Disparity Study

In January 2023, Frederick County Government of Maryland (County) retained MGT Impact Solutions (MGT) to conduct a Disparity Study (Study) to assess whether any barriers or discrimination exists in its contracting procedures or within the relevant geographic market.

The Study also investigated other factors that may have created challenges for minority-, women-owned (M/WBEs) and small businesses (SBEs), potentially hindering their ability to effectively compete for County contracts and procurement opportunities. In response to such findings, entities may begin use of an organizational program in order to address any disparities.

The County will use the information from the Study to refine its contracting policies and programs to better encourage the participation of those businesses in its contracts and procurements, and to understand whether the use of race- and gender-based measures might be appropriate in the future. Results of the Study serve as legally supported evidence and justification for the County to develop a program encouraging equitable competition and award, such as an Equal Business Opportunity Program.

Within the context of studying the County’s procurement practices, the study was conducted in a manner consistent with disparity study best practices, controlling local legal precedents, and constitutional law in order to properly advise the County about the legal basis for potential remedies, if necessary. MGT’s methodology included a review of disparity studies legal framework, analyses of utilization, availability, and statistical disparity, qualitative research, private sector analyses, and findings, commendations, and recommendations.

Value Statement

Frederick County is committed to advancing equity, transparency, and accountability by identifying and addressing disparities in access to opportunities. The disparity study emphasizes our dedication to data-driven decision-making, inclusive economic participation, and fair treatment for all individuals and businesses. By rigorously analyzing participation, availability, and utilization across all demographic groups, the aim is to inform policies and practices that promote equal opportunity, strengthen public trust, foster a more inclusive and competitive environment, and invest in small and local businesses that, in turn, will invest in the Frederick County community.                                                                                                                                                                         

Read the Executive Summary
Read the Disparity Study
Read the Appendices

Key Findings

The Study provides a comprehensive analysis of the County's expenditure data, focusing on the utilization, availability, and disparity of minority- and women-owned businesses (M/WBEs) in contracting activities. These pivotal insights shed light on any underutilization of M/WBEs compared to their availability (expected utilization) in the marketplace. As such, the County has the opportunity to establish initiatives and processes to remedy any discrimination that may have occurred against such firms.

  • Finding A: The relevant geographic market area (RGMA) includes 32 counties and independent cities in the Frederick County Market Area, with 67% of all contracting dollars spent within this region. Procurement spans 217 NAICS industry groups, including 12 in Construction, 119 in Services, and 86 in Goods.
  • Finding B: Availability analysis using a custom census approach shows 17.47% of available firms are M/WBEs; 82.53% are unclassified.
  • Finding C: M/WBEs received 4.23% of County spending; MBEs received 0.38%. Nonminority women-owned firms accounted for the highest M/WBE share at 3.85%.
  • Finding D: Small Business Enterprises (SBEs) represented 1.22% of total utilization, with limited available data preventing breakdowns by race, ethnicity, or gender.
  • Finding E: Disparity analysis indicates substantial disparities for most M/WBE groups across procurement categories, though data limitations prevent recommending race- or gender-based programs.
  • Finding F: Private-sector Survey of Business Owners (SBO) and Annual Business Survey (ABS) data further confirm statistically significant disparities for M/WBEs across all procurement categories analyzed.
  • Finding G: ACS data reveal significant gaps in earnings, self-employment rates, and business outcomes for minority groups, consistent with broader marketplace discrimination.
  • Finding H: Qualitative feedback indicates most firms did not perceive discrimination by the County, but some reported barriers tied to small-business status and challenges such as informal networks, capital access, insurance requirements, unfamiliarity with processes, and communication gaps. Businesses recommend strengthening relationships with small, minority-, and women-owned firms and offering more technical assistance for bidding.                                                                                                                                                                                                             

Key Recommendations

Frederick County is well positioned to implement targeted, data‑driven strategies to reduce barriers for Small Business Enterprises (SBEs) and Minority- and Women‑Owned Business Enterprises (M/WBEs). Although current data limitations—particularly the lack of comprehensive subcontracting information—prevent the County from pursuing race‑conscious remedies at this time, the County can advance equity through strong race‑neutral initiatives that expand access and promote fair participation in contracting.

By improving data collection, strengthening inclusive procurement practices, and addressing identified barriers, the County can build a more equitable and transparent marketplace. These actions will create an immediate foundation for broader inclusion efforts and support the potential development of race‑conscious programs as more robust data becomes available.

  • Recommendation A: Prioritize race‑ and gender‑neutral small business initiatives. Establish a Small Business Program to support SBEs and M/WBEs through simplified procurement processes, outreach, technical assistance, and dedicated staffing. This forms the foundation for future race‑ or gender‑based initiatives once better data is available.
  • Recommendation B: Create a discretionary procurement threshold for SBEs. Allow contracts below a set value to be awarded directly to registered SBEs, reducing administrative burdens and increasing participation of small and diverse firms.
  • Recommendation C: Require audit clauses in all contracts. Mandate prime contractors to track and retain detailed subcontractor data—including race, gender, and payment information—to strengthen transparency and future disparity assessments.
  • Recommendation D: Expand and standardize data collection. Improve tracking of award and payment data for both primes and subcontractors, integrate contract compliance into e‑procurement systems, and ensure consistent data collection across departments to support future program development.
  • Recommendation E: Reorganize the Office of Procurement & Contracting. Shift to specialized buying groups by procurement category, enhance supervisory structure, and ensure Equal Business Opportunity Program staff report directly to the Director.
  • Recommendation F: Increase staffing for business inclusion efforts. Add Business Relations and Compliance personnel to manage goal setting, contract compliance, outreach, and program administration.
  • Recommendation G: Strengthen business outreach and engagement. Offer workshops, training, and procurement education in partnership with professional organizations to help SBEs and M/WBEs compete effectively.
  • Recommendation H: Establish Equal Business Opportunity Liaisons in all Frederick County agencies. Designate staff within each County department to ensure consistent implementation of inclusive procurement practices.
  • Recommendation I: Plan for future updates to the disparity study. Allocate funding to update the study within 5–7 years, ensuring the County collects the necessary data to justify expanded and more targeted inclusion programs.

Next Steps

Immediate next steps:

  • Community engagement sessions:
    • April 20, 2026 from 6:00pm-7:30pm @ C. Burr Artz Library 
    • April 24, 2026 from 3:00pm-4:30pm @ Urbana Library
  • Creation of an implementation task force 

Frederick County Government has enlisted MGT to continue working with the County over the next year on creating a framework for implementing the recommendations from the Study through looking at FCG policies and procedures, building out what a small business program might look like, evaluating code requirements, and prioritizing next steps. 

Additionally, in FY26, in anticipation of the results of the disparity study, the Office of Procurement and Contracting was approved to hire a Data Management Specialist to ensure the successful capture of data to support the administration of any future programs. An Equal Business Opportunity (EBO) Program Administrator position was also approved in the County's FY26 budget to work in tandem with MGT to ensure the implementation of next steps.

Acknowledging the successful build-out of any program that aims to address inequities within the community requires constant collaboration with and trust in the community, a part-time Special Project Manager for Community Engagement has been integral in launching this study and will continue to be a key driver throughout these next steps.                                                                                                                                                                                                           

Additional Resources for Frederick County Businesses

The Office of Procurement and Contracting will continue updating resources available for Frederick County Businesses on this page. Check back frequently for updates.

Contact us: EBO@FrederickCountyMD.gov

Upcoming Engagement Opportunities:

  • April 20 at 6 p.m. at the C. Burr Artz Library 
  • April 24 at 3 p.m. at the Urbana Library