Leading Question

By Lori Johnston February 1, 2011

Minority Report

Yes, but it’s not a slam dunk.

Minority Business Enterprise (MBE) is an official designation conferred by the U.S. Department of Commerce for businesses that have 51 percent or greater ownership by minorities. Becoming a certified MBE can help minority business owners start and grow their businesses, especially by allowing them to win public contracts.

But an often overwhelming amount of paperwork, competition and financial obstacles can keep public contracts from becoming reality.

“I’d always like more,” says Marla Hough, owner of Bradenton-based Hough Engineering. “I’ve gotten some, but there’s a lot of competition.”

The state of Florida spent $1.35 billion with minority-owned vendors during fiscal year 2008-2009, according to the Department of Management Services Office of Supplier Diversity.

“When the stimulus money first came out two years ago and people realized that federal dollars would be coming down through the state, I had a ton of women and minorities come in to me to help them get certified,” says Carolyn Griffin, assistant director of the Sarasota Small Business Development Center at State College of Florida Manatee-Sarasota.

Nearly 5,000 companies hold the Minority Business Enterprise certification in Florida, with 98 in Sarasota County and 67 in Manatee County. Construction industry firms are well represented in the region, with 27 in Sarasota and 32 in Manatee.

Women who own businesses are also eligible to become MBE certified. In fiscal year 2008, about $14 billion out of a total of $434 billion in federal procurement dollars went to women-owned small businesses that obtained certification, according to the National Women’s Business Council. Women-owned small businesses took in 3.4 percent of the overall share of dollars spent, the same as the two previous years.

But it’s not an entitlement.

“It’s not a silver bullet. It’s like anything else. It’s relationships,” Hough says.

In fact, small minority-owned businesses often are competing against established larger companies with the financial resources to win the contracts. Griffin says her message is that most little guys can’t compete with the big guys, but they can partner with them as subcontractors on public projects.

“Have I seen contractors reach out to minority owners? Absolutely,” she says. “But in terms of a small business getting a contract on their own, there are definitely some challenges.”

When Shelley R. Lister became sole owner of Sarasota-based Abitar Contract Furnishings in 2009, she decided to pursue the Minority Business Enterprise certification because of the opportunity to diversify into the public sector.

“It has not been as lucrative as I had hoped,” she says.

Lister expected to receive frequent bid opportunities, which hasn’t happened. When there is one, her company is unable to meet the criteria, particularly related to bonding and insurance.

“So it’s easier and makes more sense for us to go through a contractor,” she says.

Hough’s ability to win contracts has been tied to connections in the community. She was already certified as a Minority Business Enterprise when a surveyor referred her for a job for the U.S. Army Reserve.

More work for the U.S. Army Reserve, in addition to contracts with the city of Sarasota and being a subcontractor for a Sarasota County project, contributed to 62 percent of her 2010 revenue, the highest public portion in Hough Engineering’s 14-year history.

“Once you get your foot in the door, they see that you do what they need you to do and you’re responsive. Then you just get repeat business,” Hough says.

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