Last month, AGC surveyed its members on contracts preference programs—federal and federal-aid programs that were created with the intent to help socially and economically disadvantaged businesses.

Last month, AGC surveyed its members on contracts preference programs. Contracts preference programs are federal and federal-aid programs that were created with the intent to help socially and economically disadvantaged businesses. These programs include, Disadvantaged Business Enterprise program, 8(a) Business Development program, Women-Owned Small Business Federal Contract program, Service-Disabled Veteran-Owned Small Business program, and HUBZone program. Some key highlights were:

• 2:1 ratio of General Contractors to Subcontractor/Specialty Contractor
• 72% of respondents have less than 250 employees
• Close distribution of total dollar of work performed in the last year, except for work over $500 million

• • 28.43% - $10 million or less 
  • 32.84% - $10.1 million - $50 million 
  • 26.96% - $50.1 million - $500 million
  • 11.76% - Over $500 million

• 2:1 ratio of non-DBE/Set-Aside (65%) to DBE/Set-Aside firms (29.85%), including graduated (3.48%) or eligible but chooses not to be certified (1.49%)
• The top three responses about what was successful about these programs were:

(1) Promotes diversity in construction,

(2) Increases competitiveness for federal contractors, and

(3) Access to resources and networking opportunities

• The top three responses about what was unsuccessful about these programs were:

(1) Potential penalties for noncompliance,

(2) Cumbersome certification and recertification process, and

(3) Lack of transparency and guidance on program eligibility and business readiness

• Meeting contract goals, understanding and navigating program rules, and maintaining compliance were the hardest about these programs.
• Almost half (49%) of respondents say the DBE or Set-Aside program compliance complexity creates tension between prime contractors and subcontractors
• 43% of respondents say the administrative burden to submit initial certification and/or classification is hard.

For more information, contact Jordan Howard.