Governor Ehrlich Signs Minority Business Bill

By Nia Davis

Staff Writer

Republican Governor Robert L. Ehrlich, Jr., signed legislation last Tuesday intended to help failing minority businesses in the state by requiring agencies to send at least 10 percent of state purchasing contracts to small businesses.

The legislation is one of several bills intended to improve flaws in the Minority Business Enterprise Program (MBE), a 30-year-old program that has recently come under scrutiny in a 2002 audit which found that state agencies were over reporting their compliance with the law by 40 percent. In response to the audit, Ehrlich signed an executive order to form the Governor's Commission on Minority Business Enterprise Reform in June 2003, as a way of accountability of the state agencies involved as well as ensuring that state funds allotted to minority business owners as required by law, were going to the minority businesses.

Sharon R. Pinder, who currently serves as the Director of the Governor's Office on Minority Affairs, also served on the Governor's commission as its executive director. With the new legislation, her office will triple in size and its main priority will be to enforce the new laws by making sure that the state agencies are complying with the laws.

Currently, 82,000 minority-owned and 112,000 women-owned businesses are operating in Maryland according to the most recent Census data. Minorities, including women, own about 80 percent of the businesses in Prince George's County. By law, Maryland is required to award 25 percent of its contracting dollars to minority-owned businesses.

According to the Milken Institute, an independent think tank dedicated to improving the lives and economic conditions in the US and around the world, the number of businesses launched by minorities has been increasing by 17 percent a year, six times the growth rate of all U.S. firms. However, the success rate for these businesses has been declining, mainly due to issues with funding.

Andre Downey, a small-business owner of Environmental, Engineering & Construction, Inc. in Landover, said that he would remain "cautiously optimistic" about the changes in legislation being made.

"I'm going to be watching closely," Downey said. "My experience with them [the state] hasn't been so good. The state has helped me grow my business, but as far as going out and acquiring opportunity the state has been so-so." Downey said that he is in the process of suing a state agency for the way he was treated as a subcontractor.

"I'm not just saying I'm not going to approach going out to the state," Downey said. "I prefer being a prime contractor as opposed to a subcontractor." Downey said that being a prime contractor with the state is difficult for minority businesses because they do not have as much experience.

J. Trent Rawley, vice president of corporate development for Digital Management, however, is not optimistic about the new legislation.

"Ten percent is just too low," insisted Rawley, who works alongside the Small Business Administration. "It needs to be higher than that." He suggested that the Ehrlich administration adopt policies and procedures currently used by the U.S. Small Business Administration to promote enforcement and "become more accessible to the small business community."

"The state needs to adopt federal legislation that will allow them to do what they need to do."

Gloria Aitken, president of Acudor, a small public relations consulting firm in Clinton agreed.

"Ten percent is not a high enough figure," Aitken said. "The level of monitoring is not enough. There's no follow through on enforcing stipulations and requirements."

Rawley insisted that the measures were designed to keep the number of state contracts with minority-owned businesses to a minimum.

"They don't want us to get in. They don't want us to get better."

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