In fiscal 1976, black businesses received only about 5 percent of the city's contract dollars.

That year, frustrated black business owners complained to the City Council that historic discrimination in city government coupled with the fledgling nature of their businesses was leaving them out of the market.

In a city which was more than 70 percent black, they argued, the City Council should be a leader in bringing minority businesses into the multimillion dollar government contracting marketplace.

The council responded by passing legislation creating the seven-member Minority Business Opportunity Commission (MBOC) -- which today is criticized as ineffectual, sluggish and overwhelmed.

The commission's mandate was to ensure that city agencies provide minorities with a minimum of 25 percent of their contract dollars, create a monitoring system for compliance and stimulate minority economic development.

The District government awards contracts for construction work and for the provision of goods and services -- ranging from supplying the D.C. police department with cars and public housing projects with heating oil to constructing office buildings and supplying medicine for D.C. hospitals.

During 1978, the last year for which there are complete figures, the District government awarded contracts totalling $282 million, according to the commission's records. Minority contractors received an average of 17 percent of the contract dollars awarded by each city agency that year.

But the awarding of contracts to more minority businesses is hampered by several thorny problems facing the MBOC, including:

An unclear definition of "minority." A vague definition has, in the past two years, permitted four firms, all Hispanic, to take the lion's share of city minority construction contracts as well as allowed abuse by white-owned firms with blacks fronting as owners.

A lack of power to police the awarding of agency contracts. Many minority contractors believe the city's contracting process is completely controlled by D.C. government procurement officers, both black and white, who are insensitive to minority concerns. Commissioners complain that they should be involved in determining which contracts should be set aside for minorities.

Inadequate information from city agencies. The MBOC has been hampered by some government agencies which have supplied figures erratically on minority contracts they awarded.

Limited enforcement power. Although the commission has the power to freeze the awarding of contracts and earmark them for minority firms, the commission has yet to formally challenge any city agency, even though, according to Courtland V. Cox, MBOC staff director, two-thirds of the District's agencies do not comply with the law.

Peter Taylor, an outspoken MBOC board member and minority contractor, is discouraged by the commission's poor performance. On the surface, he said, "We have done a helluva lot to give minorities work, but if you scratch at it and clean it up, you'll see we've done very little."

Taylor, who has served on the commission since it began, said he is ready to quit. "I really want to resign. I just don't feel we are doing that much for minority businessmen."

Charlotte Chapman, commission chairwoman, said commission members have in the past "gone into their pockets" and provided money to keep the office operating. The panel depended on grants until Congress appropriated funding this year. Both Chapman and Taylor say they are disappointed that the MBOC has not been able to attract business experts to advise the commission.

Chapman said the commission has had trouble eliminating groups whose minority status is questionable. "We know who we want to receive the contracts," she said. But, she explained, clearly defining a minority has been a national problem that may take years to resolve.

Last May, the commission staff attempted to solve the problem by introducing a controversial proposal that would have disqualified a number of Hispanic groups and other minorities, including those from Vietnam, India, China, Korea and Africa. But the new definition created so much furor that the commission backed down.

The new definition was quietly dropped when final guidelines were printed in the District Register last month.

As a result, four Hispanic companies -- which might have been eliminated from the minority program -- continue to be eligible for contracts and have won most of the minority construction contracts.

Cox said he is "ready to take the head and be called an Uncle Tom" because the commission backed away from the proposed guidelines. "We just had to steer clear of those definitions," he said.

In attempting to improve the commission, Mayor Marion Barry has proposed amendments to the city's minority contracting law which he sent to council this week. The amendments will clarify the definition of a minority as well as extend the life of the commission past its original March deadline. a

The definition proposed by the mayor would require U.S. citizenship and defines minorities as Black Americans, American Indians, Oriental Americans, Americans with origins in South and Central America and the Caribbean, American Eskimos and American Aleuts.

The law which created the commission simply lists minorities as Blacks, Hispanics, American Indians, Orientals and Eskimos.

Even if the definition is refined, the MBOC has other problems. The commission has been criticized for not providing substantial aid for minority economic development as required by law.

Minority contractors, who complain about bonding problems, loan problems and problems in receiving technical assistance, say it is the role of the MBOC to supply help.

But Cox countered, "We don't (provide) minority contractors with financing. We can't provide them with management skills. We can't give them bonding. Those who need assistance will have to wait. It takes time to get them into the marketplace."

The MBOC, according to Cox, has steadily improved since Barry took office. He said the mayor has alerted minorities that the city will help them win more city contracts, and has "opened the marketplace" by emphasizing to city agency heads the importance of meeting the city's contracting goals.

The commission, which has $76,000 in appropriated funds from Congress for salaries and office equipment and another $120,000 from the D.C. Department of Housing and Community Development to provide technical assistance in the construction field, has also tightened its monitoring of city agencies and increased from 125 to 313 the number of certified minority firms eligible to participate in the city's contracting program, Cox said.

"I have learned a lot since I've begun with the MBOC," Cox said. "I have learned how to better monitor the government and its contracting process. I have opened agencies to concepts (encouraged them to do more minority contracting). I've tried to make government respond to minority contractors." c

Cox also said the proposed convention center will be a model for future minority development in the city. He said the MBOC, for the first time, will be able to give minority firms advance warning about possible contracts since the commission worked with the Department of General Services to set aside minority contracts.

Mayor Barry appears to be optimistic about the commission. "I am hoping the commission will get to the point where it can use its authority to shelve contracts and take contracts away from agencies," he said on the first anniversary of his administration.

However, Col. Milton Carey, a former commission member and president of the Metropolitan Contractors Association (MCA), which represents minority construction firms, criticized the MBOC for not monitoring the awarding of contracts more closely.

He is also disturbed that the mayor has not filled a vacancy created on the board when Milton White, president of Afro-American Datanamics, a minority computer firm, resigned several months ago. The commission members are: Chapman, a community activist; Taylor, president of Community Electric Inc., an electrical firm in Hyattsville; William Syphax, president of Syphax Enterprises in Arlington; William Wright, president of Capitol Cab Company, and new appointees, Jose Font, executive director and counsel for the Greater Washington Ibero-American Chamber of Commerce, and Robert V. Johnson III, bond and insurance program manager of MCA.

Minority contractors say large contracts do not mean minorities receive multimillion dollar profits. In each case, the large contracts include costs of supplies, labor and a small margin of profit.

They say the only difference between the special minority contracting program and the regular bidding process is that minorities compete with each other instead of competing with larger firms.

City procurement officers say minorities in the special contracting program are allowed a slightly higher margin of profit -- about 10 percent -- because most have small businesses and their cost to do business is higher.