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MBE/WBE panel angry with city’s lack of contract enforcement

Thursday, September 4, 2008 by Kimberly Reeves

The MBE/WBE committee – now officially the and MBE/WBE and Small Business Enterprise Program Procurement Committee—is far from pleased with the latest compliance figures for the city’s general contractors on construction projects.

Tuesday night the committee received what is referred to as the “Request for Change” summary. On that page, staff lists the violations, notes on scope changes and unapproved requests for changes to various city contracts. July’s figure of nine violations was especially high when it came to unapproved additions, deletions, scope changes and substitutions on city contracts.

One of the problems, at least in the mind of the MBE/WBE committee members, is that the general contractor who violates the city’s new policies – even knowing the city’s standards — goes unpunished for such changes.

“How long are you going to coddle these general contractors?” asked a frustrated Kim McLaughlin. “We’re losing a chance to bid a job, and you’re going to coddle these GCs. I’m into tough love. I think you should disbar these contractors for two years; then you’ll get the understanding of the way the city works.”

General contractors are always going to bill out the full amount of the contract, whether they use their subs or themselves, McLaughlin said. So there was no real way to keep those contractors accountable without active city department intervention. And by looking at the growing numbers, it did not look like the city’s own general contractors were taking new guidelines to keep MBE/WBE businesses on the payroll seriously.

“I guess the GCs are going to get coddled, while the rest of us get the short end of the stick,” McLaughlin told the MBE/WBE committee members, adding that no subcontractor wanted to go through the complicated pre-qualification process if it would not lead to actual leads on work.

“That point is very well taken,” Chair Adrian Neely agreed.

July’s figures showed a total of nine unapproved changes to construction contracts. Without specifics on the chart, it was impossible for the committee to know exactly how significant the violations were, but Neely considered the number high, and the city’s promise to open up its violation website to other departments to be insufficient when it came to accountability.

“I thought we were going to be sitting down on a regular basis and reviewing all the projects,” Neely said, speaking of promised cross-departmental communication efforts. “It’s got to be a little bit more than having something on the site to ensure that things like this don’t happen again.”

Elaine Carter of Department of Small and Minority Business Resources agreed that simply updating a website was not a sufficient effort, but noted she was only responding to a question on the specifics of violations.

“I agree with you we do need to sit down with the other departments,” Carter said. “A problem has been identified that we need to address.”

Carol Hadnot of the Austin Black Contractors Association also raised concerns, noting that general contractors were fully informed of the city’s standards and policies during pre-construction meetings with city staff.

“They know what they can and cannot do,” Hadnot said. “They are not ignorant.”

A fuller accounting of the exceptions will be presented to the committee at its next meeting. After the meeting, Neely said it was highly unusual to see so many exceptions that were not approved. It should have been something the city caught.

A meeting on the department’s rotation list management procedures – intended to offer more opportunities to small and minority businesses — will be held next Wednesday at One Texas Center at 4:30 p.m. For more information, call Debra Dibble at  974-7027 or Rosie Truelove at 974-3064.

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