The Commerce Department's Minority Business Development Agency is launching a $35 million program aimed at providing minority businesses with information on financing, marketing, private and government contracts and other business opportunities.
The program will be the largest financed by the MBDA, the only federal agency charged specifically with helping minority entrepreneurs and advocating their point of view in the federal government. The program, though, will be run by private contractors, who will charge the firms for the advice they receive.
By October, the agency expects to have 100 consulting centers in 37 states staffed with experts in accounting, inventory control, bid estimating, contract negotiating and other areas. The first center is scheduled to open Friday in Pittsburgh; the center in the District is supposed to be operating by September.
The centers will be connected by a Commerce Department computer system--a kind of nationwide dating service to match up minority firms with new business opportunities here and abroad. MBDA already has a list of 15,000 minority firms or people who would like to go into business, and hopes to double that by next year. The agency also plans to have in its computers a list of the government contracts set aside for minorities, as well as other government and industry data.
Despite the suspicion with which many minority groups have viewed some Reagan administration initiatives--such as the Small Business Administration's effort to tighten the requirements for the program that awards certain contracts to minority firms--most groups interviewed were optimistic about the new program. They cautioned, however, that it is too early for judgments.
Congressional staffers involved with the program also declined to comment, noting that a House small business subcommittee is holding hearings on the program June 16.
Agency director Victor M. Rivera said in a recent interview that the program is designed to give minority firms the information, contacts and technical assistance they need to succeed.
Under the program, private firms and nonprofit groups can bid for the contract to run a particular center. Rivera said the outside groups would provide the centers with expertise that the government lacks.
Rivera said his staff will monitor the performance of the firms, and at the end of their year-long contracts, the centers will be ranked. The firms that are rated poorly, "the bottom 20 percent, maybe even one-third," he said, will have to compete again.
The $225,000 contract for Pittsburgh was awarded to the Pittsburgh Business Development Corp., a nonprofit group formed seven years ago to provide minority firms with technical assistance and to run trade shows and seminars to promote minority businesses.
Eck Buratti, a marketing consultant with the Pittsburgh group, said many small companies lack the staff to deal with problems in areas like marketing and finances. The centers can "fill a crucial gap that couldn't be filled in other ways," he said.
The amount of the contract is determined largely by population size and is expected to cover no more than 90 percent of costs. The consulting firms are expected to raise the rest, probably by charging fees to the businesses that seek their advice.
The centers will be allowed to charge $2.50 an hour to firms with annual sales of less than $500,000, and $6.25 for the rest. The fee is in line with other Reagan administration proposals to force those who use government services to pay for them, and Rivera said he thinks that the fee will cause businessmen to "take the service more seriously."
Rivera noted that the fee is considerably lower than those charged by most consultants. Companies that cannot afford to pay the fee can apply for a waiver, but Rivera said the inability to pay such a small amount should "make you wonder" about the firm's viability.
"We do not see this as a social program," Rivera said, although that may have been the agency's "thrust" in previous years. He described the new program as an attempt to "develop an underutilized resource"--potentially successful minority businesses--and enable them to make "important economic contributions" to the nation.