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Minority-, women-owned firms call for city to make contracting changes

From left: Larry Griffin Sr. and sons Mike Griffin and Larry Griffin attend the April 15, 2011, groundbreaking for Mosaic Village, which their company, Griffin Bros., is developing. Mecklenburg Times file photo

The April 15 groundbreaking for the new Mosaic Village complex on Charlotte’s west side was a festive affair with a marching band, marquee tent and business and political leaders galore — and an unofficial job fair for Charlotte’s minority contractors.

The $16 million student housing, retail and parking project, on land owned by local automotive and tire giants Griffin Brothers Co., is meant to help revitalize the Historic West End corridor near Johnson C. Smith University, a historically black school.

But the project’s main contractors are Balfour Beatty and Shelco Inc., neither minority-owned, leaving several minority contractors who attended the groundbreaking to jockey for subcontracting work that’s been hard to come by in recent years.

Before the ceremony, mason Cornell Sutton drew aside Stephane Berwald, a minority business consultant and president of the Metrolina Minority Contractors’ Association.

“Want to try to set up a meeting with Mr. Griffin?” he asked her.

Berwald said she’d try.

That’s how it’s been, minority contractors say, since 2003, when the city dropped a program designed to steer a percentage of city contracts to minority and women-owned firms for a program that doesn’t consider race or gender. They say minority contractors, especially, have been left out in the cold, practically having to beg for work once the recession hit.

City officials are in the midst of a “disparity study” intended to gauge whether minority and women contractors have won a disproportionately lower or higher percentage of city contract dollars under the newer program. The consulting firm conducting the study, MGT of America Inc., expects to finish by this summer and present its findings and recommendations to the City Council July 25. Council members will decide whether to institute a new race- and gender-conscious program.

Pride Patton, the 76-year-old black owner of land-clearing and demolition firm WGK Inc., can release the results of his own study right now.

“Under the old program, we did a whole lot of business. (City staffers) were more sensitive to us,” Patton said. “When they came up with this race-neutral stuff, it kind of threw a fork in the road.”

Good-faith efforts

From 1981 to 2001, the city ran its Minority Women Business Development program, which required the city and its contractors to hire minority and women-owned companies at a rate roughly equal to their share of the market — or at least make “good-faith efforts” to hire them.

But in 2001, a nonminority contractor sued the city after it had submitted a low bid on a road project and was rejected in favor of another, minority-owned firm. As part of the resulting settlement, the city agreed to establish a race- and gender-neutral program and measure whether it made a difference in the amount of work minority and female contractors did as a percentage of their market share.

The current disparity study is doing the measuring. The city hasn’t evaluated minority and women contractors’ market share since MGT’s last disparity study for Charlotte in 2003. Last year, a task force appointed by Mayor Anthony Foxx recommended the city take a fresh look at its existing Small Business Opportunity program, which doesn’t consider race or gender in contract awards.

Under the SBO program, city officials have measured the amount of work minority and women contractors have done for the city, though not against updated market-share data.

In one recent fiscal year, 2007-08, minority and women-owned firms did $52.6 million of city work as prime contractors, nearly 15 percent of the city’s $353 million total. That percentage is in keeping with the goals of the old race- and gender-conscious program.

But of that $52.6 million, $30.9 million, or 59 percent, went to nonminority women, according to an SBO year-end report by the city’s Economic Development Department. The remaining 41 percent was divided among the other minority categories: black, Asian-American, Native American and Hispanic/Latino.

“We need to see some people of color getting work, and it’s not equitable,” Berwald said. “That’s clearly a disparity.”

‘Can we do that?’

Mosaic Village technically isn’t a city project, but JCSU has asked the city for $5.5 million to help improve the area around it.

At the Mosaic Village groundbreaking, James Mitchell, the city councilman who represents the Historic West End area, threw out a challenge.

“This is a great opportunity for minority-owned businesses,” he told the crowd from behind a lectern. “All you minority contractors, can you please wave your hands so you can be seen?”

A dozen or so hands waved, and Mitchell issued his challenge: for minority firms to win 30 percent of the project’s subcontracting work.

“Can we do that?” he asked to applause.

A few minutes later, John Kirkland, a construction worker and MMCA board member, said he wants the city to return to a race- and gender-conscious program. The SBO program wouldn’t be so bad if city staff administered contracts fairly, Kirkland said, “but they don’t do their due diligence.”

But even if the city returns to its old program or something like it, officials have to be careful not to open themselves to liability by adopting quotas.

The legal challenge to the old program was based on a 1989 U.S. Supreme Court ruling that set strict standards for minority set-asides, essentially ruling such programs are constitutional only if they are justified by “a compelling government purpose” and are tailored narrowly to accomplish it.

In evaluating programs against that test, courts generally have preferred goal-oriented, good-faith effort programs to strict quotas, said Cindy White, the senior assistant city attorney who advises the city’s Neighborhood and Business Services Department. To institute quotas, White said, would invite another successful lawsuit.

And that’s another part of the problem, minority contractors say: Good-faith efforts can be subjective.

David Smith, who runs a pair of electrical contracting firms from a shop on North Graham Street, said that even under the old program, contractors would call him the day before, or of, a bid deadline, clearly just trying to “check the box.” He suggests the city, under whatever new plan it might adopt, require contractors to submit with their paperwork a list of their good-faith efforts for city staff to double-check.

“Things like this will continue,” Smith said. “You can have all the studies in the world, but unless you put teeth into whatever’s finalized, it’ll be meaningless.”

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