Risk involves the unknown, and we all respond to risk in different ways. Depending on your skills, abilities, and experience, something that looks risky to most can instead be relatively predictable and safe for you. The more you know, the more you can lower your risk, and when you minimize risk, you increase your odds for success.
Growing a Federal construction business can create a sustainable and profitable path to diversification of your economic opportunities outside of Indian Country. Native Enterprises have great advantages within the Federal Government market and, if positioned in front of the right federal personnel, can rapidly build a strong construction company that is geographically diverse and contributes meaningfully to the Nation.
What are some of the advantages for Native Enterprises?
Under the Federal Acquisition Regulation (FAR), the Federal Government can sole-source contracts to individual 8(a) owned-businesses up to $4 million. However, the Government allows for sole-source construction contracts exceeding $22,000,000 only to tribally-owned businesses. For example, if the Army Corps of Engineers is considering putting out a bid opportunity for paving that’s worth $10 million, the government contracting officers can set aside the entire $10 million contract exclusively to any qualified single tribal business before it ever becomes public. Billions of dollars of Federal procurement are done this way every year.
Tribal construction businesses can realize a high Return on Investment (ROI) while minimizing performance risk and outlay of capital by using General Contractor “flow down” practices. Capital is the fuel for growth and preserving capital while making good margins is a key for success. General Contractors can produce high ROI’s by flowing down the need for capital for labor and materials to the subcontractors.
Native Corporations need access to marketing and business personnel with expertise in locating, positioning, and capturing Federal sole-source opportunities. The Federal Government requires bonding for construction projects and the bonding industry does not understand Indian Country and how to work with the right of sovereignty. Many tribally owned companies are focused only on working in their immediate region and do not have the resources to target areas where the Federal dollars are flowing. Last, they need access to strategic guidance and the proven accounting and job tracking systems necessary to manage construction risk adequately for the banking and bonding markets. Typical business processes like accounting, HR, and job tracking need to be tailored specifically to the construction market.
There are amazing opportunities for Tribal Nations in the Federal construction market. By leveraging Bold Concepts’ proven resources and guidance, Native Corporations can up their game and win, performing on Federal construction projects wherever there’s a need.