City falls short of goals for awarding contracts

Only 7.8% of $293 million in fiscal '04 went to firms run by minorities, women

October 13, 2004|By Doug Donovan | Doug Donovan,SUN STAFF

Mayor Martin O'Malley often proudly points to his policy of awarding more city contracts to minorities and women as one of his administration's chief accomplishments.

Statistics and testimony provided at a City Council committee hearing yesterday in City Hall demonstrated a far less rosy assessment of the program's success -- although contracts involving two major city departments have not been added.

The city's Bureau of Purchases reported on $293 million among the contracts awarded in fiscal year 2004, which ended June 30. But only 7.8 percent of those contracts, or $23 million, went to minorities and women.

"This is something we need to work on," said Councilwoman Catherine E. Pugh, chairwoman of the council's economic development committee. "There is a lot of room for improvement."

The mayor's goal, spelled out in his 2000 executive order, is to award 35 percent of all city contracts approved by the Board of Estimates to companies owned by minorities and women.

Statistics from the mayor's office last month reported that 28 percent of all contracts awarded by the city last year went to minority- and women-owned firms, and that the city is on pace to exceed that percentage this year.

City Budget Director Edward Gallagher said the Bureau of Purchases' statistics for fiscal year 2004 differed because they do not include hundreds of millions of dollars in construction contracts from the city's transportation and public works departments. Those agencies will provide reports to Pugh's committee next week.

Still, representatives from the fire, parks, police and education departments told Pugh, the only council member at yesterday's hearing, that they have a difficult time finding minority- and women-owned firms that can provide the goods and services they need for day-to-day purchases.

Part of the reason is that many of those goods and services are not provided by the companies officially certified by the city as minority- or women-owned firms.

The Minority and Women's Business Opportunity Office also determines whether portions of contracts can be subcontracted to minority- and women-owned firms. If not, the office grants waivers for the overarching contract, allowing them to proceed without participation of minorities or women.

Of the contract work worth $293 million awarded in fiscal year 2004, 71 percent received waivers. As a result, in those cases, it was not required to seek minority participation, according to Bureau of Purchases statistics. The bulk of those waivers were for contracts for health and dental programs, but they also included work related to the city's fleet of vehicles, fuel, chemicals, computers and software.

"We've waived opportunities for a number of minority and women businesses to participate," Pugh said. "This is sort of annoying because we've been doing this for three years."

The city's minority contracting law, established in 2000, creates contract-by-contract goals for minority participation. But O'Malley's executive order encourages agencies to strive to award 35 percent of their work to minorities and women.

But agencies cannot circumvent purchasing procedures that require them to buy from certain companies that hold contracts to provide the lowest possible price, officials say. Those companies are often not certified as minority firms.

Pugh criticized the Bureau of Purchases for not providing agencies with more assistance in finding minorities.

But Joe Mazza, acting assistant director for the Bureau of Purchases, said he cannot recommend such companies for items that are already under contract.

City officials tried to do just that last year. They acknowledged that they improperly circumvented purchasing requirements when they encouraged agencies to buy light bulbs from a minority-owned company that offered lighting supplies at higher prices than the white-owned firm that held the city's light bulb contract.

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