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IN BUSINESS | Vol. 8, No. 13, April 3, 2008
(Whatever Happened To...)

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Left Behind?

by Jennifer Waters

Minority-owned Firms Earn $122,543 of $8.4 Million in City Contracts

African-American business co-owner Lumon May of May's Construction doesn't care for the terms "preferential treatment" or "affirmative action."

"I hate to see anybody on the outside," May says.

The state-certified general contractor helps head the Pensacola family business his father ran for 52 years.

May also roots for "local, small disadvantaged businesses," he says.

And the contractor is not alone.

During recent months, a number of other minority and women-owned business owners have voiced concerns about City of Pensacola officials unfairly awarding contracts.

"People have been systematically excluded," May says. "The whole process has to be reexamined"

In the past, the State of Florida used a 15 percent "set aside" program for minority and female-owned businesses.

Now, Pensacola has a Small Business Enterprise, or SBE, program instead of a Women Business Enterprise, WBE, or Minority Business Enterprise, MBE, which other cities utilize.

In Pensacola in 2007, out of $8.4 million in SBE funds, $122,543 went to local African-American business owners, and nearly $2 million was awarded to area women-owned businesses, according to a city memo from purchasing manager George Maiberger to city manager Tom Bonfield.

If the City Council wishes to adopt a MBE program with race-specific criteria, the City Attorney's office wrote in a Dec. 10, 2007, report, "it is incumbent upon the city to prove that it has itself intentionally discriminated over the past few years in the acquisition of goods and services"

Because of the niche Mays' father created for May's Construction locally, the family business hasn't had to rely on city bids, the contractor says.

But someone like Michael Allen of Michael Allen Electrical Contractors, which has six employees, needs the city business.

Allen recently attended one of the city's new workshops on the SBE, through which he is bidding on an electrical services contract with the city.

As a businessman, Allen weighs the time he spends bidding on a project and his chances of winning with the money he could earn instead doing small residential jobs.

Allen doesn't know about the legal ramifications of a MBE in Pensacola. He does know the SBE, which includes all businesses with fewer than 50 employees, is "a whole lot of people. Some kind of MBE certification would help a lot," Allen says.

The Pensacola code states the city's policy is to ensure that all segments of the community have an effective opportunity to participate in the SBE program.

But how that is mandated or enforced is unclear.

According to the city's purchasing office, about 280 organizations participate in the SBE program.

The Pensacola code requires the city manager to submit to the City Council quarterly reports on the operation and effectiveness of the SBE, with information on rates of participation by minority and women-owned enterprises.

The SBE participation rate was the exact same, at 8.8 percent, in 2007 and 2000, according to the Maiberger memo, which notes the small business goal for construction projects "is usually 5 to 10 percent." The rate increased to 11.1 percent in 2001, and decreased to 2.5 percent in 2004 and 2005.

"(An MBE) would give you more of an opportunity to get your foot in the door, at least," Allen says. "You can never prove yourself to these prime contractors" if you can't get the jobs, he adds.

City officials cite two challenges that have hindered business dealings with minority and female business owners, according to the Maiberger memo. One is finding the firms, and two is creating an environment where the businesses are comfortable seeking and responding to city business opportunities.

Pensacola officials plan to have the Tallahassee company MGT of America conduct a $50,000 study to review and make recommendations on the SBE program.

Meanwhile, local contractors who are certified wonder how the city staff cannot find them when they received their certifications through local and state governments.

By contrast, the City of Orlando, which does have a MBE program, mandates that 18 percent of the annual monetary value of contract and subcontracts be awarded to MBEs that meet contract specifications.

"All other factors being equal, preference shall be given to minority business enterprises located in Orange County," the local area, Orlando's code states.

In addition, a compliance official appointed by the city's mayor is tasked with monitoring adherence of the code.

The 18-percent rate of participation will also apply to minority and women-owned business owners who bid on contracts for the city's new $380 million Events Center.

Orlando Magic basketball games will be played at the center, which is scheduled to open in 2010.

"The (Orlando Magic) team is committed to creating a program that is designed to educate, develop, and economically empower MBEs and WBEs," according to Magic Chief Operating Officer Alex Martins.

In Pensacola, the Community Maritime Park Associates board of trustees is establishing a Contractor Academy to promote inclusion and diversity.

The academy will help small and minority contractors who don't have licensure or bonding be able to bid on a government project like the Maritime Park, says Ed Spears, the city's neighborhood and economic development administrator.

"Whether you're the best mason or not, you simply cannot bid on the project" if you don't meet those necessary requirements, Spears adds.

When May learned how little of the $8.4 million in SBE funds was awarded to African-American contractors in 2007, he says: "I think that public dollars should be equally distributed among all the citizens.

"We're not really contractors," May says. "We're really guys that have to work other jobs to maintain."