The District's program to help guide construction and other city contracts to local business owners has been an easy target for abuse since the city has, until recently, had a single enforcement agent to monitor participating businesses.

But the mayor's office says it is taking steps to turn things around and make it easier for the city to crack down on companies that exploited the program.

"There have been too many incidents where someone uses their mother's bedroom as their office. It doesn't make the agency look good and hurts the credibility of the program," said Council Chairman Phil Mendelson. "I think there's an enforcement issue, and I believe that the law can be tweaked so that it's easier to follow."

The mayor vetoed legislation championed by Councilman Vincent Orange meant to better regulate Certified Business Enterprises -- the District's designation for D.C.-based businesses that receive advantages in city contracting.

The CBE program makes it easier for D.C. contractors to win city contracts and allows them to charge the city up to 12 percent more for them than other bidders.

On Wednesday, a panel of local business leaders tasked with improving the city's CBE rules announced its proposals. Those changes included clarifying rules on joint ventures, giving the Department of Small and Local Business Development broader authority and clearer instructions and increasing fines for businesses violating the law.

"I'm actually hopeful that we can introduce the legislation by the end of the week," Mayor Vincent Gray said Wednesday.

Additionally, the mayor says the city is amping up the number of employees tasked with monitoring the program.

"We have been completely overmatched," Gray said. "A big part of this is resources."

The city recently levied a $1 million fine against a contractor. That may be the first fine for an errant CBE firm, despite numerous reports that the program is rife with corruption.

Gray said he thought the fine might help deter future wrongdoing.

Alberto Gomez, the owner of Prince Construction Co., said the District's program helped local businesses compete and that ensuring that only deserving companies received city assistance was essential to ensure the success of an important city program.

"The spirit of the law was to provide a lifeline to local small businesses to flourish," Gomez said, criticizing companies that abuse the system. "It's frustrating because some of us cannot get the work."