A big contract can transform a small business.
It can also put one out of business.
That was among the lessons two veterans of the Obama Presidential Center brought to Memphis on Aug. 25, sharing what they learned working on one of the nation’s most visible construction projects with minority-owned and smaller firms hoping to grow into bigger opportunities of their own.
At The Mid-South Business Continuum’s Economic Development Forum, held Aug. 26-27 at the Renasant Convention Center, Cherryl Thomas and Sam Boye Jr. of the construction firm Ardmore Roderick offered a behind-the-scenes look at what it takes to move from being able to win larger work to actually being prepared to deliver it.
And their case study came with uncommon stakes.
Not a presidential library
Just as Barack Obama was no ordinary president, the Obama Presidential Center was more than another major construction project.
Presidential libraries traditionally have served as physical repositories for an administration’s records and artifacts. Obama chose a different model, something broader, more ambitious — more audacious — than that.
His presidential library is the first all-digital library administered by the National Archives, while the Obama Foundation built a separate physical center on Chicago’s South Side.
The 19.3-acre campus in Chicago’s Jackson Park includes a museum, a Chicago Public Library branch, gardens, athletic facilities and public spaces — part of the legacy of the nation’s first Black president, built on the South Side where his political career began.
“We needed passion from everybody about this project,” said Thomas, Ardmore Roderick’s chief strategy officer. “It was so important to the president, to the city of Chicago.”
But prestige did not make the job easier. For all the talent, resources and global reach of the Obama Foundation, Boye noted one fairly significant gap in its résumé. “They don’t know how to build,” Boye said. “They’re running a foundation. This is the only building they were ever going to build.”
That meant surrounding an ambitious vision with people who knew how to turn it into permits, budgets, schedules, specifications, concrete and steel.
For firms gathered at EDF, that was part of the larger lesson: Growth requires knowing what you can do, what you cannot do yet and what capacity you must add to get to the next level.
“Just because somebody’s handing you a big contract right now doesn’t mean that’s your contract,” Boye cautioned. “You might have to pass over that and let the blessing come next time.”
From access to capacity
The Economic Development Forum is built around helping smaller firms gain access to larger opportunities, and, just as importantly, prepare themselves to handle them.
The Obama Presidential Center offered a natural case study.
Thomas founded Ardmore Associates, one of the firms originally selected to help manage development of the Center. It later merged with The Roderick Group to become Ardmore Roderick. Boye is vice president of the firm’s Buildings & Facilities practice.
The Obama Foundation set ambitious goals for participation by minority-owned businesses, local workers and firms from targeted Chicago ZIP codes. But intentionally opening the door for smaller contractors raised another question: Once they got in, could they survive the opportunity?
One immediate issue for small operations to consider is cash flow. “If you want to put a woman or minority business out of business, don’t pay them,” Thomas said. Large companies, she said, may be able to absorb waiting 90 or 120 days for payment. Small companies often cannot.
Boye said the Obama Foundation agreed to a 15-day payment cycle, removing a barrier that can make even a potentially lucrative contract dangerous for a smaller firm.
But faster payment cannot fix a company that simply takes on more work than it can handle.
Boye said participation goals on major projects can create pressure for smaller firms to grow very quickly. A contractor may suddenly be asked to double or triple its capacity. He urged owners to ask whether the company is truly ready to deliver on a major contract.
“You see that number at the bottom of the contract, right?” Boye asked. “And you think, ‘I gotta have it, I gotta have it!’ But do you? Do you?”
Grow into the work
Knowing your present capacity, Boye said, does not mean accepting it as permanent.
One way smaller firms can move into larger work is through strategic hiring.A company itself may never have managed a billion-dollar program. But if it hires someone who has, that experience becomes part of the firm’s capacity — and part of its case for winning larger projects.
“Start thinking about strategic hires that can say that they have that experience and they can bring that to your firm,” Boye said.
A larger contract may require more workers, stronger internal controls, additional insurance or bonding capacity, more sophisticated project management and enough working capital to keep operations moving.
“At the end of the day, you will have a contract,” he said. “And that contract will have requirements for you to execute.”
Getting the job is not delivering the job
One of Boye’s strongest warnings involved something less glamorous than winning a multimillion-dollar contract: quality control.
A smaller contractor may have performed the same type of work successfully for years, he said, only to encounter different specifications on a larger project.
He offered the example of a contractor installing insulated piping the way the company has always done it. The work moves forward. Eventually, walls close around it.
Then an inspection reveals that the project specifications required something different.
“The worst thing that can happen is you’re doing work, you think you’ve done two, three, four weeks of really good work, only to find out you’ve got to tear it up and do it again,” Boye said. “It can really, really tear you up.”
Thomas said contractors can get into trouble when experience tempts them to substitute their own judgment for what architects and engineers have specified.
“You might be sitting there saying, ‘Oh yeah, but I’ve done it and it worked just fine,’ but it’s only going to work so long,” she said. “Don’t ever change a spec. EVER.”
From mud and concrete to something special
For all the lessons about contracts, cash flow and quality control, Boye said there were times during construction when the larger meaning of the Obama Presidential Center could be difficult to see. For years, workers looked at “concrete, mud, water” and the unfinished pieces.
Boye said he and others would remind them: “This is something special. We’re going to be a part of something special.”
The center opened in June. Only then could the finished campus fully reveal what all those years of schedules, specifications, contractors, concrete, mud and water had produced.
Boye said visitors have openly wept as exhibits, news clips, speeches and other images that carry them back to Obama’s rise, to the years when a politician from Chicago’s South Side, a man with what Boye jokingly called “this crazy name,” began emerging on the national stage.
For those who had spent years turning the vision into something tangible, he said, that reaction was the payoff.
“It was delayed gratification,” Boye said. “We said, ‘Wait and see. Wait and see.’ And it delivers.”
And for anyone planning a visit, Boye said, be ready for the emotional pull.
“You go right back. You go back to how you were feeling in ’03, ’04, ’05, ’06,” he said. “And this guy with this crazy name said, ‘I might just be the first Black president.’ And so you will instantly go into a time warp.
“You’re going to go back there, and you’re going to feel it. You’re going to feel the weight of it.”
