Mayor Martin O'Malley attacked yesterday a state initiative to direct government contracts to minority-owned businesses as "falling way short" and angrily dismissed a state-funded sewer project as not adequately engaging companies owned by blacks.
After a heated debate with his staff, O'Malley and the Board of Estimates deferred a $33 million sewer upgrade contract because only about 9 percent would have been awarded to minority-owned subcontractors, far below the city's targets.
Governments set minority- and women-owned business goals on major contracts to direct a portion of tax money to companies that have experienced past discrimination on public works projects. O'Malley argued the state isn't setting its goals high enough.
"The state has a minority business enterprise program that ... is crumbling into dysfunction," the mayor said. "It says that they really don't care about MBEs."
State officials called those claims ridiculous and argued that Gov. Robert L. Ehrlich Jr. has widely expanded Maryland's Office of Minority Affairs -- which oversees minority contracting -- by tripling its annual budget to $1.1 million and increasing its staff.
"It sounds like a joke," said Sharon R. Pinder, special secretary of the minority affairs office. "Maryland is considered one of the most aggressive states in the country in terms of its minority business program."
Minority contracting could become an issue in next year's election. Both O'Malley, who is running for governor, and Ehrlich have pointed to their administrations' efforts to expand minority involvement.
At issue yesterday was the construction of a $33.3 million sewer main that will run from Clipper Mill Road along 27th Street to North Avenue and Broadway -- a project city and state officials agree will help reduce overflows that dump raw sewage into area waterways after heavy rains.
Because the Maryland Department of the Environment is funding the project through a federal grant, the state sets minimum targets for minority participation -- in this case, 4 percent for women-owned businesses and 4 percent for minority-owned businesses, a department spokesman said.
The city selected New Jersey-based Northeast Remsco Construction to build the main and the company agreed to spend nearly $3 million with subcontractors owned by minorities and women -- far beyond the overall 8 percent goal but less than targets usually set by the city.
"The concern is the goals are so low," said Thomas B. Corey, chief of the city's Minority and Women's Business Opportunity Office. "And we have to use their goals."
State officials said nothing precludes the city from going beyond the minimum requirements.
"It really sounds like there was a serious misunderstanding or misinterpretation," said Richard McIntire, a spokesman with the state Department of the Environment. "There was never any cap. We're not allowed to have a cap."
City officials countered that to receive the state loan for the project, they must use the state's minimum requirement in the documentation they send to potential contractors. That makes it impossible to ask for higher minority participation rates, they said.
O'Malley has committed to awarding 35 percent of city contracting dollars to minority- and female-owned firms.