Fruits of Whose Labor?

Since President Barack Obama signed the $787 billion, two-year economic stimulus bill, more than $174.9 billion has been disbursed (as of press time)–primarily on lucrative infrastructure projects. Of the nearly 4,000 contracts that have been awarded, approximately 600 have gone to minority businesses, leaving black entrepreneurs fearing that they’ll be bypassed or overlooked when future contracts are handed out.

“New day, same old fight,” says Richard Copeland, national president of the National Association of Minority Contractors (www.namcnational.org), the nonprofit trade association with chapters across the country. He adds that while his association’s members are being very proactive in seeking contracting opportunities through the American Recovery and Reinvestment Act, many are finding the process both confusing and cumbersome.

“Lawmakers are saying, ‘Trust the process; it’s coming,’” says Copeland, who is also president and CEO of Minneapolis-based Thor Construction (No. 48 on the BE Industrial/Service Companies list with $103 million in revenues). “That’s the story we always get: It’s coming, its coming–then, oh, shoot, it’s gone.”

Copeland is concerned about smaller firms that don’t have the same size capacity, capability, and political connections as his. He believes that the federal government should include a mandate that stimulus contracts and funds are distributed equitably among businesses and communities as a condition for receiving funds.

The Small Business Administration (www.sba.gov) reports $5.9 billion contracting dollars have been allocated through the Recovery Act as of this summer, of which just over $1.2 billion or 20% has gone to small businesses, with $735 million (12.4%) to minority-owned businesses. “Keep in mind, the minority-owned category is a completely self-identified field with no certification by anyone and no specific reason for a firm to identify itself as one,” says SBA press office director Mike Stamler.

Rep. Edolphus “Ed” Towns (D-N.Y.), who chairs the House Oversight & Government Reform Committee (http://oversight.house.gov

), says he’s “concerned and really disappointed” by what he considers the inadequate level of minority business participation in the stimulus process, as well as his allegation that large corporations only use minority businesses as subcontractors to win awards, but then don’t put them to work.

“We need large corporations to know that it’s not business as usual and we’re going to do this differently,” says Towns, who hopes to get legislation passed that would improve the state and local government’s ability to track stimulus dollars. “If they don’t abide by the rules and allow everyone to participate on a level playing field, they’ll be penalized.”
“The demonstrable effect [positive or negative] of the bill with minority business is not significant at this stage of the game,” says Rep. Gregory Meeks of New York.

Leon Richardson, CEO of ChemicoMays, a Detroit-based chemical management company, says he is constantly communicating with local lawmakers and other government officials. Close to 60% of his business is generated by those within the automotive industry, one of the economy’s most visible victims. “It’s very helpful to make them aware of what’s happening,” says Richardson, who is also chairman of the National Association of Black Automotive Suppliers (www.nabas.org). “The industry and the government were first concerned about the larger supplier. They’re now starting to focus on small and minority suppliers who were missed at the very beginning.”

Rick Wade, senior adviser to Commerce Secretary Gary Locke, says most notifications for grants and contracts have yet to be posted and agencies are still developing guidance on the bidding and award process. However, he says the Minority Business Development Agency (www.mbda.gov) under the guidance of its new leader David Hinson, is committed to helping minority businesses navigate the Recovery Act’s procurement process.

Rep. William “Lacy” Clay Jr. (D-Mo.), who tracks projects in his state as they are announced, says the best way to find out what contracts are available, and for whom, is to be an engaged entrepreneur. He adds, “It helps to have a proactive member working hand in hand with the small businesses to make sure they participate in the recovery.”

Where’s the MONEY?

From the $787 billion 2 Year Economic Stimulus Bill:

$174.9 billion has been disbursed

$5.9 billion contracting dollars have been allocated through the Recovery Act

$1.2 billion (20%) has gone to small businesses

$735 million (12.4%) to nearly 600 minority-owned businesses

(Source: Small Business Administration as of July 2009)

This article originally appeared in the September 2009 issue of Black Enterprise magazine.