Executives: Montgomery County’s small-business program needs tweaks -- Gazette.Net


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Officials say Montgomery County’s small-business reserve program is accomplishing its goals, but company executives say they still have trouble winning contracts.

“It’s easier to get contracts in Prince George’s County,” said Jackie Hardy, vice president of Washingtonian Limousine and Coach, a Silver Spring ground transportation company with sedans, vans, minibuses and passenger coaches that provides local and long-distance trips. “We haven’t been able to get any contracts in Montgomery County but have in Prince George’s.”

Hardy was among about 80 executives and local officials at a forum on small-business issues Wednesday in Rockville organized by County Councilman George L. Leventhal (D-At large) of Takoma Park and former Del. Herman L. Taylor Jr. Taylor is president and CEO of office-supply company Deskmate Office Products in Washington, D.C.

Year-over-year, Montgomery County’s contracting program has awarded more procurement dollars in most years since its inception in 2006, although awards fell off some in 2011. Some $83.7 million in county contracts was awarded to local small businesses in fiscal ’12, up 44 percent from $58.2 million in fiscal ’11, according to county figures. The totals were $67.5 million in fiscal ’10 and $33.3 million in fiscal ’09.

The fiscal 2012 figure is an estimate, as the annual report is still being reviewed, said Grace Denno, manager of the county’s Office of Business Relations and Compliance. That office, under the Department of General Services, oversees the program.

“Fewer contracts are being exempt,” Denno said. “Hopefully, the program will continue to grow.”

Some 94 percent of county contracts that could be awarded in fiscal 2007 was exempted from the program; reasons included a pre-existing contract or ones valued at more than $10 million. That percentage declined to 73 percent in fiscal 2011.

‘It took us six years’

There is hope for the program, said Judy Stephenson, president of Gaithersburg software training company Officepro and small-business vice chairwoman of the Montgomery County Chamber of Commerce. Her business, which obtains many federal contracts, recently won its first procurement from Montgomery, she said.

“It took us six years,” Stephenson said.

She has heard from numerous small-business owners that the county’s request-for-proposals process can be difficult to understand.

“Since we are used to bidding on federal contracts, that doesn’t affect us as much, but it does for many small businesses,” Stephenson said. “If the [requests] can be retrofitted, that would benefit a lot of businesses.”

Silver Spring high-tech company Rush Technologies has obtained contracts from Prince George’s County, Washington, D.C., and the federal government, but not Montgomery, said company President Lewis Kelley. In one open bid for a Montgomery award, Rush came in second and thought it would be awarded the procurement after the business that submitted the lowest bid dropped out for not being in compliance, Kelley said.

But county officials allowed the company with the third-lowest bid to resubmit and went with that one, he said.

“Even though we protested, they moved on,” Kelley said.

Other business representatives called for creating a committee of “really” small businesses to make recommendations, holding more forums with officials and establishing broader eligibility classifications.

Leventhal, one of the original sponsors of legislation that formed the program, said he wants to see similar forums held and recommendations taken to the County Council. He praised the Access Montgomery program initiated by County Executive Isiah Leggett (D) that includes a list of awardees of county contracts.

“We need to be transparent in knowing who is the prime” contract holder, Leventhal said. “A prime may not know what subcontractors are out there, and this will help them.”

The program has a goal of awarding 20 percent of the value of eligible county contracts to small businesses based in Montgomery. The goal was reached in 2012, 2011 and 2010, although the large majority of county contracts was exempt.

Officials have made changes to the program, including expanding the size and revenue limits for companies to qualify for the program, and requiring the director of the county’s Department of General Services to approve departments’ decisions to exempt contracts. The three-year annual sales average limit for retail, wholesale and service businesses is $5 million, and $14 million for construction and manufacturing companies.

Montgomery’s program was based on the state’s small-business reserve program, which launched in 2004. Actual payments during fiscal ’11 — which are more specific than awards that can be over multiple years — to small businesses by state agencies rose by 7.4 percent from the previous year to $202 million, according to the most recent state report.

In Montgomery, actual payments increased to an estimated $72.5 million in fiscal ’12 from $46.9 million in fiscal ’11.

kshay@gazette.net