Historically, small and diverse businesses and contractors looking to secure infrastructure contracts have experienced several challenges, mainly due to limited access to capital, bonding and training on overall business development.
With California expected to receive billions of federal dollars over the next few years to support infrastructure projects, these types of businesses will benefit from a current program in the Los Angeles metro region that aims to level the playing field in landing contracts.
“These small contractors encounter a lot of our official barriers that are not reflective of their true capacity to perform,” said Ingrid Merriwether, president and CEO of Merriwether & Williams Insurance Services (MWIS), which is administering the Contractor Development and Bonding Program (CDABP).
To help reduce these barriers, the City of Los Angeles, Los Angeles County Metropolitan Transportation Authority (Metro) and the County of Los Angeles worked together to develop the CDABP.
Infrastructure projects—including transportation, power, broadband and other utilities—not only support growth and the flow of information and people, but are powerful economic drivers and job creators in their own right.
Public agencies select from an array of contractors when undertaking infrastructure projects. Local jurisdictions can help ensure equal access to these funding opportunities and support more competitive bidding processes through programs that offer targeted support for diverse small businesses and contractors, such as the CDABP.
The program is a collaborative effort that provides contract financing, bonding and technical support, education and training for under-represented businesses. Program services are sponsored by a public agency and at no charge to participants. MWIS is responsible for the delivery of resources to businesses enrolled in CDABP and for ensuring participants have all the tools necessary to qualify, apply and execute a contract.
Merriwether shared that public agencies’ need for robust risk mitigation when deploying public funds can unintentionally screen out small and diverse firms. “The expression of risk management is in ways of insurance and bonding requirements that for these firms was harder for them to attain, more costly and harder for them to qualify for,” said Merriwether.
The CDABP maintains risk management protocols in a way that creates access to contracting opportunities and inclusion of small and diverse contractors in public construction.
Extending beyond just the CDABP program, Merriwether noted that in her firm’s more than 25 years of supporting close to 1,200 firms accessing bonding to execute contracts, only two have failed to complete their contracts, representing a loss ratio of under 1% (compared to the industry loss ratio of 20%).
“With the right supportive services, [small and diverse] contractors have the qualifications, have the aptitude, and moreover the attitude when they are awarded a contract to perform the contract successfully through completion,” said Merriwether.
Ingrid Merriwether will be a featured speaker during CA FWD’s Entrepreneurship and Small Business Ownership by People of Color working session at the California Economic Summit. Learn more about the 2022 California Economic Summit happening on October 27-28 in Bakersfield. The agenda includes working sessions, regional tours, lively receptions and more. Join us to help shape recommendations for shared prosperity for all regions.