The enactment of legislation that shifts not-for-profits from Maryland’s Minority Business Enterprise procurement program to another preference provider program will open the door of opportunity for more Black businesses and other MBEs, supporters say.
The House of Delegates, earlier this month, voted 137-0 in favour of the legislation (HB48) after amendments by the Senate, which passed it (SB1066) by a vote of 30-14. The change will go into effect July 1, though it exempts current contracts and those entered into on or before July 1, 2015.
“I was absolutely elated,” said the bill’s sponsor Del. Barbara Robinson. The Baltimore Democrat praised Gov. Martin O’Malley’s administration, singling out Lt. Gov. Anthony Brown and the Governor’s Office of Minority Affairs, for helping secure passage for the bill, which failed several times over the past three years.
“The Governor’s Office of Minority Affairs worked diligently with me to get this passed and we all celebrated because it has been such a long and arduous task to get it through,” she said.
The most difficult challenge, the lawmaker and businesswoman added, was getting not-for-profits onboard. Many labored under the misconception that she was unfairly targeting businesses that catered to the mentally and physically disabled and trying to muscle them out of the MBE program.
When the legislation was first introduced years ago, detractors came out to protest in the busloads.
“I took a lot of heat,” Robinson said. But GOMA held several meetings with stakeholders to clear up the intentions and impact of the legislation.
“We were just trying to right a wrong that should not have happened in the first place,” Robinson said. “Monies that were due to minority businesses should go to minority businesses. And monies that were due to not-for-profits that serve the physically and mentally disabled should go to them.”
Not-for-profits failed to meet the legal standard of an MBE, the lawmaker said. And, when it came to competing for contracts, they held an unfair advantage over minority-owned businesses because of their ability to present lower bids since administrative and other costs could be donated.
Of the more than 5,600 certified MBEs as of March 2013, 171 are nonprofit entities that serve mentally or physically disabled individuals. And those entities, according to a 2011 analysis, received about one-third of total MBE payments from 2006 to 2009.
Including not-for-profits also skewed the state’s numbers on MBE participation, added Sen. Catherine Pugh, who sponsored the senate version of the bill.
In 2012, GOMA reported, MBE participation across all state procurement agencies exceeded the state’s goal, reaching 25.2 percent. However, if nonprofits or community service providers were excluded, however, that rate would have been 18 percent.
“This (bill) gives us a truer picture of what is being done as it regards MBEs in the state,” Pugh said.
Calvin Mims, president of Calmi Electrical Co., who testified in support of the legislation on behalf of the Presidents’ Roundtable, a consortium of Black business owners, said a more realistic portrayal would force state agencies to do more outreach to MBEs.
“[The legislation] was important because some of the state agencies as well as private sector [companies] are not that interested in minority inclusiveness,” he said. “Rather than sitting back and being complacent and doing business as usual, they would have to get up and seek out true minority-owned firms.”