No. The pool of workers that constitute the pool for Kvaerner Philadelphia are the former workers of the Philadelphia Naval Shipyard.
And the two defense installation -- one here in South Philadelphia and one up in Bucks County. That constitutes the pool of workers. They're not workers from other 238 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 shipyards throughout the country.
There are no other workers eligible from shipyards throughout the country, unless they were former worker workers of the Philadelphia Naval Shipyard.
You have to be a former worker at the Philadelphia Naval Shipyard to be eligible for one of the permanent jobs at Kvaerner?
Yes, that's correct. In order to be reimbursed through the -- under the terms of master agreement, if Kvaerner chooses to hire someone who is not in that category, then it comes out of Kvaerner's pocket, not out of the governmental party's pocket.
So it's not true that Kvaerner could not hire or would be prohibited from hiring somebody who wasn't a 239 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 former Philadelphia Shipyard worker. You're just saying that the financial incentives would not be available to them that go with hiring someone who was a former Philadelphia Shipyard worker. I seem to recall there was some information a while ago before the deal was consummated that there were advertisements going out through national newspapers seeking workers. Isn't that true?
Why would you put ads in national newspapers seeking workers if you were only going to go after a workforce that had been former Philadelphia Shipyard workers? Are you anticipating that some of the former Philadelphia Shipyard workers have moved across the country?
And you want to make sure that they see the ad in Los Angeles?
That's certainly one possibility. The other is to help explain it, is there's the production side of the workforce and 240 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 the non-production side of the workforce, which includes highly specialized individuals trained in various aspects of shipbuilding that may not be available in this market. And so Kvaerner would be looking in, I believe, the areas that Kvaerner advertised was the areas where there were shipyards in the United States.
Well then, Mr. Benko, you're -- the statement you just made is slightly in conflict with the statement that you made earlier that Kvaerner would not be hiring people who either were not previously employed at the shipyard or the two defense installations that are in the Philadelphia area. There's a conflict in those statements.
There's not a conflict, sir. I said that if they chose to hire someone from outside of that labor pool, then the cost of that individual would be Kvaerner's.
I understand that 241 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 but that doesn't make it a prohibition. That's a business decision that they have to make based on the pool of available talent, correct?
So they are able to hire people from outside of the Philadelphia area, right?
Yes. I might add -- this goes for part of the funding, not all of it, and we are in the very, very early stage of the hiring process, and we have hired 40. We have percent 16 minorities, even if we have no goals in 17 percentages, but I think that's showing how we are 18 working and giving best efforts, and I would like 19 to see the (unintelligible) as well. 20
Any other questions for this panel? (No further questions at this time.)
Okay. Are there any of our contractor community people who -- gentlemen, you are all -- you shall be excused 242 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 from this table. You may want to avail yourselves of any of the statements that are going to be made by the contractors. And I know that we're going to be finished shortly. If somehow, though, and I'll be announcing this at the end, but if, somehow, any of the previous witnesses possibly leave the room, this hearing is going to be adjourned -- I'm sorry, recessed until Wednesday, December 9th, at 10 o'clock a.m. For any of the information requests I made, and I know specifically I asked Mr. Benko to get certain information to us, if you can get any of that information or any other information requests that may have been made of Kvaerner or other personnel, if you can get that information to us no later than two days prior to the December 9th hearing, I would greatly appreciate it.
May I made a request on the record that we invite the PSDC board to address our meeting on the 9th to answer some questions that Mr. Executive Director seems unable to answer?
Yes, Councilwoman 243 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 Clark. Either by letter from Councilwoman Tasco as the sponsor of the resolution or from myself as chair of the committee, the request will be made to all five of the board members to participate in the next hearing.
Point of clarification. Letters were sent to all five board members inviting them to participate in the hearing, and we were informed that Mr. Benko would represent the board.
However, we understand Mr. Benko, that he had on occasion on more than one time to say that he did not know. And since the ultimate responsibility lies with the board and not on him as an employee, we now ask them to come and explain or give answers to our legitimate questions. Thank you.
Gentlemen, I appreciate your being here. As I mentioned earlier, the original agenda.
Excuse me, sir, are they going to stay here? 244 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734
I understand. I excused you from the table but I suggested -- maybe I was not strong enough in my suggestion that you might want to listen to the hopefully brief testimony of our contractors. What I was about to say was that the original agenda only included the individuals who have been up to the table so far. But after discussion with Councilwoman Tasco, it's difficult for me not to have people who have been here all day. If you have follow up information that you wish to share with us, we'd be pleased to receive it. On the other hand, I'd like you to ask you to be brief as possible given the time. (Individual contractors come forward.)
I'm Jahid Ali, I'm with United Minority Enterprise Association. Good evening Councilwoman Tasco, Councilwoman Clark. Before I begin my testimony, there was 245 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 some testimony earlier from Kvaerner, and it reflected that there was inquiry made as to the welfare-to-work people. And it just took me back a minute because I had read volume number and volume number from the original hearings that were held in this Council. And one of the questions raised during the close of that hearing was raised by not a civilian, but it was a regular constituent, and he had a question in reference to the requirement for poor people to work. And his question was directed to President Street. And the question began with --
This is from the public meeting before the Council of the Whole on December 10, 1997, Resolution 970801. And in the transcript, there was a Mr. Statelli (ph.). And his question was: My last point, Councilman, is provisions. Can there be provisions assured to me for folks and for poor people? A lot of people have been kicked off welfare recently, and they could use the training 246 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 for the kind of unionized jobs at the shipyard. Will Kvaerner consider these people? President Street answers: I will answer that question for you because we have covered that turf, right? The jobs are going to be created at the Navy Yard and the training that's going to be required fundamentally is not work for people who have been put off welfare rolls as a result of this welfare and all, it really isn't. And it would be unfair, and I am certainly not going to try to fool anybody about any of this. And I think that is part of also what Councilwoman Tasco had a concern about.
And also in reference to jobs, Councilman Nutter, you had a job about the 953 jobs. Your memory did serve you correctly. Your question was -- as a result of the testimony of Mr. Hankowsky, your question to him was: So your testimony with regard to the 953 full-time direct jobs, there is no commitment anywhere with regard to good-faith goals or good-faith efforts to have any level of minority, 247 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 female, or disadvantaged individuals, are the part of the 953 workers non-construction? To put it -- I mean yes, that was Mr. Hankowsky. So all along, from the beginning of this whole Kvaerner transaction, Council, you members that are here tonight have always been on point in regards to disadvantaged businesses and members of our community. And it proves the point that we know that certain segments of the community are impacted more by violent crimes against members of the community. And one of the things that criminologists have all unified on is that most of this crime results from the lack of employment. So in essence, everything that we're doing here tonight is to put a sent in the unemployment and to give those young people on the fringe a chance to find employment, whether we can create employment for them through the means of contracts and subcontracts or we can put such a demand on those contractors that they will be forced to open up those avenues for those young people entering into the (unintelligible).. 248 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734
Mr. Ali, let me ask you -- and I appreciate your statements, and it's always nice to know that my memory's working. Let me ask you a quick question though. You were here with us back on the 27th. It would be helpful for us if we could get in a relatively brief sense from you of what, if anything, has happened or been done differently, or have you seen any positive improvement in, I guess, the environment that is of concern to the minority business coalition?
Far as UMEA is concerned, we've heard through some of our members that some of the meetings went a lot better. But in regards to treatment of UMEA, as our organization, we're like the biblical story of Joseph. We brought a problem to the attention of the king, but yet we were kicked into the well, in fact, by our own brothers because it's hard to believe that Mr. Rafdal who himself, by his own words, is an outsider, will come here and say, well, he sees no 23 need for him to deal with UMEA based on -- it has to be based on some kind of rapport he's having with either the other entities that he has 249 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 selected. So in regards to UMEA, we haven't seen any change. In fact, we just got a fax inviting us to attend a breakfast meeting in the morning with Mr. Rafdal, but we would have never got that probably had we not brought it to the attention of Councilwoman Tasco's attorney.
Let me just ask you a quick question 'cause I've seen some letters flying back and forth just in the last couple days. Is there a particular proposal or idea that you have on the table that has to do with how you want to try to interact with Kvaerner or PSDC or any off the various other agencies, how you see yourself, I guess, kind of fitting in? And especially given the context of -- it seems to me that most of the people who are doing anything in this process and project are pretty much either direct government agencies or agencies who are under contract to somebody to do something on behalf of a government agency or one of the partners. How do you see yourself fitting in on 250 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 this? What do you want to do?
It means that of all the hours, the numbers, when they start quoting numbers, everything that they get is at the end of a monthly report or maybe an occasional site visit that they summarized that what they saw on Monday is the same thing that occurred Friday. However, there is a need to have on-site monitors, people actually out in the field saying that, in fact, those 20,000 hours were generated on the job -- there's a lot of tricks in the construction trade. We don't know if those contractors who might have employees that are there on Friday, they might have transferred over on Thursday, so subsequently their hours, the end hours are going on a pay scale.
From another job. These are major contractors, they have to have multiple 251 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 sites.
I mean, again, you have to help with some education here. I mean, I have to make the general assumption that the Greater Philadelphia Urban Affairs Coalition must be using some documents or payroll sheets or something to figure out who's working where and how many hours they're working.
They're using documents. But documents, like the Councilwoman pointed out, who is to monitor what they're putting in, who questions what they're submitting? The Urban Coalition uses a good-faith effort in a sense because they request documents from the contractors, the contractors send it in, and then they either -- maybe they'll come by on a site visit and maybe they won't. I recently worked on the hospital, at the Shriners Hospital. I don't think I ever saw GPUAC on my floor. With all my crew, I never saw them on my floor. Now, would see them at the monthly meetings and they would ask me things but I was one of the guys that was looking out for them. 252 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734
However, if I was on the other side of the table, I'd tell them anything I wanted them to know.
So your position is that you want your organization to be in a position to have some number of people -- and it's a fairly large site -- to be on site every day, checking to see who's working where.
Well, we would be assisting GPUAC and MBEC in whatever their mission is that they're trying to accomplish, because we would actually be verifying that those people who are listed on those documents are actually participating on that project, and that there is no sham. We just had a question about the gray area between money and accounts and the interest. And that's on one level.
So that's how I see our 253 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 organization. And we have to resolve that there is so much going on. And as one of the other gentlemen testified earlier, everything is in the master agreement, but as far as my recollection is, every issue that was before this Council today UMEA brought up. Where was the other entities when they were there? They were there from the beginning. We've been aggressive in trying to bring these issues to the forefront.
By way of, I guess, kind of bullet points, the summary of your testimony is that some individual contractors have had a better response and have had better meetings subsequent to the public hearing than they had prior to the public hearing.
That your organization wishes to be an on-site monitor to make sure that whoever's working on the site is working on the site and hours are being counted correctly and that there are no games being played, and you want to -- and in that process, you would assist and work with GPUAC and MBEC to 254 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 mistake sure that everything is being done above board and properly.
I wanted to submit my statement for the record. And basically to summarize my statement, everything that is before this Council today, you've all had discussed in the earlier meeting on December 10, 1997. Every issue, everything that we went over, you went over then. But the difference was, the agreement wasn't in front of you. What it was it was a lot of assurances. And, see, this MBEC thing is very important. It is so important that the mayor took off from his speech and made particular attention to page number 5 in his project summary of the Kvaerner deal. And in that summary, he's particularly made mention that there was going to be MBEC participation during the construction 255 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 and/or the slight part of it. Today's testimony is there was no 4 insight into having construction for the supplier, so it was very important then and it's very important for us now. The problem is we have all these different entities coming, and they want to say, Oh, yeah, we goofed off and we didn't do this right and we didn't do that right, but don't hold us accountable. There is those regulations, the most stringent regulations that exist are the Section 3 regulations. It was us, it was UMEA that brought that to this attention. And those Section 3 take precedent over everything state and municipal because they're federal. And because should we not find relief that we seek here, we have no choice but go up to the federal level, so we've asking for you to intervene and make this situation right. And that's basically what my statement says. I'd like to submit that to the record.
That would be fine. The sergeant-at-arms will pick that pup. 256 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734
No, we would prefer to have it with Kvaerner. However, we don't to step on GPUAC's toes. We really would like to share the responsibility because we all are going for the same thing, we all want to have inclusion of minority and disadvantaged people.
Let me understand one thing. The organization has people who are in a position or who have the time to do something like this? I mean, is this something from your staff? I mean, who would do the work?
We know that we would have the most qualified people because we would have people who are experienced in the construction industry that knows the trades.
These are construction people themselves or contractors?
What are they doing 257 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 right now?
Well, we'd have to see. Some people, we'd have to have a questionnaire and interview process to get them.
Are you saying that you would staff up? If you got the contract, you would staff up with qualified people?
All right. We've got two other gentlemen at the table. You can fight it out among yourselves as to who goes first.
My name is Bill Wellock, and I work for Keystone Boiler Works in the Manayunk section of Philadelphia. This company has been in business for 107 years. In early July, I went to Kvaerner, left off some literature, followed up with another call in August. And then August 29th, I got an appointment to go down and see a gentleman at Kvaerner. At that time, we picked up an inquiry and we quoted on the job in a couple weeks. I was never advised about any meeting 258 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 by the Philadelphia Shipyard network in September 25th down at the Riverfront. On October 5th, we wrote a letter to Mr. Gargone of PIDC and also Mr. Benko of Philadelphia Shipyard Development Corporation. And the letter asks that we were invited to -- if we could be invited to the next outreach program session, and would they keep us in mind, keep in touch and so forth. We heard no reply from either one of these people. I then directed a letter in October 16th to Kvaerner and asked them -- the question was, I had heard through this meeting on September 25th that the website literature was going to be now used to converse with Kvaerner in doing all kinds of purchasing, and I wanted to know if that was correct, would they please clarify it. I got no answer to that letter. Now, I don't know why if they can't answer phone call, they can't answer letters, we don't know where we're going. When we did give them the quote, we were told two days later that our price was two-thirds higher than what they got from anybody else. That's besides the point. 259 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 But, you know, if they're getting all this money to do things, I don't know why they can't correspond with people when we're asking questions and not harassing anybody. Tell me what the answer is, Mr. Benko.
Yes, I think Mr. Benko has -- is out of the room right now. He was here just a couple mission.
You talk about frustration? Tell me where I go, what do I do?
To try to directly respond to you, there are still two representatives of Kvaerner here -- Mr. Ryan in the back, Mr. Thompson up front you. And would strongly -- you and I talked on the phone, I guess, last week talk. I would strongly encourage you to talk to either one of them right here tonight, take advantage, tackle them before they get out the door, and see if you can be back in touch with someone tomorrow. 260 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 The particular contract that you were trying to bid on, do you know if that contract was subsequently awarded?
Okay, you might to ask that question. I mean, at that point, it's public information and you can find out --
I want to make a statement besides that. I have been told -- and I'm not going to tell you who.
Because not here themselves but every time someone quotes a job to Kvaerner, and I'm talking about little jobs, I'm not talking about the buildings jobs. This job was $700,000, not a bad quote.
But I'm told that every time someone quotes Kvaerner, it's their policy to say, "You're two-thirds high" on everything. It can be a little contract or a big contract.
Well, that's one way of getting the price down. 261 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734
Well, no, I mean, you didn't go into business based on anticipating doing business with Kvaerner. Obviously, you know, that it's impossible for me to respond to that.
But I think you need to talk to the Kvaerner people, try to get your situation squared away, find out what happened with the contract that you were trying to bid on. Mr. Ryan's in the back, Mr. Thompson's over at the time side. Sit down and talk to them in a straight forward fashion and see what you can work out.
John Thomas. I'm not going to tie up -- thank you for allowing us Councilman Nutter and esteemed staff. 262 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734
I'm going to gavel you right on out of here. (Laughter.)
This is the esteemed Councilwoman Tasco and the more esteemed Councilwoman Clark. Man oh man.
I have a letter from UMEA, United Minority Enterprises Associates, Inc., that was sent on November the 9th, 1998. To the Honorable Secretary Gary E. Crowell, Pennsylvania Department of General Services, in Harrisburg, Pennsylvania.
Referencing Cornell Steel Company WBE certification. Dear Mr. Secretary: The United Minority Enterprise Associates officially submits 263 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 this letter of recusal against Cornell Steel Company, a recently Pennsylvania DGS Bureau Contract Administration Certified Woman Business Enterprise. Our association submits that Cornell and Company is not a socially or economically restricted business. Cornell and Company has an array of construction equipment worth more than $50 million. I repeat that figure -- more than $50 million and is regarded as one Pennsylvania's, Delaware's, and South Jersey's largest and most acclaimed white male-run family business. Your investigation and reconsideration of their decertification is herein requested. UMEA awaits your response as a result to said investigation. Sincerely, the Association. cc: Honorable Michael A. Nutter, Chairman, Commerce and Economic Development, City of Philadelphia; Honorable Marian B. Tasco; Honorable Donna Reed-Miller; Honorable Secretary of Procurement, State of New Jersey Legal Department. There are some other things. That was most important. I wanted that read into the record because we know how the game is played, all 264 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 right? Now, how is it that we were not included in the coalition that just left to go to Germany to further train individuals in companies to come to Philadelphia to take jobs away from the local populace? Very interesting. It is relatively obvious and most conspicuous that the President of City Council is never at these hearings. We know that the funds in question could be stopped by his office. However, only being vaguely familiar with but not fully apprised of the deals that must have been made to bring Kvaerner Shipbuilding to the Naval Base, let's be truly realistic, you're not really expecting us to believe that these hearings are working in our best behalf when you let all the key players in question avoid, evade, and outright ignore this august body's request and demands for clarification, commitment, procedures and policy. You sit here and assure us of your insurance policy of that paycheck issued every two weeks whereas we must fight to be included in money spent on contracts for which we pay taxes and have not proportionately been allowed 265 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 participation. The long documents include EEO representation and best effort for MBEs, WBEs, DBEs. However, the master agreement has yet to be clarified and policy and procedures enforced. While we depend on you to represent our need for best interests, at this point in the process, our faith is dwindling in the constitution and laws of this land which allows us fair and equal treatment as well as representation in its administration. We are despondent as to the future of minority business in our unfair city of brotherly love, and when everybody can get a piece of the pie -- all, that is, except those who must pay for it in the long run as the local popular tax base. Minorities -- black people specifically -- earn and pay taxes on $7 billion a week. However, the return on contract participation such as the Kvaerner Shipbuilding, which is supposed to benefit our city specifically and the Delaware Valley in general, is being given to special- interest groups of which only PSDC is aware of. In conclusion to what I've seen here 266 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 today from the previous panel, the dog-and-pony show is and alive and well as performed here today, but with an added attraction. That's, who's got the ball? What is the role of MBEC, the African American Chamber of Commerce, Urban Coalition? If Keating is doing their job, why is Kvaerner paying them to duplicate what is obviously a job undone by any of the aforementioned parties? That's from the Executive Director, Mr. James E. , UMEA.
I am John Thomas reading it on his behalf because he had to leave.
Thank you very much. Seeing no one else, this hearing is recessed until Wednesday, December 9th, at 10 o'clock a.m. Thank you very much. (Adjourned at 6:50 p.m.) - - - 267 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Monday, November 16, 1998, were reported and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT RESOLUTION NO. 980734 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter