Seven years ago, Ronald Scott walked into City Hall to become one of hundreds of Baltimore minority contractors certified to earn a piece of the $345 million the city government spends each year.

Under Baltimore standards, at least 20 percent of every city contract must be granted to a minority business. The city adopted the provisions 20 years ago to engage minority owners such as Scott, who historically had been shut out of the city's prime contract network.

But when the 51-year-old African-American owner of the heating, air conditioning and ventilation company later returned to complain that the contractor who hired him stopped paying his share of $3 million in city repair work, he said city leaders ignored his plea.

Scott claims the contractor, Temp-Air Inc. of Baltimore, owes his company, Marathon Systems Inc., $21,000, a claim the company denies. Because he is a subcontractor, city leaders told him they could not interfere in the matter, Scott said.

In a city governed by an African-American mayor and City Council president -- where black residents make up 60 percent of the population -- Scott's accusation that the city is failing to enforce the minority contract laws has grand resonance.

"If the city is going to have a minority business program and this is going to be fair and equal, these minority contract owners need to know that the city will ensure that they are treated fairly and are paid in a timely manner," Scott said.

Arthur Robinson knows the feeling. Robinson is the chief executive officer of Full Circle Solutions Inc., a computer company that was hired as the minority contractor on a $5.3 million computer contract for the city finance department.

Robinson filed a complaint with the city's Equal Employment Opportunity Commission in November complaining that the chief contractor, Blacksmith Inc., tried to force him to return part of his 20 percent contract award.

The company ordered Robinson to move into its offices and pay rent, according to the complaint obtained by The Sun. Robinson told city officials that Blacksmith then asked him to pay an additional $83,000 in "fees," an allegation the company denies.

After he refused, Robinson contends that company leaders attempted to remove him from the contract, saying his services were no longer needed. As a result, city attorneys in July found Blacksmith in violation of the city minority contract standards, barring the company from bidding on city contracts for one year.

But one month later the city gave a $400,000 no-bid contract to Foundry Inc., a company formed by the former Blacksmith officers. The city also allowed the company to bid $1.7 million on another city contract.

Robinson, who moved to Baltimore from Philadelphia declined to comment on the matter, but told city officials in a letter obtained by The Sun that other minority vendors in Baltimore warned him not to fight the matter.

"The messages being relayed is that this is the way that business is done in Baltimore and that as 'newcomers' we should get used to it," Robinson wrote in the June letter. "This is not who we are and not the type of business we run."

Robinson's testimony sheds light on a long-standing allegation hovering over government minority contracts. In return for simply lending their name to city contracts, it is said, minority firms receive a kickback from the prime contractor, who pays them less than the city's 20 percent requirement without requiring them to work.

One city minority vendor, who declined to allow his name to be used, said he refuses to work with such contractors. But the practice is so widespread on all levels of government that he keeps handy a list of minority contractors willing to play along to give to those who call the company. In 1992, a special grand jury found that several businesses worked in collusion to get state-awarded contracts through the Maryland Minority Business Enterprise program.

Baltimore leaders acknowledge being frustrated in their attempts to enforce the city minority contract awards.

But they stand by city minority contract laws as their best effort to give minority owners such as Scott and Robinson an entry into city government work. Despite the hundreds of contracts handed out each year to a list of 782 city minority vendors, EEOC receives no more than three major complaints a year with the size and scope of Scott and Robinson's contentions, the city said.

"Whenever we see a problem, we try to address it," said Shirley Williams, chief of the city's Equal Opportunity Compliance Office. "But a minority business enterprise program is not going to make dishonest people honest. If people can take advantage of a program, they'll do it."

Baltimore attorney Robert F. Dashiell believes the complaints by minority firms such as Scott's and Robinson's are exaggerated. As the initial chairman and longtime leader of the city's Minority Business Advisory Committee, Dashiell helped to draft the city standards 20 years ago and represents many companies bidding on city work.

Dashiell also serves as the attorney for Temp-Air, the company Scott accuses in his complaint. Dashiell points to Scott as an example of minority business owners who try to use the city standards to get an edge in contract disputes.

Dashiell and other attorneys in the city praise the Schmoke administration for increasing the amount of city work handed out to minority companies in the city.

"I don't think anyone can argue that some of the wealth has been funded into the minority communities in the city," said Baltimore attorney Claude Edward Hitchcock, who represented Robinson. "But there are frustrations that make its way into the process."

Dashiell said Scott's problems began when he attempted to bill the city directly and erred. The city recently severed its contract with Temp-Air after an independent hearing officer found the company overbilled the city at least $133,000 for work. The company said it received city permission for the charges.

"It has nothing to do with the fact that this is a minority business," Dashiell said of the Scott dispute. "It's a contract dispute of the general, garden-variety type."

City officials dispute Scott's complaint that they failed to address the matter. The city held several meetings between the two companies trying to resolve it, Williams said. When the effort failed and headed to court, the city then allowed Temp-Air to hire another minority to complete the contract.

"The program is designed to provide entre to work for the city," Williams said. "The office is not designed to be specific representatives of specific companies."

The city's handling of minority contract standards has irked Northwest Baltimore Councilwoman Helen Holton. Holton attends the city's weekly Board of Estimates meetings, where city contracts are approved, to watch over the city's handling of minority contract issues.

Holton was incensed when the city was willing to hire Foundry and waive the minority requirement after company officials had been found in violation of the city minority standards. She helped force the city to hire Robinson's company on the $400,000 Foundry contract.

"We are too quick to provide waivers on minority business enterprise," Holton said.

Holton, a certified public accountant, believes the city should raise the 20 percent standard to match higher standards reached by other predominantly African-American regions such as Prince George's County, which averages 35 percent minority participation.

"That should be a floor not a ceiling," Holton said. "You always want to exceed the goals you set."

The city recently requested bids to hire a company that will review Baltimore minority standards to determine how efficiently they are working and meeting market demands. Holton vows to make the city more responsive in enforcing standards they established. She views the action as critical to the economic evolution of minority city businesses.

"Let's not just keep doing this because that's the way it's always been done," Holton said.

Pub Date: 10/12/98