Warren Bolton

Bolton: Will small and minority businesses benefit from Richland County’s mammoth building program?

. kkfoster@thestate.com

WHEN RICHLAND County leaders urged voters to approve a transportation sales tax in 2012, one selling point was that they would keep as much money as possible in the local economy.

That included a pledge to help small, women- and minority-owned businesses benefit from the hundreds of millions of dollars in public government work paid for by the penny-on-the-dollar tax. Most of that money — roughly $769 million — is to be spent on improving roads, bike paths, sidewalks and other projects; another $300 million will support the public bus system.

With that kind of money flowing through the county, you’d think that new small businesses would spring up and existing ones would stabilize and grow. But if the way the first major construction contract turned out is any indication, small businesses might not get nearly as much work as anticipated.

When bids initially came before County Council for the Greene Street construction project connecting USC’s Innovista to the riverfront, some members were shocked that LAD Corp., the lowest bidder, included a participation level of only 1.1 percent for a disadvantaged or small local business enterprise.

The council refused to vote on the matter until staff negotiated a higher participation rate, something the company had said it could achieve without increasing its $14.1 million bid. When the contract came back before the council, the rate had been increased to 11.1 percent; that still wasn’t acceptable for some, but a majority on the council approved the pact.

Even so, the contract as well as county staff’s struggles to certify and engage small and women- and minority-owned businesses in the process raises questions about whether Richland officials will be able to deliver on the promise to give local firms a real opportunity to land work.

Councilman Kelvin Washington was incensed by how the Greene Street contract was initially structured. It was unacceptable for staff “to bring that before us with a 1.1 percent set aside,” he told me.

“My frustration was more that staff across the board hasn’t bought into the program,” he said. “All departments need to understand how this is critical to the county.”

To the disappointment of some council members, staff, particularly the fledgling Office of Small Business Opportunity, has been slow in identifying and certifying small and women- and minority-owned businesses able to participate.

Meanwhile, several other large projects are expected to begin this year. Nearly $450 million is expected to be spent over the next five years.

“These companies are going to miss out,” Mr. Washington said.

He said the effort to certify small businesses, put a tracking system into place and implement efforts to aid local businesses is lacking. “All of that framework should have been put into place,” he said. “We had talked about this over a year and a half ago.”

Mr. Washington said that when he worked at the state Department of Transportation he saw how small and minority businesses struggle to get government work. “I’ve seen how large firms come in and swallow up the dollars and leave these small firms out in the cold,” he said.

Councilman Washington doesn’t intend to allow that to happen in Richland County. “I will fight for that to not take place,” he said.

If the council itself doesn’t clearly assert its commitment to giving smaller businesses the opportunity to participate, staff members and large contractors aren’t going to either. Frankly, if someone doesn’t take this on and champion it, we’re likely to see other contracts with a proposed participation rate of 1.1 percent for small and minority-owned businesses.

That’s something Mr. Washington is aware of. “We’ve got to be advocates for these small businesses,” he said.

County Council Chairman Torrey Rush said he too wants to make sure small businesses benefit from the mammoth construction program. He said he’s been a small-business owner trying to do business with government, and it isn’t easy.

He said he recently ran into a small-business owner who does concrete work who hadn’t sought to be certified for possible work with the county. The businessman told him he hadn’t taken the time to sign up because he didn’t think it would lead to anything.

“I’m saying, no, this is real,” Mr. Rush said. “These are real opportunities. These are real dollars that are on the street today that people can benefit from.”

“If we’re putting projects on the street and we don’t have people signed up to do the work, that’s a moot point,” he said. “We’re not getting people signed up, and we’re not getting them jobs.”

If that’s not happening, then the county’s not living up to the promise it made. Fortunately, there is still time. The question is whether the county will do what it takes to get folks the opportunity.

I don’t know what the level of participation should be on any given job, be it a major road widening or a greenway project. What I do know is that 1.1 percent isn’t going to cut it, and 11.1 percent is merely a starting place.

When you consider the demographics of Richland County, it’s a reasonable and proper goal to ensure that small and women- and minority-owned businesses get a piece of the pie. Richland officials should feel compelled to make a good-faith effort to ensure that all local businesses have an equal opportunity to participate in the government’s procurement process.

Let’s face it. Historically, women- and black-owned companies have struggled to get public work. Minority businesses were locked out because of racism and other historical factors. Because of that, many have been unable to build the wealth, capacity and know-how needed to compete.

The idea isn’t to choose local or minority companies for the sake of it. They must be able to do whatever job they’re contracted to do adequately and at a reasonably good price to taxpayers.

Federal regulations don’t allow set-asides or mandates. But the council can take proactive steps to make its procurement process more inclusive, from identifying qualified companies to helping guide businesses through the process to breaking projects down into smaller pieces to allow them to compete. The county also must establish a tracking system that identifies small and women- and minority-owned companies as well as the amounts of their contracts. That information should be published regularly.

That’s the direction County Council wants to go in. It has directed staff to explore plans for the continued development of the Office Of Small Business Opportunity and the small and local business opportunity enterprise program. Plans could include help with bonding and insurance issues as well helping small businesses get paid quicker to aid cash flow as well as cutting big projects into smaller pieces.

It’s not going to be easy to level the playing field. But it’s the right and noble thing to do. And our community will be the big beneficiary.

Reach Mr. Bolton at (803) 771-8631 or wbolton@thestate.com.