To spread the economic benefits that construction projects generate more fairly across communities, government agencies reserve some public work for contractors owned or operated by traditionally disadvantaged groups.
Federal, state and even city and county agencies have special programs that give qualified minority- and woman-owned business enterprises (MWBEs) and other disadvantaged business enterprises (DBEs), such as service-disabled veterans, a chance to bid on and win certain construction projects ranging from small to mega. That is, if they are certified.
The Small Business Administration, for example, runs the 8(a) certification program, which is probably the most well-known among government contractors, but other letting agencies have renditions as well. Most certifying agencies require that a qualified business be owned by at least 51% minority or disadvantaged owners.
African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans and women are presumed to be socially and economically disadvantaged, according to the federal government. Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis.
But while certification provides some opportunities, it doesn’t mean that MWBEs and DBEs get to skip over all the hard work that goes into building a business. “That’s not the way it works,” said Dan Moncrief III, CEO and chairman of certified minority commercial contractor McDaniel’s Construction Corp. in Columbus, Ohio, and president of the National Association of Minority Contractors.
“You have to work harder than you’ve ever worked and stay up later than you’ve ever stayed up to get your first job,” he said.” And once you get a first job, it may be a long time before you get the second one. So, it’s a constant grind. If you don’t have the fortitude for it, you might want to do something else.”
With the many agencies, certifications, programs and regulations in the mix, some smaller disadvantaged contractors may be confused about where to start to how to reap the benefits available to them.
And for those contractors starting out with less capital and fewer resources than their larger MWBE and DBE counterparts have, the road to success might be a little tougher — and longer — but there are strategies that can help them be more competitive.
There are many benefits that come from developing personal relationships with project decision-makers, such as staff in public contracting offices, officials who award contracts and larger construction firms. “At the end of the day, if you don’t build a relationship, you don’t grow,” said Derek Mateos, president and CEO of Tampa, Florida-based Matcon Construction Services Inc. “It’s that simple.”