Objective 1: Work to develop policy and/or programmatic responses to better meet the access to capital needs on the part of minority and women businesses
Access to capital continues to be a major challenge to small businesses, in particular minority, women and disadvantaged business enterprises. The lack of access can be particularly counterproductive where the federal DBE program and the state MBE/WBE program encourages participation of DBE, MBE and WBE contracting firms on public construction projects. To meet this specific need in the public marketplace, the Office of Access and Opportunity will develop a Short-Term Loan Program. The purpose of the Short-Term Loan Program will be to provide MBEs, WBEs and DBEs, who have subcontracts on public construction contracts, access to working capital via a line of credit. The line of credit will be collateralized by the value of the subcontract.
Additionally, the Office of Access and Opportunity will work with the Massachusetts Supplier Diversity Office, the Office of Small Business and Entrepreneurship and the Small Business Administration to understand how current federally-guaranteed loan programs may not be meeting the needs of minority- and women-owned businesses. The purpose will be to improve stakeholder understanding of these federally-guaranteed programs as well as to improve access to and participation in these programs.
Objective 2: Bring forward recommendations to the Secretary of Transportation to address prompt payment and retainage issues vis-à-vis subcontractors
Timely payment for services rendered is important to all businesses; it is critically important to M/W/DBE firms who tend to be smaller and who operate on thinner cash flow margins. Anecdotal information has identified instances where the general contractor has failed to remit payment to the subcontractor in a timely manner even where the general contractor has received payment from a public agency. Whether contract payment is delayed from the public agency to the general contractor or from the general contractor to a subcontractor, delays in payment can be crippling to small, minority and women subcontractors.
Retainage, in industry parlance, is a percentage of the total bid, which a contractor (or subcontractor) pays upon submitting a bid for work. It is considered insurance, and a "good faith" tool; a way for public agencies to assure that contractors have fulfilled their obligations under the terms of the public construction contract. While retainage tends to be a relative small component of the overall contract, for small, minority and women contractors, retainage can often represent the profit these contractors expect to earn via their participation. If retainage is released slowly, profits can be minimized or lost altogether.
The Office of Access and Opportunity has been working with the Massachusetts Department of Transportation and its constituency divisions to form a Subcontractor Payment Working Group to look at issues of prompt payment and retainage. The Working Group will submit its recommendations to the Secretary of Transportation in August 2010.
Objective 3: Improve effective implementation of and fidelity to Executive Order 390 or its successor Executive Order by working to ensure broader access to contract opportunities on the part of MBE and WBE firms on statewide and agency contracts
The Office of Access and Opportunity will use its authority under Executive Order 519 to continue to push for policy and program changes to mitigate barriers to effective MBE and WBE participation on state and agency contracts. Specifically, the Office of Access and Opportunity will:
Work with the Operational Services Division, the Supplier Diversity Office and state procurement personnel to ensure that agencies are looking at the skills and business experience when evaluating firms and not placing undue weight on past experience, or the lack thereof, with the procuring agency to determine who is selected to perform on a contract;
Develop legislation to expand the goals of access and opportunity and the inclusion of minority business enterprises and women business enterprises access to public institutions that receive funding from the state; and
Work with the Massachusetts Supplier Diversity Office (SDO) and state agencies, in particular the Department of Housing and Community Development (DHCD) to identify ways to continue to provide information on state agency contracting opportunities and how businesses can connect to them.
Objective 4: Work to bring forward a comprehensive program of technical assistance, capacity building and educational services to meet the needs of MBE and WBE firms
At the Massachusetts Supplier Diversity Summit, minority and women businesses expressed a need for a variety of technical assistance and business development services. It is not clear that the range of available services is widely known to the summit attendees. The Office of Access and Opportunity will work to bring forward additional services to meet the needs of MBE and WBE businesses. Specifically, the Office of Access and Opportunity will:
Work with OSBE, SDO and MSBDC Network to identify any gaps in technical assistance / business development services delivery and to develop strategies to close the gaps; and
Work with ANF and MASSDOT to develop and implement an on-going technical assistance / capacity building program targeted to M/WBE contractor firms.