Local Government Tools

Historically Underutilized Businesss
Program Boosts Struggling Area

Velma Laws loves to talk success stories.

Laws, Houston’s director of affirmative action and contract compliance, swells with pride when she tells of small minority and woman-owned businesses that have gone from struggling to stay afloat to bidding on – and winning – major city contracts.

“There was one company, a second-generation moving and storage business located in the heart of the minority community,” Laws says. “They actually win bids. When our office moved, they won the bid to move us.”

A Historically Underutilized Business (HUB) program focuses on fostering this type of successful economic progress among businesses that have potential to grow, says Laws.

Getting Started

Implementing a HUB program is simple, Laws says.

The first step is a “disparity study,” which compares the number of HUBs participating in the bidding process with the number of non-HUB bidders. Another option could be developing a race-neutral program aimed at all economically disadvantaged-owned local or small businesses.

The local government then must pass an ordinance to establish the HUB program and goals that local contractors would be encouraged to meet.

Education is vital. Houston city government partners with the Houston Public Library to conduct free workshops that teach grant writing, construction management, advertising and marketing and city business practices. Laws’ department also sponsors a mentor-protégé program, in which an accomplished business shows the ropes to an aspiring one.

“It’s particularly special when it’s one MWDBE (Minority-, Woman- or Disadvantaged-owned Business Enterprise) giving back to another,” she says. “It’s important when someone achieves success to give back.”

The Pay Off

Seven years ago, Rolando Briones’ firm was a one-man operation. Now his Briones Consulting and Engineering Ltd. employs 20 people in three cities.

“We’ve been able to market ourselves to big consulting and construction companies and offer our services to doors we never would have been able to get behind,” Briones says. “This program is a stepping stone that has ensured success.”

Briones said landing the certification as a minority-owned business in 2002 gave him an opportunity to help prime contractors meet goals of using MWDBEs as sub contractors.
“The biggest thing was having that piece of paper,” he says. “It helped us tell (prime contractors) ‘we can help you meet your goals.’ They used us, we proved ourselves and then they kept using us.”

Law said some of the benefits of implementing a HUB program in a small or big city include:

  • Increasing the tax base within a population segment or neighborhood that may not have benefited before.
  • Helping small contracting firms to grow using newly learned entrepreneurial skills to succeed.
  • Fueling competition with the growth of new business, which could lower costs for taxpayers.
  • Providing jobs as certified firms grow.

“It opens doors to businesses that don’t normally have an entry to government contracts,” Laws says. “As a result of this program, a relationship develops that extends beyond the realm of city contracts. They’ve found a partner they can rely on.”

Getting HUBs Involved

There are several keys to getting more HUBs involved in the bid process. Velma Laws, director of affirmative action and contract compliance for Houston, and Ade Williams, director of business development and procurement services for Dallas, offer these suggestions:

  • Inform stakeholders from the city/county departments and contracting communities about the program.
  • Hold workshops to give HUBs an idea of upcoming jobs 90 days before the bid process opens.
  • Conduct a Disparity Study to determine the need or develop a race-neutral program aimed specifically at small businesses and/or local businesses.
  • Pass a city/county ordinance to create a HUB office and a HUB program.
  • Establish goals.
  • Create program policies and procedures.
  • Educate staff about the programs.
  • Educate the vendors and the public.
  • Encourage nearby chambers of commerce to use data reporting low numbers of HUBs bidding on specific contracts to attract new minority- and woman-owned businesses in those areas.
  • Urge HUBs that otherwise can’t fulfill bid requirements to partner with other HUBs and non-HUBs to create a conglomerate that can make a viable bid.