In my last post I planted the seed in the minds of the Prime contractors as to why it’s advantageous for THEM to work with Minority Business Enterprise (MBE) firms. Is the answer that there are laws that require sub-contracting? Yes, that may be true; but it’s not where the advantage lies for the Prime contractors. The answer is that the MBE firm opens a new market to the Prime contractor that they couldn’t enter on their own.
In a typical Prime/MBE partnership relationship, the MBE is the lead on the project and usually maintains 51% of the responsibility and the Prime is the sub to the MBE and carries 49% of the responsibility in the partnership. Now, stop and think about that for just a minute. The MBE just brought the Prime contractor 49% of a contract opportunity that the Prime contractor would not be eligible to participate in without the MBE.
This strategy allows the MBE to work with the Prime contractor in a true partnership and learn from the Prime in a mentoring style relationship. There is a blending of big business best practices and entrepreneurial innovations. I have personally seen a company grow through this process from $1M to $12M over a 10 year period, resulting in creation of 200 jobs. How gratifying is that!
We all know that the answer to economic growth is to develop the small business community and create jobs. What better way to create the opportunity for growth than for Prime contractors to find an MBE firm to partner with on local projects within their community. So, I say to those Prime contractors out there: go find yourself an MBE to mentor and be a part of the solution to bring the economy around in 2012.