'You're broke before you start'
Written by James Ylisela Jr.
While the Public Building Commission established construction set-asides for minority- and women-owned businesses to correct for past discrimination, small subcontractors say getting PBC jobs often isn't worth it. The big general contractors that win most of the commission's work have the little guys over a barrel: They often make them reduce their bids—and sometimes even their payments.
One struggling South Side contractor who asks not to be named describes it this way: “You put your numbers in, and then a few days before the bid, they tell you they need it for less. Now you know you're bidding the job too low. You know it. But you want the work, because you want to eat.”
John Luckett, the African-American owner of Glass Designers in South Deering, who has worked on six PBC projects since 2008, says he has stopped bidding for that very reason. “If I can't make money, why should I bother to bid the job?” he says. “We stick with what we do best. We go into a project and do our work, and we expect to get paid. We give you a price, and that's it.”
The pressure to accept less money continues once the project starts. According to subcontractors, general contractors often push them into accepting “buyouts,” an industry term for lower fees.
Several minority firms went out of business while working for Chicago-based F. H. Paschen / S. N. Nielsen Inc. on Gwendolyn Brooks College Preparatory Academy in Roseland, Mr. Luckett says. One was Silas Williams, the African-American owner of TVS Mechanical, a Chicago heating and air-conditioning company that recently closed its doors after 18 years.
“They always squeeze the small guy,” he says. “You have to work 90 days before you get 30 days' pay. You're broke before you start.”
Carlo Steel, a Latino steel fabricator, also went out of business during the Brooks project. Owner Nelson Carlo, in business for 20 years, could not be reached for comment, and the company's telephone has been disconnected.
Some minority contractors find it so hard to make a profit on PBC jobs that they're looking elsewhere for business, despite the dearth of construction work these days.
“You won't find my name on that list” of minority firms working on commission projects, says Harold Harvey, owner of A&H Mechanical. “The contractors win the job and then come back at you and want to rebid it. I'm not going to do that.”
Paschen declines to comment.
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