Key Players

• Eligible Business Owners. Minority-owned and other disadvantaged contracting businesses are themselves clearly the starting point for any minority-owned contracting programs.  Their needs and experiences should shape the program.
• Local Government Agencies. Minority contracting programs are often focused on public contracts.  Government agencies that hire contractors, from public works departments to transportation agencies to boards of education, need to buy into [or, be brought into] the idea of increasing minority contractor participation to make it successful.
• Prime contractors. Much of the hiring in a large construction project is not actually done by the owner, but by the "prime contractor" who hires subcontractors for specialized tasks.  These prime contractors should be both committed to the concept of increasing minority contractor participation and should be given help and incentives to look outside their usual set of contacts.
• Community Based Organizations .  Many aspects of minority contracting programs, especially those to increase capacity, are carried out by community groups.  Community development financial institutions may offer business loans, while a network of small business owners may set up mentoring or bonding assistance.  Community organizations concerned with neighborhood economic development will also often be advocates for creating set aside programs or other approaches to increasing opportunity.
• Private Owners. Sometimes increased opportunities for minority contractors will be negotiated between community advocates and private owners on a development-by-development basis.
• Local Government Leadership. To have a citywide minority contracting program passed as an ordinance and then enforced, the support and initiative of local government leaders is essential.  It is, however, possible for minority contracting programs to be carried out within a single agency or for a single project entirely at the initiative of that agency.
• Federal Government. The federal government maintains definitions of small businesses and disadvantaged businesses and other incentive programs that can support or affect local programs.

Ingredients for Success

Hire Construction Professionals. The world of construction is highly specialized, and programs aimed at increasing opportunities for minority firms will have the best success if their staff and leaders include people who are intimately familiar with the terms and practices of the industry.  This will help their outreach to minority firms and also their interactions with prime contractors and owners.

Perform Frequent Disparity Studies. Simply adopting a progressive ordinance or program in your community is not enough; it remains essential to track the program's impact.  Annual studies of minority firms' contracting achievements are necessary to justify the policy against legal challenges, as well as important for ensuring that the ordinance continues to have the impact it was designed to.

A thorough disparity study will document the discrepancy between minority and white firms in local industry participation and in awards from city contracts. The Delaware Disparity Study, completed by the Metropolitan Wilmington Urban League in November of 2001, is a useful template for how to go about conducting a disparity study.  It includes discussion on the methodology of how to conduct the study, as well as illustrates how to translate disparity findings into policy recommendations.

Build on Federal Resources.   The federal government has a number of different programs designed to support small and minority businesses.  (See policy section.) Local efforts should make themselves aware of these programs and capitalize on them.  For example, local efforts to help minority firms become bonded can make use of the Small Business Administration's Office of Surety Guarantees. For qualified contractors, this program will guarantee a certain percentage of the bonding company's surety, making them more comfortable in offering bonds to smaller or newer contractors.  Federal incentives and federal databases of "disadvantaged businesses" can also be resources for local programs.

Look Beyond Construction. Although construction is a natural first step for many programs,it is also important to examine minority participation in professional services such as engineering or accounting.  Where disparity studies find under-representation in professional services, "minority business utilization plans" should establish goals for minority participation.  This has been successfully done on the Alameda Corridor project in Southern California.  The Alameda Corridor Transportation Authority created a 22 percent minority participation goal for professional services as well as construction and surpassed that goal by hiring firms of color on 29 percent of their professional service contracts (see Tool in Action section).

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