Good Faith Efforts Not Enough

Good Faith Effort is not a new term in the construction industry, having been the underlying requirement or hurdle for contractors in their efforts to comply with EEO hiring goals and Disadvantaged Business Enterprise (DBE) subcontracting quotas. Historically, if a contractor was unable to meet the related contract goals, but could show they made such efforts to do so, it was considered acceptable. As the boom in the City of Detroit continues and the Michigan Department of Transportation begins to expand its program following the funding bill passed last year, project owner groups may no longer accept Good Faith Efforts as good enough.

An example of this is the Detroit Event Center, the future home of the Red Wings. The Detroit Event Center project team, along with several other City of Detroit projects, is now required to comply with Executive Order 2007-1. This order from the City of Detroit requires fifty-one percent (51%) utilization of bona-fide Detroit residents on construction projects and that thirty percent (30%) of the total dollar value of the contract be awarded to Detroit Headquartered Businesses and Detroit-Based Businesses. Contractors must meet targeted percentages or plan to pay fines, be removed from future bid lists, and more.

Complying with these rules can be daunting, but in our experience, the numbers are achievable with planning. Here are some key actions contractors can take to be successful:

• More planning up front means less pain later.
  • Whether you are on a project that requires this now, or may be in the future, start preparing for it now.
  • Create a database of contractors, representatives, training programs, and other local stakeholders and work to build relationships that will help support you when you need it.
  • Diversify your workforce with City of Detroit workers and/or DBE subcontractors on other projects prior to the high profile project starting so that you are ahead of the game versus playing catch up from contract award date to the finish line.
  • Talk with other specialty contractors and GC’s to find out how they met the requirements. You may learn something and you may also find out that there is qualified labor available from them as they wind down their projects. EctoHR has seen laborers and carpenters transition from one contractor to another on large jobs as each completed its scope of work.

• Document, document, document
  • Assume from the outset that you are going to be under a microscope. Preparing as if every document and file will be fully audited by an independent agency will provide peace of mind once the audits begin.
  • Create a tracking mechanism and document every conversation, phone call, email and letter related to your EEOC and DBE efforts.

• Communicate early and often
  • If you may fall short of the required City of Detroit resident worker target or in securing qualified subcontractors on a given project, communicate that to the owner’s rep and oversight agency early in the process. You may get ideas from these groups on how to solve it and at the very least, you will not be in a position to negatively surprise them later.
  • The hallmarks of true Good Faith Efforts are communication and documentation and while Good Faith Efforts may not be enough, they may afford you some leeway and grace later.

While project requirements, such as local resident worker requirements and DBE supplier objectives, can seem overwhelming and intimidating, EctoHR has learned first-hand that planning ahead and giving 110% in compliance effort will pay huge dividends throughout the project. The numbers and goals are achievable, although it may take time and a great deal of effort to get there. The unexpected results likely include better production rates than previously expected and a more diversified workforce that may stick with your Company beyond a single project.

For help with your next compliance-heavy project, contact Erica Gruss or Colleen Burke at hr@ectohr.com or 810-534-0170.