CTA diversity program gives small businesses a break in the construction industry

For 25 years, Adrian Mobley worked as a respiratory therapist at Chicago hospitals. She started her own business in 2014 to offer CPR and safety training for workplaces. In 2020, she expanded into new territory: construction.

Her Englewood company has grown from three employees to about 35. Many are labor union members making nearly $50 an hour.

Mobley’s entry into construction was spurred by the Chicago Transit Authority’s $2.1 billion Red and Purple Modernization project, which runs through 2025. She learned about subcontractor roles through outreach sessions with the CTA and Walsh-Fluor, the project’s main contractor. In 2020, she was awarded a $4.5 million subcontract to manage traffic flow and safety at CTA construction sites for the project.

The first phase of the agency’s most expensive project ever involves updating nearly 10 miles of North Side tracks and stations using federal and local funding. More major CTA projects are planned, including the Red Line extension to 130th Street.

One common concern about big construction projects is that the insular industry often shuts out small businesses, especially those run by minorities and women. But Mobley’s start into government construction work was part of a long-running effort to level the playing field.

Her company is one of 119 minority- or female-owned businesses working on the modernization project, part of the CTA’s goal of awarding 20% of the project’s contracts to “Disadvantaged Business Enterprises.” Of those, 54 are working with the CTA for the first time, like Mobley’s company. Overall, minorities account for nearly 53% of the project’s workforce, according to the CTA.

The U.S. Department of Transportation defines DBEs as for-profit small businesses in which socially and economically disadvantaged people own at least a 51% interest and control management and daily business operations. African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans and women and other groups fall into that category.

The annual gross income of a DBE must be less than $23.98 million, and an owner’s net worth cannot exceed $1.32 million, according to the department.

Government contract spurs expansion

Mobley’s employees range from 23 to 58 years old. Most are from underserved areas on the South Side and the West Side. Creating well-paying jobs with benefits, pension and health insurance has had a “phenomenal impact,” according to Mobley, who said people of all ages need good jobs, which help “keep them from doing something they probably don’t want to do.”

Her contract has led her to expand into non-CTA fence installation and caulking projects and air and wellness safety training.

Pat Nabong/Sun-Times

Despite a national labor shortage, Mobley said it wasn’t hard for her to find workers.

“People are always calling me for jobs,” she said.

The 52-year-old entrepreneur also has hired her two adult daughters. One works as an office manager, the other as a foreman.

The Red and Purple Modernization project gets federal funding, so the CTA has to follow its regulations aimed at reducing discrimination in federally backed infrastructure projects.

There are more than 2,000 certified DBEs in Illinois, established since the Department of Transportation started the program in 1980.

The Red Purple Modernization project “had a lot of folks who could participate,” said attorney Colette Holt, of Colette Holt & Associates in Texas, who has conducted studies of DBE programs at large infrastructure projects in Illinois and elsewhere. “Chicago is one of the meccas for Black businesses in the country. It has a good pool of Black, Latino and women contractors.”

While Holt hasn’t analyzed the project, she led a 2019 study of the CTA’s DBE programs and said the agency is known for its “excellent” DBE programs and “looked at as a model by other large transit agencies across the U.S.”

Outreach and training

“We set up processes so that small businesses don’t just win contracts but are successful and grow,” said JuanPablo Prieto, the CTA’s director of diversity programs and DBE liaison officer.

For example, Prieto said Walsh-Fluor broke contracts into manageable sizes so small businesses could bid on them, which involves more administrative work but lets small companies enter the field.

Subcontracts involve traditional construction work such as electrical, carpentry and concrete and also non-traditional jobs such as those in inspections, website design and traffic management, areas in which DBEs don’t typically participate.

The CTA’s small business development team holds training, outreach and networking events and contacts organizations such as the Hispanic American Construction Industry Association, Black Contractors Owners and Executives and the Federation of Women Contractors.

Mobley learned of the CTA projects through lunch sessions at Walsh’s offices downtown. The CTA also held outreach sessions at city colleges and in local communities to help small businesses bid on contracts, she recalled.

Katelyn Roberts, Walsh-Fluor’s diversity and inclusion manager, said it “aggressively” solicited DBEs, emailed and called certified small businesses and followed up with calls to walk them through bids.

Prieto said one challenge is preparing small businesses for all of the paperwork and oversight they’ll need to deal with on government jobs.

Perhaps the biggest challenge is access to capital. Many small businesses face difficulty getting mainstream bank loans or can get them only at higher interest rates. Construction companies have an even harder time, according to Holt.

“Lenders are very skittish about construction companies in general,” Holt said. “There’s a lot of risk. Things can go bad pretty easily. And being a small disadvantaged firm makes it harder to get money.”

The CTA has helped connect them with lenders that focus on small businesses, such as nonprofits and government programs. In spite of the added financial pressures faced during the pandemic, none of the DBEs that won RPM contracts has gone out of business, Prieto said.

Despite the challenges in accessing capital, “These are small businesses doing big work,” Roberts said.

One step Walsh-Fluor has taken to help is setting flexible payment terms for subcontractors “to promote financial stability and cash flow,” according to Roberts.

DBEs also might need more technical and office support. Mobley got guidance from Walsh’s project managers and diversity liaisons on setting up a better invoicing system and learning to use Excel.

“I had never done this kind of work,” said Mobley, who credits Walsh with guiding her on the industry’s best practices. “They didn’t just leave me on my own. Everybody was reachable.”

Mobley said she didn’t foresee working in construction, joining labor unions and handing out hardhats to employees but is thriving in that role and hoping to work on future CTA projects.

“I was not in the industry, but I was able to go out there and excel,” Mobley said. “With appropriate guidance, small, minority-owned and Black businesses can do excellent work. If Adrian can do it, anyone can do it.”

This story has been updated to correct the spelling of JuanPablo Prieto’s name.