Ehrlich ponders end to race-based contracts

In discussion with Schaefer, he agrees program `needs to end' in time

others decry remarks

February 03, 2005|By Ivan Penn and David Nitkin | Ivan Penn and David Nitkin,SUN STAFF

Gov. Robert L. Ehrlich Jr. yesterday said the Maryland program that earmarks state work for minority-owned businesses "needs to end," echoing sharp criticism of the program by state Comptroller William Donald Schaefer.

"When does MBE end -- E.N.D?" Schaefer asked during a pointed dialogue about the state's Minority Business Enterprise program at yesterday's Board of Public Works meeting. "The law says it is not supposed to be a permanent program."

"Do you want the legal answer, or the political answer?" Ehrlich replied, adding that discussing the end of such programs would be politically dangerous.

"Race politics is ugly," he said.

"It needs to end, we know that," he said of the set-aside program. "But for many years it was a joke, and it exacerbated racial tension."

Their statements angered some Annapolis lawmakers and minority business leaders.

"We don't need comments like that," said Sen. Joan Carter Conway, a Northeast Baltimore Democrat, who said that -- until yesterday -- she believed the administration was "heading in the right direction." She said minority set-asides would not be necessary if the state "were fair in the allocations of the contracts."

In the past, the governor "has expressed to the black caucus his interest in helping the MBE program ... Evidently it was just lip service," said Del. Rudolph C. Cane, an Eastern Shore Democrat and chairman of the Legislative Black Caucus.

Henry Fawell, an Ehrlich spokesman, said the governor's comments referred to his long-term goal of creating a race-neutral process. For now, Fawell said, the governor supports the state's minority business program.

"No one should doubt his commitment to a strong MBE program in the short term," Fawell said. "I'm definitely not aware of any plans, discussions or proposals to end it now."

Ehrlich's and Schaefer's discussion yesterday came after the board awarded a $671,865 contract to a minority firm, Colossal Contractors Inc. The company's bid tied with that of another firm, but Colossal won because, under a state rule, ties favor minority firms.

Schaefer then questioned the rule.

"When does discrimination like this end?" Schaefer asked.

The comptroller said he knew his remarks would make him a target of criticism.

"They'll bust my bottom -- `How dare you say something like this,'" Schaefer said. "Everybody is scared to death of the race situation."

But Ehrlich continued pressing the issue.

"This is a good discussion to have," Ehrlich said, adding that his administration's minority business initiatives have moved the state toward what he called "our collective goal, which is to end this program at a certain point in time."

In general, Maryland's minority set-aside program requires that 25 percent of state procurement contracts go to minority-owned firms.

But a legislative audit in 2001 found that many state agencies overstated their minority participation numbers.

The state later reported that in 2002 just 16.2 percent of the procurement work was going to minority firms. The Maryland Office of Minority Affairs estimated that the minority share probably was closer to 10 percent.

A year ago, the Ehrlich administration successfully pushed for legislation that expanded efforts to help minority firms with a measure that was race-neutral.

Since then, such agencies as the Maryland Aviation Administration have reported substantial increases in minority participation.

During the first quarter of fiscal year 2005, which began July 1, the aviation administration awarded 54 percent of its work, or $51 million in contracts, to "disadvantaged business enterprises," said Jonathan Dean, a spokesman for Baltimore-Washington International Airport. By comparison, 25 percent of contracts were awarded to disadvantaged businesses in the previous fiscal year.

But Conway said yesterday's comments about Colossal Contractors highlight the need for a minority business program. She said she believes Colossal never would have received the contract, if it had not been for the rule about ties favoring minority firms.

The discussion that followed the awarding of the contract was an indication that Schaefer and Ehrlich wanted to give the contract to another firm, Conway said.

Arnold Jolivet, president of the American Minority Contractors and Businesses Association Inc., a Washington, D.C., firm that claims 800 Maryland members, said Maryland's procurement process continues to exclude minorities.

Yesterday's board agenda, for example, listed an "emergency" item -- a designation that allows officials to seek bids without a general request for proposals or minority consideration. The $1 million contract to provide security for the Maryland Port Authority should have been openly bid, Jolivet said.

"Even if it was an emergency, it really wouldn't preclude them from reaching out to the minority contractors," Jolivet said. "If they still discriminate as blatantly as they are here, how can anyone say there is no need for an MBE program?"

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