—By Joe Mabin

The most critical issue facing minority and women contractors is the lack of capacity. If minority and women business enterprises (M/WBEs) are to benefit from the aggressive inclusion goals set on public projects and upsurges in contracting activity, they must grow capacity in financing, bonding, staff and staff capability.

To be sure, barriers remain that impede the growth and development of M/WBEs. Minority and women contractors ply their trade disproportionately in the pubic sector. Most of them rely on public contracting where participation goals for minorities and women are pre-determined. Public sector projects sometimes make up the majority of the work performed by these companies—up to 80 to 90 percent.

Kansas City's inclusion program has a maximum "size standard" for participation, which is too low and can force successful M/WBEs out of the program before they are large enough to compete for private sector work. Another issue of contention is that the city's program does not grant credit percentages for work which is self-performed by minority and women general contractors.

Professional Training to Build Capacity
Given the cyclical nature of construction, professional training is a viable, long-term strategy for capacity building. Former craft-people head most M/WBEs, and they may not have received any professional business training. While craft experience is ample preparation for job performance in the field, it does not prepare M/WBE owners to manage regular business operations, such as evaluating financial statements, handling contract negotiations, etc. If M/WBE companies commit to business development training and analysis, the barriers to development—i.e., bonding and access to capital—will be eliminated as these companies grow.

M/WBEs lack capital, have fewer assets and have a diminished access to business loans. Minority and women contractors also lack social capital and typically have limited access to business networks. It is advantageous for M/WBEs to attend planned networking events and activities. More importantly, they should learn how to effectively leverage these networking opportunities to make them work for their companies.

Minority contractors also have a very limited market. The majority of minority contractors served by the Minority Contractors Association of Greater Kansas City have come from the building trades. The limited private sector access to opportunities-both social and economic-eventually impacts the growth of larger minority companies.

Government and Corporate Programs
There has been progress, however. The aggressive development of corporate and government programs over the past 20 years is beginning to yield results. But even though larger and sometimes highly successful minority construction companies are emerging, they struggle to reach parity with majority owned companies in the private sector. Past and current efforts, while successful in making broad gains, have proven inadequate overall in resolving the disparity that still exists for achieving future progress. Much of the discourse in the minority contracting community revolves around disparity between the availability of minority contractors to perform and the actual contracts that they are awarded.

Disparity Between Large and Small Companies
However, the most significant kind of disparity that is prevalent in today's construction industry is the division between large and small construction companies, not between majority and minority firms. In fact, the areas of commonality between small majority and minority companies are many. The competition for labor, training and contracting opportunities is intense, and training resources, technical assistance and capital are scarce.

Recognizing this, the industry as a whole is grappling with the need to improve training programs and other mechanisms to address the problems of increasing technical demands upon today's construction workforce. To make matters worse, recent industry studies suggest that the construction workforce is decreasing. Industry experts are employing new alternatives to enhance the labor force and create jobs.

There is general recognition in the larger construction community that capacity-building for M/WBE is a priority. Turner Construction has developed training classes on business development topics under its Turner School of Construction Management in major cities across the nation. Locally, both J.E. Dunn Construction and Walton Construction also have initiated training/mentoring programs to help M/WBEs increase capacity. The Sheet Metal Contractors Association of Greater Kansas City has long recognized the need for business and personal development training for is members and clients. Dialogue has begun with organizations such as the Mid-America Minority Business Development Council, the Builders' Association and the Heavy Constructors to promote a cooperative effort for M/WBEs training resources.

Partnering and Business Development Are Key
Partnering and business development training are the keys to capacity-building. When M/WBEs partner with established contractors in mentoring relationships, the benefits are significant. Within the past five years, the Minority Contractors Association of Greater Kansas City has increased its efforts to arrange partner/mentoring relationships for its members.

Partnering and training also helps minority contractors to aggressively respond to major trends in the industry and to grow beyond the sole proprietorship model.

Joseph Mabin is executive director of the Minority Contractors Association of Greater Kansas City, and former owner of Mabin Construction Company. If your company is an M/WBE and you would like further information on partnering, training or becoming a member of the Minority Contractors Association of Greater Kansas City, call Joe at (816) 924-4441.