Former District of Columbia Commissioner John B. Duncan yesterday defended his use of a White subcontractor to do work under a noncompetitive U.S. contract designed to aid minority businessmen, saying he could find "no black qualified" subcontractor at the time.
Meanwhile, yesterday, a high-ranking federal official who approved the contract to Ducan's firm in a program for "socially and economically disadvantaged" bsuinessmen defended his action by raising the broad social argument that being black in America is by definition to be disadvantaged.
Duncan, a widely known civic figure and black leader who served on the city's pre-Home Rule 3-member board of commissioners in the 1960s, was cited in a Small Business Administration report on alleged abuses in federal programs to aid the disadvantaged, according to informed sources.
The allegations were brought out in Senate testimony Wednesday. Duncan was not named publicly in the testimony, but sources later identified him as the object of some of the allegations.
Contracts were awarded to Duncan's firm, Capitol Contractors Inc., although it apparently had no assets and no employees except Duncan himself, according to the allegations.
Although the contracts were awarded noncompetitively to help struggling "socially and economically disadvantaged" minority business, the report said that Duncan, who is black, they subcontracted all the work given his firm to white subcontractors.
The SBA report note that Duncan had been certified as disadvantaged even though he has an income or more than $43,000 a year and lives in the luxury Watergate apartments.
Duncan said in his statement yesterday that his firm received a $126,000 contract in 1973 "in which we the minority firm, were the general contractor; and required by government to find a very reputable and experienced subcontracting waterproofing firm. We found no black qualified waterproofers at that time."
The statement also said the firm has had "at least a half-xozen full and part-time persons workingg as staff from time to time."
The firm was an SBA-certified minority contractor "until we observed that SBA . . . had not given us a job in four years," the statement said. It said the $126,000 contract was the only one the firm received under the SBA minority program.
"We are not disadvantaged and never claimed to be" the statement simply new to the field (and) with limited capital investment . . . This has been as much an experiment in entrepreneurship as anything else."
Apparently the firm, of which Duncan was president according to the SBA report never did very well.
Charles T. Duncan, former D.C. Corporation Counsel and now dean of Howard University Law School (he is not related to John Duncan) said yesterday he is a 5 per cent owner o the firm and remembers drawing up its incorporation papers in 1972.
"To my knowledge the company only had one job, a parking lot job down in a government building," said Charles Duncan. "We had a meeting six months ago in which we in effect voted to liquidate."
He said the company once applied for an SBA loan but it was "never used." He said he knew nothing of the SBA-approved minority contract that is the subject of controversy.
A third corporate officer was Patrick C. Rooney, vice president, according to a federal spokesman. Rooney could not be reached yesterday.
SBA spokesman Paul Lodato said Capitol Contractors Inc. was approved in 1972 as "socially and economically disadvantaged" by SBA's Philadelphia regional office on the recommendation of the Washington area office headed by Winford Smith.
Smith now is director of SBA's Office of Business Development. He said yesterday he felt approval of Duncan's firm was justified because the "socially and economically disadvantage" language is, he said, "really to get around the so-called constitutional question . . . to be on the safe side."
He said that from his point of view "it would be easy to document that (any) black person is disadvataged socially."
Economically, he said, "You must establish you can't compete in the marketplace. I don't know how much experience Mr. Duncan had. I'm sure he had very little or no expertise in the construction area."
Smith said the debate is ridiculous because, "We really have a minority program and we ought to stop hiding behind that damn shield of social and economic disadvantage."
Duncan's firm received a $126,833 General Services Administration contract under the non-competitive SBA designation in July, 1973, to waterproof basement walls at the HEW building, 4th and C. Streets SW, Lodato said.
Later $38,000 was added to that figure, Lodato said. He said the work was completed satisfactorily that year.
Lodato siad SBA records shwo no subcontractor and that in fact, subcontracting is not allowed without SBA approval. He said the Duncan firm requested no such approval.
It could not be learned yesterday who the alleged white subcontractor had been.
Leon J. Bechel, current director of the Washington area SBA office, said that at the end of March this year he ordered his subordinates to get in touch with Duncan "and either get him to agree to terminate or terminate him" as approved to take noncompetitive contracts.
Bechet said this was because Duncan had not turned in required financial statements or updated his business planns as required.
"There were some rumors that he really was not operating a business," said Bechet. He said the termination took place and it was "sort of a mutual thing."
Lodato said the program in question began in 1953 as a way to given businesses so that larger, more efficient businesses would not be tempted away from Korean war-related work.
In the late 1960s he said, the program was shifted administratively to aid minority businessmen, who now get 90 per cent of the noncompetitive contracts.
In the 1976 fiscal year, there were 2,106 contracts worth $369 million let nationally under the program, he said. He said the Washington area office, one of 63 such office in the nation, let 443 or about 20 per cent of those contracts worth $37.5 million or about 10 per cent of the total.