Vincent Gray vetoes controversial contracting bill

February 11, 2013
Gray’s veto is a big win for the local business community. (Astrid Riecken — The Washington Post)

Updated 1 a.m. with Vincent Orange statement

Mayor Vincent C. Gray made a rare use of his veto pen Monday, disapproving a D.C. Council bill that aimed to make sweeping reforms to the way the government does business with small and local contractors.

“I have concluded that unfortunately the bill falls short of the mark,” he wrote in a letter to Chairman Phil Mendelson (D). “We also have heard from many people affected by this legislation who believe the bill, as crafted, is unworkable.”

The bill, sponsored by Vincent Orange (D-At Large) and passed unanimously by the council, was opposed by the D.C. Chamber of Commerce and other local business interests who felt it would make it exceedingly difficult to do business with the city. It is Gray’s second veto, following his disapproval of council budget legislation in August 2011.

In his letter, Gray (D) said the bill puts the city at risk for lawsuits due to “ambiguous language and undefined terms” and, more seriously, imposes “highly problematic” new contracting goals with small and local “certified business enterprises.”

What has, for time immemorial, been a 35 percent CBE participation requirement is raised to 50 percent under the bill — a standard that is “likely impossible to be met,” Gray wrote.

Furthermore, a change that applies the CBE participation requirement not only on the total dollar value of city construction contracts but also on the individual components of construction contracts — electrical, plumbing, HVAC, drywall and so forth — “will almost certainly increase cost and decrease quality on important civic projects,” Gray wrote.

Gray also said changes to the law that would give companies new preference points for hiring hard-to-employ individuals would allow current CBEs to lose their advantage over larger businesses and potentially invite fraud. He also criticized a system of waivers contemplated in the bill, saying it would “induce contractors to subcontract with unqualified firms or seek [small businesses] that are serving as a front for qualified firms.

“Needless to say,” Gray wrote, “a regulatory scheme that requires frequent waivers raises serious concerns about the framework itself.”

Orange said in a statement Monday that Gray “caved to non-District based business interests” in vetoing a bill he described as “pro District of Columbia and for District based businesses.”

He suggested the council could move to override the veto, requiring the vote of nine of the council’s 13 members.

On Friday, Orange held a long hearing on the CBE system that featured several contractors sharing frustrations with the current system and the Department of Small and Local Business Development, which handles the certification process.

Gray has expressed his own frustrations with the CBE system — particularly the notion that it was too easy for large contractors to evade its requirements — and last October, unveiled a series of efforts meant to deal with them, including a legislative overhaul. In his letter, he said he wants to start “working with the Council immediately … to develop reform legislation that everyone can support.”

Mike DeBonis covers Congress and national politics for The Washington Post. He previously covered D.C. politics and government from 2007 to 2015.
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