CONTRACTING NEWS

 

A Great Time for MWBEs in Construction

 

Click for bid opportunitiesBy Natasha of NRP

 

For many years, labor market analysts have been perplexed by the lack of minority and woman-owned enterprises in the construction industry. In spite of many incentives—federally mandated diversity quotas on government projects, educational advances of both groups, competitive wages for new workers, and exemplary return on investment for entrepreneurs in this industry—minorities and women remain underrepresented in the management and ownership of construction companies, especially roofing contracting.

 

“It’s not for lack of trying,” noted Dale Tyler, president of National Roofing Partners (NRP), a company dedicated to diversity in its workforce and partnerships. “There are several, historical reasons for this underrepresentation of women and minorities in the roofing contracting industry and it’s a little complicated, but it is solvable.”George Harms 6

 

More on this later.

 

Part of the reason for this lack of diversity in the building trades has to do with the sheer number of women and minorities involved in construction in the United States. According to the United States Bureau of Labor Statistics, the construction industry is composed of 5.9 percent black or African American, 8.9 percent women, 1.8 percent Asian, 27.3 percent Hispanic, and 56.1 percent white.

George Harms 4

 

In industries such as construction, where skills are learned from apprenticeships and mentoring, and promotions to management often come from on-the-job experience, there are simply not as many blacks, women, Hispanics and Asians working in the industry to start, much less fill, a pipeline to ownership or upper management.

George Harms 4

 

“We are constantly recruiting smart, able-bodied minorities and women for our projects,” Tyler noted. “All of our partners have aggressive, often bilingual, training programs to teach young people the building trades. Those who show resourcefulness and ability are promoted to management.”

 

“However, there are more systemic reasons why the construction industry has fewer minorities and women than, say, the manufacturing or retail,” he said. “There is a lack of minority ownership of construction companies. This is not due to ambition or skill or intelligence. It’s a simple lack of capital.”NRP MWBE

 

“Financial leaders such as Eugene Cornelius are trying to change this access to capital for minority and woman-owned enterprises, but it is a very slow process,” he said. “Until banks see the potential for investing in minority-owned construction companies, it will be up to those of us who are already in the industry to build partnerships with these minority firms.”

 

“This is exactly what National Roofing Partners is doing now,” Tyler said. “We are actively looking for qualified companies, which are scalable, to help themselves and us win more business.”

 

Dale Tyler and his team are very positive about the prospects for growth with a diverse workforce. Why?

 

“Local, state, and the federal governments have specifically stipulated that public contracts have a reasonable (somewhere between twenty and forty percent) spend with minority contractors,” he said. “This mandate will allow minority-owned companies and companies such as NRP, who partner with minority and woman-owned companies, the opportunity to compete for large projects.”

 

“Let’s say there is a new airport that is receiving federal funding to be built,” he notes. “There will be twenty to forty percent of the construction contract dedicated to minority subcontractors. Our objective is to find these qualified, scalable minority companies for a joint-venture with NRP.”

 

“We will use our financial resources, construction expertise, and our national footprint to aggressively pursue these opportunities,” he said. “Where some minority construction companies are not licensed, bonded, and insured, we are. This can make a big difference in pursuing public projects.”

 

The government-funded projects are not the only areas where the NRP/minority-owned joint ventures can result in profitable business. Many large companies have seen the benefit of a diverse supply chain and have committed to buying goods and services from minority and woman-owned suppliers.

 

“The Billion Dollar Roundtable is a group of twenty-one companies that have committed to spend at least $1 billion every year with minority suppliers,” Tyler noted. “Companies such as Walmart, Proctor and Gamble, Toyota, and others are actively looking for qualified companies to do business with. Since National Roofing Partners is interested in working with the Tier 1 suppliers and works with some of these companies now, it is important that we find joint venture partners among minority, woman, and veteran-owned businesses to complete these jobs,” he said.

 

If you own a minority, woman, or veteran-owned company and work in the construction industry, National Roofing Partners wants to talk with you. Contact Byron Stallworth at NRP for a no-obligation discussion about the opportunities for your company in the construction industry.

 

 

 

What Cities Should Be Doing for Small Business

They're a major engine of job growth. Yet most economic-development strategies focus on big businesses.

 

BY JANIS BOWDLER, KIM ZEULI | NOVEMBER 8, 2016

 

 Small businesses are the backbone of urban economies: They play a critical role in creating jobs for local residents. Yet too often city leaders and economic developers are not prioritizing small businesses when allocating resources to drive growth, focusing their strategies instead on the attraction and retention of large businesses.

 

A new report by the Initiative for a Competitive Inner City may make public officials consider shifting these priorities. The report provides compelling evidence that small businesses rival, and often exceed, the impact of large businesses when it comes to job creation.

 

The research, conducted with the support of JPMorgan Chase, was released on the heels of the bank's announcement that it was committing an additional $75 million to its Small Business Forward initiative, recognizing the contribution of small businesses to economic opportunity and reducing unemployment, especially for women, minorities and veterans.

 

ICIC's report measures the current state of small business jobs in five cities: Chicago, Dallas, Detroit, Los Angeles, and Washington, D.C., and identifies key findings regarding small businesses and urban job growth.

 

In all five cities, the distribution of small businesses and large businesses is similar, with small businesses -- those with 250 employees or fewer -- representing at least 99 percent of all businesses in the city. Despite this parallel, small-business job creation varies across the cities ICIC studied, ranging from 48 percent in Dallas to 74 percent in Los Angeles.

 

• In four of the five cities, small businesses create most of the jobs: 58 percent in Chicago, 53 percent in Detroit, 74 percent in Los Angeles and 62 percent in D.C. In Dallas, small businesses provide slightly less than half of all jobs. Although "micro" businesses (those with one to five employees) make up the largest share of businesses in the cities ICIC studied, medium-sized businesses (those with five to 249 employees) are driving job creation.

 

 • The importance of small business jobs is greater in the inner city. In four of the five cities, small businesses create a greater share of jobs in distressed inner-city neighborhoods than in the city overall: 70 percent in Chicago, 64 percent in Detroit, 77 percent in Los Angeles and 74 percent in D.C. Dallas is distinct in that large businesses employ more inner-city residents than small businesses, which only account for 38 percent of jobs.

 

• Inner-city unemployment is not insurmountable, and small businesses can play a key role in creating opportunities. In these five cities, a modest increase in small-business jobs could create enough employment opportunities for all unemployed inner-city residents. In four of the five cities, this growth translates to only about one additional employee per small business. Of course, this is not to suggest this growth will come easily for these small businesses, many of which have fewer than five employees. With relatively higher unemployment, Detroit would also require more aggressive small-business growth, just over three jobs per small business.

 

City job-creation chart

 

Despite the big impact small businesses can have on job creation, small-business support in most cities is an uncoordinated set of programs that focus only on the business owner's education rather than on the larger business environment. City leaders will need to leverage new tools to maximize small-business job creation in their cities. ICIC offers five critical strategies:

 

• Create a comprehensive small business plan connected to regional and city economic assets.

 

• Expand contracting opportunities for small businesses so that they can compete on procurement contracts with government and anchor institutions.

 

• Design workforce programs for small businesses, since many do not have the resources or capacity to recruit and train new employees (especially those with barriers to employment).

 

• Coordinate resources and ease burdensome regulations by mapping and making more accessible the resources that already exist.

 

• Upgrade the inner-city business environment by improving infrastructure and neighborhood amenities to support small-business growth.

 

Big tax-revenue gains and economy of scale continue to shape how many economic-development professionals think about job creation. Yet ICIC's report makes a strong case for city leaders to support the growth of small businesses with the same resources and intentionality as they do with their efforts to attract and retain large businesses.

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