Maryland’s MBE Program

1. Maryland’s MBE Program Encouraging Minority Businesses Through Procurement Policies December 2005

2. Agenda • Economic Role of Small Businesses in MD • Goals and Objectives to Encourage Minority Business Participation • Motivating Factors Behind Such Policies • Role of OEO in Meeting Minority Participation Goals • Maryland Blazing Trail in Encouraging MBEs • Overview of Tools to Track Compliance • Prism, FMIS, CTS Maryland State Highway Administration

3. Economic Role of Small Businesses in Maryland • More than 95% of Maryland businesses qualify as small business, according to the U.S. Small Business Administration • Nearly ½ of Maryland businesses owned by women or minorities Maryland State Highway Administration

4. Economic Role of Small Businesses in Maryland • Approximately 120,000 are employed by a minority-owned business and over 140,000 are employed by woman-owned businesses, totaling nearly 14% of Maryland’s workforce • Minority and woman-owned businesses in Maryland comprised a net worth of over $26 Billion in a 1997 Economic Census • The number of minority-owned startup firms increases by about 17% every year Maryland State Highway Administration

5. Goals and Objectives to Encourage MBE Participation • Senate Bill 903 – Requires a prime contractor to name their MBE at time of bid process • Senate Bill 904 – Requires 22 state agencies to allocate at least 10% of total procurement dollars to small businesses • Office of Minority Affairs elevated to a cabinet position, providing more enforcement authority Maryland State Highway Administration

6. Goals and Objectives to Encourage MBE Participation • Governor’s Mentor-Protégé Program (GMPP) • Teams Minority businesses with established firms to promote successful business practices • MBE Program Manual created to outline uniform processes and procedures among State agencies. • Coordinates outreach and marketing efforts – Women & Minority Business Forums • One-Stop Internet Portal – http://www.mdminoritybusiness.com • Free email newsletter “Maryland-MBE Connection” Maryland State Highway Administration

7. Motivating Factors Behind Such Policies • Minority businesses suffer from less than 50% survival rate • Laws from past 25 years suffer from lack of application, accountability and enforcement • A 2002 audit disclosed that State agencies were over-reporting their MBE compliance by as much as 40% • Put simply: It is the right thing to do Maryland State Highway Administration

8. Role of OEO in Helping the State Monitor and Track Compliance with Goals • OEO investigates all MBE noncompliance reports • SHA Compliance Reports • Prime/Sub Contractor Monthly Unpaid Invoice • Prime Contractor Quarterly MBE Usage Report • Field Compliance Reviews • Fraud Prevention Training • Contractor Compliance Software – Prism • Outreach Module Maryland State Highway Administration

9. Maryland Leads Way in Pursuing this National Agenda • Federal MBE goals set for Maryland are set at 20.6% • Maryland’s State goals exceed federal requirements. • 25% Overall. • 7% African-American. • 10% Women. Maryland State Highway Administration

10. Maryland Blazing Trail in Encouraging MBEs • Maryland is ranked 3rd in the nation for percent of businesses owned by Women • Maryland has been ranked the 2nd friendliest state for minority businesses, based on commitment to MBE goals, access to public and private capital, technical support programs, executive leadership and state procurement opportunities (choosemaryland.org) Maryland State Highway Administration

11. Overview of Tools to Track Compliance • Prism (Compliance monitoring) • Consultant Contract Tracking System (SHA Intranet application) • FMIS (Statewide) Maryland State Highway Administration

12. Questions Anyone? • Fire away! Maryland State Highway Administration