ANNAPOLIS — The Ehrlich administration yesterday announced the major overhaul of a state program that was supposed to create more opportunities for minority and women business owners.
“Maryland’s Minority Business Enterprise program will re-emerge as a business program designed to ensure that minority- and women-owned businesses across the state have access to resources so they may continue to develop and thrive,” said Gov. Robert L. Ehrlich Jr., a Republican. “Our Cabinet is committed, our government is committed to the program.”
Mr. Ehrlich and Lt. Gov. Michael S. Steele made the changes after an audit showed that state agencies were vastly exaggerating their compliance with awarding minority contracts.
“We have made some history today,” said Mr. Steele, chairman of the governor’s Commission for Minority Business Reform. “This is an enormously important opportunity.”
Nhora B. Murphy of the Silver Spring-based Media Network, a public relations and marketing company, said she was “excited that something is finally happening for minority businesses.”
Mrs. Murphy, who came to the United States from Columbia 18 years ago, said she has failed to land a state contract for the past two years, though she has secured several federal contracts.
“Under the previous administrations, I haven’t seen an impact,” she said. “This is the first time that I have seen an administration really pushing and really working on behalf of minority business enterprise. And they are supporting all the tools that we need to continue growing.”
Minorities and women own nearly 50 percent of the businesses in Maryland.
Though the state must award 25 percent of its contract dollars to such owners, the audit showed Maryland agencies were over-reporting their compliance by as much as 40 percent.
According to the audit, the Governor’s Office of Minority Affairs, under Gov. Parris N. Glendening, a Democrat, reported that it awarded 19 percent of its contracting dollars to minority businesses.
“No one was at the helm watching and tracking dollars that we were putting out,” Mr. Steele told The Washington Times in October.
Mr. Glendening was Maryland’s governor for eight years. He left office in January 2003 and has not returned phone calls and e-mail inquiries about the audit.
Larkin S. Simmons, president of Systems and Solutions Inc. in Lanham, said yesterday he was “shocked” by the findings in the audit but remained optimistic.
“I am hopeful because [the administration] has taken the time to invest, taken the time to effect a cure,” said Mr. Simmons, whose company specializes in Web development and data storage for the government and businesses.
Mr. Ehrlich and Mr. Steele said yesterday they have three strategies to improve the Minority Business Enterprise program — legislation, executive orders and new management initiatives for the minority affairs office.
Under the administration bills,10 percent of state contracts would go to small businesses, and contractors involved in the contract-bidding process would have to name their minority subcontractors. The administration also wants the state’s Department of Housing and Community Development to be permitted to issue taxable bonds to fund small-business loans.
Mr. Ehrlich also signed three executive orders yesterday. One establishes a mentor-protege program so owners of smaller businesses can learn from larger, more successful businesses. Another creates an automated and centralized system to store information on registered bidders. The last creates a standing council to continue the work of the commission on minority business reform.
The governor wants the minority affairs office to create a Web site so minority business owners can have better access to state agencies. He also wants the office to print handbooks to help the owners. And he wants each state agency to develop procurement plans.
Mr. Steele said the changes are not designed to create a quota system for minorities and women.
“It is not a set-aside in the fundamental sense,” he said. “There is no illegality, simply because you are not mandating it.”
Most Maryland Legislative Black Caucus members, a group of 42 Democrats, embraced the efforts.
House Deputy Majority Whip Emmett C. Burns Jr., Baltimore County Democrat, called the governor requiring primary contractors to stick with minority subcontractors an “unexpected surprise.”
House Speaker Pro Tem Adrienne A. Jones, Baltimore County Democrat, was more skeptical.
“We want to make sure that it is not just a political move,” she said. “The proof is in the pudding.”