Not enough underprivileged business owners sign up for a program providing federal money from cities and other organizations for construction work, services and supplies, said Joel Gardner, Ozark Regional Transit executive director.
"A lot of companies are (disadvantaged), but get scared of filling out the paperwork because it's so invasive," Gardner said.
At A Glance
What Is It?
The Department of Transportation’s Disadvantaged Business Enterprise program provides a way for increasing participation by minority business enterprise in state and local procurement. The program requires state and local transportation agencies that receive department financial assistance to have goals for the participation of disadvantaged businesses. Each department-assisted state and local transportation agency must establish yearly goals, and review the scopes of anticipated large prime contracts throughout the year and establish contract-specific subcontracting goals. The three major transportation operating administrations involved in the program are: the Federal Highway Administration, the Federal Aviation Administration and the Federal Transit Administration.
Source: Staff Report
The federal program, called the Disadvantaged Business Enterprise, is through the Department of Transportation. The program helps businesses whose owners considered "disadvantaged" -- that includes women and minorities. The program allows the businesses to get federal grant money used by cities and others for construction projects and day-to-day needs.
The transit, for example, must try to use certified disadvantaged businesses for products or services where more than $250,000 of federal Transportation Department money is spent, Gardner said. Most of the $1 million-plus the transit receives is spent on salaries, benefits and worker's compensation. The transit spends more money provided from cities on other items, including vehicle parts, Gardner said. Some of those parts would be covered under the program, if the transit could find a certified business.
Finding a certified business is easier said than done, Gardner said. When the transit recently needed office supplies, it first sought a disadvantaged business, but the business was 45 minutes away, didn't deliver and was pricier than others, Gardner said.
The transit hired no businesses certified as disadvantaged last year and has hired none so far this year, Gardner said.
Partly, that's because the bus system doesn't handle major construction projects -- such as roads, he said.
"The awards and commitments for (fiscal) 2013 were crippled by unavailability of vendors and no construction projects scheduled for the year," according to a shortfall analysis and action plan from Ozark Regional Transit to the Transportation Department.
Federal transportation officials recently questioned why Northwest Arkansas' regional bus system hadn't met its 0.27 percent total Disadvantage Business Enterprise goal in fiscal 2013. The problem is listed as a "deficiency" in the fiscal 2014 Triennial Review by the Transportation Department.
"We know it's really very difficult for us to really hit that goal because of the lack of DBEs in the certification process," Gardner said.
'Not Real Easy'
Signing up to be a certified disadvantaged business isn't easy, said Shelli McDaniel, owner of Center Point Contractors in Bentonville.
"They want a lot of stuff," McDaniel said. "It's a huge pile of paper you put together and send in. It's not real easy."
It took McDaniel about two days to get the paperwork together, she said. She needed years worth of bank statements, tax records, loans and obligations, financial statements -- even information about how much the furniture in her home is worth.
A state Highway Department report shows Arkansas had about 211 businesses certified in the program in 2013. A state list online showed only a handful of businesses from Benton and Washington counties.
Center Point Contractors has been on the state Disadvantaged Business Enterprise list for three years, but McDaniel isn't sure she will qualify next year.
"There's not as many DBEs out there," McDaniel said.
All the work McDaniel did to get registered with the state has paid off though, McDaniel said. She believes the program has helped her land jobs. That includes earning contracts for building fences and handrails for the Northwest Arkansas Razorback Regional Greenway, a massive trail project under way from Fayetteville to Bella Vista. Being on the disadvantage list, means she competes with about four companies for a project instead of 10 or more, she said.
Representatives from the federal Transportation Department and the Arkansas Highway Department didn't return messages left at offices handling the program Friday.
Solving The Problem
Ozark Regional Transit will roll out a program next year to recruit and help register businesses for the program, Gardner said. That should help the transit meet its goals, too, he said.
"I think it's a good program to help build these businesses," Gardner said about the program for disadvantaged businesses.
An Ozark Regional Transit employee will be trained on the program and tasked with going out and helping companies that qualify to apply, Gardner said. The transportation system plans to contact eligible vendors to encourage them to participate in the construction of a new bus wash this year, according to the transit's analysis.
The ideas were well-received during an August board meeting. Board members said their cities would try to help by providing a list of businesses they use. Hiring disadvantaged businesses helps local businesses and communities, said Lori Ericson, Rogers assistant city planner and transit board member.
Ozark Regional Transit is at a disadvantage because it's using services on a yearly basis, not just on massive projects every few years, said Wyman Morgan, director of financial and administrative services in Springdale.
Springdale only uses the program for large projects about every two or three years, and is using the program for a $900,000 airport project, Morgan said.
Springdale meets its goals by buying building materials and contracts for subcontractors and electricians, for example. Ozark Regional Transit may need to reach out to businesses about its needs, Morgan said.
"It would probably help if there were a push to get information out," Morgan said. "It definitely needs to happen."
NW News on 08/31/2014