Contractors settle lawsuit against city

Group challenged policy regarding contracts given to women and minorities

Association to join advisory panel

October 25, 2003|By Doug Donovan | Doug Donovan,SUN STAFF

A federal lawsuit challenging how Baltimore awards contracts to minority-owned companies was settled this week under terms that handed a victory to Mayor Martin O'Malley, who has said that including such firms in city projects is "of the highest priority for this administration."

The survival of the city's policy against the latest legal attack bodes well for similar programs throughout the nation aimed at rectifying past discrimination in public contracts, officials said. In 1999, many other U.S. cities suffered the same fate as Baltimore when their minority participation policies were struck down as unconstitutional.

"Baltimore is probably one of the first to come back on line and will probably be cited as an example across the nation," said John F. Robinson, president of the National Minority Business Council in New York.

On Wednesday, the Associated Utility Contractors of Maryland agreed to settle its lawsuit against the city, its second in four years that sought to dismantle the city's program for increasing the participation of minorities and women in city projects.

The utility contractors group agreed to withdraw its suit and wound up with a seat on a newly established Contractors Advisory Committee. The committee will provide an avenue for contractors to voice their opinions on how the city establishes its minority participation goals on each city contract. The settlement also would prevent the utility contractors group from filing another lawsuit until after the city ordinance comes up for renewal in 2005.

"This is enormous. This is a great result," City Solicitor Thurman W. Zollicoffer Jr. said. "There is never a guarantee in litigation, and it would have cost the city millions to litigate this. It would have been a very long, difficult battle for both sides."

The battle has been waged since O'Malley stepped into office in December 1999.

The AUC of Maryland, a 53-year-old statewide group representing companies that build water, sewer and other public works projects, challenged a previous version of the city's law that month. On Dec. 17, 1999, 10 days after O'Malley was sworn in, a U.S. District Court judge sided with the association and ruled that the city's law setting aside 23 percent of contracts for minorities unfairly discriminated based on race and gender.

The judge, Andre M. Davis, ruled that the city failed to prove that disparities existed because it had not thoroughly studied the issue.

In response, the city crafted a law in 2000 that scrapped the set percentage and established a policy that creates contract-by-contract goals for minority participation. In addition, O'Malley issued an executive order requesting that his department heads try to award 35 percent of agency work to minorities and women.

Both rules were based on a "disparity study" that found city contracts have primarily benefited "non-minority men," according to a report that the city prepared in response to Davis' ruling. Cities across the nation are following suit, conducting similar studies to justify their own programs.

The Associated Utility Contractors challenged the city's new rules in May 2001, but decided this week to abandon the litigation. The city has spent $1.05 million to defend the lawsuit by hiring the law firm of Saul Ewing to advocate on its behalf.

"We probably could have litigated this for a long while, and someone probably would have won," said Phyllis Friedman, general counsel for the contractors group. "At the end of the day, we decided that to have a real victory, we need to have a relationship with the city where we are working together rather than as adversaries."

For the first seven months of this year, the city has spent $49.2 million with minority and women-owned companies, an 8 percent increase from the same period in 2002.

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