Kevin Lighty, vice president of business development at Lighty Communications in Largo, is still waiting to see the effects on his bottom line.

Lighty said his printing and publications management company, a certified MBE, has not experienced a rise in state contracting since the reforms took effect in October.

Nevertheless, Lighty said, he has seen the signs of change.

"We just recently responded to a couple of major contracts," he said. "With the new regulations in place, the responses we're getting from potential prime contractors have been much more forthcoming. Now that they have to submit their subcontracting plan with the bid, they're having real conversations with us."

Maryland launched the MBE program in 1978 to boost minority contracting by state agencies. The changes implemented last year aim to expand the program and end decades-old abuses of MBE subcontractors by the larger firms that partner with them to win state work.

So far, MBEs such as Lighty's company are reporting mixed results. While the positive message is clear, many businesses say, the key now is for state officials to enforce the new rules so that more companies benefit.

The push for MBE reform took off in 2003, when Lt. Gov. Michael S. Steele (R) spearheaded the governor's commission to study the program. Most of the reforms that passed last year stemmed directly from the commission's recommendations.

Q.C. Jones, executive vice president for TMI Solutions, an MBE-certified information technology company, said the culture shift has been palpable since the Ehrlich administration made MBEs a priority.

Since 2003, the Largo company's procurements with the state have increased "100 percent -- literally," Jones said.

"In 2004, we saw a big difference in our ability to access information and contracts," Jones said. "We were doing zero business to the state prior to 2004."

Enforcement's the key

The reforms specifically force primary contractors to declare their MBE subcontractors upfront as part of the bidding process rather than wait up to 10 days after the contract is awarded. In the past, MBEs complained, many prime contractors "forgot" about their MBE subcontractors during the 10-day period.

State government now must reserve 10 percent of its contracting dollars for small and minority-owned businesses. The new reserve is in addition to the state's existing standard of awarding 25 percent of contracting dollars to MBEs.

"Leveling the playing field means providing small and minority businesses real access to opportunities, capital and power," said Steele, speaking at a minority business forum last week at the University of Maryland University College in Adelphi.

"The doors to opportunity have been thrown wide open," Steele told the audience of small-business owners. "Y'all come."

During a question-and-answer session, however, it became clear that enforcement within state agencies remains a sticking point. Steele said he is relying on his own powers of persuasion to bring the state agencies into compliance with the new contracting mandates.

"I've made it clear to our Cabinet secretaries that we must enforce the law," Steele said. "I've been bird-dogging this effort ... Mine is a steady, constant pressure to remind folks we're serious about this."

The administration has the right attitude, but enforcement is critical, said Del. Gareth E. Murray, who sponsored a bill that Ehrlich (R) signed last year to raise the personal net worth threshold for MBE certification from $750,000 to $1.5 million.

"The problem with any organization as large as the state government is that that folks at the top will 'get it,' but further down the line, they haven't completely 'gotten it,'" said Murray (D-Dist. 20) of Silver Spring, who attended the University College event. "Hopefully, they will put in [controls] to monitor things more closely."

Murray said he intends to introduce legislation next year that will reserve 10 percent of every state contract for small businesses rather than the current 10 percent reserve of state contracts as a whole.

"Unless you have that within each contract, these [small-business] folks will be overlooked," he said.

Better reporting

The Governor's Office of Minority Affairs assesses MBE contracting by each state agency annually. Agencies have up to 90 days following the end of the fiscal year to report MBE contracting to Minority Affairs, but Sharon Pinder, special secretary of the Minority Affairs office, said she wants to change that.

"It's been that way for over 25 years," Pinder said, "and it forces you into a reactive mode."

Pinder said she wants to "leverage technology" so she can track procurements "in real time" at all agencies throughout the year. Already, she said, her office has changed the reporting process to require agencies to calculate MBE contracting in terms of actual payments, not just contracts awarded.

Minority Affairs soon will release its assessment of MBE contracting for fiscal 2004, she said. Its assessment for the current fiscal year will be ready by January. Pinder said she could not make public the results in the forthcoming analysis, but did note that it indicates a rise in MBE contracting.

When Pinder became director of Minority Affairs in January 2003, the office had a budget of roughly $300,000 and practically no staff. As a result of the new reforms, Pinder has been elevated from director to special secretary, her budget has tripled and her staff has increased.

"In a 10-month period, our office had over 900 calls," she said. "People are asking us for help, how to market, how to resolve contracts. We went to that from no one approaching my office at all."

Still, there is room for improvement in the office's response time, said some MBEs who have sought that help.

"Perhaps they could designate a point person to actually return phone calls and respond to e-mail messages," suggested Lipton L. Chin, business development manager for Computer Temporaries Inc., a woman-owned, MBE-certified company in Largo.

Chin said his company has not experienced a rise in state contacts this past year, in part because it has focused on federal work. Chin has high hopes for the new MBE mentoring initiative, however.

The initiative, which began in March with an executive order from Ehrlich, matches MBE companies with large corporations to foster alliances and provides them with a veteran's perspective on navigating the business challenges ahead.

Chin said the state has paired his company with Pepco. Representatives from the two firms met last week to discuss opportunities and strategies.

This report originally appeared in The Business Gazette.