L.A. Unified’s Boot Camp Preps Firms for Public Work

To pull off its ambitious construction program, the Los Angeles Unified School District is educating an unexpected class of students: small contractors unused to navigating the complexities of the nation’s second-largest school system.

L.A. Unified wants to award small companies a significant chunk of the more than $19 billion in school-construction bond funds that it will spend by the end of 2012. But the competition for contractors is fierce because of an unprecedented public building boom in the region.

“There are thousands of small contractors here in Southern California, but there are not thousands doing business with public agencies,” said Veronica Soto, small-business program manager in the district’s facilities services division.

Doing business with a public agency isn’t always easy, Soto acknowledged. That’s especially true for small companies, which often lack the resources and know-how to win and fulfill a public agency construction contract, she said.

Soto is on a mission to ensure that there are enough qualified small prime contractors and subcontractors to handle the business that the district wants to send their way.

Soto’s three-person department has created a slew of programs to teach small businesses how to work with the district. The unit also has helped streamline processes to make the relationship less difficult.

The cornerstone is a free eight-week boot camp for small contractors.

The camp, which has graduated 379 businesspeople since 2003, covers a different topic each week. A district attorney guides contractors in the public contract law segment. An engineer teaches estimating. Representatives certified by the Labor Department’s Occupational Safety and Health Administration teach a 10-hour safety course that highlights the forms and processes companies must complete.

The latest version of the program starts this week at three locations, including one at USC. For more information, visit www.laschools.org/contractor/sbop.

Soto is developing a program called Contractor MoneyWorks to give contractors the tools to acquire bonding and working capital, two key barriers for most small construction businesses wanting to work with a public agency.

Last month, the district served as a co-host of the first California Construction Expo in downtown Los Angeles to introduce more small construction companies to the district’s needs and its small-business resources.

Los Angeles-based Telenet VoIP Inc. is one of the program’s success stories -- so successful that the 30-year-old telecommunications company has grown almost too large for the program. To qualify as a small business, prime contractors must have annual gross revenue of $31 million or less. Subcontractors, which typically provide specialty trades such as roofing, drywall, painting and plumbing, must have gross revenue of $12 million a year or less.

Diane Goodman, who started Telenet’s public works division about five years ago, completed the first boot camp in 2003. This year, her company expects to have about $8 million worth of contracts for work such as installing a closed-circuit television system for L.A. Unified, she said. Public works will account for a majority of Telenet’s $10 million in estimated annual revenue.

“The boot camp was absolutely more than I expected,” Goodman said.

The district has set up a range of contract levels for small businesses. Companies can test the waters by first bidding on small projects to modernize existing schools. These jobs don’t require the levels of bonding, insurance and capital that construction on new schools would, Soto said.

Despite district efforts to ease the way, public work is not right for all small contractors, said Kevin Ramsey, owner of Compton-based Alameda Construction Services Inc., which does concrete work for private and public construction projects, including for L.A. Unified. Ramsey’s 9-year-old union shop, which has 15 employees and $3 million in revenue, has benefited from the boot camp and the increased exposure Soto’s department tries to give its small contractors.

The company has won about $600,000 in district business. But Ramsey noted that complying with some of the labor rules, including the requirement to work with trade unions, could be difficult for some small contractors.

Those that aren’t already union shops usually are required to hire a certain number of union workers and to send a portion of their pay to the unions’ trust funds. That can be hard for cash-strapped small companies that are often waiting to be paid by the prime contractors that hire them.

“They have to do some really heavy soul-searching whether they want to go that route,” said Ramsey, who is also president of the National Assn. of Minority Contractors.

And despite the district’s streamlining attempts, the paperwork requirements are still heavy, said Johnathan Hou, owner of Axiom Corp., an engineering firm in Tustin. He is a boot camp graduate and chairman of the district’s Small Business Advisory Council.

“Public agencies have to follow the law,” he said. “On the other side -- small contractors, especially -- we are short of resources to produce the paperwork they need.”

Hou wants public agencies to further simplify their paperwork. It’s not hard to see why: In the private sector, a contract may be four pages long, Soto said. L.A. Unified might also require 91 pages of general conditions, seven pages or more of supplemental conditions plus a 75-page labor agreement, she said. Some paperwork has to be renewed annually.

“These are the realities and this is why the boot camp is so important,” Soto said. “We are creating a strong infrastructure for these companies, not only for public construction work but so they can have a stronger business.”

Since the construction program began in 2003, the district has met or exceeded its quarterly small-business participation goal of 25% of contract revenues awarded, Soto said.

The district awarded 1,076 construction contracts worth a total of $280 million in the nine months ended March 30, according to district reports. Small businesses won more than half of the value of the contracts each quarter, for a total of $166 million.

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cyndia.zwahlen@latimes.com