Minority businesses in Prince George's County are closer to achieving their goal of winning more government contracts as a result of legislative initiatives announced this week by key county officials.
The initiatives were fashioned in an atmosphere of cooperation within the executive and legislative branches of county government and that gives the joint program considerable momentum going into the formal legislative process.
The nine-point program announced by County Executive Parris Glendening and Council Chairwoman Hilda Pemberton will need the support of all government officials as well as the constituency for which it was developed if it is to work, however.
Key elements in the joint program call for establishment of an independent minority business commission and formulation of specific minority procurement goals for departments and individual county employes.
The commission as well as the head of the county's minority business office would report directly to the county executive.
By tying minority procurement goals to job-performance ratings for purchasing agents and their supervisors, county officials hope to create incentives for employes to support the program.
Among other proposed initiatives is a plan to modify the existing bonus point system for minority contractors. Under the new system, bids from minority contractors on all contracts up to $500,000 would be reduced by a discount amounting to 10 percent (5 percent for minority firms outside the county). The discount formula would replace a more complex bonus system that some county officials find unsatisfactory.
Still another initiative calls for the county to negotiate directly with minority firms when a contract for goods or services is valued at $15,000 or less.
The program is neither a panacea nor a guarantee that minority firms in the county will be any stronger than they were a year ago. The reality is that those firms won't gain a whole lot monetarily from receiving county contracts. A renewed push to help minorities receive 30 percent of the county's contract dollars represents a greater commitment but should not be mistaken for a windfall.
Even a 35 percent goal preferred by some in the minority business community won't add significantly to total revenue received by minority firms. If the 35 percent goal had been applied to county contracts totaling $96 million last year, then minority firms' share would have been $34 million -- not a very large pot to be divvied up, especially when there are more than 5,700 black-owned businesses alone in Prince George's County.
The greater accomplishment for minority firms, then, is gaining further support for a principle and for equity in a procurement system that is supported, after all, by taxpayers.
Meanwhile, the legislative and administrative actions set forth in the Glendening-Pemberton initiatives mark a significant shift in philosophy for the county executive. Although supportive of efforts to expand opportunities for minority firms, Glendening has often stated publicly that he is "philosophically opposed" to set-asides for minority contractors doing business with the county.
By its own admission, Prince George's County has fallen short of its goal of awarding 30 percent of county contracts to minority businesses. But the present system to aid minority contractors is based on recommendations of a citizens' advisory panel that Glendening appointed two years ago. Minority firms' share of county contracts increased from 12.4 percent in the first year of the program to 19 percent last fiscal year. Nonetheless, Glendening has come under sharp attack by those who are demanding a higher percentage of county contracts.
Glendening's point that it "was more important that Hilda and I agreed on a cooperative approach to reaching our goal" is well taken.
Hearings before the county council should provide ample opportunity for constructive input from critics of the Glendening-Pemberton initiatives. With substantial input from the minority business community already apparent in the initiatives, however, the county appears well on the way toward purging an entrenched procurement system of inequities and remnants of a closed old-boy network.
In the meantime, the success of minority businesses in Prince George's County lies not in receiving $4 million or even $34 million in government contracts. Four or five minority firms with strong cash flow and the ability to compete for lucrative contracts could absorb $20 million or more in one year. The Maxima Corp. of Rockville, for example, successfully bid on a five-year $17 million contract this year to manage Prince George's County's central data processing facilities.
Strengthening minority businesses so that they become more competitive as government contractors as well viable players in the rough-and-tumble world of the private-sector is where the focus needs to be now.
Prince George's County is supporting minority entrepreneurial development through other initiatives. A commitment by minority business leaders to help that process will bring greater returns in the long run than arbitrary government contract percentages.