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New Program To Aid Small Firms Get Government Contracts

Stanley and Jocelyn Tucker, founders of a nearly 20-year-old landscaping company in Central Jersey, know firsthand the difficulties that minority-owned small businesses face. So they welcome a new state program that will enable firms like theirs to compete for lucrative state and federal contracts.

The husband-and-wife team, partners in Job One Lawn and Landscape LLC in Ewing, are among those voicing their support for legislation signed into law earlier this month by Gov. Chris Christie that created the Small Business Bonding Readiness Assistance Program.

The program, under legislation passed unanimously by both houses of the Legislature, will be administered by the New Jersey Economic Development Authority and provide support services and assistance to small companies so they can secure surety bonding, a task that has discouraged many small businesses in the past.

Surety bonds, which ensure a project’s completion in the event of a contractor’s default, may not be a sexy subject. But they are important because securing them is typically required for contractors, big or small, who want to bid on government projects. The new state program aims to make that bidding process less exclusionary — and more competitive — by making more players eligible.

According to the the governor, 98 percent of all the businesses in New Jersey are small businesses, with fewer than 100 workers, and they employ more than 1.7 million people. And 28 percent, or 31,395, of Bergen County’s companies, are minority owned, while 36 percent, or 16,478, of Passaic County’s are minority owned, according to 2012 U.S. Census data.

Jocelyn Turner described bonding requirements as both “the gateway” and the “big wall” for small businesses to win “larger and more substantial” contracts.

“You could have done a lot of the leg work to prepare yourself in many ways, and then you’ll hit that roadblock,” she said. “We are still in that same space and have not been given a surety bond or been able to bid where one is required to date.

Years in the making

The legislation had bipartisan support and involved several years of work and meetings between the African American Chamber of Commerce of New Jersey and state officials, including Christie, according to John Harmon, president and chief executive of the chamber. The bill also had the support of the Statewide Hispanic Chamber of Commerce of New Jersey and the New Jersey Chamber of Commerce.

“You hear about public projects and then wonder, ‘Why isn’t the small-business community participating?'” Harmon said. “It’s because the law says that in order to do a public contract over $200,000, you need a bond. So this was in response to a growing need to have more of New Jersey small businesses participating in economic opportunity.”

The bonding assistance program will walk small-business owners through the necessary steps to obtain a surety bond, he said.

“The bonding is a strong vetting process,” Harmon said. “They sit down with you and want to know your history of work done and completed. How many jobs have you done over the last year? What was the size of those jobs? Did you complete those jobs? How good is your record-keeping, your financial management? How good is your understanding of estimating and contract law? What we proposed is the state of New Jersey start a program that will take small businesses, contractors, through this process and then introduce them to sureties so they will be bonded.”

Under the new law, the EDA will also create a $250,000 fund to award grants to small businesses that participate in the program.

Governor’s support

When Christie signed the bill at a ceremony at the chamber’s headquarters in Trenton, he called the new program “another avenue for small, minority-owned and women-owned businesses to have greater access to job creating opportunities.”

The governor added, “Increased competition for public contracts will lead to lower costs and a more diverse pool of small businesses performing public services.”

The Tuckers are likely to avail themselves of the program, and they have turned to the EDA for assistance in the past.

“Legislation like this is meaningful because when you think of a situation where the majority of a minority group or minority groups face the same consistent obstacles historically over time, then there needs to be this kind of a door opener,” Jocelyn Tucker said. “And that’s what I equate this legislation to.”

Her husband, Stanley Tucker, added, “A program like this would just help us get over the top.”

Carlos Medina, chairman of the state’s Hispanic Chamber of Commerce, said that his group has members, “mostly in the construction industry — painters, Sheetrock guys, carpeting guys, flooring guys — where the surety bond becomes an issue.” The process can be onerous because “you have to have a certain amount of sales, it’s paperwork, it’s a combination of things,” according to Medina. The new EDA program “definitely eliminates one of the hurdles” for small firms to land government contracts, he said.

Sponsor speaks up

The lawmakers who sponsored the bill, including Assemblyman Jamel Holley, D-Union, said it was in response to feedback from minority-owned small businesses, adding that they will now be able to tap into the fund created by the new program.

Tom Bracken, president and chief executive of the New Jersey Chamber of Commerce, said he has witnessed the problems small companies have getting surety bonds.

“When I was in the banking business, if a small business went to a bonding company to try to get a bond, it was pretty much a quick conversation because they couldn’t qualify,” he said. “So, the new program is a way to open up new avenues of potential revenue for small business.”

http://www.northjersey.com/story/money/small-business/2017/01/24/new-program-aid-small-firms-get-government-contracts/96724648/