Contractors sue to stop set-asides

City goals on contracts for minorities targeted

May 25, 2001|By Gail Gibson | Gail Gibson,SUN STAFF

A group of public works contractors is again suing Baltimore's mayor and City Council in federal court, charging that the city's revised minority contracting goals remain unconstitutional.

The Associated Utility Contractors of Maryland Inc. won its first round against the city in 1999, when a federal judge ordered Baltimore to stop enforcing a law requiring 23 percent of city contracts to go to businesses owned by minorities or women.

Responding to U.S. District Judge Andre M. Davis' ruling that the city had failed to prove that disparities existed, the city adopted a new policy last year based on a $200,000 study that found city contracts primarily benefited "non-minority men."

FOR THE RECORD - In an article on city minority contracting goals in Friday's editions of The Sun, the word "set-aside" was inserted into the text and used in the headlines. The term was incorrect; "set-aside" programs and quotas have been the subject of unfavorable court rulings. The article and headlines should have referred simply to goals the city is considering.
The Sun regrets the error.

In the suit filed in U.S. District Court in Baltimore, the contractors association contends that the new rules - including an executive order by Mayor Martin O'Malley that set a goal of awarding 35 percent of city contracts to minorities - still unfairly discriminate on the basis of race and gender.

"The way we see it, the city wasn't satisfied with 23 percent being unconstitutional; they had to come back with 35 percent," Maury S. Epner, a Rockville attorney representing the utility contractors, said yesterday.

"And we think the result [in court] will be the same," Epner said.

City Solicitor Thurman W. Zollicoffer Jr. had not seen a copy of the lawsuit filed Wednesday and could not respond to it directly. But Zollicoffer said that city officials had carefully constructed the new set-aside rules to avoid a constitutional challenge and would vigorously defend the policy in court.

"I guess there's just certain aspects of the community that have a problem with it," Zollicoffer said. "It's unfortunate that diversity isn't everyone's priority."

Under the city's new law, enacted in late November, the percentage of city contracts awarded to businesses owned by minorities and women is to be set each year by the Board of Estimates, the five-member panel that reviews city financial transactions.

The board set as a goal this year awarding roughly 30 percent of city contracts to minority-owned businesses and about 5 percent to businesses owned by women.

The goals are to be updated each year, based on a statistical analysis of which businesses are available to do work in a given field, a provision that city leaders expect to help insulate the law from a court challenge.

Across the country, minority contracting policies have faced challenges since a 1995 Supreme Court decision that federal programs containing racial preferences were constitutionally suspect.

In his December 1999 ruling, Judge Davis said the previous Baltimore law failed to pass the Supreme Court's "strict scrutiny" test because the city had not collected data to prove that there was a disparity that warranted correcting by city ordinance.

The contractors association claims in its lawsuit that the city still cannot meet that standard. The lawsuit says the city cannot prove any current or historical pattern of discrimination and that it failed to narrowly target its remedy for the alleged problem.

In September, before the new minority contracting law was approved, O'Malley issued an executive order to city departments setting a goal of awarding 35 percent of city contracts to businesses owned by minorities and women.

The lawsuit targets the city ordinance and the mayor's order. O'Malley's spokesman said yesterday that the mayor's office had not received a copy of the lawsuit and that it would be premature to comment.

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