Thursday, December 11, 2008

Minority Report: Construction Contract List Minority and Women-Owned Subcontractors Who Are Not Working On The Contract

A City Schools Construction Contract Lists Minority and Women-Owned Subcontractors Who Say They Did Not Agree to Work On The Project.

By Edward Ericson Jr.

Mildred "Meme" Thomas says she was surprised this summer to discover, through an internet search, that her landscaping company was a listed subcontractor on a multi-million dollar Baltimore City Public School contract.

Neither Thomas nor her company, Earthscape Design, had ever worked for the school system, she says. She had never even been contacted by the prime contractor for the project, Williams Scotsman.

Earthscape Design is a certified minority and woman-owned business enterprise. The federal government, states, and cities across the country have created a system of contract set-asides meant to counteract decades of race- and sex-based discrimination in business. In Maryland, these set-asides are expressed as minority-participation goals that prime contractors pledge to strive for. A complex system of checks and balances--including the requirement that prime contractors obtain signed affidavits from minority subcontractors agreeing to be part of a contract bid "team"--is meant to discourage cheating.

"We called Williams Scotsman and asked them where our affidavit was agreeing to work with them," Thomas says. "They sent a three-page letter saying they used the other companies."

Thomas gave City Paper a copy of Scotsman's fax, which included a Sept. 24 letter to her, a Jan., 2007 letter to a school-system official, and its "intended use list" of minority and women contractors. In its letter to her, Scotsman's associate counsel, Kathleen Keyser, says Scotsman didn't need landscaping services for the portable classrooms installed under the school contract, and that "Williams Scotsman met the [minority and women-owned business] requirements . . . by using other types of subcontractors."

Unmollified, Thomas tried to contact the seven other subcontractors listed by Williams Scotsman. None of the four she reached, she says, were even aware of the contract. (Of the other two, one was unreachable and the other out of business, she says).

So Thomas called the school system's fraud hotline. "We want to use this company as an example to the city and say 'Hey, we are aware of your illegal business,'" she says. "We're not gonna stand for this any more."

What's happened since has angered Thomas even more. "There has been no response" as of Nov. 19, she says.

School officials have made it clear that there is an investigation. At an Oct. 14 meeting, school board Chairman Brian Morris stopped another listed subcontractor, Chet Brown, from testifying about the matter during a public-comment session. "I know you don't think I am, but I am familiar with your case," Morris told Brown, according to a transcript. "What I don't want you to do is to prejudice this body, which may have to stand at some future point as a judge in your concern."

Tammy L. Turner, the school board's chief legal counsel, says her office's investigations division has been operating only since June of this year, and since then it has received 42 allegations of all kinds. The office's three investigators gather documents, interview witnesses, and report their findings to the accused's supervisor, she says.

Turner says whistleblowers like Thomas "should always think that all complaints are taken seriously and are being investigated thoroughly," adding that "some investigations may take longer" than others.

Thomas is not satisfied. To date, investigators have not even contacted her, she says. Turner's job is to defend the school board and school employees, and the board itself will sit in judgment of the case. "They're investigating themselves," Thomas says.

Brown, an electrician and co-founder of Brown-Tisdale, Inc., says he has not been contacted by investigators either, although he's willing to be patient. "What I want to do is, I want to give them the opportunity to make this right," he says.

Brown confirms that Scotsman did not work closely with him. "They had me listed [in their bid] as a WBE, which is a woman-owned business," he says. "I'm not a woman by no stretch of the imagination."

Brown says he hears about this kind of thing all the time, though he has seldom seen proof. "In this case we were fortunate that Ms. Thomas happened to trip up on it," he says.

The contract Thomas stumbled upon is called "AEPA IFB 002-PA Modular and Portable Classrooms." It began in 2006 as a $6 million contract to supply and set up portable classrooms on school grounds "as needed." The latest iteration is a $2 million contract extension.

With about 90 offices in North America, White Marsh-based Williams Scotsman is one of the country's largest suppliers of portable buildings. As part of its response to Thomas, it faxed her a January 2007, letter from company salesman to Mike Krupnik, the school system's contracts manager, which states that Scotsman "has contacted several MBE/WBE contractors whom we intend to use" on the $2 million contract extension.

The next page lists eight companies.

Of the six companies City Paper contacted, only Brown remembers any contact from Williams Scotsman. "The only thing I remember even remotely getting from Scotsman was an e-mail, and I didn't respond to the e-mail," he says.

Luis Campos, owner of Arriba Construction, which Scotsman listed as a minority subcontractor, says he has not heard from any investigators as of Nov. 6. "The people who were named were lucky enough to catch onto this," he says. "It's pretty strange."

Donald Koch, vice president of C.C. Johnson & Malhotra, says in his 10 years at the 30-year-old environmental and civil-engineering company, he has never done a Baltimore school contract. After Thomas told him his company was listed as an electrical subcontractor, Koch says he sent Williams Scotsman a message telling the company he knows what happened. "I said we know you listed us. Not real cool," Koch says, adding that Scotsman has not replied, and that he has not heard from school system investigators either.

Dena Jackson, vice president for operations at paving company H.A. Winchester Enterprises says roughly the same. She also has not been contacted by either Scotsman or school investigators.

Two of the remaining three companies--Accurate Plumbing, Inc. and Alpine Electric--appear to be out of business and could not be reached. The last one, landscaper A. Morton Thomas and Associates, Inc., confirmed that the contact person listed on Scotsman's bid had not worked there for several years.

Williams Scotsman did not return e-mails and telephone messages from City Paper.

Wayne R. Frazier, president of the Maryland Washington Minority Contractors Association, suggests that governments hire more compliance officers to monitor these contracts, or at least use a computer program that notifies all the subcontractors whenever the prime gets paid for a job. That, he says, would cut way down on these kinds of cases.

"If the [prime contractors] know that there's no compliance taking place, they will do whatever they can to get away from it," Frazier says. "They look at this program as a nuisance. I can understand that, from their perspective. But the law is the law. It's taxpayers' money."

Even if Thomas' allegation is proved, remedies appear to be lacking. "There are no laws in place that would ban these contractors from . . . coming back to the city," says Frazier. "I think it's a shame--we can have inclusion goals in place, and no remedies for those who cheat. It goes on all the time."

Email Edward Ericson Jr.


Subject: *
Your Name: *
E-mail Address: *
Message: *

* Required