Archive

BAPLA

In March, Councilmember Mitchell Englander – the strongest pro-business voice on the Los Angeles City Council – hosted his quarterly Northwest Valley Business Roundtable that focused on City contracting opportunities for San Fernando Valley businesses.

At the event, Merriwether and Williams presented lots of information and education about the Bond Assistance Program (BAP), and how local, small and minority-owned businesses can receive technical and administrative assistance to help them successfully bid and compete for City contracts.

But that’s not all. The L.A. Department of Public Works, LA Department of Water and Power, Port of Los Angeles, Los Angeles World Airports and LAUSD gave presentations on upcoming City contracting opportunities related to major construction projects.

The event also included a question-and-answer session with representatives from Councilmember Englander’s office, the Mayor’s Office of Economic Development, and participating City Departments.

All who came agree that this was an invaluable way to network, get educated, and gain a deeper understanding of how local businesses can thrive.

Advertisements

Sometimes things get a little bumpy on a job. That’s the experience for John Wilson, the General Manager at TT Commercial, a company that recently worked as a subcontractor on LAUSD South Region High School #12, doing tile surfaces.

Wilson found out about BAP through the GC on a different project that his company worked on. When brought to their attention, the company jumped on the chance to get involved. “I don’t know that it would’ve been feasible without the program,” says Wilson. “It gave us the ability to perform the job.”

On the job, Wilson found that things just went a little more smoothly than previous jobs when working with BAP and general contractor Suffolk Construction. He explains why: “It seems that because there is a third party [funds administrator] involved that is a mediator, it forces the GC to be more on their toes with things, and possibly more available than they would be without.” He says that having a third party helped move everything, including billing, change orders, and releasing funds, just a little more quickly.

That made a big difference to how efficiently TT Commercial could get the job done.  “The amount of paperwork in today’s world in construction is ridiculous,” he says. “It’s five to six-fold of what it was three years ago, and the ability to get paid is double to triple the time,” says Wilson. “I sit on the board of a contractor’s association, and we talk about these types of things. It’s not just going on in one region like LA, it’s going on throughout the country.”

Wilson says that working with BAP mitigated some of the problems in today’s construction landscape. As of late August, the company is 75% done with the project – the first with BAP, and hopefully the start of many more.

 

As owner of Birdi & Associates, Moninder Birdi has worked with LAWA over the past ten years. So it was through LAWA’s small business outreach that he learned about the Bond Assistance Program. The program gave him the confidence to bid on a $1,200,000 contract for the Turn Key Implementation of VMS/VSS IP Cameras. With BAP posting $180,000 collateral, he was awarded the contract.

Doing project management and systems design work for this security project is complex. But Birdi found invaluable help along the way. “LAWA really helps facilitate everything,” he says.

Canaan Hillery, from Canaan Insurance Agency, has similar kudos for the Bond Assistance Program at LAWA. “LAWA is an easy program partner,” he says. “They get their paperwork done, they are detailed and fast to respond, they call you back right away, and they are easy to work with.”

Hillery says that BAP has done more than offer contractors like Birdi financial support — it’s offered peace of mind. “When the whole real estate bubble burst, a lot of contractors used their properties for collateral, and some ended up losing their homes” he recalls. “BAP has helped quite a few people stay afloat.” He adds: “In the long run, it helps contractors who can’t bond on their own stay working.”

The Turn Key Implementation, which started in late August, is only the first step in a long relationship, according to Birdi. “BAP has really helped me,” he says. “In the future, I’ll be depending on that program.”

The purpose of a boot camp is to whip you into shape. That’s exactly what happened for Marco Rojas, owner of Rojas construction.

When he found out about a LAUSD boot camp, he jumped on the chance to attend. Until then, he had no bonding capacity and not-so-stellar credit. “I decided that we should take advantage of the free education,” he says. “I had no education as far as what was offered,” he said. He wasn’t disappointed. “Boot camps teach you exactly what to do and what to expect,” he says.

Now that he had a clear road map, he set upon making his business a success. To build capital, he started winning small LAUSD projects that didn’t need bonding. But he still didn’t have high hopes of getting bigger projects. “I just thought we couldn’t do it,” he says.

That changed when he connected with the folks at the Bonding Assistance Program. With BAP’s support, he embarked on his first bonding project ever. To date, he’s done five projects with BAP, the latest being the Port of Los Angeles’ Phase Two of Disney Cruise Terminal Improvements, with BAP posting $30,011.60 collateral for the $75,027 contract. Without bonding, he says he wouldn’t be able to bid on projects over $10,000.

“I’ve benefited tremendously,” he says. “I thank God for that program. Without it we wouldn’t be able to put food on the table.”

But the Program isn’t just about one job, or even five jobs. It’s about a sustained effort to help companies get — and stay — successful. “With just a few more projects, I can repair my credit,” he says.  “My whole life I’ve had doors closed. But you have to persevere. Without the BAP, we wouldn’t be able to be where we at right now. Don’t give up.”

How do you create a community? Ask Pinner Construction. When they were awarded the role of Prime contractor for South Region High School #15 with the help of the Bond Assistance Program, they needed a subcontractor for insulation and acoustical work.

That’s when they turned to Hamilton Ceiling Systems. “When we approached them, we found that they were having some difficulty getting bonded,” says Gary A. Riehle, Insurance & Risk Manager, Pinner Construction CO., Inc. Riehle recommended they get in touch with MWIS. “We’ve had a long history of working with small business contractors  and we value that relationship,” he explains. “We looked at the potential they had and liked what they had to offer, and knew that they are the type of subcontractor we’d like to work with.”

For Hamilton, it was a welcome introduction: “BAP was a great help,” says office manager Jessica Turner. “Without it we wouldn’t have been able to move forward with the bond or the project. We were very happy and relieved to learn of the program.”

Turning them over to LAUSD and BAP, Riehle knew they were in good hands. And he felt good about that: “It’s a proud moment to look at Hamilton and know that we helped them.” He adds: “The system can work if it’s done right and the people are willing to work within it.”

And it’s working. With the project about halfway done, they are well on their way to a beautiful new high school with a view of Catalina Island. But the benefits will extend way beyond this particular project. “It adds growth to your company by increasing your bond-power,” says Turner. Says Riehle: “If you help somebody out, you are helping that contractor get future work, helping out the building community, and our public works system. This creates jobs and helps businesses flourish.”

There’s nothing wrong with small jobs. They are necessary and worthwhile. But sometimes, a company wants to get to the next level.

Ranbay Construction is an LA-based general contractor in business since 2009. When they started, they worked on jobs in the $30,000 range. But that changed very quickly when they started working with Bond Assistance Program (BAP). “The jobs became more sizable,” says broker Frank Morones, VP at Contractors and Developers Bonding in Covina. The numbers inched up and up. In the most recent turn of events, Ranbay, owned by Tigran Bayburtski and Ashken Zargaryan, was awarded a project for the Southwest College Bookstore for more than $1.5 million.

Their work with BAP has been invaluable in their ascent to the top. “It’s allowed them to go after larger jobs and higher profit margins,” says Morones. “They are now bidding against larger companies that don’t carry the overhead of Ranbay.”

Of course, bidding is one thing. But actually completing the contract is another. Morones says that the owners have expertly navigated this path. Whereas some contractors complete a contract and make a small margin, Ranbay is making “very good” margins on their projects, according to Morones. “Tigrin comes from a larger company that was completing $9 million dollar projects. He’s learned his trade and has applied this to his own company. His company started out small, and now it’s very successful.”

Overall, working with LACCD has been a wonderful experience for Ranbay. “They haven’t had a single issue working for LACCD,” says Morones. “They’ve developed good relationships with project managers, and hope to bid on more projects in the future.

Established in 2008, until recently the relatively new company CDMI Construction had only completed private sector jobs up to $650,000. With the assistance of the Bond Assistance Program, CDMI obtained two subcontracts, one for $2,122,000 and another for $3,613,000. These will be the first public sector projects for this company — and hopefully the beginning of many more.

We caught up with Carley Montgomery, who along with Andy Russo, Jr., founded the company. We talked to her about her experience seeking help in obtaining bonding for a Walsh Austin Joint Venture (WAJV) project for the LAX expansion.

Q: How has the Bond Assistance Program (BAP) helped your business?

A: The BAP has made it possible for CDMI to obtain bonding in excess of five times its current bonding capacity. This project has facilitated the exponential growth of our small women owned business in gross revenue as well as future bonding capabilities. Without the program, we would not be able to perform or compete on the projects bidding at LAX.  With the program, we have been able to obtain contracts totaling over $5.5 million on the Bradley West Projects.

Q: What does it mean for CDMI to have a public sector project?

A: What it really means is that in this ever-changing economic climate we are able to diversify our portfolio. Competing in the public works sector gives us access to bid on more projects. Let’s face it, since the market really crumbled in the end of 2008, and coincidentally when CDMI was just getting off the ground, the private market has essentially died due to the crash of the credit markets.  Projects that were under construction or in design lost funding and new projects weren’t coming online since there was no financing.  With the money from the ARRA (American Recovery and Reinvestment Act) and the sale of Federal Bonds, the Public Works Sector has continued to build.  Without access to bonding, it’s impossible to get into this market.

Q: Where are you on the project to date?

A: We are mobilized on site and ready to go to work.  We are experiencing some delays, which is very common on LAX projects.

Q: How was the process of working with the BAP?

A: The BAP program has been wonderful to work with, incredibly helpful and a true ally. I originally met with the BAP in 2008 when working on V Australia and looking for a bond.  At that time I didn’t need to utilize the program since I was able to secure the bond myself, but have always had a working relationship with Margarita Lopez, who is now the diversity affairs coordinator for Walsh Austin JV.  I feel that Margarita, Maria, Diane, Rosa and everyone else I have been dealing with at Merriwether & Williams Insurance Services and the BAP are truly there to be of service to the Contractor.  They have all gone above and beyond their job responsibilities to help navigate the programs that the city has to offer small businesses.

Q: Do you have any words of advice for others thinking about enrolling in the BAP?

A: Enroll now —  don’t wait until you need it and are under a deadline. The process of obtaining a bond, even with the program, takes longer than you would have expected and likely longer than the time you will have once you have a successful bid. Especially since the program is only one element in the process, it’s best to get it out of the way now. Use an experienced bonding agent familiar with the program, and Sureties who have already accepted the Letter of Credit offered by the City through the program. Keep your financial information up to date and have your CPA regularly review them — this is invaluable when it comes to applying for your bond.