Phenomenal Businesses Face Insurmountable Barriers
Over the past fifteen years, African American small contractors have faced many challenges to build capacity within their firms. Actually, their focus was primarily to sustain themselves during the recent tumultuous economic period. Many closed their doors. Unemployment has been at record highs. African American firms in the construction industry have been dealing with many issues just to keep their doors open. Here are some of the factors and reasons:
Less than 1% of public construction contracts go to the Black construction firms. Participation in the private sector is minimal.
“Fronting” firms are killing any real possible participation which could build capacity in legitimate firms. And sadly, too many people condone this practice.
Black participation on Development projects are almost non-existence.
High unemployment continues to plague the communities where funds were to be expended for economic development to revitalize those areas.
In spite of some elected officials efforts, the "political will" is non existence for a disparity study.
Most of the construction projects generated by CDBG funding go to other firms. Black firms are very seldom engaged.
Small firms do not get paid timely and most Black firms are small firms, so not getting paid is paramount.
In municipalities across South Florida, performance bonds are being required on projects that are oftentimes less than $100,000.
Bid bond requirements eliminated many small firms ability to bid projects.
Liquidated damages on Rehab projects are over $450 per day.
Municipalities are accepting unreasonably low bids.
Packages are being bundled when in fact they could have been smaller projects.
There are public projects being performed by Prime contractors who in turn require Pre-qualifications. In some instances, one of the requirements may be that the small firm has a line of credit in order to qualify.
Small firms cannot get the same price quotes from Suppliers that large firms receive. It is disguised as “volume discounts”. Therefore, small firms’ bids are not competitive.
Bid times are too short to respond with a responsible bid.
There seems to be a lack of support for Black construction firms’ inclusion.
There is no oversight to ensure that processes work for the good of the whole.
Many small firms have closed their operations during this economic downturn.
Small firms cannot sustain themselves and support the Center
Budget cuts for the municipalities funding have negatively impacted the Center.
Most of the issues outlined above have never been addressed by any entity or group expending public funds.
In spite of the many barriers listed above, I find that African American firms continue to exist and navigate the construction industry successfully. However, with a sincere paradigm shift in the attitude, policies and practices for expending public funds, there could be a phenomenal change in their growth and development.