Minority Contractors in Construction: Definition, Impact, and Why Certification Matters

Key highlights

Minority contractors are businesses that are at least 51% owned, operated, and controlled by people from historically underrepresented groups—most commonly African Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and Subcontinent Asian Americans.

Despite the construction industry’s size and importance, representation remains uneven. Only 6.8% of U.S. construction companies are owned by African Americans, a gap that points to deeper structural barriers and missed opportunity across the sector.

On a broader business level, underrepresented groups owned about 20% of employer firms in 2020. That progress matters—but it also reinforces how much work remains, especially in industries like construction where capital access, networks, and long-standing procurement patterns can be hard to break into.

Minority contractors are not just “participants” in the industry—they’re catalysts. Greater inclusion strengthens diversity, innovation, and competitiveness, helping firms and project teams bring new approaches, stronger community ties, and resilient growth strategies.

And there’s a practical reality too: government programs and regulations often require a percentage of contracts to be awarded to minority-owned or disadvantaged businesses, creating pathways to more equitable access—when companies know how to qualify and compete effectively.

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The underrepresentation problem—and why it matters

Construction is one of the most opportunity-rich industries in the country, but it can also be one of the most difficult to enter and scale in. When minority contractors are underrepresented, the industry loses out on:

• Fresh competition that drives better pricing and performance

• More diverse subcontractor ecosystems that reduce concentration risk

• Innovation in delivery, workforce development, and community engagement

• Local economic growth, especially in communities that have historically been excluded from major projects

The numbers make it hard to ignore: if only a small slice of construction firms are minority-owned—particularly African American–owned—then the playing field is still tilted, regardless of demand for qualified contractors.

What is a minority contractor?

A minority contractor is typically defined as a business that is:

• At least 51% owned by one or more individuals from a recognized underrepresented group

• Operated and controlled by those same individuals (ownership alone isn’t enough)

Groups commonly included in minority contractor definitions include:

• African Americans

• Hispanic Americans

• Native Americans

• Asian Pacific Americans

• Subcontinent Asian Americans

This definition matters because it’s the gateway to certifications, programs, and contract opportunities specifically designed to improve participation and fairness in procurement.

The role minority contractors play in a stronger construction industry

When minority contractors gain real access to projects—not symbolic access—the benefits show up fast:

• Better project outcomes through broader competition

• A larger, more capable subcontractor bench (especially valuable in tight labor markets)

• Stronger community trust on public and infrastructure projects

• More resilient supply chains, because dependency on a small vendor set decreases

Diversity isn’t a slogan here—it’s a performance lever.

Why certification matters (and what it unlocks)

Certification as a diverse supplier isn’t just a label. It can unlock:

• Eligibility for set-aside and goal-based contracting

• Improved visibility with government agencies and prime contractors

• Credibility during bid evaluations and vendor qualification

• Access to mentorship and development programs

Two of the most important designations in construction procurement are:

MBE: Minority Business Enterprise

MBE certification is widely recognized and often used by public agencies and large private organizations to meet supplier diversity goals.

DBE: Disadvantaged Business Enterprise

DBE certification is especially important for U.S. Department of Transportation–funded projects and similar public works pipelines. There are around 87,000 DBE-certified enterprises in the U.S., showing just how central this designation has become for equitable contracting.

A major growth pathway: SBA 8(a)

For many minority-owned businesses, the Small Business Administration’s 8(a) Business Development Program is a serious accelerator. It’s designed to support disadvantaged businesses through:

• Business development resources

• Contracting assistance

• Mentorship and networking

• Program support to help firms compete and grow

If your goal is government work and long-term scale, 8(a) is one of the most strategic programs to understand early.

The bottom line

Minority contractors are essential to the future of construction—not as a “nice-to-have,” but as a core driver of innovation, competition, and economic growth. The industry still has clear representation gaps, but the combination of certification pathways, government contracting goals, and development programs creates real openings for businesses ready to pursue them.

The work isn’t easy, and the barriers are real. But the opportunity is real too—and it’s growing.