Ohio proposes changes to state programs for minority-owned, disadvantaged businesses

Forum on proposal to be held Friday in Evanston

CINCINNATI – An Ohio agency wants to change the rules that govern how the state awards contracts to minority-owned companies, and some local leaders worry that could make it harder for such firms to get work from the state.

At issue are Ohio’s Minority Business Enterprise and Encouraging Diversity Growth and Equity programs, known collectively as MBE and EDGE. They are designed to encourage state spending with businesses that are certified as minority-owned or disadvantaged.

 

“Ohio is one of the few states left in the country that has an MBE set-aside law,” said Sean Rugless, CEO of the Greater Cincinnati and Northern Kentucky African American Chamber of Commerce. “If this change makes it easier and improves contracting opportunities for minority businesses, that’s great. But we do not want it to erode the program.”

The changes certainly are not designed to weaken MBE or EDGE, said Beth Gianforcaro, director of communications for the Ohio Department of Administrative Services.

Rather, the rules are being updated as part of a regular review to make sure they relate to current state laws, she said.

“Our goal is to increase the numbers of minority and qualified businesses to participate in the programs,” she said.

Local Forum Set For Friday

Rugless, officials with the Cincinnati USA Regional Chamber and Rep. Alicia Reece, D-Bond Hill, have been working to determine what impact the changes could have on the region’s minority-owned businesses.

As president of the Ohio Legislative Black Caucus, Reece urged Gov. John Kasich to give interested business owners and groups more time to study the proposed changes and comment on them.

Originally, state officials emailed a notice about the proposed changes on Dec. 24 and indicated that they would accept comments about the changes through Dec. 31.

That timing – right in the midst of the busy holiday season – drew criticism from business leaders and lawmakers alike.

Reece wrote Kasich a letter requesting more time for comments, and the state extended the comment period until Jan. 31.

Gianforcaro said officials were originally trying to get all the rule changes finished by the end of 2013. Once people raised concerns, the state quickly extended the comment period, she said.

“At the end of the day, it’s about are we increasing contracts with minority-owned businesses in the state of Ohio and increasing jobs,” Reece said.

The local African American Chamber will host a forum on the proposed changes at 1 p.m. Friday at the American Red Cross Conference Center, 2111 Dana Road in Evanston. The meeting is open to the public.

Chamber's Aim: Ensure Changes Don’t Hurt Businesses

The Ohio Department of Administrative Services has a page on its website that describes the proposed rule changes for the programs and explains the impact those changes would have on the programs.

Locally, business owners and business advocacy groups are studying the information so they can provide comments before the Jan. 31 deadline.

The Cincinnati USA Regional Chamber wants to make sure the proposed changes don’t make it too difficult for legitimate, minority-owned businesses to become EDGE-certified with the state, said Crystal German, vice president of the Minority Business Accelerator and economic inclusion at the chamber.

 

“There definitely are some rule changes that we’re going to emphasize to them to take another look to make sure they didn’t unintentionally make it too onerous for a firm to get certified,” German said.

Rugless said he also wants to make sure the state doesn’t dismantle parts of the program without understanding how that could negatively impact results.

“There was a complete rescinding of several components of the MBE program, and there were some modifications to the EDGE program,” he said.

For example, the changes call for the elimination of a minority set aside review board along with certain types of bid notifications and specifications concerning minority-owned businesses.

“Until you understand the entire web, taking away a strand or two may seem small,” Rugless said. “But it could have a big impact.”

State Programs Have Spending Goals

The state has a 15 percent spending goal in the MBE program and a 5 percent spending goal in EDGE.

The purpose is to spur business growth across all parts of the state and all segments of the economy, Rugless said.

Within state government, some agencies met or exceeded those goals during the state’s 2013 fiscal year, but many did not, according to the state’s most recent scorecard.

“The biggest challenge is that the state has never achieved its overall goal,” Rugless said. “When it was announced they were changing the rules, there was quite a bit of sensitivity.”

That was due in part to the timing of the announcement and the original Dec. 31 deadline for submitting comments, he said.

Now that minority business owners and the groups representing them have more time to study the proposed changes, they are anxious to share their thoughts with state officials.

 

“We’re kind

of in the middle of our review process right now,” said Jason Kershner, the regional chamber’s interim managing director of government affairs.

“Some of these changes could be good things. Some of them could be troublesome,” he added. “Overall, from a government affairs perspective, we just want to make sure we’re not making it harder for businesses to do business.”

To RSVP for the Jan. 24 forum, call the African American Chamber at (513) 751-9900.

For more stories by Lucy May, go to www.wcpo.com/may . Follow her on Twitter @LucyMayCincy.

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