Federal Contracting Made Easy is interviewing Raymond Christy. Raymond is the Disadvantaged Business Enterprise (DBE) Coordinator for the Salt Lake City Department of Airports. I have known Raymond for over a decade now and I can tell you his passion for small businesses has grown over the years. Now let’s get to that interview.
Nancy – Raymond welcome to today’s show.
Raymond – Thank you for having me today. It’s a beautiful day outside and I know it’s going to be beautiful for us here on the silver screen. Which is kind of small.
Nancy – Can you tell us a little about your background?
Raymond – Well I have a varied background between logistics, consumer product sales, purchasing, contract negotiations, program coordinating and logistics.
Nancy – How did you get involved in the DBE program?
Raymond – When I started… When I started my career with the Utah Transit Authority, a transportation agency in the state of Utah. I had to learn about what is called the Disadvantaged Business Enterprise Program. In learning about that program and the regulations that are part of that. That took me into the world of compliance as well as the disadvantaged business enterprise program. Prior to that my experience in consumer product sales, logistics, purchasing, program coordination, contract compliance helped me to understand and fuse the two worlds of compliance, procurement contracting together.
Nancy – Well, that sounds like a big thing for you to do.
Raymond – Well it has been a lot of fun along the way. It has been interesting.
Nancy – We have known each other what over about 12 years now?
Raymond – Yes
Nancy – It has been a long time.
Raymond – Yes
Nancy – So, is the DBE program available in every state?
Raymond – Yes, the DBE program is under directly out of the United States Department of Transportation. And therefore, any grant recipient whether they are a port authority, tunnel, train, highway, airport, that gets grant funds from the United States Department of Transportation under their operating administration has to have a Disadvantaged Business Enterprise program when they receive more than $250,000 in grant funds in a given year.
Nancy – Okay, so why did they create the program? What is the purpose of it?
Raymond – Well for me the biggest purpose of the program it is get those small businesses opportunities so that they can grow their portfolio. Grow their resume. I’ve always said the DBE program is the way, how you take the catch out of a catch 22. You can’t get any jobs without any experience and you can’t get any experience without any jobs. So, because of the program which motivates contractors or concessionaires to seek out firms that provide goods and services that they can utilize. The program motivates them to go out and find those firms so that they can build their resume of the goods and services that they provide.
Nancy – What is the qualifications for the program? Can anyone apply?
Raymond – Anyone can apply. It is kind of like all are welcome but only few are chosen. The criteria specifically takes a look at personal net worth, your company’s gross receipts, based on the Small Business Administration’s NAICS codes, North Atlantic (meant America) Industry Classification Codes System as well as your ownership. It takes a look at these criteria’s; I will get into the specifics in a second. And on paper if you can meet that criteria and then through an interview demonstrate how you meet that criteria. That is how you can get certified because you are being a certification in that you meet the criteria based on paper and what you do.
Personal Net Worth
For Example, personal net worth. Your personal net worth in the Disadvantaged Business Enterprise or DBE program cannot exceed $1.32 Million minus the equity you have in your business. Now the DBE program also has another component for those people looking at doing work in the airport. And that is what we call the airport concessions DBE program and the personal net worth is still the same $1.32 million. The gross receipts are different between the airport concessions program and the DBE program. In the DBE program your gross receipts cannot exceed $52.3 Million averaged over a three-year period. It is a little big higher… excuse me I said that incorrectly. In the DBE program your gross receipts cannot exceed $32 million averaged over a three-year period. Whereas in the ACDBE program it is a little bit higher. Gross receipts is $53.3 million averaged over a three-year period. Thirdly based upon the Small Business Administrations size standards under the North Atlantic (meant America) Industry Classification System (NAICS) you cannot exceed those standards of gross receipts annually based on what SBA deems a small business. I always use the example of a low voltage electrician your gross receipts in a given year cannot exceed more than $13 million because above $13 million in annual sales the Small Business Administration does not consider you a small business.
And fourthly, the ownership of a company has to be 51% either woman or minority or white male that can demonstrate that they have been socially and economically disadvantaged. So through paper and through an on-site interview where someone comes out and will verify that you are who you are and you do what you do. That is the certification process.
Nancy – Do these numbers get adjusted, similar to how SBA adjusts the size standards? So, the number of ever get adjusted up? Or do they always stay at those levels?
Raymond – The United States Government under the United States Department of Transportation takes a look at those numbers and will adjust up or down based on inflation.
Nancy – Okay it is done by inflation. Just like SBA adjusting the size standards base on inflation. They get adjusted up. I’ve never seen them go down, they have always gone up. (both Raymond and Nancy laugh)
Raymond – We don’t want…with the way folks…the way our economy is growing, you know year in year out. Yes, you want those folks to adjust those numbers up. If we have to adjust down, we have a much bigger problem.
Nancy – Right
Raymond – Other things that. You will find is that there is a close similarity in some of the standards and criteria between what the SBA is looking at in its program versus what is looked at in the DBE, United States Department of Transportation’s DBE program.
Nancy – So you are saying that it’s the 8a program is similar to the DBE program in a lot of ways.
Raymond – Yes, it is. One of the biggest differences that I’ve found is that the DBE program looks at specific experience in what you currently have not where you are looking to grow to. But what experience you currently have and those are the areas that you are certified in. Whereas the SBA program looks at what you have done but also where you can grow to. And so, those are the two biggest differences in the program.
Nancy – Cool. So, you said something about an interview is that part of the process?
Raymond – Yes that is part of the process. It is a way of verifying and seeing exactly what you do and how you have the experience in what areas you want to provide goods and services in. Because again, a certification in the DBE program is looking at what you currently have experience in providing not what direction areas you can grow too.
Nancy – Okay
Raymond – Look at what areas you currently are working in.
Nancy – So where can there be multiple state agencies that you can apply to? Like in Utah for example, you can apply with the Utah Transit Authority (UTA), you can apply with the Salt Lake City Authority and there is another one that I can’t recall off the top of my head.
Raymond – Which is the Utah Department of Transportation.
Nancy – Right. So those three authorities if you get certified in one are you good for across the state?
Raymond – Right
Nancy – Or are you restrict to that certain area?
Raymond – No correct. In the State of Utah because the State of Utah does not have a certification program for woman and minorities business, or small businesses or veteran owned or serviced disabled businesses. The DBE certification once you are certified it is good for the whole state. Now you can get certified by one of those agencies and what happens is the certification process looks at what kinds of goods and services you are going to provide. And what’s best suited. Are you looking to do work only airports? Considering work only on highways? Were you looking to do work in transit? Or a combination of all three.
Seek Certification through the Agency You Want To Work
So with that being in mind, you know, whether it is the highway doing the certification, or the airport doing the certification or the transit agency doing the certification it is good for all agencies that receive funds from the United States Department of Transportation. Now the biggest difference when you go outside the state other states have certification programs for the state and local municipalities. So, that particular state has one agency that that is all they do is just certifications. And with that being the case, with that certification you then can go to any municipality, any transportation agency that recognizes that certification and use that certification in that program. What we call the local program, state program or in the case of the DBE program their federal program.
Nancy – So you mentioned an MBE? Is that correct?
Raymond – Yes. MBE stands for Minority Business Enterprise or WBE – Women Business Enterprise or SBE – Small Business or Small Emerging Business Enterprise.
Nancy – So what is the difference between those and the DBE program?
Raymond –Well first and foremost does your state or local municipality have a local program? So if they don’t have a program the one thing you know that will be out there is the federal program which is the Disadvantaged Business Enterprise program.
Nancy – So that (DBE Program) is nationwide these other are state specific.
Raymond – Correct. The ACDBE program and the DBE program is going to be nationwide. The same application that you would use in one state is the same application that you would use in another state. In fact, you cannot deviate from that application and the process and the regulations and the criteria is the same all across the country. Where you get into differences or difference variations or different criteria is the Minority Business Enterprise Program, Woman Business Enterprise program, Small Business Enterprise Program the criteria maybe a little bit different or vastly different but that is by state or municipality.
Nancy – I didn’t know that, I learned something new today.
Raymond – And that’s why your doing this podcast so that folks all can be educated.
Nancy – Yes, I am trying to educate everyone on everything that is available to them. Because I think that your program offers small businesses such a unique opportunity. Where they can go work with a prime contractor and get some experience behind them and later on become a prime contractor and be able to help others along the way. That is what this country is all about. Equal opportunity for everyone.
Raymond – You are going to find airports, transit agencies, highways, somewhat, they are an end user. And when the agency sees themselves as an end user and they are proactive on the support of small business. As an end user you use a lot of different various different services and that’s where the opportunity comes in for small businesses. If that agency looks at themselves as we only do roadway work and it’s just this, an this, an this and it’s there then that limits the opportunity. Whereas if they see themselves as an end user we use all these different various goods and services and we understand the economic impact to the local community and that local economy. That is where you are going to see multiple opportunities for small businesses to thrive and grow and compete in the mainstream.
Nancy – Is there some opportunities and trainings available to these DBE businesses?
Raymond – Depending on the states a lot of department of transportations at state agencies, specifically highway state agencies have grant funds to provide support services to help with the training for small businesses to understand what the opportunities are and where they can be found as well as how that small business can access that service. You just have to find out who has those funds and have supportive services programs.
Nancy – What happens if it is not offered in the state that they are in? Can they go to another state and receive that assistance?
Raymond – They can go to other states, but they can also take a look at their community. You will find that a lot of communities’ programs that are initiated to help small businesses. Now they may be in areas of high population of based on race, Hispanics, African American, Asian Americans, but the services that they provide even though they may be directed towards a specific type of community based on race or gender. They are going to have their doors open to anyone that is a small business that is looking to grow and understand how they can do business.
So that is another place that I have found in my experience across the country is another place to go where if you can’t find free resources provided by your state or that city on how you can grow your business. That would be local non-profit businesses that partner with a lot of agencies to provide services to small businesses. It is just a phone call away. Now a days, it’s just matter of saying “Hey Google” or “Hey Siri” or “Hey Whatever” or smart phone whatever. Whatever smartphone you have. It is just a statement to that smartphone to assist.
Nancy – Well that is true. It is just a Google search away is what I always say.
Raymond – (Laughs) Yes very much so.
Nancy – So what happens after I apply to the program and you have done your interview how long does it take for my application to be processed?
Raymond – The application will be processed will be based upon if all the documents that are part of the checklist that is part of the application you have provided. And with that being the case under the regulations under the DBE program the certifying agency, agent official has 90 days to complete that application. Now that is just to give you the timeframe. Now things can happen quicker, things can take a little bit slower it all depends on the number of applications currently being processed by that certification official. But if you hand in all of the necessary documents that clock starts ticking.
Nancy – So you said something about a checklist? Is that checklist available? Can anybody download the application or is it available online?
Raymond – Well the benefit of the DBE Program or ACDBE program the application is the same application that you will find whether you are in Portland Maine or Portland Oregon, or Seattle or down in Corpus Christy. It’s the same application and the last page of the application contains a checklist of those business documents that need to be a part of your application. And these are business documents very common documents that you would have in your business. Examples: business license, if you have a loan, copy of the loan, operating agreement or a business agreement on how you are structured, what you are looking at doing, financials as well as your taxes. As well as your website or telephone numbers or fax numbers or how does someone find your location.
Nancy – So it is your business documents that a business owner should have.
Raymond – Correct, should have.
Nancy – So all the documents that should be readily available. So, do you review the finances every year or do you get re-certified at all? Or once you are certified you are certified. How long is it good for?
Raymond – Well in the DBE program which is different from the SBA’s programs. In the DBE program you are in the program. Once you get certified in the program you are in the program until you graduate because you exceed your personal net worth or gross receipts, or you do not meet on of the basic criteria for the certification. Otherwise you are in the program for life whereas in the SBA’s program, 8(a) program it is a nine-year program.
Nancy – I am assuming that you re-certify every year or every three years? How does that work?
Raymond – In the DBE Program per the regulations after you are certified you have to provide an affidavit that states that you currently meet the certification standards annually on your anniversary date. Then there are some other documents that you have to provide along with that affidavit. As long as you are providing that annual update and those requested documents on your anniversary date or the date specified by your certifier you are still within the program.
Nancy – So what should I do after I am accepted into the program? How do I market myself to these prime contractors?
Raymond – Well first and foremost in your state identify, do your research. Which agencies currently receive funds from the United States Department of Transportation? Or what agencies receive funds through one of the larger agencies? Whether it is Department of Highway, transit or airports because you can have some recipients in a given state that they receive funds through an airport, and they are a separate recipient.
Identifying Potential Clients
So, identifying those recipients with that then take your letter or certification if you received one, do a letter that says hello, I am who I am, this is what I do, I would like to meet you, I understand that you are a grant recipient from the United States Department of Transportation, I can provide these goods and services.
I would like to schedule a time to talk with you whether it is by phone or come to your office to visit with you and sit down with you. Take those proactive steps find out which agencies are having an open house on the goods and services that either they will be forecasting to purchase in the upcoming year. Attend those open houses. Do some networking at those open houses. Those opportunities to connect and get yourself out there as well as schedule appointments to meet with people go a very long way in how you can utilize the certification to grow your business.
Nancy – So it sounds very similar to what I try to teach people when they market to the federal government. It is basically the same process it is part of the federal government. Right? You are going to have to go out and market yourself with your capability statement or a little resume about your business in other words. And you are going to market to all those businesses that receive federal funds.
Raymond – Correct. And you are going to find that taking a further step then that is creating that document that very quickly and shortly that also says this is the goods and services that I provide.
This is my experience. This is where my company is located in. And I am looking forward to meeting and talking to you. Because you can get a phone call on the construction side or you can get a call or see an advertisement from a general contractor that is looking for DBE firms for a particular project that has federal funds in it. Or you happen to attend an expo and those businesses are located at that expo.
Or you are on a networking board and the opportunity presents itself. That way once you get that email address you can send or a phone number you can make that call to follow up. That’s all about getting your business in front of someone that makes them aware of what you do and what you provide. And even if the opportunity does not exist for them, they may know somebody else that is looking for the type of goods and services that you provide, would like to provide you information on the goods and services that I provide.
Nancy – Do they have to have a subcontracting plan these prime contractors? So when they bid on a job they know that they are going to select these DBEs to do business with? Or do they wait till they get the project and after you all make the determination of what percentage has to be set-aside for DBEs? How does that process happen?
Raymond – Well, first of all let’s back up for a second, the language that we use in the DBE program is different than what is used in a lot of federal programs including SBA.
DBE vs. SBA 8(a)
In the DBE program there are not any set-asides there are a goal, a target. And that agency that is receiving the funds they have a target that they are looking to meet so that they can meet their overall based on the contracts that they have in a given year. In the DBE program it is not a set-aside because that is illegal in the DBE program. However, the agencies are very much aware that if they don’t meet their goals year after year, opportunity after opportunity, they also get questioned because per the regulations those agencies have to make good faith efforts towards meeting their goals.
What Happens When Agency Fails To Meet Goals?
The unspoken thing that happens is that at an agency if you are not meeting your goals and you apply for grant funds it gets scrutinized as far as do you get those funds or not. The agency needs to take a hard look at that because if they are not meeting their goals and they are not justifying it with very good reasoning on why they missed their goals they may not receive funds in the future.
And that is a big, big impact when you are trying to rehab a taxiway and you do not have enough money to rehab the taxiway because you got to have federal funds in there. And if you don’t have the money to do it, you can’t have the runway the feds are going to shut you down. Therefore, it is an unsaid way of accountability that’s one way of unsaid accountability where agencies are going to be held accountable not trying to be proactive on not meeting their overall goals.
Nancy – So the agency has the goal not the contractor? Is that how this works?
Raymond – Correct, because the agency is going to let the contract, but the contractors are told that this is their goal because it is the agency goal. Your goal, your target. AND someone is going to be accountable. Someone is going to hold that agency accountable if they don’t meet that goal they are going to ask the questions. Why did you not meet that goal? And the agency has to give a reasonable answer.
Nancy – So if somebody is marketing does the prime, prime contractor. I am not sure if that is the correct word. But the contractor that receives the funds or grant money however you want to refer to it as. Do they already know which DBEs they are going to use on that project? Like when you are bidding on a federal project. You already have a team of subcontractors that you work with, that you already know are going to bid on that project. They bid and then put the proposal together and then submit it to the government.
The process for the DBE seems a little bit backwards. It seems like you get the project, you know how much money you have and then it is awarded to someone. Am I making the connection there? So basically, how does a DBE, do they have an opportunity to bid or work with that contractor prior to the contractor receiving it?
Raymond – No a little bit differently because first of all you have there are a lot of variables. One of the variables depending on the economy of that location, that municipality, that state is their economy robust. Good example, right now depending on whoever is watching this video, the economy in Utah is very, very strong. Everyone who is currently constructing is working. So even though a general contractor may have some folks that may want to work with or worked with in the past doesn’t mean they are available.
Good Economy vs Bad Economy
So that general contractor in a robust economy has to be out there looking to find those firms that can work with them so that that way they can meet the goal in their proposal that they are going to submit. Because their competitors are also going to be meeting the goal in that robust economy when they submit their bid. The general contractor, again the general contractor may have folks that they like working with but doesn’t mean everybody is available. Now when the economy is in a downturn and folks are all looking for work and people are submitting lower prices because they are just trying to keep their doors open. Then it is at the benefit of the general contractor because they can pick and choose who they wish. Then you have some economies that are just like in between.
A Good General Contractor Always Looking For DBEs
So the overall answer is that general contractor has to always have a variety of folks in his packaging that he is looking at that he can always turn to that he can submit with his bid. That he is proposing to work with. Because he doesn’t always know who is available and who is not. And that is a little bit different from the federal contract.
Nancy – Yes, it is. And thanks for clarifying that. Sorry if I am using the wrong terminology. I can only go with the terminology that I know.
Raymond – I understand. We have similar worlds and they operate similarly but yet there are different criteria and different rules that we have to follow.
Nancy – So do you have any best practices or tips for anybody that is becoming DBE certified?
Raymond – Well, I will reiterate what I just already said. You have that certification in your hands or that letter in your hands and that is a very good marketing tool.
Locate Construction Projects
That is one. Two, learn where construction projects or concession procurements are being advertised. Three, make a list, find a list with all the agencies that are receiving grant funds from the United States Department of Transportation.
Make a list find out who that liaison officer is. Who is posting the information from what ever webs? And make the rounds. Get your face and your name in front of that particular person. Because all those things going for you someone is going to pick up the phone and say “Hey I saw your information what goods and services do you provide? Oh is that something that you can provide to me on a regular basis? Or I am looking for this?” Then that opportunity presented itself for that small business.
That would be one tip and the only other tip I would provide is as a small business even if your presentation bombs, stinks, you know you are just kind of like where do that come from, whatever should happen in that timeframe that you are sitting out with hopefully a potential decision maker always, always, always ask for the award. Always, always ask for the contract at the conclusion.
Nancy – You may feel that the presentation did not go over well but that doesn’t mean that it wasn’t well received.
Raymond – Correct.
Nancy – that is really good advice. Do you have any parting comments that you would like to make to my viewers or anything?
Raymond – I just want to say thank you for the opportunity to talk to your audience. I look forward to seeing them at my office, knocking on the door so that I can open up more doors and windows of opportunities for them.
Nancy – Well you might see an increase nationwide as my podcast and YouTube channel are nationwide. Specifically, in Texas, Florida, Utah, California and the beltway.
Raymond – Well I am glad that I know you.
Nancy – Alright folks we are going to end this here today. As always be safe until next week.
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