An effort by a multi-ethnic coalition aiming to get a fair share of federal stimulus money being spent on construction projects in California will operate from a home base that reflects the diverse nature of the participants: The offices of a Latino-American business organization located in the Little Tokyo district of Downtown Los Angeles.
Representatives of the Latin Business Association (LBA) recently announced the formation of the "California Construction Task Force" with a stated aim of ensuring that small and minority-owned businesses get a fair opportunity to win contracts on jobs funded by the federal government's economic stimulus package and other projects.
"I have received numerous complaints in the last few months from LBA members saying they were 'aced' out of contracts at the last minute, or were paid so late they couldn't keep the contract," said Ruben Guerra, chairperson of the group. "We've always had concerns about construction contracts, but the problems are escalating due to the federal influx" of stimulus funds.
Joining the LBA on the task force are the California Small Business Association, the California Black Chamber of Commerce, the Asian Business Association of Los Angeles, the American Indian Chamber of Commerce of California, and the National Federation of Independent Business. The participants make up "a cross section of small business owners, corporate leaders, elected officials and lending institutions," according to the group.
Among the main goals of the task force, according to the representatives, will be efforts to establish oversight procedures to ensure that prime contractors implement a goal of awarding 25% of subcontracts to small businesses, with 15% of that total to go to minority-owned enterprises. Another goal of the task force will be to ensure that primary contractors pay subcontractors within 30 days of invoicing, according to representatives of the LBA.
"We will not allow the primary contractors to use the 'due diligence' excuse and claim they could not find minority subcontractors," Guerra said. "If they cannot find them, we'll do it for them. No more excuses. The economy is suffocating our small businesses, and we can't sit and watch the stimulus money pass us by."
LBA representatives said that a total of $7.3 billion in federal funds has been dedicated to the state of California for infrastructure stimulus money. California Governor Arnold Schwarzenegger has announced the first 57 projects in line to receive some of the money, totaling $625 million, they said. They added that $565 million of the funding is going toward the State Highway Operations and Protection Program for projects to improve highway safety, repair bridges, and complete various paving jobs.
LBA representatives said that the California Department of Transportation (CalTrans) is responsible for the bidding on most of those projects, but added that officials of the agency recently decided to no longer include Latino-American-owned businesses as part of its set-aside construction program.
That leaves a gap on the government side of the bidding process, according to LBA representatives, who said that they hope the newly formed task force can step in to apply pressure to primary contractors "in spreading some of that wealth to Latino-owned businesses."
Guerra said that plans call for the task force to share its findings with community groups, the media, and elected representatives in a bid to make life difficult for prime contractors who are not in compliance with the LBA's goals on small-business and minority-owned businesses.
Plans also call for the task force to work towards eliminating the practice of "contract bundling," which LBA representatives described as gathering numerous smaller contracts into a single deal and awarding the work to a large company.
Guerra said he would prefer that the state or federal government had an agency to serve as "Construction Czar" for projects and contracts related to the stimulus funds.
"But there isn't such an oversight position, requiring us to take the lead and address this important issue," Guerra said.
Visit www.lbausa.com on the Internet for more information about the organization and its California Construction Task Force.
Sam Hassan is a writer for the L.A. Garment & Citizen.
Graphic image from www.lbausa.com
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