City sees rise in minority contracting

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But owners say access to financing remains the biggest roadblock.

Anne Field

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Article can be found at http://www.crainsnewyork.com/article20150.106/SMALLBIZ301049987/city-sees-risein-minoritycontracting

Angela Abrahams-Gibson worked hard to learn the ropes of winning city contracts at Abrahams Consulting, an IT services firm in Jamaica, Queens, that is also a hardware and software reseller. But now she is breathing a little easier, as a result of the de Blasio administrations steppedup focus on helping minority owned firms like hers bid on projects successfully.

She has noticed that navigating the citys bureaucracy has gotten speedier. “I see more accountability, because people know there’s a directive from above,” she said.

Ms. Abrahams-Gibson, whose firm is certified as a Minority and

Women Owned Business Enterprise, or MWBE, is among a number of entrepreneurs benefiting from the administrations Contractor Nayan Parikh says city officials offer speedier help push. The Department of Small Business Services recently these days.

announced that the city had awarded 690 million in prime and subcontracts to certified MWBEs in fiscal 2014, a 57% increase from the year before.

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“We have helped significantly increase the amount of contracts awarded to MWBEs in the past fiscal year,” said SBS Commissioner Maria Torres-Springer in an email.

To that end, SBS has added to existing training programs, such as an eight-month class on the basics of running a construction business, with other “capacity-building” workshops. For example, in 2015, it will offer a workshop for construction companies on how to get bonding.

There are still stumbling blocks for minority contractors, of course. Ms. Abrahams-Gibson, for one, said it can be hard to find a bank willing to give her a loan, because she keeps little inventory. That is despite her success in winning 1.1 million in 59 contracts from the city since getting certified as an MWBE with the city and state in 2011.

Most recently, in November, her profitable firm which she says has annual revenue in the 1 million to 3 million range won a 62,000-plus deal with the Department of Housing Preservation and Development to provide telecommunications software.

But Ms. Abrahams-Gibson also recently had to give up a 96,000-plus contract when a lender, included in a list of recommended institutions compiled by the city, ran out of money and wasn’t able to provide her with 100,000 she thought she could borrow. “The city is trying to help, but we still have to contend with heavy obstacles,” she said.

As a result of such challenges, only a small portion of the 17 billion the city spends on goods and services annually goes to minority and women owned enterprises, according to a recent report by Comptroller Scott M. Stringers office. To bridge the gap, a number of traditional lenders and Community Development Financial Institutions, or CDFls, which make loans in underserved markets, have heightened efforts to address financing obstacles.

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Take BOC Capital Corp, a non-profit CDFI and SBA microlender in Brooklyn. Last year, it launched a 3.5 million loan fund for community-based construction companies, capitalized by Goldman Sachs’ 10,000 Small Businesses program and the Surdna Foundation, a Manhattanbased nonprofit that works to build sustainable communities. “Theres a lot more focus on this issue, and I believe its starting to pay off,” said Nancy Carin, executive director at BOC Capital, which has been lending for more than a decade.

That money came in handy for Anderson Inniss, owner of Inniss Construction, a Hollis, Queensbased, six-employee general contractor that he says has revenue in the 1 million to 3 million range.

Still feeling the pinch from the economic downturn, the profitable company recently took out a 120,000 loan from BOC Capital. That funding allowed him to take on a 380,000 bathroom renovation project for SUNY Downstate Medical Center in Brooklyn. “This gave me money to get things off the ground,” said Mr. Inniss.

Some MWBE small-business owners also report they face fewer bureaucratic hassles getting paid.

In the past seven months or so, Nayan Parikh, founder and president of 15-employee Ashnu International, a Woodside, Queensbased general contractor, has won about 7 million in city contracts. If payment is delayed, Mr. Parikh said, he has

an easier time finding highlevel officials to help rustle up a check. “Im very encouraged,” said Mr. Parikh, who said his profitable company has revenue above 5 million. “This didn’t happen before.”

Entire contents ©2015 Crain Communications Inc.

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