Senator Eliot Shapleigh - El Paso, Texas

Gerardo A. Licon, owner of Licon Engineering, has remodeled buildings at Fort Bliss such as Soldier Hall. Federal money for base expansion has allowed contractors to compete for jobs. (Photo by Yasmine A. Aboytes / El Paso Times)

Gerry Licon's business card is the equivalent of a small, one-page pamphlet filled with information he believes is helping him capture millions of dollars in military construction work.

The card is part of a new trend in El Paso that requires small companies to jump through bureaucratic hoops and, in many cases, change the way they do business. But the rewards can be great.

About 80 local companies, including Licon's, have already secured work in the competition for a share of the $2.6 billion expected to flow into the city over the next five years to expand Fort Bliss as nearly 23,000 additional soldiers arrive at the post.

The difficulties of getting that work have led some to charge that El Paso is being shortchanged when out-of-town companies get the large, "prime" contracts and then subcontract work to out-of-town businesses with which they have worked in the past.

Local companies that have received work "have done their homework and they've marketed themselves," said Joseph R. Conway, program manager for El Paso Community College's Contract Opportunities Center. He added that companies that aren't getting jobs are "waiting for the work to come to them, and it's not going to happen."

When the large businesses apply for the prime contracts, they already must have a list of subcontractors that will be performing the work, Conway said. And the federal government puts a lot of stock in previous experience with government contacts, he said.

"I teach all of our people: Start now getting subcontracts," Conway said. "That builds up your history."

Licon's business card -- for LEC Group, an El Paso commercial construction company -- has an e-mail and Web page address, a toll-free number, a list of federal certifications, and on the back, an incomprehensible list of numbers under the headings of "construction, "engineering" and "environmental."

The numbers are part of a code that -- at a glance -- informs contractors vying for the multimillion-dollar prime construction contracts what specific expertise and qualifications Licon's company possesses. Licon and his wife formed their company five years ago. Already they are doing about $3 million worth of work as subcontractors on military projects, he said, and an additional $1 million in smaller jobs on which they are the prime contractor.

El Paso officials have represented the expansion at Fort Bliss as a way to expand small businesses such as Licon's, and as a way to help raise the city out of poverty.

But how realistic is it to think that a mom-and-pop business that does sporadic record keeping can break into the flow of billions of dollars directed by big government and big business and use that work to become a regional or national business?

"It think it's possible," said Gus Rodriguez Jr., vice president of Basil Glass and past chairman of the Greater El Paso Chamber of Commerce's Armed Forces Committee. "We are in a time in the history of El Paso when there's an opportunity larger than we've seen in decades."

The process of getting a government contract can be tedious, due to requirements that include solid bookkeeping, being bonded and insured for large amounts of money, and spending time marketing to the prime contractors. It also works in a company's favor to have successfully completed other federal contracts.

Nonetheless, the Army Corps of Engineers holds no bias against companies that are applying for first-time contracts, said Ed Gill, chief of the corps' Contract Administration and Technical Support Branch at Fort Bliss. The corps "looks at past experience primarily to look for indicators of poor performance or non-performance," he added.

Gill said that private-sector projects of a similar magnitude or type would help a company, but he added that a successful history of completing projects with the corps or other federal agencies "would be a positive factor in the overall evaluation."

But inevitably, some will find ways to circumvent the intent of rules meant to encourage small, minority-owned and other businesses traditionally shut out of the mainstream, said Joe Lopez, a member of the U.S. Hispanic Chamber of Commerce board of directors and owner of Lopez Marketing Group in El Paso.

"Big companies come from out of town É and plan for what they're going to do -- how much they're going to spend with local companies and minority firms. And I have heard that company all of a sudden finds excuses for not using the local companies they said they were going to use," Lopez said. "They (local companies) basically didn't get any work. The excuse was that the contract had been reduced."

Lopez said he's also heard of situations with state contracts in which businesses get around the minority hiring requirements by lowballing a project, knowing the minority-owned company will decline the work. Then the contracting company sends paperwork that the minority company is to fill out certifying that it was offered the job.

"Some people are scared to complain," Lopez said, because they are afraid they will be "blackballed" in the future. "When you have a company that's local, they pay more taxes, hire more people, and they invest and give to local charities."

Gill said he was not aware of any of the abuses described by Lopez, and added that prime contractors usually make those kinds of decisions based on business realities such as timing and quality of work and material.

The Army Corps doesn't have any requirements for how much money is awarded to local companies, Gill said. However, there are goals for how much money is awarded to minority and other "disadvantaged" companies.

To guard against practices that cut out the locals, Lopez has asked U.S. Rep. Silvestre Reyes, D-Texas, and others to formally oversee the way the money is spent.

Reyes said his office wants to hear about such practices and has already been investigating some similar allegations.

"Those are the kinds of complaints my office gets," Reyes said, adding that his staff has monthly meetings with the Army Corps. "We get right on them and resolve those kinds of complaints."

Although local companies have a responsibility to market themselves to the prime contractors, the prime contractors also have the responsibility to find out about local capabilities, said Cindy Ramos-Davidson, El Paso Hispanic Chamber of Commerce chief executive officer.

"We are teaching primes that there are companies in our market who ... can do the work," Ramos-Davidson said.

A number of workshops have been held -- at least three by the Army Corps since late last year, Gill said -- where local businesses can make contacts with the larger contractors. Those meetings are vital, according to everyone interviewed for this story.

Licon said his company determined which of the major companies were likely to receive the contracts and began marketing the company's capabilities. As the company has successfully completed the federal contracts over the last four years, its bonding capacity -- basically an insurance policy guaranteeing successful completion of the project -- has grown from $100,000 to $5 million, he said.

The business also is qualified as an "8(a)" business, which is a federal program for minority-owned and women-owned small businesses that allows them to bid on "set aside" contracts.

Earlier this year, Reyes introduced a bill that would increase the cap from $3 million to $10 million for such set-aside construction contracts.

The Army Corps sets goals for how much money must be allocated for those types of businesses each year and the amounts and numbers of contracts vary depending on how close they are to the goals, Gill said.

Future opportunities exist, Gill added. Although future funding depends on how much Congress allocates and what schedules the Army sets up for moving soldiers into Fort Bliss, it is anticipated that the next three fiscal years, starting with 2007, will be when the bulk of the $2.6 billion will be awarded, he said.

After that the amounts will taper off, he said.

"It's just amazing the amount of work coming up," Licon said. "If we spend some time learning the system, this is just the tip of the iceberg, so the quicker we learn to work with the system, the better off we're going to be."

This article was published in Week 6 of the El Paso Times Poverty Series.