When Steve Cockerham came to St. Louis three years ago to accept a position as vice president of Planning, Design & Construction for BJC HealthCare, he quickly came to a conclusion: Something was broken.
What was broken, he discovered, was the system BJC had in place for encouraging and monitoring the inclusion of minorities and women – as contractors and as workers – in BJC’s multiple, lucrative design/build projects.
BJC is one of the largest nonprofit health-care organizations in the United States and the largest employer in the St. Louis region.
BJC had in place self-imposed goals of 10 percent inclusion of Minority Business Enterprises (MBE) and 5 percent inclusion of Women Business Enterprises (WBE). “Which we had not hit since … ever,” Cockerham told the American.
Now, he said, the combined percentage for MBE/WBE inclusion at BJC is 26 percent.
“In 2007 we hit our goals for the first time, in 2008 we about doubled them and 2009 will be a good year for us,” Cockerham said.
As an engineer who also has a sociology degree, Cockerham is data-driven in his approach, yet understands the social value of inclusion goals. In terms of minority-inclusion goals, he said, it’s a matter of “getting the dollars down into the neighborhood” – neighborhoods where large numbers of African Americans live.
“I went and talked to everybody,” Cockerham said, summarizing visits to unions, contractors and inclusion consultants when he came to St. Louis.
“Everybody thought they were doing a great job – but to an outside observer, the system was broken.”
Cockerham decided the only entity that could fix the system was “the guy who is paying for it”: BJC.
So Cockerham put in place a three-tiered approach to fixing the broken system and getting more of BJC’s design/build dollars into the pockets of minorities and women.
For contractors, he mandated that for every $5 million in business they get from BJC, they hire one worker from the ACCESS Center (the “portal” that Cockerham selected for funneling non-traditional workers into the system) and maintain those workers throughout the length of the build.
“Usually, you have a two- to three-year build cycle, so that gives people time to get through their apprentice program with the union,” Cockerham said.
“It enables them to move from apprentice to journeyman, and that’s a ticket they can take and work anywhere.”
That means the unions needed to be aboard – and Cockerham saw to it that they were.
He said, “I went to the labor market and told them that if they want to work on my project, they need to take” minority and women applicants for their apprentice programs.
He also stipulated that a mentoring system be provided for non-traditional workers new to the union environment.
Next, he wanted to create a better system to make sure that minority and women business owners were involved.
He said he went to the Regional Union Construction Center (RUCC), a business incubator, and “wrote them a check” to help sustain MBE and WBE in the region.
Then he created a new program at BJC, the Preferred Vendor Program, designed to support smaller MBE and WBE.
He said that on average BJC usually has about 350 open projects worth between $400-500 million. Of those, he said, 60 percent of the jobs are relatively small, costing $200,000 or less.
He calls this “churn work, the day-to-day grind: replacing carpet, repainting the hallway, putting in new tile in an aging hospital.”
Typically at BJC, each job involves a competitive bidding and review process, known as RFP (Request for Proposals), which “eats up a lot of time” when done over and over for the steady flow of “churn work.”
So Cockerham created a Preferred Vendor Program to handle these smaller jobs, and he put out one RFP to participate in it. He contracted nine firms (three each to handle construction, architecture and engineering services), which are offered jobs as they come up, within an even and strict rotation.
Four of those nine firms are minority-owned.
“It’s right in their breadbasket for them,” Cockerham said.
“We start 10-12 projects a month, and wrap up 10-12 projects a month. So they are always working. We put $2-3 million on the street every month in continual project work.”
He also requires MBE to hire two minority workers from the ACCESS Center for them to participate in the Preferred Vendor Program.
“Even MBE and WBE, you have to force them to hire minority and women workers,” Cockerham said.
Finally, on larger and more complex projects, he mandates joint-venturing, which forces larger contractors to give smaller MBE and WBE experience in more complex projects.
As evidence of what he calls the “great success” of the joint venturing initiative, he cites the partnership that won the contract to do a new resident clinic at the corner of Euclid Avenue and Forest Park Parkway. Initially projected at $50 million, he said the job has grown to $120 million. The joint venture with the contract is an WBE (Tarlton Corporation) and an MBE (Interface Construction Corporation), making the project 100 percent MBE/WBE.
Above all, Cockerham provides the St. Louis corporate community with a new model of finger-pointing. The corporate finger, he said, needs to be pointing back at the owner.
“Unions and contractors, left to their own devices, don’t care,” Cockerham said.
“They want to get the job done, but there is no great benefit to them to make the extra effort for minority inclusion.”
Cockerham said that “the only one who can change the status quo” is the owner paying for the project.
“The only one who can change the system is the owner – no one else has a vested interest,” Cockerham said.
Cockerham said he has enjoyed the full support of his bosses in BJC executive management – Robert W. Cannon, BJC group president, and Steven H. Lipstein, BJC president and chief executive officer – in aggressively pursuing inclusion goals.
Paul McKee Jr., BJC board chair for most of Cockerham’s tenure, said he takes pride in how BJC “has developed innovative programs to remove many of the barriers that in the past made it difficult for minority-owned firms to successfully bid on work.”
Now Cockerham is taking his successful model around to the corporate community in St. Louis, hoping to export it and get more of those dollars flowing down into the neighborhood.
The American will follow his efforts and break down the BJC model in greater detail in future editions.