Archive

Q&A

John Martin - Executive Director SFO
                            

John Martin is the Executive Director of San Francisco International Airport. We caught up with John recently to ask him about what’s happening at the airport.

Q: What are the major upcoming projects at SFO? 

 

We are remodeling boarding area E in Terminal 3, which is the old American Airlines boarding area, to make room for the expansion of United Airlines. This project should be completed by 2014 and is valued at $140MM. In addition, we are completely renovating Terminal 1 and building another boarding area B, encompassing approximately 20 gates, making it a very large project. It should be complete by 2014 and is valued at $1B.

We are also replacing the Air Traffic Control tower, which was originally built in 1983. The new tower is expected to be completed by 2015. This project is valued at $120MM We are also complying with a congressional mandate to make additions to the runway safety area. It’s valued at $220MM.

Most people are unaware of what happens behind the scenes to make the airport run smoothly and efficiently. We are continually reinvesting in maintaining state-of-the-art facilities – if not, our airport would fall behind other major international airports.

Q: What is SFO doing to assist small and local businesses to compete on SFO projects?

We package the contracts so that small businesses can bid as prime contractors. We also set goals so that large contractors must subcontract to local firms at a significant level that reflects the diversity of the City and region.

Big contractors by and large want to support the airport’s goals and achieve a high level of business inclusion. In a recent project, 50% of the $383MM went to local contractors.

We utilize a Design Build methodology – Prime contractors are chosen through an RFP process rather than a low bid. This encourages them to support local hire initiatives and deliver the project on-time and on budget.

Q: What is the history of SFO and the City and County of San Francisco Surety Bond Program?    The bond program was created in 1996 as a part of the $2.4B master plan for the airport. It began as a pilot program for the city, and the first for the airport, soon became city-wide.

The success of the bond program, really shows the value of pilot (test) programs. The bond program pushed the envelope at the time, it was a vanguard program, particularly because of the guarantees that the airport would provide. When the airport created their program, the underlying fear was that there would be many losses, which proved not to be true. In terms of risk management, these programs work, are effective, without any significant losses.

Q: Why do you feel that diversity and inclusion is important as a public agency?

Our vision at the airport is to provide an exceptional service and serve every part of our community. The airport is an economic engine for the region and everyone should see the progress we’re making as beneficial to the entire Bay Area. This is a large part of why our mission statement says “communities” and not “community” because it is our job to serve the diversity of the communities we serve.

Currently, we are rethinking how we serve the disabled community and how they experience the airport. We are working very hard to make sure everyone enjoys the benefits of our amazing airport.

Q: What is your vision of the next 10 years?

We really hope to use the airport as a model for other airports. We are currently a leader in environmental programs and we’d love to see more companies use the airport and our continued development spring board more small businesses to a national level.

I love to see small businesses get their start in San Francisco, especially at the airport, and become national companies. Luster Construction Management, Pacific Gateway Concessions. These companies started working on projects at SFO and have truly grown to become national companies.

One can say that MWIS was able to grow significantly through its partnership with the airport. That is refreshing to see and demonstrates the impact of these types of programs.

Over the next 10 years, the airport is investing in over $2B in improvement projects and we take pride in working with the community to make sure there are business opportunities for MBE and LBE firms to compete.

Advertisements

Susan Muranishi is the County Administrator. As the “CEO” for the County, Susan watches over many crucial departments, including Risk Management, and oversees many services such as welfare, health, probation, and more. We caught up with Susan to ask her a few questions:

MWIS: What is Alameda County is doing to improve outcomes in the community for local workers and local businesses?

SM: Alameda County promotes business development throughout the County through collaborative efforts with other local organizations and its own contracting and procurement activities. It also recognizes the need to conduct business in a manner that preserves our resources for future generations, and is very active in promoting sustainable business practices in the region.

As a social services provider to the County’s most vulnerable populations, we link residents and employers via employment resources such as The East Bay Works One-Stop Career Center Programs through our Social Services Agency. We also work with local youth to ensure they are prepared for the new economy through training programs at Youth Uprising in Oakland, and our New Beginnings program, which works to provide job training and opportunities to foster youth and youth in our juvenile justice system.

MWIS: What made the County adopt an Owner Controlled Insurance Program for Alameda County construction projects?

SM: The County continually strives to utilize its resources in a fiscally prudent manner while encouraging local business development. Under an owner controlled insurance program (OCIP) the County provides standardized insurance coverage for all covered subcontractors at a lower cost than would be possible for the subcontractors to do on their own without the benefit of the pooling of risk. The County and the subcontractors both benefit from the more uniform coverage that is provided at a lower total project costs.

MWIS: What are some other programs creating jobs in Alameda County?

SM: The Small, Local and Emerging Business (SLEB) program is designed to enhance contracting and procurement opportunities for small, local and emerging businesses within Alameda County by providing up to 10% bid preferences on eligible contracts. The program was developed to promote and foster inclusiveness, diversity and economic development, as well as provide on-going evaluation to ensure that all local businesses are provided equal opportunities in County contracting and procurement activities. The SLEB program is administered by the Office of Contract Compliance (OCC), which is located in the Auditor-Controller’s Agency.

And of course, The Contractor Bonding Assistance Program was established by the County Administrator’s Office Risk Management Unit in July, 2008 to reduce barriers and assist eligible contractors to obtain bid, performance, and payment surety bonds for work on Alameda County contracts.  Guarantees up to 40% of the bond amount or $750,000 (whichever is less) are available for qualified contractors.  Each contractor receives one-on-one consultation and assistance to identify their barriers to bonding. The program links them to the resources they need to avail themselves of program services to obtain bonds needed to bid on County contracts. CBAP also provides contractor-focused group workshops and seminars and regularly communicates with CBAP participants to inform them of upcoming bid opportunities, resources for business growth and news and other information to help them grow their businesses.

The County is actively engaged with labor to develop project labor agreements for the East County Courthouse.

SM: The First Source Program assists County vendors in fulfilling staffing needs, places County residents in sustainable, local jobs, and provides workforce education and training. The program was developed to link Alameda County residents with employment opportunities provided through the County’s relationships with businesses, including contracts that have been awarded to vendors through the competitive process, and economic development activity in the County. The First Source Program allows the County to create and sustain these connections. Vendors awarded contracts for goods, services and/or professional services for $100,000 and over are automatically qualified to take advantage of the First Source Program — there are no additional enrollment requirements. The success of the First Source Program represents a valuable service to vendors by effectively and efficiently delivering a qualified, local worker in response to an employer’s workforce request.

MWIS: How has the Contractor Bonding Assistance Program benefited the County?

SM: Small local contractors have successfully bid on County contracts through their participation in the program. Since the collateral pool and full complement of services became available in May, 2009, 20 have progressed through the process to obtain bonding or evidence of “bondability” in the aggregate amount exceeding $9 million. Over the past year, CBAP contractors have been awarded contracts with Alameda County, totaling over $9.4 million.  Most of these contractors did not have bonding prior to participating in the program.

The increase in awards to the local contractors has strengthened the local economy on multiple levels. One of CBAP’s contractors was awarded a job order contract (JOC) for $3 million.  As a result of that contract, the local business was able to hire two permanent employees.  Both employees are residents of Alameda County and were unemployed prior to being hired. Overall, in the last year, CBAP contractors report over 100 additional jobs resulting from CBAP assistance.

We have seen the program open the door to additional non-County contracting opportunities for small contractors within Alameda County. The technical assistance provided under the CBAP has enabled 12 local contractors to successfully bid on contracts with other public and private entities. One small, local, African–American male owned construction company has been awarded a contract by another entity in Alameda County, a solar project with Cal Trans, based on the improved bonding capacity achieved through technical assistance from the County’s program.  Another African-American male owned construction company was awarded a million dollar project with the City of San Jose based on a referral from CBAP. Since these contracts were not with the County, no bonding guarantees were provided.

The County benefits from the awarding of these non-County contracts to local firms through the overall strengthening of the local economy, the expansion of the bidding pool, the additional revenue flowing to small local businesses and the resulting increase in tax revenue to the County. The small businesses benefit by increasing and diversifying their revenue stream and building capacity that may lead to a future successful bid on a County project.

MWIS: Is Alameda County doing anything else to assist small businesses to compete on GSA or Public Works projects?

SM: The County has a very robust outreach program for local contractors. Information on contracting opportunities is readily accessible to the public via postings on its website, www.acgov.org.

The General Services Agency Enhanced Construction Outreach Program (ECOP) incorporates goals for local participation in County construction projects that encourage large contractors to fully utilize the small local contracting community and minority and women-owned businesses.

The Public Works Agency Building Opportunities for Business (BOB) program works to promote economic growth, local employment and business development within Alameda County through maximizing public contracting opportunities to local businesses and ensuring non-discrimination through outreach, education, and technical assistance. BOB periodically holds outreach meetings with local contractors to provide information regarding Public Works contracting opportunities. These meetings are usually held over breakfast, to accommodate the early work schedule of most contractors.

MWIS: What are some of the upcoming projects that small Alameda County contractors should be looking out for?

SM: There are three capital projects being managed by the General Services Agency that will provide opportunities for Alameda County contractors.

  1. There are still subcontracting opportunities for small contractors on the Highland Hospital Acute Tower Replacement Project, which is scheduled to be completed in 2017.
  2. The East County Hall of Justice, a $141 million project in Dublin, has prequalified bidders, but contracts have not yet been awarded.
  3. The seismic retrofit of Peralta Oaks, which will be the new home for the Sheriff’s crime lab, Coroner’s Office and Public Health lab will also have opportunities for local contractors.

MWIS: Tell us about The East Bay Economic Development Alliance

SM: The East Bay Economic Development Alliance (East Bay EDA) was established by Alameda County 22 years ago and is a vehicle through which the East Bay’s public and private leaders collaborate to achieve our shared goal of a healthy, vibrant economy able to create and sustain quality jobs. It has grown into a public/private partnership serving the San Francisco East Bay including Alameda and Contra Costa Counties. It seeks to establish the East Bay as a world-recognized place to grow businesses, attract capital, and create quality jobs.

East Bay EDA recently completed a comprehensive report on economic development and job creation in the East Bay “Building on our Assets”, which is being utilized by private and public partners to further encourage business development in the region. The study reveals that Alameda County is ranked second nationwide in the receipt of venture capital funding in three industries – industrial energy, semiconductors, and electronics equipment.

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.

Q&A With Joyce Sloss

Joyce Sloss is the director of the Business and Jobs Resource Center, which helps job seekers, emerging businesses, and student interns navigate and access employment, contracting and work experience at LAWA and the larger community.

Q: Can you explain the mission of the Business and Jobs Resource Center?

A: We connect the dots between access to small business and jobs for the underserved communities.

Q: What is the background of the Resource Center?

About 10 years ago, cities around the airport decided to sue LAX because of the negative impact due to expansion plans. But wise heads prevailed. Instead of giving the money to the lawyers, the two sides decided to figure out a way that everyone could benefit economically from the growth. The result was the Community Benefits Agreement. These are 7 tenets, everything from air and noise quality. One of the tenets was economic development, and the BJRC falls under this umbrella.

Q: How has the program evolved?

A: For our pilot program, we started out using faxes and email. Now, we work with a local African-American-women-owned company that provides us with a fully automated database that helps us with technology, but also human resource capital.

Q: How do you keep the community involved?

A: We have program partners like NABWO, the National Association of Minority Contractors, the Asian Business Association, and governmental agencies. Through these connections, we let businesses know about opportunities at the airport. We also have a meeting the first Wednesday of every month, where we talk about how to do business with LAWA.

Q: How do you work with the Bond Assistance Program?

A: The BAP is housed in the BJRC offices. They participate in all of our monthly meetings, and in pretty much everything that we do. We do a lot of mandatory pre-proposal meetings, and we always introduce the BAP program because with all of the construction we are doing, it’s an essential component. One of the biggest barriers to working on larger projects is the lack of bonding, and so this program is key in helping businesses expand their capacity to bond. It’s a major response to the need.

Q: What kind of economic activity do you anticipate with the construction at LAWA?

A: We’ve already spent $750 million to martinize Tom Bradley; that project is complete. Some of the plans on the table include adding additional gates to accommodate the double-decker A380 airbus, consolidating our rental car facilities, and a mid-field satellite terminal. That will impact the community in terms of jobs and business opportunities for local business, and that will multiply out. It’s quite a huge economic impact on the local economy.

To learn more about the Business & Job Resource Center, visit www.lawa.org/bjrc.