Innovative Program Helps Disadvantaged Businesses Succeed

by: Carol Gronfor, Metropolitan Economic Development Association (MEDA)
March 20, 2013

Public projects, such as the Central Corridor LRT, usually contain specific goals for including small and disadvantaged business enterprises (DBE) as subcontractors. Thanks to the numerous nonprofits and government agencies that assist and monitor the prime contractors in their efforts to meet these goals, many DBEs got the opportunity to bid successfully on construction work for the Central Corridor LRT. 

DBE businesses are often less experienced with lighter balance sheets than the larger majority owned contractors.  To promote a vibrant inclusive economy, small and disadvantaged businesses may need specialized, caring and confidential support behind the scenes.  Contracting for Success, a program of the Metropolitan Economic Development Association (MEDA), has successfully assisted DBEs in overcoming a variety of obstacles by working diligently behind the scenes.

For example, one DBE client of our program bid successfully on a $450,000 project recently. This client was approached because a significant portion of the Central Corridor DBE goal was in jeopardy due to the closure of a company originally contracted to perform the work.  The prime contractor was seeking a new contractor that could meet the original budget, meet the expected deadlines, and still help the project meet DBE targets.

The DBE owner is an exceptionally gifted salesperson, knowledgeable in the field, a highly capable manager of workers, and well liked within the industry.  Yet for all these strengths, the company has growing pains and infrastructure gaps. These gaps could have prevented successful performance on the contract, and potentially undermined the business overall had the DBE not received support. 

To meet the $450,000 project budget limit, the DBE had proposed a series of changes to the design.  These engineering level changes were accepted but had not been updated in formal design specs, leading to communication challenges and the potential of serious liabilities issues for the DBE. MEDA helped the DBE connect to legal counsel and ensure that contract language was updated to protect the client from later charges and responsibilities to meet specs.

Then the client’s bonding was pulled, leading to a business crisis. Without bonding, union labor was no longer allowed to be on job sites. The DBE lost his workforce, and was suddenly unable to perform on a series of contracts. If he lost the contracts, his company would have folded. Yet the causes of lost bonding were manageable. MEDA helped address management issues and through our business partnerships, successfully advocated for renewed bonding. In less than 48 hours, the workers were back on site.

This is just one example of the DBE success stories that MEDA can credit to the Contracting for Success program.  The program has helped many disadvantaged businesses not only engage with the economic opportunities provided by the CCLRT project, but to also use their successful experience as a springboard for new and larger opportunities.