Baltimore's spending board banned a minority subcontractor yesterday from qualifying for certain city government work for two years, a decision that the company's representative said equals a "death sentence" for the firm.
Three members of the city's five-person Board of Estimates revoked the "certificate of qualification" that it awarded last year to Union Technologies, or Utech -- a Baltimore firm whose ties to City Council President Sheila Dixon have spurred a state investigation.
The board took action after city officials recently ruled that Utech, which has employed Dixon's sister, submitted "falsified and inaccurate financial statements" to obtain the certificate that qualifies it to win construction-related city contracts.
"We need to protect the integrity of our contracting process and also our minority business development efforts," Mayor Martin O'Malley said after the board meeting.
The certificate approved for Utech by the board in June 2005 included qualification for up to $8 million in work, including electrical, building construction and maintenance, and installation of cable communications systems, street lighting and power lines.
The city is also reviewing whether to renew Utech's status as a certified minority subcontractor. That designation renders it eligible to be hired by contractors seeking to fulfill city law requiring the use of minority subcontractors in government work.
The mayor and his two appointees were the only board members to vote yesterday.
Dixon, the board's chairwoman, recused herself because of the state prosecutor's investigation. Board member Joan M. Pratt, the city's elected comptroller since 1995, also abstained. In 2002, Pratt's accounting firm prepared Utech's taxes.
Arnold Jolivet, president of the Maryland Minority Contractors Association, defended Utech President Mildred E. Boyer at the meeting. But he failed to persuade the board to revoke Utech's qualification for only six months.
"This will put them out of business," Jolivet said of the two-year prohibition. "She does 90 percent of her work with the city."
Jolivet and O'Malley confirmed that Boyer acknowledged submitting false information. But Jolivet said the board's action was too severe and "politically charged."
Jolivet praised Boyer, a member of his group, for her courage as a black woman trying to obtain construction contracts. Boyer has not responded to repeated requests for comment over the past two months.
"It's a tough market ... for black women," Jolivet said. "She's basically a one-person shop."
But the "one-person shop" description speaks to other problems Utech has encountered in a separate city investigation.
Utech was hired in 2003 as a minority subcontractor for two of City Hall's biggest contractors: Comcast Corp., the city's cable television provider, and TeleCommunications Systems Inc. (TCS), the city's computer network manager.
The Minority and Women's Business Opportunity Office is trying to determine whether Utech paid others to perform the bulk of its work on those contracts, which have totaled more than $1 million. The city's minority inclusion law prohibits subcontractors from farming out more than 10 percent of their contracts, a provision aimed at preventing contractors from using front firms to meet minority targets.
The Sun reported this week that Utech has rarely, if ever, performed its own work. Records reviewed by the newspaper indicate that Utech has hired other companies, and it shifted formerly grant-sponsored city employees onto its own payroll, to honor its TCS contract.
TCS still employs the firm, mostly for "help desk" computer services.
Comcast stopped using Utech to perform survey and installation work in November, but it has not said why.
The Sun has also reported that Utech employed another company to honor its underground electrical subcontracts with Doracon Contracting Inc. at two developments -- Frankford Estates in East Baltimore and Silo Point in Locust Point. Doracon is owned by Ronald H. Lipscomb, a friend of Dixon's and political ally of O'Malley's.
Frankford Estates, which received a gift of land, a loan and a tax break from the city, must abide by the city's minority subcontracting law. Records show that the developers of Silo Point, which received a rezoning and development plan approval from the council, agreed to meet minority subcontracting goals.
Although Jolivet said the board's actions will jeopardize Utech's contracts, city officials said the current computer services work does not require a qualification certificate. It was unclear whether underground electrical work at a private development governed by the city's minority subcontracting law needed the qualification.
Questions about Utech first arose after The Sun reported in February that Dixon asked Comcast officials at a council committee hearing why they were no longer employing Utech. She did not disclose that her sister, Janice Dixon, had worked full time for Utech since February 2004 and part time for some months before that. Dixon has said her sister no longer works for Utech.
In addition, when Utech came before the Board of Estimates for its TCS subcontracts between 2003 and 2005, Dixon never abstained, according to city records. Dixon also voted to approve Utech's certification of qualification last year.
The city's ethics law prohibits public officials from participating in "any matter" that involves a sibling's interest or the interest of a relative's employer. It says public officials must recuse themselves from participating in such matters if they have knowledge of their relative's position. They must also disclose such conflicts.
State prosecutors have issued subpoenas to several city agencies, as well as to Comcast and TCS, requesting documents about Utech.