JP Observer: JPNDC Program for Small Contractors Left out of the Boom Deserves a Boost

By Sandra Storey/Special to the Gazette

Boston is experiencing an incredible building surge right now. Evidence abounds right here in Jamaica Plain. Contractors with a range of skills are much in demand. Unfortunately, construction-related companies owned by people of color and women are struggling to benefit from the boom.

Although the picture has been grim for small minority and women-owned contractors up until recently, Jamaica Plain Neighborhood Development Corporation (JPNDC ) is trying to do something about it through its fledgling Small Contractors Success Initiative (SCSI). Things have gradually been looking up since it was established in the second half of 2016. But there is much more to be done.

According to JPNDC Fundraising and Communications Director Sally Swenson, “Among some 1,100 black or Latino-owned construction firms in Suffolk County, only 56 have paid employees. And, though those firms make up 27 percent of contractors in Boston, their sales and receipts add up to only 2 percent of those of white-owned firms,” she wrote.

“Less than 1 percent of the $664 million Boston awarded last year for contracts for construction and professional goods and services went to minority or women owned businesses,” according to an article in the Boston Globe on May 2.

SCSI is overseen by Director of Small Business Services at JPNDC Carlos Espinoza-Toro. “We are the one answer to the less than 1 percent women and people of color as Boston construction contractors,” he said in an interview earlier this month.

JPNDC became keenly aware of the needs of minority and women contractors in 2013 when it joined five other community development corporations (CDCs) and the Mass. Minority Contractors Association to ensure that 30 percent of contracting jobs on 11 CDC projects would go to minorities, according to Swenson.

JPNDC exceeded the goal (90 percent and 71 percent) on two of their projects but learned a lot from the experience, according to Swenson. They learned that “CDC projects alone cannot make a dent” in the need for work for people of color and women contractors.

Most important, they realized that “most minority-owned firms are not positioned to secure good contracts.”

Given JPNDC’s already strong Small Business Services office and its network of contractors, the local CDC decided to create a program to alleviate the dearth of contracts obtained by Boston minority and women contractors.

Certainly, Swenson wrote, “discrimination against minority and women-owned enterprises exists in all procurement categories,” as documented by the Commonwealth of Massachusetts.

But, after doing research, the JPNDC realized that practical steps need to be taken to support the small contractors who were sturggling practicalities, including: informal, inconsistent business practices, especially in all aspects of money management and record keeping; credit issues and lack of working capital; expensive insurance; and lack of access to critical networks, including lists of approved vendors maintained by large management companies.

SCSI offers training and support to women and minority owned construction companies in Boston that have been operating at least two years, have annual revenue between $50,000 and $1 million and between one and five full-time employees. The value of their largest completed job need to be less than $1 million.

In a recent presentation to John Barros, Mayor Marty Walsh’s Chief of Economic Development, JPNDC staff said they outlined how SCSI is addressing the minority contractors’ needs with education and training. The JPCDC is looking to get city support, resources and connections to expand its program, according to Espinoza-Toro and Swenson.

In a combination of group sessions and one-on-one conversations with mentors and experts the small contractors get to learn specific business skills, address and improve practices from office and time management to bookkeeping and marketing. They can learn about vendor certification processes and how to do estimates and bids, among other skills. Meanwhile, they can contact mentors for advice and support.

SCSI is funded by the Commonwealth of Massachusetts Small Business Technical Assistance Grant Program, whose funds come up every year in the budget. Income from the Brewery, which JPNDC owns, also goes toward economic prosperity programs. Targeted funding has come from the Boston Foundation and Mass Housing Investment Corporation.

So far, 13 contractors have participated in the program, getting help from three mentors and five experts. Those small construction businesses have achieved more than 33 new contracts and earned $2 million from them, according the JPNDC reports.  Quite a success!

“We want the program to grow and spread,” Espinoza-Toro said. “We want to scale up in terms of ownership of firms and capacity… we are building momentum right now.”

The SCSI goal is to build program capacity and access $9 million in new contracts in Boston over the next three years, according to their report to Barros.

Support, including from the City of Boston and others, is needed to do that.

Given the continued lack of construction contracts being given to the many companies owned women and people of color in Boston, Espinoza-Toro said, the program, which has shown some success already “has nowhere to go but up.”

The Boston community deserves to benefit from the development boom. SCSI and Boston’s small construction companies owned by women and people of color deserve a training boost to achieve that.

For more information about SCSI, see https://jpndc.org/small-contractors-success-initiative/. For information about Small Business Services overall see https://jpndc.org/smallbusiness/. For information about either, people may also call Espinoza-Toro at 617-522-2424 ext. 226.

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