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January 14, 20001 The NAMC LCDP Will Provide A Proven Contractor Capacity Building Program For The...
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Transcript of January 14, 20001 The NAMC LCDP Will Provide A Proven Contractor Capacity Building Program For The...
January 14, 2000 1
The NAMC LCDP WillProvide A Proven Contractor Capacity Building Program
For The Public and Private Sector
January 14, 2000 2
The LCDPThe Local Contractor Development
Program is the leading national program for achieving small contractor
participation in public and private sector construction projects.
The LCDP provides a new basis for underwriting, that substantially reduces
the traditional barriers that prevent participation: surety bonding and
contract financing.
January 14, 2000 3
The LCDP Goals
• Achieve productive small business participation in construction projects
• Achieve measurable results• Savings on awarded work
• As measured by the difference in the awarded prime bids of participating LCDP contractors from the next lowest non LCDP participant
• A larger pool of small business prime bidders• In general without the LCDP there will not be additional new
small business prime bidders
• Provide a foundation for the ongoing success of small contractors
• Enhance local economic development
January 14, 2000 4
The LCDP Elements
• Outreach
• Qualification Assessment
• Surety Bonding and Contract Financing
• Technical Assistance Referral
• Contractor Progress Monitoring
January 14, 2000 5
The LCDP Team
• The Owner funds the LCDP through the NAMC Chapter– NAMC’s PMs and Financing professionals will conduct a LCDP
Qualification Assessment.– NAMC’s PMs will perform Construction Progress Monitoring– NAMC’s outreach staff will conduct Outreach and Referral
Qualification Data Collection & InterviewsConstruction Progress Monitoring
Underwriting for Surety BondingContract Financing
OutreachReferrals for Assistance
Owner’s Project
January 14, 2000 6
The LCDP Methodology • Early analysis determines the contractor
community’s capacity• Technical assessment provides qualified
contractors with surety bonding and contract financing
• Ongoing contractor performance monitoring reduces risks
• Feedback on the path to qualification, for firms lacking capacity
January 14, 2000 7
Outreach
• Communications and marketing plan to encourage participation by small contractors
• Identification of available support services provided by locally based organizations
• Expansion of existing pool of local contractors eligible to bid on projects
January 14, 2000 8
The LCDP Underwriting “Qualification Assessment”
• As rigorous as traditional underwriting, but with a different focus– Contractor’s technical qualifications, experience
and track record are the major criterion– A qualifying “financial floor” designed with small
business realities taken into account
• Business improvement recommendations provided regardless of approval level
January 14, 2000 9
In-house Bonding Authority
• Qualification Assessment assures technically qualified contractors
• Conducted by engineering/construction and financial professionals
• Extensive interview, references, credit check and contractor progress monitoring
• Rates that will keep bidders competitive
January 14, 2000 10
In-house Contract Financing Authority
• LCDP underwriting is used for contract financing and surety bonding
• “Feeder System” Local banks benefit from financial development of emerging businesses
• Financing terms matched to local market
January 14, 2000 11
The LCDP Will Provide Referrals to Technical Assistance Resources
• Administration• Outsourcing• Management• Job Cost Reports• Software• Financial Statements• Labor Burden Costs
• Subcontractor Monitoring
• Equipment Utilization• Contracts Completed• Profitability• Job Cost Reporting
January 14, 2000 12
Performance Monitoring
• Monitoring of schedules, performance, and compliance with CM directives
• Preparation of periodic and final reports on contractor progress and performance
• Coordination of contractor performance information with construction management team
January 14, 2000 13
The LCDP Results
• Achieve small business participation goals in a non set-aside, non preference environment
• Enable small contractors to overcome credit and bonding hurdles
• Contribute lasting economic benefit to local communities through creation of viable local businesses
• Provide a unique database of qualified local contractors
January 14, 2000 14
The LCDP Uniqueness• Program targeted to support local emerging
small and disadvantaged firms• Program operation in a non set-aside, non
preference environment• In-house authority for surety bonding and
contract financing – Pre-qualification assessment to assure contractor
capabilities – Underwriting for surety bonds and contract
financing technically based – All technically qualified participants receive surety
bonding and working capital• Contractor Progress Monitoring on awarded
work
January 14, 2000 15
Support for the NAMC LCDP
• DevCorp Consulting Services– LCDP training and program consultation– QA final package review, surety
recommendation– Contract Financing
• Aon Construction Services Group(The market leader in contactor insurance products)
– QA recommendation approval– Surety bonding
January 14, 2000 16
The LCDP, a Proven Program
• Experience with programs in Florida, Texas, Michigan, Maryland, Colorado, Ohio and Washington
• Over 500 contracts successfully completed with no losses or defaults
• Over $300M in bonding capacity and $40M in contract financing provided
• Over 100 new prime contractors created