The City of Houston is growing and growing fast. In fact, the entire four county area around Houston is growing at twice the rate of the average growth rate in the US. Growth is good! As they say, “If your not growing your dying”. With this tremendous growth comes many great things including higher property values, more prosperity for all in the area and more infrastructure such as highways, bridges, schools and hospitals.
The bad news is that many of these government funded projects have requirements that mandate certified, MWBE Texas contractors or WBE contractors or DBE contractors compete and bid for the planning, designing and building of these municipal works endeavors. With so much growth and so many projects at the Federal, State and local levels, general contractors that are qualified to do the work, are in short supply or have very long lead times. To make matters worse, MWBE contractors, WBE contractors, DBE contractors and SBE contractors are feeling pressure also. So much so that at times they have to pass on jobs or not bid jobs because of the lack of follow up they will be able to provide.
According to DLB Industries, a certified, Texas WBE & DBE materials procurement specialist company, “many large projects come with mandated, set aside goals for HUB and other WBE, DBE, SBE certified contractors that cannot be met.” Recent projects out for bid such as convention centers, airport terminal expansions, hospitals, bridges and schools have large set aside requirements that will be very hard, if not, imposible to reach. General Contractors spend a tremendous amount of time, energy and money on trying to find qualified sub contractors that can satisfy not only the scope of work but also get, keep and maintain their WBE or SBE certifications throughout a project. DLB says that ” a WBE or similar sub contractor losing their certification during a project is an absolute disaster and so, large Gernal Contractors are very cautious when vetting companies to fullfill set aside goals to try and avoid the extreme confusion, loss of time, loss of money, penalites and overall loss of continuity when an WBE or SBE sub cannot perform. ”
The City of Houston is struggling with this very issue currently. The $9.7 billion North Houston Highway project, the I-10 White Oak Bayou, The LBJ Hospital, the Bush Airport Expansion and the George R Brown Convention Center addition are just a few of the projects containing large set aside goals for DBE, WBE and SBE sub contractors, at the same time. So, with talent spread very thin, General Contractors are having to implement creative and expensive teams to find, nurture and retain qualified sub contractors. This process can take many months to yield a potential candidate and even then does not ensure that the sub contractor keeps their certifications updated and stays in buisness untill the close of the project.
Set aside goals are here to stay and become more complex everyday. Most large cities have their own DBE type departments which establish the guidlines and protocols for their, specific city. These protocols may vary significantly from city to city and may change often. General Contractors must take this into account when bidding and performing work under specific city guidlines. For example, the City of Houston has established the Office of Business Opportunity, which is a well organized department established to help and outline for small businesses some of the efficient ways to participate in City of Houston, State of Texas and Federal jobs.
The City of Austin has a similar Department called the office of Small and Minority Business Resources, whose function is similar to that of Houston’s yet contains various concepts and requirements that differ slightly. A general contractor must know or at least be aware of these subtle yet important differences when bidding jobs in each, unique market. Specialty contractors including material procurement firms exist to help contractors with these needs. As the Texas market, population and need for public works projects increases, the need for qualified, certified sub contractors to help Prime Contractors reach set aside goals will only increase. For more information about DBE, WBE, HUB and SBE certifications feel frer to call DLB Industries at (512)-637-4229 or their Houston office at (281) 231-8133.
