Strengthening Support to Minority-Owned Firms

Ed. note: This is cross-posted from The Commerce Blog

Supporting the growth and global competitiveness of minority-owned businesses is a priority for the Department of Commerce and the Obama administration.

And we’re making good on that priority. Last year, the Department’s Minority Business Development Agency (MBDA) registered the best annual performance in its 41-year history. It assisted minority-owned businesses in gaining access to nearly $4 billion in contracts and capital, supporting the creation of nearly 6,000 much-needed jobs. Over the last three years, our network of 39 MBDA Business Centers, has been largely responsible for generating $10 billion in contracts and capital while helping to create and save nearly 20,000 jobs.

Today, the challenge for MBDA–like so many organizations across the federal government–is to figure out how we build on that record while becoming more efficient. A number of bureaus right here within the Commerce Department are facing a similar challenge, which has led, for example, to consolidating or otherwise cutting several programs in the National Oceanic and Atmospheric Administration (NOAA), restructuring some units within International Trade Administration (ITA) and shifting the Economic Development Administration’s (EDA) emphasis to regional innovation strategies. So how do we meet the President’s mandate to improve services to minority-owned businesses and entrepreneurs in an increasingly difficult budget environment?

The answer for our Bureau started with looking at the grassroots where MBDA interacts on a daily basis with minority business owners. Our front lines are our 39 MBDA Business Centers and related business development support services. Our plan is to strengthen connections at that level to enhance services and get more for your tax dollar.The centers, operated by local entities, are funded in part by grants from MBDA.  The average grant is less than $300,000 and had not experienced an increase in funding in over 15 years. . . until recently.  Last year, when we launched a new round of competitions, MBDA was able to increase the size of the grants and extend awards from three years to five years. As a result of earlier streamlining efforts, MBDA was also able to expand its presence to establish new centers in Denver, Cleveland, Boston, Minneapolis and Anchorage in fiscal year 2011.

But to put more resources into our business centers, we needed to find savings in other parts of our budget. Like many businesses in the private sector, we looked at our administrative costs and decided on a plan to consolidate our five regional administrative offices. It allows us to cut funding for overhead, while putting more resources into the Business Centers and business development programs that help minority-owned firms land contracts and financing awards.

In each of the cities where we have an administrative office that’s slated for closing, there’s an MBDA Business Center that will continue to provide direct services to minority-owned businesses and entrepreneurs. MBDA, as an advocacy agency for the nation’s 5.8 million minority-owned firms, is not in jeopardy; and I am confident that this new operational structure will unleash even greater benefits to our constituency.

It’s a common sense solution and part of a larger strategy that began when I arrived at MBDA nearly three years ago. My goals have been to make the Agency more responsive to the changing marketplace and to enhance its ability to meet the demands of the rapidly growing minority business community. In my first year, the Agency finalized its work to consolidate the grants management and monitoring program in headquarters and adopted a paperless system for processing, approving and tracking grants.

The plan in our 2013 budget to centralize our administrative functions is just an extension of that work, and we look forward to working with members of Congress on this proposal.

Minority-owned firms account for $1 trillion in gross receipts and employ almost 6 million Americans. MBDA, the Department of Commerce, and the Obama administration are dedicated to growing those numbers by strengthening our national presence and localized footprint. It’s my firm belief that we can do that at the same time we get a bigger bang for the taxpayer’s buck.

David A. Hinson is the National Director of the Minority Business Development Agency