Forming Alliances

Minority, Majority Firms Gain from Partnerships

by Karen Schwartz

When Anthony Thompson founded St. Louis-based contractor Kwame Building Group in 1991, he made a key decision to work with other minority firms as well as with large, majority-run firms.

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“I have a construction firm that happens to be a minority firm,” says Thompson, who is African American. “If I’m going to be in the game, I have to swim with the big guys.”

His first project as part of a joint venture with a majority firm was not a sprint but a marathon.

Kwame partnered with Maryland Heights, Mo.-based Sverdrup and the Parsons Corp. of Pasadena, Calif., for the first phase of the $1.1 billion expansion of Lambert-St. Louis International Airport. Begun in 2001 and completed in 2006, the project included the acquisition of 1,500 acres of land, relocation of seven major transportation arteries, addition and relocation of several airport support facilities and construction of a third runway with associated taxiways.

Kwame provided program management, which consisted of developing a master plan during the preconstruction phase that fully defined procedures, policies and practices for every phase of the project. The plan also laid out management of project schedules, cost and quality control.

“I’ve developed new leadership skills including how to manage clients that are with large organizations,” Thompson says.

“I’ve also had direct access to the decision makers both within the partnering firms as well as the client firms. Most minority firms do not have direct access to key decision makers when subcontracting to larger organizations, or often communication is filtered through to the owner/client, and the owner never realizes the expertise or depth that may exist in the smaller firm.

“A joint-venture places you at the table on all decisions: financial, technical and managerial.”

Weathering Tough Times, Too

Though Thompson is proud of the success he has had as chief of a minority firm and values the relationships he has formed with principals at major firms, he has also had to weather some difficult times.

Such was the case when Kwame partnered with Jacobs Civil Inc., Parsons Brinckerhoff and STV Inc. The group, otherwise known as the Cross-County Collaborative, endured a 100-day civil trial as the result of a suit brought by the St. Louis-based Metro rail system.

Metro contended that CCC was responsible for its 8-mi rail project opening 15 months late, in August 2006, and more than $126 million over its original $550 million budget. Though the jury returned a verdict in November that threw out the municipal owner’s $81 million claim against the rail project’s design-construction management team, the trial took its toll on Thompson’s company.

“I was always optimistic because I knew we did nothing wrong,” says Thompson, who was deposed for the suit. “But I know we lost a lot of work over a period of years as a result of the lawsuit because people knew we were involved.

“But even though our revenues dipped and I had to cut 50% of our staff, we’re a better firm because of this lawsuit, and I don’t regret getting involved in the project. If I hadn’t been partnered with three large firms, I wouldn’t have been involved in the lawsuit, but I also wouldn’t have had the money to defend my company.”

A Learning Opportunity

There are a number of reasons why construction companies headed by minorities partner with majority firms, rather than go it alone.

Minority-run firms often find that teaming up with other firms gives them greater access to capital, manpower and the opportunity to work on larger projects. Forming such partnerships may also enable minority executives to acquire new technical and business skills and develop professional and personal relationships that lead to other projects down the road.

“When minority contractors form partnerships with majority firms, it enables the minority firms to grow and excel,” says Al Barber, national president of the Washington, D.C.-based National Association of Minority Contractors.

For instance, Kwame is currently involved in a joint venture, called TriGold, with Pasadena, Calif.-based Jacobs Engineering and Omaha, Neb.-based HDR, an architectural and engineering firm, in connection with the Pittsburgh Port Authority’s North Shore Connector project.

 Scheduled for completion in 2011, the estimated $435 million project will extend the Port Authority’s light rail transit system, the “T,” from the Gateway subway station underneath Stansix Street and the Allegheny River to the rapidly developing North Shore area of Pittsburgh.

Kwame’s role in the project is construction manager, which includes cost control, documentation control and project scheduling. The company is also providing support in the areas of construction procurement, inspection, quality assurance and project safety.

Some majority-run firms go the extra mile to form partnerships with minority firms.

For example, in May New York-based Turner Construction Co. was honored with the 2007 Corporate Leadership Award by the National Minority Supplier Development Council for its significant support of minority business development.

More specifically, Turner awarded 2,800 contracts totalling more than $1 billion to minority- and women-owned business enterprises during 2006. This was the second year in a row that the company surpassed the milestone of awarding in excess of $1 billion of contracts to M/WBE firms.

The firm also offers its Turner University, an online effort to increase the knowledge level in construction.

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