Promise Zone. That’s a high-poverty community where the federal government partners with local leaders to increase job creation, economic investment and a whole host of other things.
The National Geospatial-Intelligence Agency’s new $1.75 billion facility will be built in a Promise Zone, which includes parts of North City and North St. Louis County.
Through the facility’s construction, the federal agency has a significant opportunity to provide jobs to the surrounding blighted area.
However, in an interview with The St. Louis American, NGA National Director Robert Cardillo said that he believes he has no authority to establish goals for how many minority, women or local workers will be employed on the project. He said the U.S. Army Corps of Engineers will be building the facility, and those goals are in their hands. When asked if he would be able to make recommendations, Cardillo said, “I don’t even know.”
Cardillo’s office passed the question off to the Army Corps’ diversity officer, who told The American he did not have the authority to make that call. The Army Corps’ spokesperson then told The American that it was the “project contracting officer” who would decide the minority participation goals for the entire project.
And the contracting officer will set the goals at the federal minimum – 14.7 percent minority and 6.9 percent women workers. However, those goals do not reflect city’s minority population or ensure that local workers get a piece of the pie.
In February, the St. Louis Building and Construction Trades Council wrote a letter to Cardillo proposing that at least 37.81 percent of all labor hours on the facility would go to minorities, which more than doubles the inclusion goals set forth in federal guidelines. The St. Louis union council also proposed that at least 23.28 percent of all labor hours would go to St. Louis city residents, and 6.9 percent of all labor hours would go to women.
These goals are based on an extensive disparity study, which found that St. Louis city has the capacity to employ this number of minorities. The NGA project will likely create 425 construction jobs and 250 “immediate indirect jobs” connected to the construction. The solicitation for bids on the project will be posted on the FedBizOpps website in late October, according to the Army Corps.
The American asked Cardillo what he thought of the council’s proposal, and he said, “The Army Corps will follow all federal guidelines. I appreciate that that letter went beyond that. I would just have to defer to the Army to speak to how they make decisions about what percentage ultimately is awarded.”
Employment opportunities for minorities have been the center of discussion for the past two years following the Ferguson unrest. The American asked the Army Corps if the region’s attention on this matter would encourage the Army to consider higher minority workforce goals.
The Army responded, “We are still conducting research on project labor agreements and are open to discussion.”
While the union council is seemingly trying to employ minorities, there’s a major catch in its aggressive proposal. All the project’s workers would have to be union members – and construction unions in this area have historically been regarded as unwelcoming by minorities.
When asked if area unions currently have enough minority members to reach the council’s proposed goals, its executive secretary-treasurer Jeff Aboussie said, “To start the project off, I believe we do.”
Adolphus Pruitt, president of the St. Louis City NAACP, said he would lean away from project labor agreements and more towards a “community benefits agreement,” which would allow union and non-union workers to compete for the jobs.
The NGA’s decision to build the facility in North City was lauded by many leaders as an opportunity to reinvest in an area that has been in ruin for decades. However, if the project only aims to meet the minimum federal goals – which do not address employing local residents – then that applause was for naught, Pruitt said.
“It would be a significant embarrassment for the City of St. Louis, the State of Missouri and the federal government – including the president’s office – if they would spent that type of money in the one of the most disadvantaged, blighted communities and the folks who live around it are the least to benefit from it,” Pruitt said. “If that would to happen, I would do my best to stop the project.”
Unfamiliar with supplier diversity
Pruitt said he would like to see minorities participate at the greatest level on the construction side. However, more importantly, he would like to see permanent employment opportunities for minority businesses through supply and professional service contracts.
North City is also in a HUB Zone – or an area where Historically Underutilized Businesses get a preference at government contracts.
“NGA should be a magnet for small minority businesses to move into a HUB Zone, not only to supply NGA, but also to grow and supply other government agencies and build a minority supply infrastructure,” Pruitt said. “There are a lot of job-creation opportunities that can spin off this.”
The American asked Cardillo about the agency’s supplier diversity program. The director was not familiar with the term, which was created by the U.S. Small Business Administration. Many government agencies and corporations have created supplier diversity programs, which give minority-owned, women-owned and underutilized businesses opportunities to secure contracts.
Looking at the number of contracts that NGA currently awards to disadvantaged businesses, it’s not difficult to see why Cardillo is unfamiliar with supplier diversity programs.
NGA currently aims to award five percent of its contract dollars to disadvantaged businesses. And in fiscal year 2014, it only achieved 0.87 percent – not even a full percent. The agency’s goals for HUB Zone business contracts was three percent, and in FY 2014 the agency awarded zero dollars to these businesses. The agency awarded 12.42 percent to small businesses in the same year, meeting less than half of the agency’s 28 percent goal.
The American asked the agency’s Office of Small Business why they struggled to award contracts to HUB Zone and disadvantaged businesses.
In an email, a NGA spokesman wrote that the challenges in meeting these goals include “the size of the requirement and the lack of capability.”
“NGA continues to focus on carving out work for small businesses,” the spokesman wrote, “and work on innovative approaches to provide more opportunities for small business to be the prime contractor.”
Clay, Blunt respond
Congressman Wm. Lacy Clay, who represents the North City area where NGA will be built, has repeatedly said that the federal government owes the area its reinvestment after its disastrous Pruitt-Igoe housing project – and the devastation it left behind. Clay said that NGA and the Army Corps both have a responsibility to ensure that local and minority residents have employment opportunities on the project.
“That would have to be an understanding between the owner (NGA) and the Army Corps,” Clay said. “They have to set those goals. I intend to advocate for those goals.”
U.S. Senator Roy Blunt said that Cardillo has emphasized the need for diversity within and without the agency’s walls.
“I believe that commitment should start with the construction of the new facility,” Blunt said. “North St. Louis’ designation as a Promise Zone was one of the key factors in bringing this project to the area, and I look forward to working with Director Cardillo, Mayor Slay, and other local officials to ensure that the project creates new, good-paying jobs for local and minority workers through the construction phase and well beyond.”
NGA is receiving a considerable amount of tax incentives to build the facility. The state has committed $131 million for infrastructure improvements – $95 million in Tax Incremental Financing and approximately $36 million in Brownfield Tax Credits. The state’s commitment – in addition to a $1.5 million annual contribution for up to 30 years by the city – will cover site acquisition, site preparation, utility and road improvements and providing the land at no cost. The land has an estimated value of $14 million.