For years, Guilford County has had very low participation rates of minority and women-owned business enterprises (MWBE) for major construction and repair projects.
At the Guilford County Board of Commissioners Thursday, July 16 meeting, Guilford County MWBE Director Cynthia Barnes-Phipps announced a new program that staff has been working on to increase those numbers.
At the meeting, Barnes-Phipps told the board that staff is putting together a plan whereby the county, rather than the MWBE firm doing the work, would cover or subsidize the cost of construction bonds – thus allowing firms to take on larger county projects even if they can’t afford the pay the bond. The bond is essentially the way a construction firm assures the county of a job well done.
Construction bonds are surety bonds that are often required before a project starts. Putting up the money insures a client against delays, disruptions and financial loss if the contractor doesn’t do a satisfactory job as laid out by the specifications in the construction contract.
At the July 16 meeting, Barnes-Phipps said that, when it comes to MWBE firms – such as roofers, and mechanical and electrical contractors – there’s only a small pool of available minority contractors that can perform the work.
“They do not tend to go after the project when it requires the bonding because they are not able to acquire the bonding that’s needed and necessary for a project of this size,” Barnes-Phipps said of one current county project under discussion. “One of the initiatives that I have been working on is for us to, in the very near future, be able to create some type of program for contractors awarded projects with Guilford County so that we can help to subsidize them up front and have funds made available for them to be able to purchase that.”
She told the board that, due to existing project insurance requirements, that money has to be paid at the start of the project.
“So, if they don’t have the capital to be able to underwrite that themselves, then they typically will not take advantage of the opportunity – or they partner with another general contractor that ends up driving up their costs,” Barnes Phipps said.
She said staff planned to bring the program to the Board of Commissioners for approval once the pandemic was under control.
The day after the meeting, two commissioners – Chairman of the Guilford County Board of Commissioners Jeff Phillips and Commissioner Alan Branson – when asked about the plan, said that, based on the limited amount they heard, they had serious reservations.