Firms easily skirt Md. minority contracting program

May 14, 2010

I read F. Tyrone Hills letter Friday morning ("Md. minority business program among the nation's best," Readers respond, May 14), and I had to shake my head. Having worked in the construction industry in Maryland for the past 30 years, I can tell you the two fatal flaws that make the state's minority business enterprise participation requirements on state projects a joke, and this goes for federal projects as well.

While the MBE requirements guarantee that a minority owned business will be given the contract, there are no guarantees that the work will be performed by that company. The common practice in this area is for white subcontractors to bid jobs, then they run the paperwork through a minority business, which collects a fee of typically 5 percent for processing the paperwork. Since the minority business doesn't do the work itself, only the owner of that company benefits. Only a person who is rich gets richer. If that company was forced to do the actual work with its own workforce, that owner would be forced to hire new people and train them, and since minority owners typically hire minority workers, it would vastly improve the unemployment situation in the city. As it is, it's a big joke in construction circles.

The second thing that makes the MBE requirements a failure is the lax enforcement of immigration laws in Maryland. The Hispanic small business owners have an inherent advantage because they have an almost unlimited supply of cheap labor in the form of illegal aliens. They pay them under the table and don't have to pay the unemployment insurance and all the other things that run up the cost of bidding for those projects. That means that Hispanic labor crews get a huge percentage of the installation contracts, while African-American electricians, civil engineering firms, and sub contractors are left to battle over those scraps of the MBE requirements that are left over. If the Hispanic business owners were forced to compete on an even playing field, the rate of African-American success in going after these contracts would improve exponentially.

I'm a fiscal conservative, a tea partier, so there's a part of me that thinks the current system is probably the cheapest way to go, if we are going to insist on having these MBE goals. But I'm also an American, and I drive through Baltimore, and I see the plight of the city. If we're going to do this sort of social engineering, then we need to do it right. This half-baked system we have now just costs us more money without giving us the full benefits of the intent of the MBE requirements. Until it changes, I'll consider it a colossal failure.

Fred Pasek, Frederick

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