More News

Officepro was one of the first companies to sign up for Montgomery County's small-business reserve program when it started in 2006. In fact, the Gaithersburg software training company helped test the program's Web site.

But more than three years later, Officepro is among the large number of participants that have yet to receive a contract. Last fiscal year, only $11.8 million out of $983.3 million in county contract dollars — about 1 percent — went to local small companies, according to county figures. The program's goal is to award at least 10 percent of "qualifying" county contract dollars to eligible small businesses.

Montgomery officials reported they met the requirement in fiscal 2008 and awarded 14 percent to small companies by exempting a whopping $904.6 million worth of county contracts. And therein lies the rub to businesspeople such as Judy Stephenson, president of Officepro.

"We have not had an opportunity to bid on a contract, and that's basically due to the restrictions on the number of contracts that are eligible for this program," said Stephenson, an active member of the Montgomery County Chamber of Commerce.

Numerous people, including county officials, share her bewilderment that so many contracts have been exempt, especially during a recession when many local small companies need all the help they can get.

It was "never our intention" to have so many contracts exempted from the program, County Councilman George L. Leventhal (D-At large) of Takoma Park, one of the sponsors of the 2005 bill, said at a recent meeting. "I'm embarrassed on my own behalf. That's never what we thought was going to occur."

Changes approved by the council this week should help, officials said. The new law, which took effect this week, raises the percentage of county contracts awarded to small businesses to 20 percent. It also requires that David Dise, director of the Department of General Services, which oversees procurement and the program, approve departments' decisions to exempt contracts, and extends the program to 2012.

"This is good news for the small-business community," said Councilwoman Nancy M. Floreen (D-At large) of Garrett Park, who also co-sponsored the original bill. "I hope to see fewer waivers."

The biggest reason contracts were exempted in fiscal 2008 was there being a pre-existing contract, with 39 percent of procurement dollars in that category. That was followed by no local small business being deemed qualified by procurement officials, with 29 percent.

Other reasons included noncompetitive contracts, conflicts with a state, federal or local law, and procurements being greater than $10 million. About the same amount of contract dollars was awarded to small companies in fiscal 2007 as 2008.

In a recent council meeting, Dise said many of the pre-existing contracts are about to expire, and the department is looking at "unbundling the larger contracts to push them to local businesses — office supplies, for example." Many of those will be issued this year, he said.

The law is based upon "eligible" contracts and is "pretty clear in that regard," Dise said.

Officepro provides software training, which is done on a contract basis for the county by Montgomery College. Because the college is a public entity, that contract is not put out to bid and is not subject to the small-business program, Stephenson said.

"I'm not saying we should automatically get that contract. Montgomery College could well be the best vendor for it," Stephenson said. "But how do you know if it's not put out to bid?"

The new law is a step in the right direction, she said.

"I commend the council for these changes and for doing what they can to support small businesses," Stephenson said. "We're making progress, but there is still an opportunity to improve."

State is not meeting goal

The state of Maryland has also faced criticism of its small-business reserve program, which began in 2004 and requires that at least 10 percent of contract dollars in 22 agencies go to small companies. Data from fiscal 2007, the most recent available, show that state agencies awarded 6 percent of contract dollars, or $121.9 million, to eligible small businesses. That was about the same percentage as in fiscal '06.

The data did not indicate how much was exempt from the program.

Where to register

Companies can register for the Montgomery County small-business reserve program at www.montgomerycountymd.gov/LSBRP.

Companies can register or renew for the state's small-business reserve program at www.smallbusinessreserve.maryland.gov.