February 4, 2011

Blog: Minority contracts down? No, not really….

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Considering the effort that the Board of Public Works has put into ensuring that contracts go to those with a percentage of minority business participation, a Department of Legislative Services analysis saying it had fallen by nearly 10% was surprising. The O’Malley administration had been touting annual increases.

The analysis was surprising to Board of Public Works staff, too. Executive Secretary Sheila McDonald quickly realized that the information Legislative Services staff had about minority business enterprise – or MBE – participation was wrong.

McDonald said that the incorrect information was an input error, and staff members burst into activity to pull the correct figures by hand. And, McDonald said, it is a good thing they did. According to the incorrect figures, more than 45% of contracts that the board approved had zero MBE participation. But after fixing the figures and recalculating the numbers, McDonald said, that number fell to just over 39%.

“Clearly there is no decline in MBE participation in this state,” she told the Senate Budget subcommittee on Education, Business and Administration on Thursday. “They are at their highest levels ever,” an all-time high of 23%.

Looking at raw numbers, it still may appear that MBE participation was down last year. In 2009, only about 37 percent of contracts had no minorities. However, McDonald said that figure is statistically insignificant, especially because there were lots of procurements for employee health systems in 2009, and some new ways of looking at the law in 2010 caused a different breed of contracts to require Board of Public Works approval. And, she said, 56 contracts where 100% of the employees are minorities have been approved.

While the Board of Public Works, which approves many government contracts, has been trying to adhere to contracting law requiring MBE participation, it does not have the only word on what is going on in government procurement. Only about a third of government contracts come before the scrutiny of the Board of Public Works, McDonald said. The rest are exempted or go through specific agency-based processes.

–Megan Poinski
Megan@MarylandReporter.com