Colorado's Business Opportunity Gap: What Disparity Studies Reveal About Minority-Owned Businesses

What do Colorado's disparity studies tell us about access to government contracts, business growth, and opportunities for minority-owned businesses?

If you own a small business in Colorado, especially a construction, landscaping, concrete, transportation, professional services, or other trade business, you may have heard that government contracting can create opportunities for growth.

But there is another question worth asking:

Are all businesses entering that marketplace with the same opportunities?

Colorado has conducted disparity studies to examine that question.

The findings do not mean that every minority-owned business faces discrimination or that every government contract is unfairly awarded. A disparity study looks at broader patterns: who is available to perform the work, who actually receives contracts, and what barriers businesses encounter in the marketplace.

And the data provides an important lesson for entrepreneurs:

Being qualified is only one part of being able to compete.

What Is a Disparity Study?

A disparity study is an analysis used by governments to determine whether businesses owned by different groups are participating in public contracting at levels that would be expected based on their availability and qualifications.

Researchers generally examine:

- The number of businesses available to perform specific types of work

- Government contract and subcontract awards

- The dollar value of those contracts

- Prime contracts versus subcontracts

- Industry and geographic markets

- Access to capital and financing

- Bonding and insurance

- Business networks and relationships

- Experiences reported by business owners

The basic question is:

If qualified businesses are available to perform the work, are they receiving public contracting opportunities at a comparable level?

Keen Independent Research, which conducted Colorado's statewide study, describes disparity analysis as a comparison between the share of contract dollars going to particular groups and the availability of those businesses to perform the work.

Colorado's Statewide Disparity Study

Colorado's statewide disparity study was conducted by Keen Independent Research and delivered to the Colorado Legislature in 2020.

The study examined State contracts during the period from July 2014 through June 2018.

The study found evidence that the playing field was not level for certain groups of businesses in Colorado.

The statewide study found that minority- and women-owned businesses received approximately 8% of State contract dollars, compared with approximately 28% that might have been expected based on the availability analysis.

The State itself summarized the study by stating that disparities continued to exist in the awarding of contracts to historically underutilized businesses.

That is a significant difference.

But the story becomes even more important when we look at specific industries.

What About Hispanic-Owned Businesses?

The statewide study specifically analyzed Hispanic American-owned businesses.

In the construction industry, the study found a substantial disparity for Hispanic American-owned firms seeking prime contracts.

For Colorado State construction prime contracts during the study period:

Business ownership| Utilization| Availability

Hispanic American-owned| 2.77%| 8.83%

That means Hispanic-owned businesses represented approximately 8.83% of the businesses available for that work, but received approximately 2.77% of the contract dollars.

The resulting disparity index was approximately 31.

Colorado's methodology considered an index below 80 to represent a substantial disparity.

This distinction is important:

The study did not simply count how many Hispanic-owned businesses existed. It compared their availability with their actual participation in State contracts.

Prime Contractor vs. Subcontractor

There is another part of the data that small contractors should understand.

Government contracting is not always:

Government → Your Business

There can be several layers.

A project might look more like:

Government Agency

↓

Prime Contractor

↓

Subcontractor

↓

Lower-Tier Subcontractor

A small business may therefore participate in a public project without being the company holding the government contract directly.

This is particularly important for newer contractors that may not yet have the size, bonding capacity, financial history, staffing, equipment, or past performance required to compete for larger prime contracts.

But there is an important distinction.

The Colorado study does not support the statement that Hispanic businesses are "usually" third-tier subcontractors.

In fact, the statewide construction data showed something more complicated.

For construction subcontracts, Hispanic American-owned firms represented approximately 7.83% of available firms and 9.33% of subcontract dollars, meaning Hispanic-owned firms did not show a substantial disparity in construction subcontracts during the study period.

The substantial disparity appeared in construction prime contracts.

That difference matters.

It suggests that the question is not simply:

«"Are Hispanic businesses getting government work?"»

A better question is:

«"At what level are they participating, and are they able to move from subcontractor to prime contractor?"»

That is a much more useful business-growth question.

The Contracting Ladder

For a small contractor, government contracting can be viewed as a growth ladder.

Level 1: Build the Business

Before pursuing public contracts, the business needs a strong foundation:

- Legal structure

- Business banking

- Accounting

- Insurance

- Licensing

- Proper pricing

- Contracts

- Payroll systems

- Safety procedures

- Capacity planning

- Professional marketing

Level 2: Become Contract-Ready

The business begins preparing for public work:

- Register with relevant procurement systems

- Identify appropriate NAICS codes

- Monitor solicitations

- Understand bonding requirements

- Build a capability statement

- Organize past-performance information

- Develop proposal procedures

Level 3: Become a Subcontractor

A smaller company may first pursue opportunities with established prime contractors.

This can provide experience with:

- Public projects

- Government specifications

- Documentation

- Scheduling

- Compliance

- Change orders

- Reporting

- Larger project environments

Level 4: Pursue Prime Contracts

As capacity increases, the business can begin pursuing opportunities directly from government agencies.

Level 5: Build a Scalable Company

The goal should not simply be:

"I won a government contract."

The bigger goal is:

"I built a company capable of winning and successfully delivering larger contracts."

The Problem Is Bigger Than the Contract

The Colorado disparity study also examined marketplace conditions beyond government contracting.

The study identified evidence involving barriers related to areas such as:

- Access to financing

- Bonding

- Insurance

- Business formation and growth

- Relationships and networks

- Opportunities to enter and advance within certain industries

The Minority Business Development Agency summarized the Colorado findings as including unequal opportunities to start and operate businesses and obtain financing and bonding, as well as differences in business outcomes and revenues.

This is why government contracting should not be viewed as an isolated sales strategy.

A business that cannot obtain adequate financing, bonding, insurance, equipment, employees, or working capital may struggle to take advantage of a contract even when an opportunity becomes available.

Newer Colorado Data: Is the Problem Still Relevant?

The 2020 statewide study is still the most recent statewide Colorado procurement disparity study listed by the State's procurement office.

But there have been newer local studies.

Boulder County and City of Boulder

Boulder County and the City of Boulder conducted a joint disparity study using contracting data from 2018 through 2022.

Boulder County states that its 2024 study found disparities in the utilization of minority- and women-owned businesses in county contracts and subcontracts.

The County subsequently changed its procurement practices, including targeted outreach and a Contract Participation Goals program for certain projects.

This is important because it demonstrates that disparity studies are not simply academic reports.

Governments can use the findings to change procurement practices.

Denver: A More Recent Look

Denver also commissioned a new Availability and Disparity Study examining participation by small, minority-, and woman-owned businesses in City contracts and conditions in the local marketplace.

The study examined Denver's contracting environment and included business surveys, interviews and outreach regarding barriers to opportunity.

Reporting on the completed study indicates that the study examined Denver and airport contracting from 2016 through 2023 and found that minority- and women-owned businesses received approximately 21% of city contract dollars compared with approximately 37% expected based on availability. It also identified continuing barriers involving areas such as capital, credit and business networks.

That gives Colorado entrepreneurs something important to consider:

The conversation did not end with the 2020 statewide study.

Local governments are continuing to examine who participates in public contracting and what barriers remain.

What Does This Mean for a Hispanic Small Business Owner?

The data should not be used as an excuse.

It should be used as information.

If you own a Hispanic-owned construction or trade business, the question should not be:

"Is the system against me?"

Instead, ask:

1. Where are the opportunities?

Which agencies purchase your services?

Which cities, counties, school districts, transportation agencies, and other public entities have contracts that match your capabilities?

2. What level can you realistically enter?

You may not be ready for a $2 million prime contract.

That does not mean you should ignore the opportunity.

A subcontracting opportunity may be a more appropriate entry point.

3. What is preventing you from moving up?

Maybe the problem is:

- Bonding capacity

- Cash flow

- Pricing

- Past performance

- Staffing

- Equipment

- Proposal writing

- Financial documentation

- Lack of relationships with primes

- Not knowing where opportunities are posted

Those are business problems that can be addressed strategically.

4. Are you actually contract-ready?

A government opportunity can expose weaknesses in a business very quickly.

Before bidding, you need to understand:

Can I perform the work?

Can I finance the work until I get paid?

Can I meet the insurance and bonding requirements?

Can I staff the project?

Can I manage the reporting and compliance requirements?

Will the contract actually be profitable?

Winning the contract is not the same thing as building a profitable business.

From Subcontractor to Prime Contractor

For many small businesses, subcontracting can be a strategic step rather than a permanent position.

The goal can be to use smaller opportunities to build:

- Past performance

- Relationships

- Capacity

- Revenue history

- References

- Project-management experience

- Financial strength

- Bonding capacity

- Credibility

Then the business can gradually pursue larger opportunities.

This is where government contracting becomes part of a business-growth strategy, rather than simply another source of revenue.

What Small Businesses Can Do Now

If you want to compete for government contracts, start with the fundamentals.

Step 1: Know your numbers

Understand your:

- Revenue

- Gross profit

- Labor cost

- Overhead

- Equipment cost

- Cash flow

- Break-even point

Step 2: Know your capacity

Know how much work your company can realistically handle.

Do not bid on a contract simply because the dollar amount looks attractive.

Step 3: Identify your target agencies

Create a list of government entities that regularly purchase your services.

Step 4: Monitor opportunities

Do not wait until a solicitation appears on social media.

Build a system for finding opportunities consistently.

Step 5: Build relationships

Learn who the major prime contractors are in your industry.

Introduce your company before you need the contract.

Step 6: Prepare your proposal materials

Have your:

- Capability statement

- Business information

- Certifications

- Insurance information

- References

- Past performance

- Pricing information

- Key personnel information

organized and ready.

Step 7: Evaluate before bidding

Not every RFP is a good opportunity.

Ask:

Does this contract fit my business?

Can I meet the requirements?

Can I make money?

Can I finance the project?

What are the risks?

What happens if the project changes?

The Bigger Lesson

The Colorado disparity studies provide evidence that opportunity in the public contracting marketplace has not always been distributed equally.

But the answer for a small-business owner cannot simply be to point at the disparity.

The more powerful question is:

What can I do with this information?

If you are a small contractor, the objective should be to build a company that is increasingly difficult to overlook.

That means becoming financially strong.

Operationally organized.

Contract-ready.

Strategically connected.

And capable of moving from smaller projects to larger opportunities.

The data tells us that the playing field has not always been level.

Our responsibility as business owners is to understand the system, identify the opportunities, and build businesses capable of competing within it.

Need Help Evaluating an RFP?

Finding an opportunity is only the first step.

Before investing time and money into a proposal, your business should determine whether the opportunity is actually a good fit.

At Inclusivo, we help small businesses evaluate opportunities, understand requirements, strengthen their business foundation, and develop strategies for pursuing government contracts.

Found an RFP and not sure whether you should bid?

Start with our RFP opportunity assessment.

Important Disclaimer

This article is for educational and informational purposes only. It is not legal, financial, tax, procurement, or government advice. Disparity-study findings are based on specific methodologies, time periods, industries, geographic markets, and datasets. Individual businesses and contracts may have different circumstances. Businesses should review the current solicitation requirements and consult appropriate legal, accounting, procurement, or other qualified professionals when necessary.