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Minutes

Committee Hearing, October 27, 1998

Philadelphia City Council Committee HearingsOct 27, 1998

People mentioned

Names our system found in this transcript. Automatically extracted, so it can include anyone named in the record, not only officials or parties.

Organizations mentioned

Councilman Nutter

Mr. Ryan works for you. What's your phone number?

Mr. Thompson

875-2707.

Councilman Nutter

2707. And I'm very sensitive -- if you have a last name like mine, you're really sensitive to other people's names. (Addressing Mr. Sjursen.) Is it "Tore"? Okay, can you say your last name again for me, please.

Mr. Sjursen

Sjursen (sounding like "SHUR-SEN").

Councilman Nutter

Sjursen?

Councilman Nutter

Okay. And what is your phone number?

Mr. Sjursen

875-2630.

Councilman Nutter

2630, okay. Now, Mr. Sjursen, there is one matter that I need to try to get some clarity on with regard to you, and then I have some questions for all of you. In the letter from the City Controller to Mr. Hankowsky, dated September 18, 1998, there 138 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 are comments that are attributed to you that read as follows, in quotes: "I don't care what the contract says. We will do what we want on this project. It's Kvaerner's business, not the City's, and all we promised in the contract was an attempt to involve minority companies. We are not contractually bound to do anything. And by the way, this conversation does not leave this room." Did you say that, Mr. Sjursen, in a meeting? (Mr. Sjursen briefly confers with Kvaerner counsel, Ron Brown.)

Mr. Sjursen

As you're aware, when Mr. Leonard testified, we are in a lawsuit with Mr. Leonard. And I, therefore, would respectfully decline to answer that at this stage because I believe it's relevant to that lawsuit.

Councilman Nutter

Okay. Is that somewhat tantamount to taking the fifth? (Laughter.) (Mr. Sjursen briefly confers with Kvaerner counsel, Ron Brown.)

Mr. Sjursen

My counsel is advising me 139 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 that since this is in litigation, it would not be appropriate for me to answer that. I'm sorry.

Councilman Nutter

Okay, I'll accept that. Let me ask you so that you don't have to respond to comments made by someone else. Why don't you share with us your perspective on what this project is about, whose project it is, what your relationship is and the nature thereof with the City of Philadelphia, what your responsibilities are to the citizens of this city, if not the surrounding county. And why don't you put on the record what your perspective is as it relates to this project and our involvement in it.

Mr. Sjursen

Well, I believe that we have the responsibility to build a state-of-the-art shipyard. And I believe that in doing that, we will provide jobs, long-term jobs for the citizens of the city. I believe that it is our responsibility to give a fair chance, a fair chance to all members of this community to both bid the contracts we're giving out, we're letting out, and 140 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 to seek employment within the organization.

Councilman Nutter

And can you describe to me the methodology and the program plan that you intend to use to accomplish the goals as you have stated them?

Mr. Sjursen

Yes. If I may, I would like now to read the letter that I have submitted on behalf of Mr. Rafdal, which I believe addresses those questions.

Councilman Nutter

Okay, read it into the record.

Mr. Sjursen

As you may know, Kvaerner Philadelphia Shipyard, Inc. has plans to transform the former Philadelphia Naval Shipyard into a state-of-the-art facility. One of our most important objectives in our efforts to do so is to start actual construction of our first ship by next summer. This objective is most critical because if achieved, Kvaerner will be able to attain the further goals of, A, meeting the objectives set in our agreement with the Commonwealth of Pennsylvania and the City of Philadelphia; and, B, creating jobs and getting people back to work. 141 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 The achievement of these goals is heavily on our need to use the fast-track approach to complete the construction of the shipyard. Here at Kvaerner, we are very enthused by the fact that our plans for the Philadelphia Naval Shipyard will encourage many businesses and employment opportunities for the Philadelphia communities at large. We strongly encourage the inclusion of minority-owned and women-owned business as well as employment opportunities for these groups in our construction plans for the shipyard. To ensure our good-faith efforts to arrange so that these inclusions are met, we have established a cooperative with the Minority Business Enterprise Council, the Office of Housing and Community Development, and the Greater Philadelphia Urban Affairs Coalition to monitor our directives to include minorities and women in our shipyard project. We also have an existing relationship with the Philadelphia Shipyard Development Corporation. The above-mentioned minority organizations are an integral part of Kvaerner's 142 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 contract bidding process. To that extent, organizations such as MBEC and the PSDC are incorporated to (unintelligible) selection criteria which is used to establish our potential bidders list. Once we have established an appropriate business list, that list of approved bidders will be forwarded with adequate to the African Chamber of Commerce, MBEC, and OHCD.

Councilman Ortiz

And the Hispanic Chamber of Commerce.

Mr. Sjursen

And, certainly, the Hispanic Chamber of Commerce will be added to that list. This will also keep the necessary contract information flowing through the contracting process, we believe. We will also give all the interested parties an opportunity to participate in the contracting process. Enclosed in this letter, you will find a flow chart that outlines the various stages of the contracting process. (I believe that's now shown there.) For future reference, please be 143 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 informed that we are working in collaboration with MBEC's Mr. Jim Roundtree to consult with us in our efforts to identify quality minority and female subcontractors and to ensure that information regarding contracting opportunities are disseminated amongst all those that are interested. For reasons of efficiency, we have asked that he be responsible for providing information of this sort to the appropriate persons. I hope this letter addresses any concerns you may have about the Kvaerner Philadelphia Shipyard project. And also Mr. Rafdal encourages you to call him if you have any further questions regarding the matter.

Councilman Nutter

Well, I may have a few but there are probably some people in the audience who may have even more questions. They might want to call him.

Councilman Nutter

I appreciate your reading the letter into the record. And in light of what Mr. Rafdal 144 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 indicates by way of interests and intentions and what you plan to do, could you shed some light on why we heard the type of testimony that we heard earlier? You were in the audience. If everything is apparently in place to make the process flow smoothly, get information out, why do we have so many disgruntled people?

Mr. Sjursen

Well, I believe, obviously, that this progress, while it has been in place, does not work the way we intended it to work.

Councilman Nutter

Why is that?

Mr. Sjursen

I think there might be several reasons for that. I think maybe we need to explain the bidding process more detailed, in a more detailed way. And if I could, I would like to take the opportunity to do that.

Councilman Nutter

That would be good. Can you tell me, though, before you explain it to us, what's been done in the past to get the information out. Why do apparently, again, so many people or organizations seem not to know what's going on? 145 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734

Mr. Sjursen

Well, this process that we set up has been in place since the beginning of the project. It has been changed and amended in some ways, which I can explain after I --

Councilman Nutter

Before you get to that, though --

Councilwoman Tasco

Can I just ask, what process are you talking about, the process you just read in the letter?

Mr. Sjursen

No, the vendor selection process, the bidding process.

Councilman Nutter

Okay. And how did that information get out?

Mr. Sjursen

Excuse me, which information?

Councilman Nutter

If you're pointing to the vendor selection process as "the process," what was the mechanism or system to get that information out to people so that folks could understand it? I mean, are you saying that you handed people this chart and then expected them to follow this chart to get to the money?

Mr. Sjursen

Yes. The chart was established -- in June? 146 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734

Mr. Hankowsky

In May.

Mr. Sjursen

In may, June.

Councilman Nutter

Is there any written material to go with it? I mean I'll just -- I mean, I'm not a contractor; it's probably fortunate that I never built anything. But I'm about -- I'm fairly lost after about the second level here, and I wouldn't know where to go, so I'd probably go seek another project. Who -- what individual -- Mr. Hankowsky said that Kvaerner's responsible for the implementation of an MBE/WBE program. Can you tell me what individual by name title, location and function is specifically in charge of the implementation of the goals of this project?

Mr. Sjursen

The specific person in charge of implementation of the MBE/WBE goals is Mr. Gary Thompson. And working for him as the project manager, Rich Ryan.

Councilman Nutter

And so when people have concerns and questions, is it your testimony now and direction that they be in touch with those 147 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 two individuals directly?

Mr. Sjursen

And also they should in touch with a gentleman called Jason Carr.

Councilman Nutter

I'm sorry?

Mr. Sjursen

Jason Carr.

Councilman Nutter

Oh, this is a new name.

Councilman Nutter

Who is Mr. Jason Carr?

Mr. Sjursen

Mr. Jason Carr is working in our organization under Mr. Mr. Gary Thompson, and he has been responsible for receiving information from potential vendors and in establishing a supplier data base within our organization.

Councilman Nutter

What's Mr. Carr's title, what is his job, and what was he doing before you guys got to Philly?

Mr. Sjursen

Mr. Carr worked for Kvaerner Construction, and he is now -- his title is -- he's got dual responsibilities; he's also a cost manager.

Councilman Nutter

A cost. . . ? 148 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734

Mr. Sjursen

Cost manager. And --

Mr. Thompson

He's maintaining the data base of the vendor input we get from the marketplace, and he logistically gets involved in getting the pre-qualifications sent out and --

Councilman Nutter

So he's a hands-on person.

Mr. Thompson

Correct.

Councilman Nutter

He deals with contractors, he knows the contracting business, he's the person that someone who wants to do business with you, they should be able to talk to Mr. Carr.

Mr. Thompson

Correct.

Councilman Nutter

And they'll get past the administrative assistant and talk to Mr. Carr? I mean --

Mr. Thompson

Yes. He gets hundreds of calls a day, and he talks to hundreds of people a day in corporation and --

Councilman Nutter

And is he here today?

Mr. Thompson

No, he's not.

Councilman Nutter

He's back at the 149 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 shop?

Mr. Thompson

Yes. He's at the shipyard.

Councilman Nutter

What's his phone number?

Mr. Thompson

I don't know off hand. 875-2712.

Councilman Nutter

2712.

Mr. Thompson

Correct.

Councilman Nutter

Okay. I know that there must be some questions by my colleagues and I know Councilman Cohen has a time issue, but Councilwoman Clark beat him to the punch. Councilwoman.

Councilwoman Clark

If you don't mind, Mr. Chairman, I'll defer to Mr. Cohen, who has to leave. Then I would like to follow up.

Councilman Cohen

Earlier I raised the question as to who from Kvaerner who is here present today has power to make decisions? Is there anybody?

Mr. Sjursen

I believe I do.

Councilman Cohen

You believe you do. What kind of assurances can we have from this day 150 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 on, you will take whatever steps are necessary to maintain the closest contact with the groups that are represented here at this hearing and address the problems; that they will feel welcome; that when they have questions, you will go out of your way to make sure they have answers so that they can do what they're prepared to do, which is to undertake very responsible work on behalf of Kvaerner, an behalf of the City of Philadelphia. What assurance can we have from you today that that will happen?

Mr. Sjursen

I think the best way that we can assure that this will happen is that we now make the procedures that we put in place in order to keep everybody informed, everybody up to speed and give everybody the opportunity, that we all work together and make that procedure work. I think that's the best way of making sure that these concerns are addressed.

Councilman Cohen

I mean no disrespect but I have to tell you, that kind of answer says nothing. The kind of answer I'm looking for that would give me confidence would be your statement 151 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 flat-out that you're going to undertake that responsibility, and that you will report regularly to the City Council, and that your phone will be available to us as well as to all of the folks that are here in case the system doesn't work right.

Mr. Sjursen

Well, I can definitely give you my assurance that that is what we will do.

Councilman Cohen

And you will do that?

Councilman Cohen

Okay, thank you, Mr. Chair.

Mr. Sjursen

I would like to state that if this is perceived not to work, then I would very much like to know about it, and I will do what I can in order to rectify any problem.

Councilman Cohen

Well, is there anything you cannot do? If you're responsible at the Kvaerner operation, can't you give us absolute assurance that we'll never have another hearing like this where people come to us and say, We call on the phone and don't get and answer. That we 152 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 don't get the information we need to compete fairly. All of them, they impressed me with their honesty, their integrity, and their ability to do the kind of job that we understood Kvaerner was interested in doing, and that was a job of excellence. And all of us believed -- you know, we took Kvaerner in good faith, and we went out of our way to reach that kind of a conclusion. This is not news to you, right? Mr. Hankowsky?

Mr. Hankowsky

No. 15

Councilman Cohen

No. We want to deal fairly and honestly and openly. We would like to have it made clear that if there's any problem whatever, City Council and the groups represented here will have quick access to you so that you can take steps to correct everything. That isn't asking for very much, is it?

Councilman Cohen

And I think you're going to have the best kind of operation if you cooperate fully with them. 153 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 Mr. Chairman, I'd like to suggest, before you're done, that it would be very good if we could have continuing reports, maybe even continuing hearings until everybody -- by continuing hearings, I mean once a month to get reports on progress, because I understand Kvaerner's moving forward rapidly. It wants -- I understood that from the testimony before, that they have a quick timetable. And we would like to feel very confident, you know, that the confidence we placed in you is fully earned by Kvaerner. We want nothing but real success for Kvaerner and real success on behalf of the folks that have testified here, and we think both desires are fully compatible. (Applause.)

Councilman Nutter

Mr. Sjursen?

Mr. Sjursen

I would like to say that we have no objections at all in providing you with the information you seek. We have contracted with GEP, the Urban Coalition, to provide reports to us. And also OHCD and MBEC are involved in our process and will get information on how we 154 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 proceed. And I'm sure they can also provide you with that type of information.

Councilman Cohen

Well, I think the last touch that's needed is our confidence that you will be available on a hands-on basis to deal with any problems that may develop so that this whole process can go forward to everybody's advantage.

Mr. Sjursen

Well, I can give you that assurance.

Councilman Cohen

Very good. Thank you, Mr. Chairman.

Councilman Nutter

Councilwoman Clark?

Councilwoman Clark

Thank you, Mr. Chairman. I have several thoughts here. I'm having difficulty with the fact that Mr. Rafdal, who is the President and CEO, finds it inconvenient for himself to be here. And the one person in the corporation who has a direct hands-on responsibility for monitoring minority, disabled and women business opportunities is not here either. 155 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 Now how can it be that you didn't anticipate that we would need to hear from the person who sets overall company policy and the person who has implementation responsibility exclusively? How can it be that those two people are missing? And then in the light of those two very glaring omissions, you ask me to take your word that you're going to make it better? I mean, that worries me. That lack of performance on your part worries me. Now we might have asked you some esoteric question that the person who would have the answer to it might not be here. But the only reason you came here today was because we had conveyed way in advance our unhappiness with the assurance that minorities, women and disadvantages would be handled in a fair way. I can't see you came here without people who can speak firsthand of what the process is and what the progress is toward achieving the goal. How can that be, sir?

Mr. Sjursen

Well, first of all, when Mr. Jason Carr's name was mentioned, it was in 156 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 response to a question regarding who minority companies should call in order to get an opportunity. I firmly believe that all of the people present here have a hands-on responsibility for --

Councilwoman Clark

No, sir. No, sir. Any job that's everybody's job is nobody's job.

Councilwoman Clark

I want to know who in your company on an organization chart charged with the direct responsibility of monitoring and reporting up the chain and down the chain what the progress is, and what the sanctions for failing to meet are? And if you don't even understand the significance of having one person responsible and having that person in the room to answer for the company, how then would you expect me take the rest of your representation?

Mr. Sjursen

Well, I do believe we have that person here who is directly responsible for the implementation of these programs, and that's Mr. Rich Ryan, the project manager. 157 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734

Councilwoman Clark

Well, then, sir, how are we doing?

Mr. Ryan

Okay, you've asked a number of questions, and I'm not trying to be evasive. This chart set up here very is difficult to read admittedly. The reason why the chart was set up was to control the bidding process. It wasn't not deliberately meant to be exclusionary, that wasn't the intent. The intent behind the chart was to get the best contractors and to get involvement of them and WBE firms. In the absence of this, let me just tell you, we got many almost 1,000 contracting firms in our data base. You can imagine, with the amount of work that's available in the city, everybody wants a piece of the pie. That has to be controlled. The only way to control that process with regard to the master agreement is to put together a matrix where we can filter out the correct firms. Now, I'm sorry if I didn't answer your question directly but that's the background to the chart.

Councilwoman Clark

Let me tell you 158 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 what's wrong with it, sir. And I do not in any way mean to impugn your motives, please.

Councilwoman Clark

You say to me that this is a very complex chart in order to make sure that everybody has an opportunity. That's not what we're here for today. You need a chart that specifically lays out the plans and steps that you will take to be inclusive. How will you find these people? We found -- they found you and they can't get their telephone calls answered. We don't ask you to be (unintelligible) and find them. We say, Answer your telephone calls. Don't do anything special for them, just don't construct a new barrier for them to hop over.

Mr. Ryan

Agreed, agreed. I guess what I'm saying is this chart addresses different organizations at different level.

Councilwoman Clark

But you introduced the chart, I didn't.

Mr. Ryan

Yeah, if I could just finish.

Councilwoman Clark

Excuse me. In 159 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 response to our questions, you introduced this chart. This is a poor chart under any circumstance.

Mr. Ryan

That's subjective, but if I could just continue for a moment, please. The chart is meant to handle contracting organizations at different levels. And what I mean by that is, all these good people who sat here today -- and there are different levels and sizes of contracting organization -- they all have an interest in the job. But Kvaerner, the interest they have is represented on a different level. For instance, one organization may be a subcontractor, one organization may be a prime contractor. The intent of this chart is to try and filter out into the correct position the prime and the subcontractors.

Councilwoman Clark

I know, but you're being far too basic and you're missing the point that I'm trying to make (unintelligible) understand the concept of prime and sub. We've been at this a very, very long time, and some of these guys are primes and some of these guys are 160 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 permanent subs.

Councilwoman Clark

We know who we are, we don't you knowing why we are. In response to our question, what is your plan, you drew up an unintelligible chart which doesn't answer the question. Now I need you to go back and develop a chart that says how will you access these and others like them who are qualified. At no point did I ask you to hire anybody in terms of what they look like or what their gender is. But if you are going to put this chart up this obfuscates, this confuses and confounds. It does not make it plain that you have the intention to include people who are historically and systematically excluded. And because there is no regular way of doing it, we're offering you a process that's about 30 years old. Some of us have been involved in it. You don't have to take a block of wood and turn it into a wheel; it's been done.

Mr. Ryan

If you have any advice on how you'd like the chart to be structured -- 161 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734

Councilwoman Clark

Yes, I have advice.

Mr. Ryan

-- we would be happy to receive that.

Councilwoman Clark

There's no 7 question about do I have advice. I've been trying to give it to you as long as you've been trying to get here. (Applause.)

Councilwoman Clark

Now, my direct question is this: Is it true that $80 million worth of contracting has already been signed into agreement? If so, how much contracting is left and what's left for these people except to watch other people go to the banquet?

Mr. Sjursen

We have signed -- I don't know the exact figure, but we have signed approximately that amount of money. A structural steel contract was mentioned of $48 million, and we have -- although not signed it yet, we have a pylon contract for practically $20 million.

Councilman Nutter

I'm sorry. I didn't get the number. How much was it?

Mr. Sjursen

Approximately $20 162 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 million.

Councilman Nutter

20.

Mr. Sjursen

I think the important thing for us, and this is part of the strategy that we chose initially to involve minorities is that the minority contents of those contracts have not been finalized. We are on a very fast-track schedule, and this is why I initially wanted very much to be able to explain this procedure because I think it's relevant to describe our efforts and our strategy for involving minority companies. I think, we, in order to reach another important goal of the master agreement to start shipbuilding next summer, we have needed to go out and get contractors on board based on very little information. Some of the gentlemen that previously testified mentioned that there weren't drawings available, etc., and this is true, this is part of the enormous challenge that we have because we're trying to both decide and buy and construct this project in parallel. I can tell that you just two weeks ago, the structural field drawings were just issued. Yet we had to contract with a structural steel 163 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 supplier in order for him to place a mill order with the different mills already in July.

Councilwoman Clark

Well, that's --

Councilwoman Tasco

How do you do that without the specifications being available? And how did he come up with the dollar figure for the project and the scope of work without having the plans? (Interruption from unidentified member of the audience.)

Councilman Nutter

Sir, sir, sir, you are out of order in the back. You are out of order, you are not at the table. Thank you. You will have an opportunity to speak.

Mr. Sjursen

This is again part of our challenge because this is not a normal way of doing it, we realize that. But the basis of the bids that these people have given have been based on unit prices and a general description of the work typical.

Councilwoman Tasco

Well, what happens if they come in under or over, how do you just 164 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 adjust for that?

Mr. Sjursen

It's a unit-priced contract, which means that when the actual quantities can be from the plans, the contract price is adjusted accordingly.

Councilman Nutter

Right.

Mr. Sjursen

And it's -- it's -- it's -- it's not uncommon on fast-track projects to use this type of. . . If I could please --

Councilman Nutter

Do you want to finish?

Councilman Nutter

Go ahead.

Mr. Sjursen

If I could please continue. And, therefore, since we have in a way been, in my belief, since the schedule that we're under has required that we employ this type of a bid process, we have included the goals, the minority- and women-based enterprise goals in each of the prime contractors -- prime contractors' contracts. And so we are trying to have these prime contractors as the process moves on, as they 165 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 receive more plans, more drawings, we require them to go out and receive bids from subcontractors. And we have -- and that's why also we have asked the Urban Coalition, on our behalf, to follow up on contractors and to report back on the type of job that they're doing.

Councilman Nutter

Right. I want to ask a question on that, but Councilwoman Clark has a final comment, and Councilwoman Miller has to get in a comment as well.

Councilwoman Clark

Sir, in my grown-up live before I came in government, I was in affirmative action and in affirmative retention and hiring and contracting. And I can tell you, based on being a member of three of the affected classes -- being black, female, and over 50 -- that it doesn't happen just because you say it's going to happen. There has to be a sanction and you really have to hold somebody's feet to the fire. Unfortunately, you may have to sacrifice somebody to prove that the bill has teeth. And that's what we're missing. All of the language -- if you go back through this transcript 166 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 today, all of our questions have said, in essence, And what is the "or else?" Comply or else; or else what? Or else the manager will not invite you to tea? Or else I will call you in default of your loan agreement and that the entire unpaid balance is due and payable immediately with sanctions? Now that's teeth. I will tell you that if your goal to include minorities, women and disabled was equal to your goal of opening your shipyard by a date certain, unless you care that much and unless you are that strong in insisting you'll meet your opening date and you'll give us a reason how come you almost made it and didn't. It cannot be done as an afterthought. And this is the last clear chance you have to make all of your primes and subs understand that you're serious about it. And we're in these hearings trying to insist to you how serious we are. We are on the same team. I have nothing to gain by being a part of the a cabal that kills Kvaerner Shipyard. Nor do I have anything to gain by watching another group of people go to a banquet while I hungrily 167 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 press my nose to the glass and watch other people eat. That's why I'm very serious about it, and I want you to know that we offer you help. We're not daring you to succeed; we are offering you help to help you succeed. But you have no 8 give us some process that's dependable. Going back, then, what is your prequalification process? You've got to work that out, you've got to transmit that to us. And these guys who meet it are in, these guys who don't meet it our out, and the rest of it doesn't matter. Thank you.

Mr. Sjursen

Thank you, Councilwoman. (Applause.)

Councilman Nutter

Councilwoman Miller?

Councilwoman Miller

Councilwoman Clark did make some comments that I wanted to make. I just want to add that I believe the prequalification requirements need to be written so all of us are very clear what that is. I'd also like to know if you have a written policy that can describe your good-faith 168 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 efforts, the term "good faith," 'cause your interpretation and, say, my interpretation of "good faith" could be totally different. And, also, one thing I still can't understand, if OHCD was the entity to monitor and you knew that Kvaerner knew it, then how come OHCD reps and minority business reps were not allowed on the base? I can't -- I still can't figure that one out. And I think they've been allowed back on the base since we had that meeting in September, and I don't know whether people knew they weren't allowed. I mean, the security guards would not allow them on the base to do their job. I can't understand that. I'd also like more information on the term "fast-track" because to me, that sounds like that could also be an exclusionary term. You know, I don't know, you have to tell me a little bit more about fast-track. And does anybody there from Kvaerner know anything about the New Jersey operations?

Mr. Sjursen

(Shakes head.)

Councilman Nutter

It's going to be 169 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 very difficult for the stenographer a shaking of the head.

Mr. Sjursen

No, I don't -- I'm sorry. No, I don't know anything about that operation.

Councilwoman Miller

Can you give us some history later written on minority participation at your New Jersey plant?

Mr. Sjursen

Yes, I can try to get a hold of that information. I will contact the office in New Jersey and get the information on that.

Councilwoman Miller

Okay, minority and women and disabled. Because I think I can recall at our public hearings to discuss this last year, that people asked about the history of Kvaerner dealing with minorities, and I think I remember, and I'm going to read the transcript, but I think I remember that we really didn't get any information. We got the impression that you really just did business -- we only knew about your business in Germany and whatnot. So I'd like to get some of that information too, Mr. Chairperson.

Councilman Nutter

Mr. Sjursen, you 170 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 didn't actually mean to say that you would "try" to get the information in response to Councilman Miller; you really meant to say that you "were" going to get the information that she asked about; is that right?

Councilman Nutter

Okay. What is Mr. Carr's background with regard to monitoring MBE/WBE contracts, compliance, involvement and the like? Has he done this work before?

Mr. Sjursen

No. And it will not be Mr. Carr's responsibility to do that; that will be the responsibility of the Urban Coalition, under the direction of Mr. Ryan. Again, I would like to repeat that when you asked me for Mr. Carr's name, I understood this to mean the telephone number that people would call to get information.

Councilman Nutter

To get information.

Councilman Nutter

Okay. But it's really Mr. Ryan working in conjunction with the Urban Affairs Coalition that will disseminate information. 171 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734

Councilman Nutter

Okay, all right. I think that's why --

Councilwoman Miller

Are they here? Are there Urban Affairs Coalition reps here?

Councilwoman Tasco

I think they're going to testify.

Councilman Nutter

Yeah, they're going to testify. That's why I think, in response to Councilwoman Clark's question and for the next hearing, it would be, I believe extremely helpful if -- notwithstanding the chart and whatever you're going to do with the chart -- if there were a written implementation plan that we could see that was in a narrative, laid-out, what you will do, what you plan to do, how you're going to do it, and who is going to do what, and what the various points of contact are. Because I'm taking from your testimony to some extent that you are really almost contracting out the day-to-day responsibility for implementation of your plan. And then Mr. Ryan then has to have the involvement with the Urban 172 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 Affairs Coalition. He ultimately becomes the person, you know, holding the bag, if you will, and will take -- you know, I guess he either gets the praise or takes the hit if things don't go right. But you seem to not be directly engaged in it, as Councilwoman Clark says, as you may be in making sure that you start building ships in June of 1999. This is a part of the larger operation that you're trying to do, but it's really being subbed out to somebody else. Is that a fair characterization?

Mr. Sjursen

Well, it's my responsibility to see that we meet all of the goals of the master agreement for the development of the shipyard.

Councilman Nutter

At the Philadelphia Shipyard operation, can you tell me how many on your staff, how many African-Americans or other people of color work for Kvaerner Philadelphia shipyard, Inc.?

Mr. Sjursen

Four or five, I think.

Councilman Nutter

Okay. You can provide us at the next hearing, unless you know 173 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 off the top of your head, who those people are, what they do, what their responsibilities are.

Councilman Nutter

You have an organization chart?

Councilman Nutter

Okay. I apologize. I cut across Councilwoman Miller, she was not finished.

Councilwoman Miller

Okay. I know we have all these steps that we have to do to get through the construction phase of this, but I want to talk about post-construction, and I don't really know whether this is in the master agreement or not. I guess the 20/10 -- I don't know whether it's for construction or just what. But I'd also like to get information regarding Kvaerner's position on post-construction opportunities for professional services, food services, etc., etc., for minorities and women. I'd like to get that in writing.

Councilwoman Miller

Thank you.

Councilman Nutter

Councilwoman 174 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 Tasco?

Councilwoman Tasco

How many contracts does Kvaerner plan to let by the end of this project?

Councilwoman Tasco

And you've let how many so far?

Mr. Sjursen

We've let, I believe, five?

Councilwoman Tasco

Five. And of that, how much minority participation?

Mr. Sjursen

Well, it varies. We have four goals in our -- we have four goals in our objectives. Minority business participation, women business participation, and also the employment goals.

Councilwoman Tasco

Mm-hmm.

Mr. Sjursen

And so it varies from contractor to contractor. And as I also tried to explain, we haven't really finalized the process with each contractor. But we have a contractor, for example, the dismantlement, they have a minority business enterprise which is called "DCA," I believe. They 175 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 handle hazardous waste. They have an employment content of about 45 percent minority participation. We have --

Councilwoman Tasco

Is that workers or subcontractors.

Mr. Sjursen

Yes, workers.

Councilwoman Tasco

Workers? MR. SJURSEN? Workers, people that are employed.

Councilwoman Tasco

Mm-hmm.

Mr. Sjursen

We have, for example, in the structural steel contract a women-based company, Cornell from New Jersey, as the steel erector. We have Hannah & Sons, I believe was mentioned on the demolition -- underground demolition, 5 percent participation. We have on the design contract Synterra. I believe that's about 25 percent. And Judy Schiller & Hersch.

Councilwoman Tasco

Do you report this information to the PSDC board? Do they get this information?

Mr. Sjursen

Not on a regular basis, 176 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 but it will be part of the Urban Coalition report.

Councilwoman Tasco

And how often will the -- is the Urban Coalition going to monitor your projects from now on?

Mr. Sjursen

That's correct.

Councilwoman Tasco

And then you will submit that report to the PSDC board?

Mr. Sjursen

That's correct.

Councilwoman Tasco

What are the differences between the construction and operational phases of the Kvaerner project?

Mr. Sjursen

With respect to minority participation?

Councilwoman Tasco

No, just what's the difference between construction and operation?

Mr. Sjursen

Yes. Well, in construction, it's obviously building the facility itself.

Councilwoman Tasco

Right.

Mr. Sjursen

Operations is when we start building the ships. And during that phase, we will be -- there will be a lot of subcontractors also involved in that operation. I guess that's the main difference. 177 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734 It's building the facility and then building -- the shipbuilding itself.

Councilwoman Tasco

Councilwoman Miller mentioned something about professional services contracts on the business side.

Councilwoman Tasco

How many professional service contracts have you given out to minorities and women?

Mr. Sjursen

Well, for the moment, we have Mr. Ron White who is counsel to the company.

Councilwoman Tasco

Mm-hmm.

Mr. Sjursen

We are now in the process of going out to bid the operations, or we're looking for contractors for the operations part. We really haven't proceeded very far with that. The focus has been on the construction of the yard.

Councilwoman Tasco

When did you let your first contract? Not professional services; let's go back to construction.

Mr. Sjursen

Yes. The first contract was let in May, I believe. Do you remember the bids? 178 COMMERCE & ECONOMIC DEVELOPMENT - RES. 980734

Mr. Thompson

It was in May of this year, the design contract.