♪ ♪ ♪ >> New contract opportunities for business owners in communities of color, next on "The Chavis Chronicles."

>> Major funding for "The Chavis Chronicles" is provided by Reynolds American, dedicated to building a better tomorrow for our employees and communities.

Reynolds stands against racism and discrimination in all forms and is committed to building a more diverse and inclusive workplace.

American Petroleum Institute -- through the core elements of API's Energy Excellence Program, our members are committed to accelerating safety, environmental and sustainability progress throughout the natural-gas and oil industry in the U.S. and around the world.

You can learn more at api.org/apiEnergyExcellence.

Over the next 10 years, Comcast is committing $1 billion to reach 50 million low-income Americans with the tools and resources they need to be ready for anything.

♪ ♪ >> This is a special edition of "The Chavis Chronicles."

We'll focus on the Small Business Administration of the United States government, and we have two leaders with us today.

Bibi Hidalgo, you are the first female administrator of the SBA dealing with contracts and business development.

And of course, Ron Busby, you're over all the Black Chamber of Commerces in the United States.

Well, we welcome both of you to "The Chavis Chronicles."

>> Thank you for having us.

>> Thank you very much.

>> Bibi, let's start with you.

How do you feel about President Biden appointing you in this prestigious position?

>> You know, it's an extraordinary opportunity and time to be here because this is one -- this is a time in our nation, as you have seen, in the last two years, where we realize procurement, government purchasing -- it's not just a technical issue, it's not just a kind of, you know, policy issue.

It has everything to do with building wealth in this country.

We are the biggest purchaser, not only in the United States, but in the world.

$560 billion every single year.

So, when I had the opportunity to take this role at this historic time -- and, in part, the attention to it is very much as a result of what happened in 2020, with the murder of George Floyd and this country suddenly realizing, "Wait a second.

What are we doing to empower the leadership and talent and executive leadership and talent of the Black community across this country?"

And that comes back to Black-owned businesses and contracting.

And so, as a result of Black Lives Matter and the protests, we got to a point where the president and the Cabinet have very much realized, "This is -- This is beyond just us purchasing as a government.

This is how we invest in our nation and the talent of our country's businesses so that we tap into that innovation, the ingenuity, but we build wealth," because that's what contracting does.

It builds wealth.

>> From an immigrant family, how do you see the inclusiveness of the Biden-Harris administration in its appointments?

Some say that it's the most diverse administration in the history of the United States.

Can you bear witness to that?

>> Absolutely.

It's not only just the most diverse.

We've gotten to another level as far as Black leaders, Latino leaders, Asian-American being in policy roles... >> Yes.

>> ...'cause that's the key.

We often find ourselves in the communications role, in the legislative affairs, but the sausage has already been made in the backrooms by then, you know, in the closed-door conference room.

And so here we are at yet another historic phase where we are shaping policy.

>> Right.

>> And that's one of the things I'm so proud about this administration, about President Biden and Vice President Harris, who have been leading.

>> So, Ron, tell our audience -- what is the intersection between the Black business community and the U.S. Department of Commerce SBA, Small Business Administration?

>> The U.S. Black Chamber is really founded on our five pillars, advocacy being the first one, access to capital, contracting, which is extremely important to what we were just discussing, entrepreneurial training -- that's had a huge impact on Black businesses over the last couple years.

We lost 41% of our businesses, and when they were surveyed, the majority of them, over 70%, said -- >> How'd you lose these businesses?

Was it because of COVID, or was it because of lack of opportunity, or a combination?

>> Combination.

We were already facing challenges prior to COVID.

During COVID, we saw a bad policy, as was being discussed, under the payroll protection plan, which really did not include our businesses.

As I was on here before, I said we own 2.6 million Black firms, but 2.5 million had no employees.

So, you had a program that was set to save the employees, but not the employers.

And for businesses that were owned by African-Americans and Black people around the country, it did not really relate to us.

So that's why it was so important to have people of color sit in the rooms when the conversations and policies were being created so that we could say, "This is not good for our business.

This is not good for our communities."

And so to have people like Bibi sit in those rooms had a great deal of impact on the U.S. Black Chamber, as well as Black businesses going forward.

>> So, you're affirming that the situation is getting better.

>> It's getting better.

We still have a great deal of challenges as it relates to contracting opportunities.

It was wonderful to hear the President of the United States go to Tulsa last year and say we're going to increase our spend from 5% to 15%.

What we now have to do is to continue to challenge this administration, as well as the SBA, and contracting agencies to be intentional.

It's one thing to say a minority program.

It's a different thing to say a Black business program or a Hispanic business program.

For too long, we've been painted under the broad brush of minority programs, and it has not moved our communities, our businesses forward at all.

The same disparities that we had in the '50s are the same numbers that we have today in 2022.

When the president made that announcement in June in Tulsa, it was the first time that we saw what the government was actually spending with Black firms, and unapologetically, the number is 1.76%.

That's less than $10 billion of this country's contracts between awarded to Black firms.

So now it's upon us to say, "How can we double that?

How can we triple that?

How can we move that forward?"

But it started with intentionality.

We had to uncover what was really being spent in our communities so that we could really have a conversation about equality and equity.

>> From your perspective, Bibi, as the administrator for business development and outreach to these communities of color, what are you seeing?

>> From day one, Administrator Guzman and I set out to make sure we got this data out -- because we need to establish accountability and transparency so we know where we're going from there.

And so we worked very closely with the White House, with all the major contracting agencies, of which there are seven -- we call them the Big Seven -- that represent 90% of the federal spend.

And we said, "It's time to put this out there so we know exactly how we're going to shape our policies and approaches to create equity in procurement," which is what the day-one executive order signed by the president indicated.

It wasn't just general equity policy.

It was also procurement.

That's the game changer here.

So, when we were able to finally release that data -- and, I mean, working with White House counsel, with Department of Justice, everyone -- we now know -- we now know, as a country, as Mr. Busby stated, we only have -- it's about 1.67% Small Business contracting with the federal government among Black-owned businesses.

If you add -- >> That's a very small number.

>> It's a very small number.

If you add kind of mid-size or large Black-owned businesses, that gets you to 1.9%.

Not a big difference, but as far as Small Business contracting, it's only 1.67% Black-owned.

It's 1.78% Latino-owned firms.

And, you know, the Black community owns about 9% of the businesses in the United States.

In the Latino community, it's, I think, somewhere around 12%, 13%.

So, there's a huge disparity there, and that's when Ron says, "We can't just say minority contracting anymore."

It's time to have the conversation about where we have a huge number of really talented, capable firms, and yet we're not tapping into them.

>> Right.

But what are the future opportunities for us to get beyond less than 2%?

>> So, as Mr. Busby stated, with the president at Tulsa indicating that he wants to see 15% -- his commitment is 15% small disadvantaged business contracting.

And he wants to see us get there by 2026.

So, each year, we need to do about a 1% increase to get to 15%.

So, my team over the last few months has been negotiating with all 24 of the Cabinet agencies to figure out our path to getting -- >> So, a government-wide approach.

>> Exactly.

My office in particular is the one office within SBA that has a whole-of-government-policy approach when it comes to contracting.

And so we negotiate with the agencies to see how they're gonna get there.

And it's -- they are very collaborative, but it's -- it's a -- you know, it's a very tough road in a way to figure out, "How do we get it up 1%?"

'Cause 1% is a lot when you're talking about a $560-billion contracting budget.

And even though we can't have specific by race, by putting the data out there, now we know exactly where we stand.

And as I like to say it, it's not that we're helping businesses.

It's that they're helping us because when we tap in to executive leadership at these companies, we benefit.

The federal government benefits.

This is where innovation occurs in the nation.

And as we know, with Black leaders and Latino leaders, getting to a glass ceiling often in corporate America and in government, where's the best talent in this country often go?

They start their own business.

So, we -- we need to benefit from that because that's where the innovation is.

And that's what will make our government even better.

>> Ron, what is the trim, from your informed perspective?

What do you see, the trim going forward?

>> For us here at the U.S. Black Chamber, we're saying that we got to start to look at the industries that we're currently not in.

If you look at Black and brown businesses across the country, Hispanic- and Latino-owned, we're typically in one industry -- service industry.

But if you look at what's getting ready to happen if the infrastructure bill does actually play itself out -- >> It's the law now.

>> It's law.

That means there's going to be great numbers of opportunities for large contracts.

And so we're telling our businesses, "Go find out where the dollars are being spent, and let's start those businesses."

Let's -- >> The energy sector.

>> Energy sector is great.

Technology is great.

Biopharmaceuticals is always going to be there, as well as just e-commerce opportunities.

And so, for us, we're telling our businesses to think outside the box, but think large.

Let's get out of the mind-set of, "Let's create another small business."

So often, when you talk about minority firms, they put us in the bucket of small businesses.

Nothing against the Small Business Administration, but all of our businesses aren't small.

I also want to say certification is extremely important.

We're talking about, through the SBA, what's going on with the pri-- I mean with the public sector, but the private sector is also a huge component and a huge spender.

And so we're asking now -- Now that we've seen the federal government display their numbers, we're wanting the private sector to do the same thing.

So, we're going to our large companies and saying, "What is your spend with Black firms?"

And when we start to see those numbers to also be shared with the public, you would be surprised now when Black people can say, "That's not only a good product, but they also have a good mission of making sure that they're supporting our businesses, as well as our communities."

And so I think generational wealth is being created through both the private sector as well as the public sector going forward.

>> I mean, how many brothers and sisters know these opportunities are out there?

>> That's a great question.

And I was talking to some of your staff before we got on, and I say the SBA has great programs.

As a former business owner, I know the resources that they have.

The challenge is really getting that information out to the business owners across the country.

And so this year they -- or last year they created a program called the Navigator, the Small Business Administration Navigator program, which really allows now the five organizations, including the National Urban League and the U.S. Black Chamber, to go to our businesses across the country that may not necessarily have a relationship with the SBA and tell them, "Here are the resources.

Here are the opportunities.

Here's the information that you don't know."

Last year, as I was stating, 41% of our businesses went out of business, and when we surveyed them, 70% said the reason that they went out of business was lack of information.

It wasn't lack of acumen.

It wasn't even necessarily lack of capital, but they just didn't know what they didn't know.

And so the SBA Navigator program is really developed and designed to be able to allow organizations like the U.S. Black Chamber to go out and reach and touch those business owners that normally don't have a relationship with the SBA office in their local communities and tell them, "Here's what you need to know to be successful long term," not just getting through difficult times like the pandemic, but if we are really going to create businesses that have sustainability and have the ability to be able to hire and continue to grow, we've got to inform them on relationships, access to capital, contracting, and entrepreneurial development.

That's how we change what's going on at the SBA to benefit our businesses and, ultimately, our communities.

>> Let me ask you this, Bibi.

What is your message to young people?

Are there increasing entrepreneurial opportunities in America today?

>> Definitely.

We have seen with, again, the changes over the last two years in this country that we're having more conversation about it.

And so the government is going another direction, and I'm seeing more and more major corporations doing the same.

And so for the innovators that we have among the young generations, this is an opportunity to not only -- you know, as they go to school and study engineering, finance, ultimately -- or, you know, science, and they want to create an invent, ultimately where do you -- how do you bring that out to the market?

That's where the federal government can come in and be a partner.

Now, I will tell you, Dr. Chavis, we had written up a $4-billion plan in the Build Back Better plan, which, as you know, has struggled in Congress, to invest -- >> I'm hoping one day that the Congress will finally -- >> [ Chuckles ] >> I know there are different components to the Build Back Better plan, but... >> Right.

>> ...you're saying one of those components touches on entrepreneurial development for young people.

>> And HBCUs.

>> Exactly.

>> And historically Black colleges and universities and historically Latino universities.

>> That's right.

We wrote up a really extensive plan, working very closely with Senator Cardin's team -- he's the head of the Small Business in the Senate -- and Representative Nydia Velázquez's team in the House to invest in HBCUs, minority-serving institutions, HSIs, Hispanic-Serving Institutions, to create 8(a) and other business development academies at those institutions, where local businesses can go and get that training -- because it would be going to organizations that are very much a part of their community, of their family.

That's where we want to be able to be much more accessible with these programs.

But then, apart from that, we wanted to build it into the curriculum of the university through this plan that we had put together so that students start learning about it from the beginning of their college education.

So, as they are thinking and dreaming and planning and strategizing, they can also see how they can partner with the biggest purchaser in the country and learn about that so by the time they graduate, there's no fear there, you know, that they can -- they know exactly what to do to start building out their business and providing and offering their services and their products to the U.S. government.

Now, of course, we have to figure out how we're going to continue to try to implement parts of it without that funding, without that financial backing of the Build Back Better plan.

So, we're in the midst of conversations right now to see, "Alright, how do we get the word out?

How do we work with HBCUs?"

And I welcome very much your input to see how they can start building that out, and perhaps nonprofit sector and even private sector can be partners in that so that we can get this institutionalized so it can become part of these important institutions in the communities across the country.

>> Ron, what is your number-one recommendation of how to close the wealth gap in America between communities of color and white America?

>> The fastest way to create wealth in the Black community is through entrepreneurship.

End of conversation.

When we start businesses in families, in communities, that's how we create wealth.

And in reference to the unemployment conversation that we're having, which is a huge indicator of what's going on, I always bring it back to simple math.

There's 2 million Black people today that are unemployed, but there's 2.6 million, 2.9 million Black-owned businesses.

So, simple math says if each one of those businesses can hire one of those unemployed people in our communities, I don't have to worry about unemployment in the Black community anymore.

I don't have to worry about the federal government making that happen or the private sector.

It is really upon us as business owners to make sure that we can grow our businesses and then hire from within our communities.

That's how we deal with decreasing the wealth gap between white businesses and Black businesses, which ultimately decreases the wealth gap between white families and Black families.

>> So, Bibi, I'm gonna ask you the same question.

Not only from a Latino perspective, but in your position as the Assistant Administrator for Contracts and Business Development at SBA, what is your number-one recommendation that Americans need to do to close the race -- the wealth gap without any disparities as to race or ethnicity?

>> Well, I will tell you, having lost -- I actually lost two family members in less than 18 months -- my mother and my brother.

And my mother had what they often call all the social determinants.

She had type 2 diabetes.

She was -- obesity, heart disease.

And my brother also had a very serious pre-existing condition that made him very susceptible at the beginning of this pandemic.

And so it's something I think about quite often in terms of what's really hurting our communities, things that can be so preventable, you know, like healthcare.

And so in narrowing the racial wealth gap, I will say of course seeing the numbers of people that are able to get back onto the Affordable Care Act is enormous.

Being a part of, as Ron said, a company that's growing, that can, you know, provide health benefits is one way that we're gonna close the racial wealth gap because too many families are struggling.

And, you know, we saw it.

We -- We -- Our family, even though, as you mentioned, came from Cuba, we always struggled.

It was a tough -- a tough challenge.

And to this day -- now there's four of us, there used to be five -- we supported our parents financially once we grew up and went to college, and to this day we're supporting my father financially.

So, you get that squeeze, and it's tough.

It's tough when you're also raising your own children.

It's tough when you're dealing with chronic health issues.

So, the more that we can take advantage of these opportunities, like affordable healthcare, like government contracting, be able to lean on these important resources -- because, as I mentioned, we need to partner with Black-owned business leaders across this country.

We're only gonna be a better government if we do.

So, this is a partnership.

And that's what we want to do.

We want to come together.

>> So, I'm listening very carefully to your answer.

You say the future of our democracy, the future of our economy -- that diversity, equity, and inclusion is something that's good for business.

>> Definitely, definitely, but it's not -- it's not just in name.

I think we've heard that too much for too long.

It's about transparency and accountability.

So, if you've got diversity, equity, and inclusion, and transparency -- so we know what's the baseline -- 'Cause it's gonna be hard.

We need to work together to get these numbers up, and that's why we wanted to put them out.

But you have that transparency, and then you have accountability.

What are our buyers, the people who control the purse strings -- billions and billions of dollars in decision making every year -- what are they doing to develop their relationships?

What are they doing to go out and meet new firms?

That's why we put it into performance evaluations -- because now they're also being measured about what they're doing to make and create those relationships.

And that can be done across the country, and that's what will be the game changer here.

>> Bibi Hidalgo, Ron Busby, I thank both of you for joining "The Chavis Chronicles."

>> Thank you for having us.

>> Thank you very much.

♪ >> Major funding for "The Chavis Chronicles" is provided by Reynolds American, dedicated to building a better tomorrow for our employees and communities.

Reynolds stands against racism and discrimination in all forms and is committed to building a more diverse and inclusive workplace.

American Petroleum Institute -- through the core elements of API's Energy Excellence Program, our members are committed to accelerating safety, environmental and sustainability progress throughout the natural-gas and oil industry in the U.S. and around the world.

You can learn more at api.org/apiEnergyExcellence.

Over the next 10 years, Comcast is committing $1 billion to reach 50 million low-income Americans with the tools and resources they need to be ready for anything.

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