City Council OKs minority-contract rules bill

The Baltimore Sun

Baltimore will set specific targets for how much money black- and Hispanic-owned subcontractors should receive from companies that bid on city work, under legislation unanimously approved by the City Council yesterday.

The goals for specific racial or ethnic groups - as opposed to the general minority business thresholds Baltimore uses now - are part of an effort to update a 30-year-old program that city officials say has spread $500 million in business to minority firms in the past six years.

"This is something that we should support because disparity does exist," said City Councilwoman Helen L. Holton, who shepherded the legislation through the council. "It is real."

Local governments such as Baltimore's frequently require companies competing for municipal contracts to set aside a portion of the money they receive from the city to hire subcontractors owned by women or minorities. In the past, Baltimore has not delineated what percentage of those subcontracts should go specifically to black-owned businesses, for instance.

The new rules adopted yesterday would change that for any construction contract over $1 million and for all architectural and engineering contracts. Specific goals for each ethnic group's participation in various kinds of contracts will be set later by the city's minority business office.

Another section of the legislation eliminates an unenforced prohibition in current law against large companies taking part in the minority business program. The old law required the city to set a revenue threshold at which a large, minority-owned company is no longer eligible to compete as a minority firm.

But that threshold was never set, and now the law is being changed to reflect what has been practice.

Wayne R. Frazier Sr., president of the Maryland-Washington Minority Contractors Association, said he supports most of the bill but disagrees with the decision to allow large minority firms to remain in a program that was created to help small companies grow.

"There must be size limits placed on minority participation because smaller minority businesses can't compete with larger businesses," he said.

The bill, introduced by Mayor Sheila Dixon's administration, was approved by the council unanimously with one abstention by City Councilman Bernard C. "Jack" Young.

The bill is expected to be signed by the mayor and will go into effect immediately.

Despite the hundreds of millions in contracts awarded to minority- and women-owned firms, a study released in September shows there is still a large disparity between the capacity of minority firms to perform work for the city and the size of contracts those companies receive.

As the legislation worked its way through the council this year, a number of critics said the program covers all Hispanic businesses - including those owned by immigrants from Spain and Portugal. One of the city's largest paving contractors, M. Luis Construction, is owned by a Portuguese family and occasionally competes as a minority subcontractor.

City officials, including Holton, said the city relies on the federal definition of Hispanic - which they said includes Portuguese - and argued that removing the country from the minority business program would open the city up to a federal lawsuit.

Holton noted that M. Luis Construction has performed much of its work as a prime contractor, meaning it did not rely on its minority status to get city work.

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