Minority firm farmed out work for city, records show

May 07, 2006|By DOUG DONOVAN | DOUG DONOVAN,SUN REPORTER

The minority-owned firm tied to Baltimore City Council President Sheila Dixon - already under scrutiny for how it operates - has rarely, if ever, performed its own work on government contracts and city-backed developments, according to documents obtained by The Sun.

The company, Union Technologies LLC, or Utech, is one of two city contractors that the Maryland state prosecutor's office is investigating because of ties to Dixon. In response to grand jury subpoenas issued by state prosecutors in March, the city delivered 27,000 pages of documents, including contracts, e-mails, transcripts of public meetings and phone logs.

The documents offer a far more extensive picture than previously known of the company's operations. They show that Utech honored its minority subcontracts with the city by paying other firms and by placing grant-sponsored city employees on its payroll. Additional records show that Utech also used other contractors to fulfill its work at two private developments required to abide by the city's minority subcontracting law.

Since 2000, Utech has billed itself as one of the few female-owned wiring firms certified by the city as a minority subcontractor. That designation renders Utech eligible to be hired by prime contractors who must conform to the city's law requiring minority and female inclusion on contracts.

One provision of that law prohibits minority subcontractors from paying others to perform the bulk of their work, a condition aimed at preventing contractors from using front firms to meet minority hiring targets.

The Minority and Women's Business Opportunity Office has given Utech until today to prove it has not breached the rule. If Utech doesn't, its certification as a minority subcontractor will be terminated.

The firm's certification was suspended once before, in February, after city officials ruled that Utech's downtown office on Calvert Street was just a telephone and a mailbox. The certification was reinstated after Utech's president, Mildred E. Boyer, opened a new office off South Hanover Street in Brooklyn.

Now the city awaits an answer to why Boyer has paid subcontractors more than half of what Utech has generated in revenue.

"According to the financial information that was submitted [by Utech], total income for 2004 was $1,203,854 and the amount to subcontractors was $725,574, or 60 percent," states a Feb. 10 letter to Boyer from the minority business opportunity office. The law prohibits certified minority firms from passing on more than 10 percent of their subcontracts to third-party subcontractors.

Utech must submit documents to the office demonstrating how it performed city contracts with its own employees.

Boyer protested in a letter Feb. 28, saying she was being treated "very harshly."

"I was not aware of the program's percentage rule," she wrote.

The office's ultimatum to Boyer came after The Sun reported the council president's ties to Utech, which began employing her sister, Janice Dixon, full-time in February 2004 and part-time for some months before that.

The council president said this past week that her sister no longer works for Utech, but she has declined to comment further because of the investigation. Neither Boyer nor Janice Dixon has responded to repeated phone messages over the past two months, though Boyer denied any wrongdoing in an e-mail sent last month to city officials.

Utech was hired in 2003 as a minority subcontractor for two of City Hall's biggest contractors: Comcast Corp. and TeleCommunications Systems Inc. Both firms have received grand jury subpoenas from state prosecutors requesting information about Utech.

Utech, which Boyer started in 2000, has also done electrical work for Doracon Contracting Inc. on two projects - Frankford Estates in East Baltimore and Silo Point in Locust Point - that must abide by the minority inclusion law because of city involvement.

Doracon's chief executive, Ronald H. Lipscomb, is friends with Dixon and an ally of Mayor Martin O'Malley's. Lipscomb did not return phone messages seeking comment.

The Sun reported last month that Utech hired a subcontractor, Aggadan Electric, to do the bulk of its $344,000 contract in 2004 and 2005 at Frankford Estates, an East Baltimore housing development that received City Council approval, a tax break and a city loan. The subsidies required minority inclusion, and Doracon employed Utech to meet those goals, officials said.

Boyer is not a certified electrician with the state or city, which is why, Aggadan President Daniel Gonzalez said, Boyer hired him.

City documents also show that Doracon hired Utech as an electrical subcontractor at Silo Point, a housing development off Fort Avenue in Locust Point. The value of the contract was $700,000, according to a Utech document.

On Silo Point, the development team agreed to meet city minority-subcontracting goals of 5 percent to 15 percent, according to city documents.

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