting, Commissioners Mims, Joey Williams and Matt Joseph voiced disappointment that minority and Dayton small businesses have not benefited more from the building projects.

“When we have local citizens who are paying taxes for the building of the library, and then we see an absence of those citizens getting some of the (project) dollars to help them pay their taxes, it causes great concern for us,” Mims said.

Residents’ tax dollars are paying for the library project, and minorities represent a large share of Dayton’s population, Mims said.

Local residents should rightfully expect that their tax dollars will stay in the community and help a broad representation of its businesses, he said.

Mims said the library has shown a willingness to work with the city to find some creative ways to better fulfill its goals.

Mims said he would like to see specifications added to the bidding process that improve the opportunities for minority and local firms to get the subcontracting work.

Like the library, the city of Dayton has struggled to reach its own contracting goals, falling short of its benchmarks for minority-owned firms in 2013.

City officials attributed the failure to a shortage of certified minority firms.

The local economy and construction market have heated up, and since there is more work to go around, the library project is having trouble attracting companies to bid, Kambitsch said.

“We are only getting, oftentimes, only one or two bidders for each of these packages,” he said.

Construction work has been broken into smaller bids in the hopes of luring more local and disadvantaged firms, Kambitsch said. But of the first 54 bid packages issued, 43 did not receive responses from minority-owned businesses, he said.

For construction projects, private companies, nonprofit groups and other organizations often will mandate certain levels of business participation from minority and disadvantaged firms, Kambitsch said.

Many organizations can accept or reject bids based on their inclusion promises and plans.

But the Ohio Revised Code requires that public libraries select the lowest “responsible” bid, and the library cannot attach business-participation requirements to its construction projects, Kambitsch said.

Kambitsch said he consulted with Montgomery County about the state law.

In a June letter, Montgomery County Prosecutor Mathias Heck Jr. wrote, “It is my opinion that the minority involvement cannot be used as a criterion in selecting and awarding a bid for contracts over $50,000, but it may be stated as a goal in soliciting bids.”

But the library is exploring ways to encourage general contractors to increase minority participation when they parcel out work to subcontractors, Kambitsch said.

In Segment 2, companies that submit the lowest bids will have to include in their bid package a list of the subcontractors they will use, hopefully encouraging the hiring of women, minority, local and small Dayton firms, Kambitsch said.

“All the general contractors are responsible to help us meet those goals,” he said.

The library lacks enforcement power and cannot make contractors use specific subcontractors.

But the library will closely monitor how general contractors contribute to its business participation goals, and they will have to document their “good faith efforts” to help reach the inclusion targets.

Earlier this month, library board of trustees approved the same business-participation benchmarks for Segment 2 of the construction project as they approved for segment 1.

“Inclusion is such a core value of the library,” said Jayne Klose, the library’s community engagement manager. “This really matters to us. … The last thing we’re going to do is step back from aggressive goals just because they are aggressive.”