Guest Commentator: Paul Mason, Principal, David Mason & Associates
How will upcoming infrastructure legislation impact Black and brown businesses in the architecture, engineering and construction industries?
Realistically, the short answer is probably “not much at all.”
That seems odd and counterintuitive given the scale of the proposed legislation – an estimated $1.2 trillion over the next 10 years. President Biden had asked for 20-percent of these funds to be targeted to minority- and woman-owned businesses; the Senate passed a bill that cut his request in half, setting aside 10-percent. Most of this work will go to subcontractors hired by the behemoths in construction and engineering, owned primarily by white men.
That notwithstanding, how could this not be a good thing specifically for Black and brown business owners?
Before I answer, let me admit to my significant bias. I am a principal in a minority-owned engineering firm that has been working on infrastructure-related projects for more than 30 years. I freely admit to self-interest, but that does not change what history has clearly demonstrated to minority-owned firms like ours.
It comes down to the federal rules that govern what is a Small Disadvantaged Business (SDB). The most experienced minority-owned contractors, engineers, and architects will be too big to be considered eligible as an SDB and too small to compete for the lion’s share of the rebuilding projects.
Consider this: the combined gross annual revenues for the three largest construction firms in the US will exceed $40 billion this year. Cynically, these huge firms do not do business with minority- or woman-owned firms unless they get credit for working with a federally certified SDB. So, a minority-owned construction firm with significant infrastructure experience that grosses more than $39.5 million a year would be disqualified as a potential subcontractor because the rules say it is too large to be an SDB.
And there is more… Black and brown (and women) firm owners who have a net worth exceeding $1.2 million are also excluded from the SDB designation. An entire cohort of highly experienced architecture, engineering, and construction firms, and the professionals they employ, will be shut out.
Why would American taxpayers, eager to see our country’s infrastructure rebuilt, hire the biggest and best firms owned by white males, while intentionally excluding the largest and most experienced firms owned by minorities and women?
In Pennsylvania alone, there are nearly 4,000 bridges considered to be structurally deficient, and nearly 12,000 bridges in need of repairs totaling an estimated $12 billion. Who will do that work? Who will benefit from those jobs? What companies will grow to a more competitive scale after a decade of rebuilding?
I hope to be proven wrong, but I am guessing it will be the usual suspects.
Through Recharge & Recover PHL, the Chamber is working with our members to make Greater Philadelphia a place known for investing in and growing small small, Black-, and brown-owned businesses.
This objective is part of five aspirations of Recharge & Recover PHL with the aim to support not only Greater Philadelphia’s recovery but to also provide a means to differentiate our region for decades to come.
Paul Mason, is absolutely on point in his observations. Most importantly, the flawed mandate of disqualifying the largest most qualified and most influential minority owned businesses has been a problem for decades of these well intentioned programs. Legislaltoors need to re-think that the small business focus is only a portion of the “fix”. One issue he failed to mention was that even if the original contracts are awarded to the small minority businesses, when their “success ” allows them to grow into larger, higher employment and influential businesses, they lose future opportunities because of their success. (as he mentioned relative to is own organization). This would seem to be an easy, non controversial, and logical fix by our legislators. But, somehow never seems to click.. How can we move this along?