A Montgomery County program designed to promote locally owned small businesses is only reaching a small fraction of eligible companies, has frustrated local business owners and has cost county taxpayers more than $200,000 a year, according to a new report.
The Local Small Business Reserve Program, approved by the County Council in 2005, allowed local small businesses to bid on certain contracts and required county departments to award 10 percent of eligible contracts to those businesses. County lawmakers expanded the threshold to 20 percent earlier this year.
But a new report by the Office of Legislative Oversight said that only a small fraction of the more than 20,000 eligible small businesses had registered for the programs. And only about 45 percent of the 1,540 businesses that registered for the program have kept their membership in the program current, records show.
Local business owners had high expectations that the new program would help them land county contracts but have found little success, the report said.
Business leaders reported that “the process of participating is too complex, the program is not well publicized, and the [program] is not consistently implemented across county government departments,” the report said.
In response to the report, Chief Administrative Officer Tim Firestine said that the county had been aggressive in promoting the new program but “was not thorough” in identifying the county’s needs relative to what small local businesses provided.
“As a result, many businesses that registered expecting opportunities were disappointed, while county departments searching the registry of businesses were unable to identify businesses providing the goods or service required,” Firestine wrote in a memo to the Office of Legislative Oversight.
The county has spent between $209,000 to $362,000 a year, mostly on staffing, to run the local business program, records show.
Firestine also said that since the County Council voted to change the program this summer and expand percentage of eligible county contracts that needed to be assigned to local businesses from 10 percent to 20 percent, there have been more solicitations through the program in six months than there were in the past two years.
