Md. eyes plan critics say excludes minority business

Brian Witte

ANNAPOLIS, Md. — Amid criticism that Maryland has failed to adequately include minority businesses in state contracts, state officials say they will work harder to encourage state agencies to raise the participation of minority firms.

Shortcomings in reaching goals under the Maryland Minority Business Enterprise Program were underscored at last week’s Board of Public Works meeting, when the renewal of $30 million in contracts relating to commuter bus operations came before the board. Arnold Jolivet, head of the Maryland Minority Contractors Association, pointed out that the contracts didn’t include minority business participation.

“There’s no reason to renew the contract as is — which means that two more years will go by — and it’s just tragic that out of $30 million, not one dime will go to a minority firm,” Jolivet told the board. “It boggles the mind that that can happen.”

The contracts did not include minority firms because the state granted waivers to the companies that ended up with the work. A contractor can ask for a waiver under the program if it can’t reach a stipulated amount of minority firm participation. It is then up to the state agency that is looking for a contractor to decide whether to accept the bidder’s request for a waiver.

Luwanda Jenkins, who heads the Governor’s Office of Minority Affairs, said Jolivet “does raise a valid point with regard to the abuse of waivers in previous years.” She said the state will be keeping a closer eye on the number of waivers granted to agencies.

Jenkins said state agencies are being asked to report the number of waivers on a monthly basis with the use of StateStat, Gov. Martin O’Malley’s statistics-based accountability initiative.

“To the extent that when waivers are issued, we can really look at the necessity of those waivers and try to mitigate waivers before they come to board approval,” she said.

Jenkins said state agencies often are not looking hard enough for minority firms that can do the work. She said her office is working to make sure minority participation goals are placed on bids when they go out to the marketplace, reflecting the availability of work on state contracts.

The Maryland Minority Business Enterprise Program aims for 25 percent minority participation. The program is written into state law, providing that agencies strive to reach the 25 percent mark.

The state is in the process of calculating how much minority firms participated on state contracts in fiscal year 2007. In fiscal year 2006, participation by minority firms reached an estimated 22 percent, Jenkins said. However, she noted that calculating the correct amount of minority firm participation is complicated, and the percentage could be less than 22 percent.

Jolivet blamed former Republican Gov. Robert Ehrlich’s administration for making a “conscious decision” to engage in “selective enforcement” of minority business law. Now, he said, scores of contracts are coming back to the Board of Public Works for renewal that are and have been without minority participation.

“What you’re seeing today is just the [tip] of an iceberg of contracts that will be coming before you in the next 12 months,” Jolivet told the board, which consists of O’Malley, Treasurer Nancy Kopp and Comptroller Peter Franchot, all Democrats.

Former Lt. Gov. Michael Steele, who led efforts focused on minority business programs under Ehrlich, said he worked hard to turn around what had become “a moribund program.”

Steele also said the contracts the board was reviewing last Wednesday were not a reflection of an entire program “that has been reformed from top to bottom.” Steele said there remains a lot of work to do to change attitudes in state government about reaching out to minority businesses.

“I would not paint with such a broad brush to make this damning incrimination of the [Ehrlich] administration, to sort of create the perception that there was nothing done to [minority business enterprise] reform,” Steele said.

O’Malley asked Jolivet to make the state “aware of the other pieces of this iceberg that are coming.”

“It could well be that we’re not aware of what’s out there and what’s coming down the road as you might be, so if you can let us know … that would be helpful, too,” O’Malley said.

Often, Jenkins said, once contracts are allowed to move forward without minority business enterprise (MBE) goals, it is hard to modify them, because “it becomes embedded into the contract life cycle.”

O’Malley repeatedly asked Jolivet during the hearing if he had raised his concerns during Ehrlich’s administration, when the contracts were waived the first time.

“Sometimes, you know, when you hold Democrats to a high standard, but you let people of other parties take a walk, you know, we kind of make the bed, don’t we? And now we’re lying in it,” the governor said.

Jolivet said his organization did raise concerns with at least 95 percent of the contracts.

“We did not consciously acquiesce to any systemic waiver of the MBE,” Jolivet said. “I can assure you that.”

Steele said when he was in office he tried to point out contracts without an MBE component, such as the contracts that came before the board last Wednesday. He also took issue with O’Malley’s characterization that Republicans were lax on meeting the program’s goals.

Steele said improving minority contract involvement is a continual process.

“You don’t hit all the points that you need to hit right out of the box,” Steele said.

The board ended up approving the contract renewal on condition that the Maryland Department of Transportation meet with contractors to highlight the concerns raised by Jolivet and attempt to secure some voluntary compliance with MBE goals. O’Malley also asked the transportation department to report back to the board.

(Associated Press)