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This Female, Native American, Service-Disabled Veteran Couldn't Get Funding And Kept Getting Scammed. Here's How She Built GC Green.

This article is more than 6 years old.

Liz Perez

When Liz Perez returned home to Southern California in 2006 after serving in the Navy, the combat veteran found herself in another trying chapter. The single mother was pregnant with her second child, and homeless after fleeing a verbally abusive relationship. She was also recovering from muscular and skeletal injuries caused by an accident sustained while on active duty in Bahrain. While living in a Motel 6 near Palomar Airport in Carlsbad, she worked full-time at Xnergy, a construction company. She used her disability check and savings to buy a home and set aside $5,000 to start GC Green. The Vista, Calif.-based installation and consulting business specializes in environmentally efficient solutions for older buildings -- be it LED lighting, solar panels or updated boiler systems. Even though checking the box for 6 different minority groups would get her into a host of small business workshops, the female, disabled veteran with Native American and Latin roots couldn’t get funding for her clean energy upstart. She discovered a common practice among prime contractors is scamming veteran-owned small businesses by using their credentials to win contracts but then failing to share the business. Instead of taking them to court, she turned to networking and negotiating for survival. In this interview, which has been edited and condensed, Perez discusses how she rose above her scammers and built GC Green to $2.3 million in revenue with 25 employees, one-third of whom are veterans.

Tanya Klich: What sparked your interest in clean energy?

Liz Perez: While I was deployed to the Middle East, I learned that a terrorist attack killed my friend, Seaman Nicole Palmer, who was on board the USS Cole while it was refueling off the coast of Yemen. This is why I am part of a group of veterans who advocate for energy policies that contribute to national security. Also, my mother’s family is from the Native Mono Indian Tribe so I’ve been raised to take care of Mother Earth and not to abuse it. From updating the Indian Legal Services Building in Escondido with a water conservation system, to installing a chiller upgrade for a VA Hospital in La Jolla, my Native roots play a major part in my mission.

Liz Perez

Klich: How did you get started?

Perez: After the military, I worked in sales at Xnergy then later pitched the idea of opening an energy-efficient department. But when their headcount fell from 65 to 18 during the recession, owners Joey Patalano and Jason Davis encouraged me to start it as a business of my own. They mentored me and told me, ‘Look, you’re a women, you’re a veteran, you’re Native. There are a lot of advantages for you.’

Klich: What advantages were available to you?

Perez: In 2008, I attended a business course at the American Indian Chamber of Commerce of California (AICC), which helped me formulate a business plan. Then I took a Veteran’s Entrepreneur Bootcamp at Syracuse University, which encouraged me to pursue my MBA through a live online program.

Klich: Has your status helped you receive funding?

Perez: No. I never got a loan or any financial assistance from the government. In the first four years, I applied for the SBA Patriot Loan but was disapproved three times without any feedback. I got approved for a bank loan but the rates were astronomical. Everyone thinks ‘Oh you’re a minority you must have a lot of money.’ But the minority and veteran status only helps us get our foot in the door. Just because you're a small disadvantaged business with several certifications does not guarantee you work. Past performance is key.

 

Klich: Why was it so difficult to get a bank loan?

Perez: From 2010 to 2014 I received a lot of pushback because lenders weren’t sure if the green energy industry was here to stay after the Obama administration. I haven’t applied for any assistance and a lack of funding is keeping us from growing and taking on larger projects that could employ more veterans.

 

Klich: How did you get by for the past eight years without funding?

Perez: My bosses at Xnergy allowed me to work with them on a few projects but I couldn’t piggyback forever. Registering as a women-owned and veteran-owned business was important. When the government issues RFPs for public projects, they incentivize prime contractors that include minority and service-disabled veteran-owned businesses. Specifically, thanks to a Supreme Court decision, the Department of Veterans Affairs must follow the Rule of Two, where the prime contractor awarded the contract must “set-aside” work for two or more veteran owned and service-disabled veteran owned small businesses.

Klich: Is the certification process easy?

Perez: Becoming a certified service-disabled veteran-owned business (SDVOB) took nearly two years. It was confirmed in 2013, only because I was going to be honored at the White House for the Veterans Advancing Clean Energy and Climate Security event. I had to call before the event and ask if my designation had been approved. After my call, they approved it within less than 24 hours.

Klich: Why did it take so long?

Perez: The “Rule of Two” creates a Catch-22 for the SDVOB community. Unfortunately, there are a few bad apples who lie about their disability, combat service, or being a veteran altogether just to get the certification. It messes it up for the rest of us who are trying to run legitimate businesses and hire other veterans. It’s wrong and un-American. I can see why the federal government goes through all of these checks and balances before certifying a business. But should it take 2 years? Probably not.

Klich: How has this fraudulent practice by some prime contractors affected your business?

Perez: It’s a rampant problem because a few high profile companies including two global energy firms have directly asked me if they could use my certifications but planned to keep all the work in-house. They just wanted to meet their small business contracting obligations. As a woman who served in the military, and a combat veteran who enjoys getting dirty and turning wrenches, I was extremely offended. At the AICC, I learned that it was a common bad practice for prime contractors to exclude other disadvantaged small businesses in their response to RFPs. If they’re doing this to veterans, they’re doing this to other groups.

Klich: Did you take any legal action?

Perez: The first three times I thought it was a mistake. But just last spring when we were left out of a contract for the fourth time, we had our lawyer call them. They apologized and agreed to include is in two new contracts, which were nowhere near as big.

GC Green

Klich: Did you decide to go ahead and work with this large construction firm?

Perez: Trust me, it kills me inside, I feel guilty for not suing, for not fighting. But filing a lawsuit might deter other prime contractors from working with GC Green in the future. I need these partnerships to put other veterans to work. Many small businesses don't want to be the whistleblower because there is fear that it might prevent future business from coming their way. Also, there are limited resources for the small business to take legal action.

Klich: How did you manage to survive, despite these setbacks and scams targeting veteran and minority entrepreneurs?

Perez: I joined the Disabled Veteran Business Alliance as a board member to help expose these bad firms and advise other military business owners to stay away from them. I also try to team up with other veteran-owned businesses. It would be great if larger companies took the lead in stitching together smaller veteran-owned businesses so we could participate in government projects. It would also be great if owners of other veteran-run businesses reached out to each other VOSBs about RFPs in other cities and states. Basically, I’m building a portfolio of other veteran-owned businesses that I can partner with. Maybe the others are too busy as small businesses, or not researching enough to realize we are stronger together. If we pooled our resources and capital, we can go after these larger government contracts. We wouldn’t need these goliath primes that are constantly winning this stuff and giving us minimal work to meet some federal requirement. In the meantime, we’re mostly constricted to smaller projects.

Perez

Klich: How else did you grow GC Green?

Perez: Negotiating with the prime contractors was also key to survival. I’ve negotiated with large companies to break up some projects into phases so that a small business like mine can handle it.  It’s also common for prime contractors to not pay subprime contractors for 120 days but the law allows VOSBs to adjust those terms to two weeks. This shorter payment period allows us to cash flow our projects. As a small business owner that goes through many challenges, I can understand why many small disadvantaged business owners don't last past 5 years of business. Access to capital is limited and prime contractors tend to stretch you out in payments as much as possible. It's a tough industry and game to play in.

Klich: What kind of projects have you worked on by teaming with other SDVOBs?

Perez: About a year ago we got a contract from Southern California Edison to inspect the energy-efficiency of their pool pumps. There are a lot of zip codes in L.A. County and as a smaller company with limited manpower and trucks, I reached out to All Temperature Air, another SDVOB in Imperial Valley. They handled Eastern L.A. while we handled Downtown L.A. It was a win-win.

Klich: How did the military equip you for the world of entrepreneurship?

Perez: An older veteran once told me that as long as he’s not in the middle of combat, then there’s no such thing as a bad day. That really moved me because he fought in Vietnam and was a prisoner of war. Additionally, the military taught me how to be fearless and to adapt to any condition or environment, which is why many Veterans like me turned to entrepreneurship during the recession.

 

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