Minority firms get more Md. contracts

May 10, 2006|By HANAH CHO | HANAH CHO,SUN REPORTER

Maryland awarded 21 percent of all state contracts to minority-owned businesses in fiscal 2005, Gov. Robert L. Ehrlich Jr. said yesterday.

He said the figures show the state is moving closer to its goal of providing more government work to companies owned by women, people of color and those with disabilities.

Flanked by Lt. Gov. Michael S. Steele, state officials and dozens of small business owners, Ehrlich told a Baltimore news conference that minority- and women-owned firms received about $954 million of $4.5 billion in state contracts for the fiscal year that ended June 30.

Participation among women- and minority-owned businesses in state contracts rose by nearly 50 percent from fiscal year 2004, when the firms were awarded $641 million in state contracts, or 17.4 percent, he said.

"Everyone has to be able to compete," Ehrlich said. "You can't be a pro-business state if a significant population is left behind."

The state has a goal of 25 percent minority participation in state contracts under its Minority Business Enterprise program.

Attributing last year's gains to his administration's efforts to expand the program, the governor vowed to keep reaching out to the minority business community.

At least 51 percent of businesses in the program must be managed, owned, or controlled by women, minorities or physically or mentally disabled individuals.

Some Democratic lawmakers expressed skepticism about the report's accuracy, noting a state study in March that found racial disparities in the awarding of state contracts.

They also said Ehrlich, a Republican, had received help for the minority business program from the Democratic-controlled General Assembly.

"If the numbers are accurate, we're all pleased" that the program is expanding opportunities, said Del. Dan K. Morhaim, a Baltimore County Democrat.

Sharon R. Pinder, who heads the state's Office of Minority Affairs, said yesterday's report on state procurement represented a different time period than the disparity study. She said the latest report was prepared by Sage Policy Group, an independent consulting company.

The report also showed Maryland made contract payments of $568 million to women- and minority-owned businesses in fiscal 2005, compared with $300 million in the corresponding period of 2004.

State officials say these payouts represent a more accurate measurement of money going into the minority business community.

BITHGROUP Technologies, Inc. is one company that has grown because of state contracts, said Robert Wallace, owner and president of the Baltimore business. The minority-owned company has received millions of dollars for wireless engineering and networking security work since 1995.

"To be successful in business, you have to believe you could win," Wallace said. "So what the state has done is create an environment where guys and gals like me believe we could win."

But Wayne R. Frazier, president of the Maryland-Washington Minority Contractors Association and former head of Democrats for Ehrlich, said he'd like to see proof of where the millions of dollars in state contracts for minority-owned businesses went.

Among the association's 230 members representing construction, engineering and janitorial firms, none got a state contract in fiscal 2005, Frazier said.

"My constituents and myself, we all want to see who is winning because when we look around the room ... the question that is asked is, `Are you part of this group?' and not one can say they're part of the group," said Mr. Frazier in an interview.

Pinder, who has the Cabinet-level title of special secretary of the minority affairs office, said the state has come a long way since a 2002 legislative audit found that state agencies inflated their minority contracting figures.

After Ehrlich took office that year, the governor assigned Steele to head a commission to study the state's minority business program and recommend changes.

During a public conversation with Comptroller William Donald Schaefer last year, the governor sparked controversy by suggesting the minority business program should end at some point. Ehrlich later said he was committed to the program.

This year, the General Assembly approved legislation - sponsored by Morhaim in the House of Delegates - to extend the minority business program until 2011.

hanah.cho@baltsun.com

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