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O’Malley-Brown Administration Announces Strategic Enhancements to Maryland’s Nation-Leading MBE Program

Reports that in FY2013 MBEs received $1.67 billion in awards

February 27, 2014 (Baltimore, MD) – Governor Martin O’Malley today announced a series of steps to create even more opportunity for Maryland businesses through the state’s Minority Business Enterprise (MBE) Program. The changes include providing MBEs with advanced notice on all new solicitations over $100,000, and increasing agency oversight for state contracts over $25 million.

“Expanding opportunity for all Marylanders has been the guiding principle of the choices we’ve made as a State, and with Maryland ranked among the top states for upward economic mobility by the Pew Center, we’re getting real results,” said Governor Martin O’Malley. “Maryland’s MBE program is a national model for minority inclusion, but we can do better. The enhancements we’re proposing today will help modernize our MBE program, and help ensure that we do everything possible to help more minority and small businesses succeed.”

In an effort to impact minority participation at the outset of the procurement process, Governor O’Malley is directing all participating agencies to obtain the Governor’s Office of Minority Affairs’ (GOMA) approval of MBE goals prior to issuing a solicitation for all statewide master contracts or procurements expected to exceed $25 million. This is designed to ensure that all MBE opportunities have been identified at the agency level.

For MBE firms trying to engage in State contracting, GOMA’s website will include forecasting reports on contracts expected to exceed $100,000 during the fiscal year. The reports are useful in helping small and minority-owned businesses identify which agencies buy what they sell, and with what frequency. These reports also provide them with time to effectively compete for these contracting opportunities with the State.

“Our commitment to minority and women-owned businesses has been a critical part of our effort to create jobs and expand economic opportunity throughout Maryland,” said Lt. Governor Anthony Brown. “As we look to the future, we’re going to continue to strengthen our MBE program and ensure that we’re supporting Maryland’s minority and women owned businesses, wherever they’re found.”

MBE goals are set on a contract-by-contract basis. GOMA works with agency buyers to ensure that all subcontracting opportunities are identified when the solicitation is being developed. Particular focus is given to those agencies that award more than $25 million annually.

GOMA also announced today that MBEs were awarded $1.67 billion in FY2013, representing 24.4% of the total $6.87 billion in contracts awarded by the 70 participating agencies/departments across state government. GOMA will publish the FY2013 Minority Business Enterprise Program Statistical Report in mid-March.

“Maryland has one of the oldest and most ambitious MBE Program in the nation,” commented Zenita Wickham Hurley, Special Secretary of Minority Affairs. “As we continue to fight against discrimination, we will also continue to strengthen the program with legislative and policy enhancements.”

Overall MBE participation in FY2012 was 25.2%, representing $1.92 billion in MBE awards of the $7.65 billion in total awards. Overall MBE participation between FY2012 and FY2013 declined slightly (by less than 1 percent).

Maryland has taken other steps to boost MBE participation as well, raising the goal for participation to 29 percent effective FY2014. In 2013, Maryland became the first state to include a liquidated damages provision on all contracts with an MBE goal in the event a prime contractor does not comply in good faith with its MBE participation commitments. In 2012, the prime contractor’s MBE commitments were made an enforceable part of the executed contract with the State. And in 2011, the program’s sub-goal policy was amended to include Hispanic Americans and Asian Americans in addition to African Americans and women.

This year, GOMA is proposing a regulation to allow the value of the work performed by an MBE prime to count toward 50 percent of the MBE contract goal. Current regulations prohibit MBEs that perform as prime contractors from counting any of their own work toward the goal. Following a public comment period, the regulation change is expected to take effect this summer.