What does Utech do?

May 09, 2006

There's no doubt that Union Technologies Inc. is a woman-owned business, but how it does business is another question. As reported by The Sun's Doug Donovan this week, Union Technologies, which is under state investigation, contracted out more than 50 percent of its work on city-related contracts in violation of Baltimore's minority business enterprise law. Utech's practice has pointed up a vulnerability in the system; oversight isn't as it should be, and the city's inspector general should undertake a review of eligible minority subcontractors to ensure they aren't gaming the system.

Utech caught the attention of the state special prosecutor because it employed the sister of City Council President Sheila Dixon, who voted on contracts to the firm without disclosing her ties to it. As Mr. Donovan has reported, Utech was paying others to perform its work on city contracts in excess of the allowable 10 percent. Utech's president, Mildred E. Boyer, claimed in a letter to the city not to know about the percentage rule.

But ignorance is not an acceptable defense. If Ms. Boyer doesn't know the rules of the program, how can she successfully and legitimately compete?

The city's program was designed to protect against front companies who cash in on city contract work intended for minority- or female-owned firms. In two city development-related contracts, Utech relied on another firm and specialists to do the bulk of the work for which it was paid $1 million, according to Mr. Donovan's report. How is this pass-through any different from a front? Did any minorities actually benefit?

Over the years, as minority businesses and professionals have developed and increased, they have rightly demanded a greater share of municipal contracts and goods and services. There is a lot at stake: Last year alone, eligible firms received $127.1 million worth of city business. Companies that bend or violate the rules don't deserve a chance to compete. Legitimate firms should turn them in.

The O'Malley administration has sought to increase minority participation in city business, and records show some success, from 14 percent to 31 percent. Where the state special prosecutor is headed with his investigation is unknown. But the Utech inquiry so far shows a need to more rigorously review minority firm participation and compliance to protect the integrity of a program that has worthy goals.

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