In May 2006, Todd's Grading & Hauling, a black-owned, mom-and-pop construction firm run from an attic office in Zebulon, was wrapping up work on a $380,000 contract at East Carolina University's new College of Allied Health Sciences building.
The superintendent on the job asked owner Griffin Todd and his workers to repair concrete sidewalks that had been damaged by other contractors at the Greenville campus. It was a big job that took Todd's firm two months to complete, and it fell outside the original scope of his contract, which included only installing the original concrete steps, sidewalks and paving. Such additional tasks usually require change orders, which authorize revisions in the work, price or contract schedule, but Todd agreed to do the work without getting an agreement in writing—the only choice he felt he had.
"When you don't do it, they throw you off the job and ruin your reputation," Todd says.
By agreeing, he put himself in a vulnerable position—one he says the construction culture often pushes minority firms into.
Todd submitted invoices totaling $60,000 to Bovis Lend Lease, an international firm with more than $100 million in net income last year, which managed the project for ECU.
It was a year before Todd saw the check.
"In my opinion, he was charging way too much money," says Bill Seyler, a project manager with Bovis Lend Lease.
Todd is one of several minority contractors across the state who have secured construction contracts with the University of North Carolina system, which has more capital improvement projects under way than ever right now. A multi-billion dollar building boom began in 2000, funded by a $3.1 billion bond referendum and another $1.5 billion from individual campuses.
But Todd, like many of his fellow black contractors, argues that his experience on the ECU job shows that getting a contract is only the first step toward true minority inclusion in public projects. They cite a culture of racism in the construction industry, saying it masquerades behind complicated contract disputes like Todd's recent problem, which prevents authorities from stepping in and taking action. For historically underutilized businesses (HUBs) to be viable in the competitive construction business, the university system needs to monitor the big firms that run the projects, Todd says.
"They ignore you and tell you you're foolish for charging that when you gotta pay your men and buy your materials," Todd says.
Black contractors working other projects across the state cite similar problems with payment.
"When the general contractor loses a certain amount of money, they look for weak places to take it from," says Bobby Nichols, who runs Bobby's Painting Company in Charlotte. Nichols has struggled to get paid for extra work at Central Piedmont Community College and UNC-Charlotte. "They look for minorities, thinking we are not 100 percent on top of our paperwork."
Terry Carter, owner of Controlled Demolition & Construction in Raleigh, also worked on the ECU project under Bovis Lend Lease. He experienced similar difficulties getting paid and says he almost went into foreclosure.
"Most large companies understand that cash flow is a big component in a small company," says Carter. "If you do anything to disturb that cash flow, you can run that company out of business. That's a control mechanism that they use."
Like many other minority contractors, Todd, Nichols and Carter turned to Kenneth Johnson for help. She's the consulting director for Carolinas Associated Minority Contractors, a statewide trade organization that advocates for the inclusion of minority firms in public projects.
With Johnson's support, Todd took his complaints to anybody who would listen: engineers at ECU; administrators at the State Construction Office, which manages the construction of state buildings; and the central administration at the University of North Carolina system. At each stop he met the same response: Officials told him they would not intervene in an individual contract dispute.
"The problems were with the general contractor, but the system wouldn't back us up," Todd says.
"The UNC general administration usually has no role" in disputes like that, says Gordon Rutherford, architect for the university system. "Griffin Todd called me and set up a meeting and we were unable to reconcile." Rutherford—who, according to Todd, Johnson, and Seyler of Bovis Lend Lease, stormed out of that meeting in frustration—denies the allegations of racism.
"If you can uncover a specific allegation, we would love to do something, but every time we get this general allegation, we have spent a good deal of time trying to uncover some specific data but have never been able to do that." Rutherford says. "There is certainly not any systemic problem. There are individual disagreements."
Johnson thinks the university could do more.
"If a system existed that would be institutionalized on each campus to address nonpayment, discrimination and other barriers affecting subcontractors, then we would be able to realize greater economic viability," she says.
"Kenneth is trying to wave the banner for minority firms, which is good," says Seyler. "But we have the same issues with all kinds of subcontractors. I can tell you unequivocally that Griffin Todd was one of many HUBs that we had. Most of them got their money quicker than the non-HUB firms."
In the end, someone within Bovis Lend Lease helped Todd get paid.
"It was coming time to start another project at the school and they wanted minority participation on it," Todd says. "The project manager, Mr. Craig Bradley, knew that I did good work. He called me and asked me if I would bid on it. I told him, 'Why would I bid on it and I can't get paid on the other work?'"
Bradley has tried to build a working relationship with Johnson, the advocate. He pressed his colleagues to reconsider their stance.
"Our folks above me and myself sat down," says Seyler. "We finally said we needed to come up with a middle of the road here and make an offer, which we did and he accepted."
Todd accepted a few thousand dollars less than he originally charged.
"It was in our best interest to get it resolved," says Bradley. "You have to work with them or they are not going to be successful," he says of HUB firms.
Looking forward, Todd says, it is in the big contractors' interest as much as the minority subs' to avoid protracted payment disputes and other problems that make it difficult for minority firms to hold onto valuable public contracts.
"I want to build relationships with these construction managers for minority contractors," Todd says. "Bovis can lead this. It's some bad apples within the company that just need to be educated. Bradley was looking out for the company."