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Remarks by MBDA National Director David Hinson at National Association of Minority Contractors
Board of Directors Retreat
San Juan, Puerto Rico
I’d like to thank Francis Onwualu, Art Queen, and the board of directors of the National Association of Minority Contractors for inviting me to be with you. It’s always great to see old friends and I hope I’ll have an opportunity to meet those of you I don’t know. Before I get started, I would like to recognize a key member our team – Otis Turner – from our San Francisco office. Otis, please stand. Otis is outstanding and has helped many of our clients build their businesses. Before you leave, you need to make sure you meet him and get his business card. He is a key contact for your company!
I am delighted to be here on behalf of President Obama and Secretary of Commerce John Bryson. Last month, in his State of the Union address, President Obama spoke about laying the foundation for an Economy Built to Last. An economy based on fairness, where everyone has a fair chance, does their fair share and plays by the same rules. This is the type of America that I believe all of us want; the type of America that so many of our grandparents and great-grandparents worked for…and in some instances, died for.
But in outlining this vision for our nation, President Obama also ushered in a brave new world for the minority business community. A world where we can no longer rely on the continued increase in government spending as a source of opportunity. A world where competition is truly global. And a world where corporations will no longer contract with our businesses because they think it is the “right thing to do”…but will contract with our businesses ONLY if they see a sound business case, a competitive advantage or a specific need that can be satisfied.
I applaud companies such as Kaiser Permanente, Walt Disney, Turner Construction, Gilbane and Southwest Gas for embracing the strong business case of working with African-American-owned and other minority-owned businesses. We need you to engage more. But for every Kaiser Permanente who embraces the business case of working with African-American construction companies, there are 100 companies who don’t. And for every Disney or Turner, Gilbane or Southwest Gas who understands the competitive advantages of partnering with the minority business community, there are hundreds of companies of equal size, scale and capacity who close their eyes to the economic benefits of a diverse supplier base. It is our responsibility – yours and mine – to make the business case for partnering with our businesses.
But to truly make the business case, we have to be the business case. We have to talk the business case and walk the business case and live the business case. And I believe we have to reestablish our companies in the mold that made companies like HJ Russell and Thor Construction so successful.
What We Must Do!
Allow me to share with you five things that I believe we must do to strengthen our business case and take our companies to the next level.
First, for every $10 we make, we need to save $15. In the 1950’s, when a young Herman Russell started building his dream, there were not a lot of places an African-American entrepreneur could go for capital. Some say…not much has changed! But what has changed is how we view capital acquisition.
Today, far too many of us allow external capital availability to dictate our opportunities. We need to go back to our roots, providing our own capital through continuous and aggressive savings, through investing in ourselves and, equally important, through investing in each other. But sometimes this means we have to make tough choices – would you rather have a strong lifestyle or a strong balance sheet? In the privacy of your own space, each of you will decide what is most important.
Second, we need to identify and acquire a strategic partner or mentor and leverage the immense credibility that he or she can bring to our companies. Today, far too many minority business owners don’t surround ourselves with the relationships that will make others look at them as safe, secure and value-added partners. Far too many of us stay in our own silos, with those just like us, thinking about things in the way we always have – no new approaches, no new vision! I know nobody in this room does this, but I’m sure you know a black construction company owner who does!
We have to build credibility through relationships. Thor Construction did not complete the Bellagio Suite Remodels or the Sales Pavilion at the MGM City Center on their own; they developed the types of partnerships to play at a higher level. And one thing we know – IT WORKED!
Third, we need to find and retain good people. Today, your business is only as good as your people, and there are thousands of highly skilled people who are looking for work and would be motivated to add value to your company. I don’t need to tell you that the first statement of the quality of your company is the quality of your people. Spending money on good people today will pay huge dividends for your company tomorrow.
Fourth, we need to embrace the attitude that we will do whatever it takes to win! To be clear, I am not talking about working harder or doing anything illegal! I am talking about having a commitment to winning, regardless of the obstacles. When HJ Russell started in the 1950s, there was no 8a program or SCORE or MBDA. He had to have an attitude that he would win at all costs. He had to find a way to win in the face of huge obstacles – some that don’t even exist today!
You come from a community that has a history of making something powerful out of nothing – embrace that history. Reconnect to that attitude that makes us all winners!
Finally, we need to engage every entity – government or private sector – who can help us grow. For me, that means all of you should become clients of the Department of Commerce, Minority Business Development Agency.
As the only federal agency tasked to promote the growth and global competitiveness of minority-owned businesses, our very mission is to help your businesses grow and help you create wealth! And I must say we do a very good job of it.
Last year, through our national network of MBDA Business Centers, we assisted minority-owned firms in gaining access to nearly $4 billion in contracts and capital, creating nearly 6,000 new jobs.
And since the beginning of the Obama Administration, we have assisted minority-owned firms in gaining access to nearly $11 billion in contracts and capital, creating and saving nearly 20,000 jobs.
This is the best performance in the 41-year history of the agency. This is happening in the Obama Administration.
In the construction industry, we increased contracts to minority-owned firms from $508 million in 2010 to $646 million in 2011 – a 27% increase. And if we include financings, we provided $1.38 billion in contracts and capital in 2011. In addition, this past year we opened new MBDA Business Centers in Boston, Cleveland, Denver and Minneapolis to support you.
Next week I will be cutting the ribbon on our new satellite office in Anchorage, Alaska to help you develop strategic partnerships with the large Alaska Native Corporations. And later, we will be officially launching our MBDA Federal Procurement Center in Washington, DC to help you compete for and win contracts with the federal government. This center was established as part of our Administration’s commitment to ensuring that everyone has a fair shot at winning federal contracts.
But there are those who still may have some doubt about the commitment of the Obama Administration to minority business development. If you doubt, have a chat with Luis De La Cruz, founder and CEO of Andale Construction in Phoenix, Arizona. In 2007, Luis contacted the MBDA Business Center in Phoenix during only his second year in business. The Business Center helped Andale get local and SBA 8a certifications and marketed the company to various prime contractors, including Sundt Construction.
With the Business Center’s assistance, in 2011 Andale negotiated a mentor-protégé Agreement with Sundt that led to the company securing over $70 million in new contracts. According to Luis, it was the MBDA Business Center’s help over the years that built his confidence, made key introductions, and prepared his company for growth.
Or ask Greg Rice, founder and CEO of G&M Associates in College Grove, Tennessee. Greg became an MBDA client in 2006. He was looking for assistance in identifying contracts, bidding and marketing. Through MBDA, last year Greg secured a $14 million contract with the Gulf Coast Housing Agency in New Orleans. Now, his company is headquartered in Tennessee, but we assisted him in getting a contract in New Orleans – this is the power of the MBDA national network.
Or you can just stay here in Puerto Rico and ask the folks at BetterRoads, Inc. about working with MBDA. Our Puerto Rican MBDA Business Center assisted the company in securing a $7.9 million contract with the Puerto Rico Transportation and Highway Authority. Does anyone want to do business in Puerto Rico? You can if you partner with MBDA and our Puerto Rican MBDA Business Center.
Let there be no doubt that the Obama Administration is committed to helping your companies grow. We want to partner with you and we need you to partner with us. To be successful, we must come together and work together. And if we do, we can truly achieve the President’s vision of creating an economy that’s built to last. I want to thank all of you for taking the time to listen to me today. We are looking forward to working with all of you in the coming months and years!
I welcome your questions.