Baltimore City

City approves $90,000 in business with companies barred from working in Md.

Mayor Stephanie Rawlings-Blake, Council President Bernard C. "Jack" Young and other Baltimore officials approved nearly $90,000 in city business last week with three companies that are barred from doing business in the state.

The three companies were approved as subcontractors on deals to manage parking garages and locate underground utility lines.

As members of the city's Board of Estimates, the officials voted to approve contracts that included two lawn-care subcontractors that had lost their state certification, in one case because of unpaid taxes. And they backed an agreement that included a staffing subcontractor that went out of business last fall.

Last week, the city suspended a lucrative contract with one of the city's licensed tow companies after a Baltimore Sun reporter showed officials that the company had lost its state certification two years ago because of a tax lien.

On Tuesday, Rawlings-Blake ordered city agencies to verify the status of subcontractors for all new contracts.

"The mayor is absolutely committed that every business doing business with the city of Baltimore is in compliance with state rules and regulations," spokesman Ryan O'Doherty said. "We may need to take a look at a more regular and routine process by which these background checks are occurring."

Rawlings-Blake, Young, Comptroller Joan M. Pratt, City Solicitor George Nilson and Public Works Director Alfred H. Foxx approved the contracts as members of the Board of Estimates.

The spending board acts on millions of dollars in contracts in its weekly meetings, typically voting in a matter of minutes to approve an agenda that can span more than 100 pages. The board rarely discusses the contracts in detail.

Officials said neither Rawlings-Blake, Young, Pratt, Nilson nor their aides routinely check the state's online database of companies certified to do business in Maryland. Pratt said it is incumbent upon the agencies requesting a contract to determine whether the company is certified.

"It should be the responsibility of the department," said Pratt. "They're the ones talking to the vendor."

But Young said the city should change its protocol to avoid awarding contracts to companies that are not in good standing with the state. "I think it should be someone's responsibility, but I don't know whose," he said.

The contracts with the uncertified businesses were first reported by the blog Baltimore Government Watch.

The three subcontractors have been classified by the city as minority- or woman-owned firms. The city requires that a certain percentage of its contracts be awarded to such businesses.

The spending board approved a $700,000 contract that included $31,290 for Professional Employment Inc., a Pikesville staffing firm. The contract, a one-year extension of a $1.1 million deal awarded to One Call Concept Locating Services Inc. in April 2009 to find utility lines, lists Professional Employment as a subcontractor to fulfill the woman-owned business requirement.

"That couldn't be us. We closed last year," said Professional Employment's owner, Beverly Epstein.

The state revoked the company's charter in October. The state Department of Labor, Licensing and Regulation said last month it had placed a lien on the business for unpaid unemployment insurance taxes.

One Call President Mike Horne said Professional Employment had been the original subcontractor on the project. He said he was working with the city's Minority and Women's Business Opportunity Office to find a new subcontractor.

Shirley Williams, head of the Minority and Women's Business Opportunity Office, said she did not know that Professional Employment had lost its state certification until contacted by a Baltimore Sun reporter.

Williams said the office checks to see if a company is in good standing with the state when it certifies or recertifies its minority status. But staff does not always check to see whether a subcontractor is in good standing with the state before recommending it to a contractor, she said.

"I'm not even going to give the impression we check every time, because we don't," she said.

If a contract is approved with subcontractors who lack state certification, Williams said, her office would help find new subcontractors.  The subcontractors could be swapped without approval by the Board of Estimates or public notice, she said.

A Baltimore Sun review of 120 minority- or woman-owned firms on the city's list found that one in six are barred from doing business in the state. The city has certified 1,287 minority- or woman-owned businesses.

In many cases, Williams said, a lost certification hinges on a technicality and may be quickly rectified.

But that was not the case with the three subcontractors approved by the Board of Estimates last week.

The spending board awarded a $323,000 contract to LAZ Parking to manage the Baltimore Arena garage, which included $8,440 for landscaper G.E. Thompson. The subcontractor lost its state certification in October 2009 and is subject to a lien for tax debt.

"Obviously, I'm aware" the company lost its state certification, said owner Glenford E. Thompson. He said the business has been "under extreme duress."

Neither LAZ Parking nor the quasi-public Parking Authority of Baltimore City responded to requests for comment.

Another landscaping subcontractor, TGM Inc., was awarded a total of $46,000 as part of three parking garage management contracts, two with Republic Parking and one with LAZ.

TGM lost its state certification in October 2009 by order of the state comptroller. Calls to TGM seeking comment were not returned.

A manager with Republic Parking referred all calls to the Parking Authority, which did not respond to a request for comment.

TGM and G.E. Thompson have been operating as subcontractors for LAZ Parking since the fall, Williams said.

Nilson, the city solicitor and spending board member, said companies do not necessarily need to be licensed when contracts are approved, but should be before work begins.

"Doing business starts when the contract has been signed and has been approved by the Board of Estimates and the agency says, 'OK, you're on the clock, start working,'" Nilson said.

Officials did catch at least one subcontractor that was not in good standing with the state. Zeemax Plumbing Inc. was part of the $1.7 million deal with J.A. Argetakis Contracting to renovate Transportation Department offices and a tow lot office on Pulaski Highway.

The spending board approved the contract with Argetakis last week over protests from a rival bidder. But the board warned the company that it needed to get Zeemax certified or find a new subcontractor.

Williams said none of the six companies that applied for the contract met all of the criteria, so Argetakis won because it had submitted the lowest bid.

City Council members called for spending procedures to be revamped.

"I don't think we should be giving contracts to anyone who is not compliant with the law," said Councilman James B. Kraft. "We should at least insist that they get their charter reinstated within a certain period."

Councilman Bill Henry said city agencies should streamline computer systems to facilitate checks.

"If there were a central system for the city, then it would be easier to hook it up to the state database," he said.

Councilwoman Mary Pat Clarke said she was shocked to learn that the spending board did not check whether contractors and subcontractors were in good standing.

"It's time for them to start checking," she said.

All of the subcontractors listed on the Board of Estimates agenda for its weekly meeting Wednesday morning appeared to be in good standing with the state.

Baltimore Sun reporter Peter Hermann contributed to this article.