Montgomery County Procurement Program

The Montgomery County Council is poised to overhaul its contracting and procurement practices for minority owned businesses. Over the last few years, the Montgomery County Attorney’s Office set out to determine whether or not a disparity exists between minority, female and disabled owned companies in County procurement services.  It hired a law firm, Griffin & Strong P.C. to investigate.  In 2014, the firm concluded that ”There remains a significant disparity between the utilization and availability of MFDs  (minority, female and disabled-owned firms) in Montgomery County.”  The disparities are “statistically significant enough to suggest the possible presence of discrimination.”

This must be pretty solid evidence to change policy.  But the current total number of how many businesses are owned by what groups in Montgomery County is not available.  The latest data goes back to 2007 that contains  32.4 percent Women owned firms, 10 percent Hispanic owned; 12.1 percent Asian owned;   12.4 percent African –American owned; 0.7 percent American Indian and Alaska Native .  That is, 67.6 percent of all firms in 2007 were owned by females and minority.

The General Services Department, specifically, the Office of Business Relations and Compliance, is responsible for reporting the Minority, Female and The County Disabled Persons Owned Business Program (MFD) Annual Report.  It published the first report in 2013 using the same data that was also submitted to the Griffin and Strong firm for the disparity study that Montgomery County uses to implement new laws on Montgomery County procurement for MFD by Bill 49-14 (April, 2015);  Expedited Bill 48-15 with multiple amendments hearing on December 1, 2015.  Based on these reports also two tasks forces were formed: Procurement Policies and Regulations  and Minority Owned and Local Small Businesses Task force. The two task forces have made controversial recommendations, causing some members to question the likelihood of potential legal challenges.  The full report can be found here.

Unfortunately, the FY2013 MFD Report was outdated when it was written because it was based on 21-year old data.  It “provides statistical data on Montgomery County’s utilization of MFD businesses as either prime contractors or sub-contractors. The availability of minority businesses is based on the 1992 U.S. Department of Labor Census data of businesses located in the Washington, DC-Baltimore Consolidated Metropolitan Statistical Area (CMSA).”  The previous report was FY2004 that was benchmarked on even older MFD report with much older data.  The FY2013 pushes this outdate data into the future stating, “The County’s Attorney’s Office is conducting a new Disparity Study in FY14. Its findings and recommendations would impact the MFD program regulation and enforcement in the coming years.”

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The Griffin and Strong P.C. (GSPC) stated in their disparity report that all data came from Montgomery County and other data collected by GSPC.  “The County’s Finance Department provided electronic data from the FAMIS system from which GSPC was able to pull data for DPO Direct Purchases, but only for the FY2011 and FY2012 years. DPO data prior to that time was not available electronically, and after interviewing a substantial majority of the County’s departments, it was determined that the departments did not maintain direct purchase data prior to 2011. Two years of data for DPOs is sufficient to conduct the necessary analysis.”  Not only raw data was used in this study, but it also relied on “anecdotal portions of the Study which included surveys, public hearings, focus groups, and interviews.”

Furthermore, the Griffin and Strong P.C. didn’t compare data from Montgomery County alone but they compiled data from the entire Washington, DC region Maryland, Virginia and District of Columbia. Unfortunately, the years of the data is not clear, but is labeled as “Griffin & Strong, P.C.2014” pages 76-80.  This entire combined data from District of Columbia, Virginia and Maryland was used to determine disparity among MFD businesses in Montgomery County.

Under Maryland Procurement Law, COMAR § “Socially and economically disadvantaged individual” is rebuttable presumed to include a member of any of the following groups: African American; American Indian/Native American; Asian; Hispanic or Latino; Physically or mentally disabled; Women regardless of race or ethnicity; Any other individual found by the certification agency to be socially and economically disadvantaged.

Montgomery County is now set to discriminate based on race and gender by relying on outdated data. Montgomery County is very diverse; the Census Bureau confirms that white (non-Hispanic or Latino) males constitute a minority of the county population.  On October 14, 2015, the Census Bureau  published new data. According to new estimates the White (not-Hispanic or Latino) population has been consistently plummeting in Montgomery County from 49 percent in 2011 to 46 percent in 2014, contrasted with 72 percent in the 1990s .  Furthermore, the Montgomery County population has increased to 1,030,447 people. With African-Americans 18.8 percent; Hispanics 18.7 percent; Asians 15.2 percent; Two or more races 3.2 percent; American Indian and Alaska Native 0.7 percent; Hawaiian and other Pacific Islander 0.1 percent and White alone( not Hispanic or Latino) 46 percent that brings to 102.7 percent total pollution in Montgomery County. Females make 51.8 percent of entire Montgomery County population.

If the County is going to change its procurement policies, it should only do so relying on accurate, up to date information.


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