Small contractors seek fair share

Who Gets to Build California? Small Contractors Seek a Bigger Share of the Infrastructure Boom

Edward Henderson | California Black Media 

William Jackson knows that ability alone is not enough for a small contractor to secure public infrastructure work. 

“You’ve got to know where to go,” said Jackson, president of Global Electric, a Southern California electrical company. “And then when you go through, you have to have the resources in order to participate because a lot of these public works jobs require bonding.” 

Since 2006, Global Electric has focused exclusively on public works, completing projects involving LA Metro, Los Angeles International Airport, solar systems and electric-vehicle chargers. 

Jackson’s experience reflects the challenge the Equity in Infrastructure Project (EIP) is working to address nationally: ensuring that small and historically underutilized businesses have meaningful opportunities to compete for public infrastructure contracts. 

EIP was created to leverage infrastructure investment as a tool for building wealth in underserved communities. Co-founder and co-chair Phillip Washington said the organization aims to move small businesses beyond primarily serving as subcontractors to large firms and position them to compete directly for major public contracts. 

“We need to try to help position these historically underutilized businesses to compete at a higher level as primes themselves,” Washington said. 

The effort has taken on greater significance as California and communities across the country spend billions of dollars on roads, bridges, transit, airports, water systems and other infrastructure. Much of that investment was accelerated by the $1.2 trillion Infrastructure Investment and Jobs Act, signed by President Joe Biden on Nov. 15, 2021. 

For small contractors, however, accessing those opportunities often requires navigating complex procurement systems, securing financing and bonding, identifying projects and building relationships with public agencies and larger contractors. 

Jackson said bonding is one of the most significant barriers. A contractor seeking a $1 million bond must demonstrate financial qualifications similar to those required for a substantial loan, he explained. However, the bond does not provide the contractor with the money needed to complete the project. 

Small firms may therefore need training, financing, bonding assistance or additional collateral before they can qualify for larger contracts. 

Jackson also emphasized the importance of becoming a prime contractor — a company that contracts directly with a public agency instead of working under a larger firm.

LA Metro operates a small-business prime program. Jackson said becoming a prime contractor gives a small company valuable experience managing vendors, negotiating prices, purchasing equipment, making payments, delivering projects and invoicing agencies. 

LA Metro’s commitment to paying contractors within 15 days of receiving an invoice can also help small businesses manage cash-flow challenges, he said. 

“If you don’t bid, you can’t win,” Jackson said. 

Without programs that provide access to public contracts, Jackson believes Global Electric would be “a much smaller business,” with fewer opportunities to take on increasingly sophisticated work. 

EIP has sought to expand those opportunities by building a national coalition of public agencies and infrastructure organizations. On June 4, the organization brought more than 130 infrastructure leaders to San Francisco for a signing ceremony and workshop. Sixteen organizations joined the coalition, bringing the number of EIP signatories to 104. 

The event also highlighted EIP’s “Procurement for Prosperity” playbook, which outlines strategies public agencies can use to expand access and competition, strengthen procurement practices and create pathways for small businesses. 

Washington said bringing more companies into the bidding process can also benefit public agencies by increasing competition and potentially lowering costs. 

“The goal is not simply to add small businesses to existing supply chains,” he said, but to “flip the script so that a small business can become the prime contractor while a traditionally larger company works as its subcontractor.” 

Bishoy Metry, a structural engineer and contractor, understands how difficult it can be to enter the public contracting system. 

Before moving to the United States in 2018, Metry worked on major infrastructure projects in Egypt, including two tunnels beneath the Suez Canal. After settling in California, he earned A and B contractor licenses and launched a construction company. 

But knowing how to build was not the same as knowing how to compete for public contracts in a new country. 

“It’s hard here to get a piece of cake from the big sharks,” Metry said. 

He found a pathway through a training and mentor-protégé program that taught him how to manage his business, submit bids and communicate with prime contractors. After three to four months of training, he began bidding on public projects. 

His first public contract was with Caltrans, followed by a project for Alameda County. As the company grew, Metry hired more workers and expanded his team. 

That progress required substantial personal investment. Metry estimates that he spent more than $15,000 from his savings to establish and maintain the company while covering licensing, insurance, bonding and other startup expenses. 

“If this program didn’t exist, I would not be able to survive,” he said. 

California has developed several programs aimed at addressing the practical barriers facing contractors like Jackson and Metry. 

Alameda County’s Contractor Technical Assistance Program provides small and diverse businesses with training and assistance related to construction contracting and bonding. LA Metro’s Contractor Development and Bonding Program similarly helps small and disadvantaged businesses prepare to compete for construction opportunities. 

For small contractors like Metry and Jackson, advocates say, the challenge is not simply finding infrastructure work. It is gaining the knowledge, capital, relationships, and contracting opportunities necessary to grow.