Dive Brief:

• Gilbane doubled down on its industry-wide push for more diversity in construction, committing $4 billion in contract awards to underrepresented firms over the next five years, including veteran, minority and women-owned businesses.  
• Annualized, the amount would represent about 13% of Gilbane's revenues, which were $6.2 billion in 2021. The firm awarded $812 million in projects to minority- and women-owned companies, as well as small businesses, last year. That was 18% of the awards it put out, short of its 20% goal.
• In an exclusive interview, recently appointed President and CEO Thomas Laird said Gilbane's executive bonuses could potentially be tied to hitting diversity goals in the future. "It needs that level of intensity," Laird said. "We're shining a bright light on it, and our leaders know that."

Dive Insight:

Gilbane has been a vocal advocate of advancing diversity and inclusion in construction in the wake of George Floyd's murder. A conversation between Gilbane Chairman Thomas Gilbane, Jr. and Turner Construction CEO Peter Davoren during the subsequent social upheaval led to the industry's inaugural Construction Inclusion Week last year.

And for good reason. Examples abound of hiring practices that shut out underrepresented contractors, and the field's macho and racist image. The result has been young, diverse workers staying away during a historic labor shortage.

Laird said Gilbane needed to do more to change that.

"And that means 18% on a goal of 20% is not good enough," said Laird. "So we are going to strive harder yet."

Part of the challenge of hitting those goals, Laird emphasized, is the smaller number of diverse contractors who are big enough to take on multi-million dollar projects. That was an issue discussed in a recent Congressional hearing on diverse contracting practices.

Laird pointed to the Cleveland, Ohio, market as an example.

"It's an area where it's very diverse, yet the diverse contracting capacity is very thin," Laird said. "So we are very focused on trying to create that capacity in Northeastern Ohio."

Since November 2020, for example, Gilbane has targeted the issue with its Rising Contractor Program, which pairs diverse contractors with mentors in its business units. Participants engage in classroom curriculum focused on real-world opportunities to win work. If a bid is unsuccessful, they get feedback on why.

"Until we provide that support, that help, that nurturing, it will continue to be a struggle, and it's just not acceptable," Laird said. The program has produced 138 graduates since inception. 

A focus on ESG

The pledge to commit $4 billion in contracts to diverse contractors and veteran-owned businesses — and report on those efforts publicly — is also part of Gilbane's forthcoming environmental, social and governance (ESG) report.

Investors are increasingly focused on how public companies conduct themselves in those three areas, and Laird said customers are now pressing the privately-held firm about it, as well.  

"It's becoming more of an expectation," Laird said. "We have clients asking for our ESG platform. A year ago, those questions weren't being asked, and now they are."

Laird was initially appointed interim CEO of the 153-year-old, family-owned company in January, before being named president and CEO shortly after. He started with the firm straight out of college in 1986, and has held positions throughout the firm's Mid-Atlantic and Central Regions.

Laird's promotion followed the hasty retirement of CEO Mike McKelvy, who resurfaced three weeks later as CEO of energy contractor McDermott. While McKelvy's eventual retirement had been planned for, the acceleration of the timeline took the firm by surprise, Laird said.  

Asked if he could change one thing, Laird said it would be to bring down the company's attrition rate in today's highly competitive jobs market.

"There's a lot of opportunity, and people have been recruited away for financial reasons," Laird said. "I'm a good example of somebody that stuck to it with a great company, and has benefited from that. Seeing others that feel differently make different decisions, I wish I could stop that."