Committee approves reallocation to small‑business programs, eyes $1.7M for challenge grants and support for small federal contractors

Montgomery County’s Economic Development Committee on Wednesday advanced budget changes affecting the Business Center Team and the Small Business Support Services NDA, including committee agreement to a staff recommendation to reallocate unspent contractor dollars and create competitive "challenge grants" for community providers.

County executive staff presented a recommendation to reduce certain contract lines and to shift contracts aligned with administration activities to the CEX budget. Staff also identified a currently vacant business liaison position (item 2.1) and proposed removing it from the FY26 packet; the committee debated that deletion and voted 3‑1 at the committee level to eliminate the vacant position in the packet, with direction that OMB reconcile exact shifts for the full council packet.

Nadia Klute, the county’s small business navigator, summarized FY2024 outputs for the Business Center Team: more than 2,000 direct assistance contacts by liaisons, support to 74 incubator businesses, roughly $1.2 million in direct county grants to businesses and proactive outreach to about 831 businesses. Klute said the team also tracks interactions through a CRM and that resource partners reported roughly $3.2M in assistance to 178 businesses in 2024.

Council members pressed for clearer data and standardization. "There should be a standard and there should be a checklist," said one council member who asked for a dashboard and clearer intake/tracking so supervisors can see case status and closeouts. Staff said the CRM can produce reports showing interactions, session counts, who worked with a business and communication types and agreed to provide more details to the council.

On the Small Business Support Services NDA, staff proposed redeploying estimated FY25 contractor spending (about $1.3–$1.4M) and allocating the remainder to create a $1.7M fund that would award competitive grants ("challenge grants") of roughly $150,000–$250,000 to new providers and to fund organizations that provide coaching and supports to small federal contractors who have lost contracts. County staff described an RFP/portal approach to solicit proposals and emphasized that the county intends to spread awards across multiple organizations rather than give one large award.

Why it matters: the package is meant to better align county small‑business programming with current needs, target support for contractors who lost federal work and open opportunity to community organizations that can provide direct technical assistance and procurement assistance.

Next steps: staff will provide the committee and full council with additional CRM reporting, a clearer outline of procurement parameters for the challenge grants, and OMB will update the full council packet to reflect compensation and contract shifts.