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Md. Black Entrepreneurs Want More State Contracts

As Black entrepreneurs in the District seek more contracts from the city government, their Maryland colleagues want the same thing as they deal with similar issues of access and opportunity.

The Maryland Department of Transportation (MDOT) houses the Office of Minority Business Enterprise (MBE) and serves as the official certification agency for entrepreneurs who wish to do business with the Free State. In addition, MDOT manages the Disadvantage Business Enterprise (DBE), Airport Concessions Disadvantaged Business Enterprise and the Small Business Enterprise programs.

Maryland appears to be a state where Black businesses have a chance to prosper. A 2018 survey by the firm Paychex found that Maryland has the highest per capita people of color and women-owned business ownership in the country, with nearly 42 minority owners per 100,000 residents and 17.5 women-owned businesses per 100,000.

The survey found Prince George’s County had four of the five ranked communities in order of business ownership diversity — Capitol Heights, Beltsville, Brentwood and Bowie.

However, while it appears that Maryland has an active program for minority entrepreneurs to get contracts and counties such as Prince George’s have initiatives with that goal also, problems persist in areas such as capacity to handle large or even small projects, financing and fair bidding opportunities.

Nevertheless, David Harrington, president and CEO of the Prince George’s County Chamber of Commerce, said county leaders are in helping Black businesses procure contracts.

“We want to make sure that Black businesses get as much work as possible,” Harrington said. “We are constantly working on this. There is a great deal of bureaucracy in procuring government work and we need to untangle all of the bureaucracy to see that Black businesses get their fair share of this robust economy.”

The problem isn’t just in Prince George’s County. Calvin Mims, president and CEO of Calmi Electrical Company in Baltimore and an active member of the President’s Roundtable, an organization of Black-owned businesses in the Baltimore metropolitan area, said he has problems getting contracts.

“I have been in business for 33 years and still to this day I am not solicited for work in the private sector unless it is tied to the state mandate that there must be MBE participation in a project,” Mims said. “I have letters of exemplary work from companies such as Whiting-Turner but still, I can only get work when the project is mandated to have a MBE company as a subcontractor.”

Despite issues of contracting, Mims and Michael Smith, a District business owner, have dealt with MDOT and praise its MBE program.

“MDOT takes the time to work with businesses who are seeking certification and they are good and professional at what they do,” Smith said. “MDOT has a great program and I have no qualms with it. MDOT monitors their program and when there is an issues, they address it.”

Some Black entrepreneurs want the District government to conduct a disparity study to show how many Black businesses are getting government contracts. In Maryland, such studies are done on a regular basis, the last one conducted in 2017, said Maryland Del. Jazz Lewis (D-District 24).

Lewis explained that in 1989, the U.S. Supreme Court held in the City of Richmond vs. J.A. Croson Co. that state and local MBA programs are allowed under the Equal Protection Clause of the 14th Amendment to the U.S. Constitution.

“The condition for allowing the programs, however, was that the state or locality had to show clear evidence that the program is narrowly tailored to address actual disparities in the marketplace for the jurisdiction that operates the program,” he said. “To accomplish this, before every re-authorization in the state, we must conduct a disparity study to determine if there is continued evidence that MBEs are underutilized in state contracting.”

Lewis said the 2017 study showed continued disparities in Maryland.

“Since 2013, our statewide MBE participation goal is 29 percent of all dollars spent,” he said. “African American-owned construction businesses were paid 5.1 percent of state construction contract dollars, but they made up 10.3 percent of the construction sector in the state of Maryland.”

To help Black businesses get their fair share, Lewis helped pass a bill in the General Assembly that enables contractors who meet the state’s qualifications and who are federally certified as a DBE to get quick certification as a MBE for Maryland without additional paperwork.

“This bill will save small and minority businesses much time from having to go through the duplicative process we currently have, which can take six months to a year to get registered in the state,” Lewis said.

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