Anglo Cracks Freeway Contracting Barrier by Teaming With Minority

After 40 years in the highway construction business, Fontana Steel Co. found that it was having trouble getting contracts on the $2.5-billion Century Freeway project because the company is owned and operated by Anglos.

Don Ware, president of Fontana Steel, said in an interview that the company had been unfairly excluded from Century Freeway contracts because of a Caltrans requirement that about 35% of the construction contract dollars go to female or minority firms.

“How would you feel if you were the son of a father who started this company . . . and you’ve been doing good highway work for 40 years and now you can’t get work because you’re not the right race?” Ware asked.

Caltrans civil rights officials say Fontana Steel made several attempts to be certified for Century Freeway jobs by creating new companies that were ostensibly run by Latino employees of the company or by female relatives of Fontana Steel executives. All of these efforts were rebuffed, according to Caltrans.

Ware then sought out female or minority partners but had little luck.

“We had some people we supported that left owing us a lot of money,” he said. “They don’t have two nickels to rub together, so we’ll never get it.”

Then Ware found Ron Francis, the 46-year-old black president of R. A. Francis Inc., a state-licensed architectural engineer whom Ware described as “a good listener, an educated guy and he’s honest.”

A deal was struck.

In a short time, R. A. Francis Inc. emerged as a major subcontractor on the Century Freeway, providing reinforcing-steel work worth several million dollars for Morrison-Knudsen and Steve P. Rados Co., two major freeway contractors.

According to Ware, Fontana Steel provides Francis with the fabricated steel, the work crews and the construction equipment. In some cases, he said, Fontana also has provided “up-front financing” on jobs with large beginning payrolls.

Fontana and Francis work out bids together because Francis has had little experience in bidding on multimillion-dollar highway jobs.

“We’re trying to bring this guy along until he learns the business,” Ware said. “Isn’t that what it’s all about? We try to keep him from making any mistakes.”

For his part, Francis handles payrolls and other administrative services from his office at the corner of Crenshaw Boulevard and Imperial Highway.

Critics say this is a classic “front”--a company that supposedly is owned and run by women or ethnic minorities but that is actually controlled by an Anglo firm. But Ware insisted that his relationship with Francis does not constitute a “front” operation.

“A ‘front’ is something you’re lying about,” Ware said. “We don’t lie about anything. The arrangement we have is auditable. We’re within the guidelines.”

Francis also denied that he is a “front” for Fontana Steel.

“This is not a case where someone comes to you and says, ‘Here’s a deal and we’ll take care of everything and you just sit back and twiddle your thumbs,’ ” he said. “I’m in control and I’m making the decisions and I’m handling the money--that’s hardly twiddling your thumbs.”

Francis agreed that Fontana supplies the fabricated steel and some equipment but said the workers are “union crews, not Fontana crews--we’ve hired people who’ve never worked for Fontana.”

However, Caltrans civil rights investigators say most of the crews working for Francis usually work for Fontana Steel. The workmen even wear “Fontana Steel” T-shirts, a Caltrans civil rights official said.

Francis also denied that Fontana has financed any of his jobs. He said his relationship with Fontana is “strictly contractor and supplier--I’m the contractor, they’re the supplier.

“I don’t know totally what Fontana has been through in the past,” he added. “I’m not concerned with that. I’m concerned with working with them on business I can do, where I can make some money, and they provide a service. Maybe in the past they were looking over the shoulder” of other minority subcontractors, “but that’s not true with me.”

But Caltrans is looking into the relationship between Ron Francis and Fontana Steel, to see if Francis’ certification as a legitimate “minority business enterprise” should be revoked. If it is, Don Ware will have to find a new partner.