By Nathalie Weinstein
Dolan Media Newswires
Portland, Ore. — When the subprime mortgage crisis hit in 2007, Erik Esparza of LanPacific Inc. knew he’d have to look for opportunities outside the private housing market that had been the bread and butter of his design-build engineering company since 2004.
He wanted to start pursuing public projects, but because LanPacific was a small, minority-owned business, he needed to get his foot in the door first. That’s why he spent the past 1½ years pursuing the Small Business Administration’s 8(a) Business Development Program certification. After a rigorous application process and four submittal attempts, LanPacific was 8(a) certified in April.
Joseph Loddo, associate administrator for business development with the Small Business Administration, said he has seen an increase in the number of applicants for 8(a), which provides small businesses contracting offers within the federal government and puts certified firms on a short list for federal contracts. Eight(a) refers to a section of the Small Business Act authorizing a program to aid small businesses that are owned and controlled by socially or economically disadvantaged individuals.
“We’ve noticed a significant increase beginning in February of this year,” Loddo said. “That time frame coincides with the enactment of the American Recovery and Reinvestment Act. There’s been a lot of interest in allowing disadvantaged businesses to participate in the federal marketplace.”
But the application, which requires extensive company and personal financial information from business owners, has 8(a) applicant Marcela Alcantar of Alcantar and Associates, a consulting and civil design firm, wondering if there will be any federal money left by the time she finishes the application process.
“Like any other person, I’m looking for new opportunities,” Alcantar said. “There are no opportunities for minorities anywhere else except federally. But they put up all kinds of barriers. People are telling me, once I get certified, the money may be all spent. And you still have to compete for it.”
For Esparza and his business partners, Mark Ferris and Shaun Fidler, the hard work was worth it. LanPacific has three jobs coming up with the General Services Administration, Army Corps of Engineers and the U.S. Fish and Wildlife Service as a result of the certification.
“It’s a long-term investment,” Esparza said. “But it’s also an opportunity to grow your business to the next level and establish relationships with the federal market, which right now has the funds to do projects.”
Most of the application can now be filled out online, but hard copies of certain financial information are still required.
Maurice Rahming’s company, O’Neill Electric, has been 8(a) certified since 2003, and while the program has provided him many opportunities, he said it’s not for everyone.
“The key thing to be successful with 8(a) is you have to have no issues with doing paperwork,” said Rahming. “If you’re a small contractor that hates doing paperwork, you’re going to hate the program. With the application, they are trying to make sure there’s no fraud involved and that you aren’t a front for another business.”
Rahming said the load of paperwork doesn’t lighten after certification; 8(a) companies must be audited each year by an independent accountant, which can cost around $20,000.
“It just takes patience, perseverance and paperwork,” Esparza said. “I don’t think it’s any more work than any small business owner goes through on a regular basis.”