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The National Association of Minority Contractors-Wisconsin (NAMC-WI) and the Wisconsin Department of Transportation (WisDOT) have partnered to expand contracting opportunities for minority business owners as the state prepares to take on federally funded infrastructure projects.
The partnership is meant to take advantage of the influx of infrastructure projects coming to Wisconsin as the federal government puts several billion dollars toward roads, bridges and manufacturing projects, explained Tim McMurtry, the executive director of infrastructure business development at NAMC-WI.
“Opportunities of a lifetime are best taken in the lifetime of the opportunity. … We don’t want to look back at this golden opportunity for wealth creation and say, ‘We missed the boat on that. We could have done more to deliberately and consistently push the envelope for participation,’” McMurtry added.
To help minority-owned contracting firms get their foot in the door for infrastructure projects, timing is crucial as WisDOT leverages its Disadvantaged Business Enterprise (DBE). However, making sure the program stays true to its original goals for diversity, equity and inclusion has been a challenge.
In September, WisDOT released a DBE program report showing businesses owned by just white women were awarded 60% of contracts while only making up around a third of disadvantaged firms. According to NAMC-WI, Black owners made up nearly 40% of DBE firms but were awarded less than 10% of jobs in 2021.
“We want to increase women-owned businesses. But if the bulk of that DBE participation is disproportionate, we’re not truly changing the status quo. … We are looking to increase visibility and access for the ethnic, diverse business community to participate in a major way in the major WisDOT projects coming up,” said Ugo Nwagbaraocha, president of the board of directors at NAMC-WI.
Another catalyst was the U.S. Supreme Court’s ruling that a key part of Small Business Administration’s 8(a) Business Development was unconstitutional, forcing minority business owners to prove they were disadvantaged by their race to keep certifications.
Breaking the larger projects down into digestible bites, motivating business partners to move on their own
To make the most of state infrastructure plans, such as the Interstate 94 East-West project in Milwaukee County, WisDOT can provide mechanisms such as strategic unbundling and break pieces of overall design to fit the size of diverse businesses, McMurtry said.
“Instead of having boxing matches where a scrawny guy goes against Mike Tyson, sort it into weight classes. Given the sheer size of said projects, they create opportunities to give consideration for strategic unbundling,” he added.
The unbundling would give DBEs, which are often small and niche contractors, an opportunity to build capacity and perform as primary contractors for billion-dollar projects broken down into jobs worth tens of millions of dollars, McMurtry said.
“So, you have a billion-dollar project versus a $10 million project. The latter would be along the size a diverse business can get on based on their current capacity. They get better and more familiar and establish more relationships. Because of said experience, they can take on bigger projects,” he added.
Both engineering and consulting firms and construction firms have ethnic and diverse business enterprises, and NAMC-WI is advocating for greater levels of participation in future projects, McMurtry said. Because the state has some flexibility with federal projects and controls its own road projects, advocates are asking WisDOT to be as generous as possible with DBEs, he added.
On the private side, advocates said they want to grow relationships with owners and general contractors to the point where those corporations will pursue DBEs on their own. Some examples of companies hosting participation goals in construction projects were Fiserv Forum and the Northwestern Mutual Tower and Commons.
Additional strategies to help bolster DBE business are building capacity for owners, including workforce development, resources to procure equipment and streamlining all processes, advocacies added.
Partnerships are integral to expansion of minority business
NAMC-WI works with many partners, such as banks and state organizations, to reach its goals, said Nwagbaraocha. “I don’t want to steal their thunder, but U.S. Bank has done some amazing things and has been a partner at all of our events. I’m also looking at BMO Harris Bank. These are two major tanks that have leaned in with a huge platform of resources and streamlining access to it,” he added.
The Wisconsin Housing and Economic Development Authority (WHEDA) and Wisconsin Economic Development Corp. have been “amazing” partners, Nwagbaraocha added. The former has resources outlined for diverse-owned business and the latter gave access to workforce development grants. Workforce development partners include WRTP | Big Step and Employ Milwaukee.
WisDOT and the state, with political will, are among the most integral pieces for those partnerships, McMurtry said.
NAMC-WI aimed to serve as a true partner to the transportation department, Nwagbaraocha added. The group recognized Secretary Craig Thompson, recently appointed business and equity director Tondra Davis, transportation administrator Scott Lawry and Bob Gutierrez, the director of the southeast region.
Minority business part of bigger picture to close the equity gap
Having the biggest impact for the diverse business community is part of the larger picture when it comes to disparity, said Nwagbaraocha. In Milwaukee, gaps between Black and white people when it comes to earnings, household income and home ownership are larger than some national peers, he added.
“That status quo, we have a bigger role to make sure we’re attacking that from the diverse business community,” Nwagbaraocha said.
WisDOT also agrees DBE firms will play an important role when infrastructure projects commence.
“WisDOT values its longstanding partnership with NAMC-WI and remains committed to continuous improvement of the Disadvantaged Business Enterprise (DBE) program. DBE firms are a vitally important part of delivering quality infrastructure to millions of people in the traveling public,” a spokesperson for the department said.
The department works closely with the industry and DBE firms “to ensure stronger relationship development that is being reflected in project bids,” the spokesperson added. WisDOT met its DBE goal for the past three years, they added.
“We will continue to focus on collaboration within the industry to administer a program we can all be proud of,” the department noted.