Vesharn Scales, the black president of MTI Construction Company in Northwest Washington, still talks about the million-dollar minority Metro contract that got away.
For three years, Scales, owner of one of the District of Columbia's largest black trucking and excavation firms, has complained bitterly that he narrowly lost a contract intended only for minority firms to a minority firm fronting for a white-owned company.
Last month, Scales' complaints about R&W Construction Company were borne out. The firm's two owners were convicted in a Baltimore federal court in connection with another minority bid case for being just that. The two men are currently awaiting sentencing.
"I was told by the prime contractor (who handled the bidding) that they could satisfy their minority participation requirement by using the other company rather than using me as a hauling contractor," he said.
Scales' own suspicions about R & W's minority claim at the time prompted him to ask Metro to investigate the firm. Whether Metro did or not is unclear, but there was no doubt about how Metro viewed R & W: the construction firm, Scales was assured, was a legitimate minority operation.
Scale's experience is distressingly common, according to other minority contractors and concerned District government and Metro officials.
Minority fronts - firms secretly controlled by white contractors - have snapped up millions of dollars worth of government construction and service contracts that had been set aside for minority contractors, they claim.
Angry minority contractors claim that the fronts were spawned by vague definitions of just what constitutes a "minority" enterprise.At the same time, they say, the fronts are sustained by a lack of government regulation that, in effect, allows prime contractors - who are almost inevitably white - to award many lucrative minority contracts. It has reached the point now where companies like R&W may be performing more minority contracts than legitimate minority contractors, many believe.
"In every area of contracting and procurement where there is money to be made," said Col. Milton Carey, Associated Minority Contractors of America president, "these phony minority operations are trying to take advantage of affirmative action contracting programs for minorities."
"All these regulations on the books to help the minority are a bunch of horse - and anyone can get around them," said James A. Travis, the white vice president of Metro Electric in Alexandria, a firm that has had its minority status challenged recently.
At least 13 Washington-area firms, including Metro Electric, are being investigated by a special District of Columbia government team to determine if the companies are taking advantage of the city's lucrative minority contracting program.
The unit, organized by the District's oversight panel on minority contracting, suspects that some firms may be little more than fronts for nonminority companies.
Investigators are also studying the possibility that some wholly or largely minority-owned firms may be winning city government contracts only to turn around and sell them to nonminority firms at the regular price, pocketing the 10 percent difference without performing any to the work.
Metro Electric alone has been awarded more than $2 million in Metro and Maryland Department of Transportation contracts as a minority firm. The company is seeking certification in the District as a minority business.
Lyndley Turnbull, the black president of Concrete Reinforcing Detailers in Takoma Park, is another minority contractor who believes that he was beaten out of several hundred thousand dollars in minority setaside work by a firm that has taken advantage of liberal interpretations of what constitutes being a minority.
"This guy," said Turnbull, "was 21 years old and grew up as a white man. When he was accused of being a front, he got a woman to say his great-grandmother was an [American] Indian."
The firm in question, Steelworkers Inc., a Balimore steel reinforcing firm, was started as a nonminority firm, according to Tom Detig, its vice president.
It was only after a University of the District of Columbia contracting officer told the firm: "I'd like to have you bid on this job, but you are not a minority firm," that Detig said Steelworkers Inc. decided to capitalize on the minority status of two of its company owners.
The firm paid nearly $3,000 to trace the ancestry of the two partners to document that they were American Indians.
Detig, who is while, and has a third interest in the firm, said one of his partner's has a grandmother who is a "full-blooded Black Foot Indian," while the other partner's mother is a Cherokee.
One of the partners, David Blessing, said, "People should just look at my mother. She looks like a squaw."
Blessing said he is tired of the questions concerning the company's minority status. "We have been hassled for more than two years in Baltimore and Washington and I am tired of it," he said.
Nonetheless, the District's Associated Minority Contractors of America, overwhelmingly black organization, has formally challenged the firm's minority status. The firm has also not yet received certification by the Maryland Department of Transportation, according to a spokeswoman, who said they are awaiting proof of the owner's Indian heritage.
"If you haven't got a black face," Detig said, "they" - black contractors - feel a firm should not qualify for minority status. "They don't care whether you are Indian or not," he said.Turnbull, who said Steelworkers out-bid him on five contracts to supply and install reinforcement steel at the university campus, says he avoids minority set-aside bids now because he is "tired" of competing with what he believes are white-front organizations.
The lure of minority contracts is simple: Money. In an effort to encourage and help sustain minoritites entering a field long dominated by whites, federal and local governments have developed policies permitting minority businesses to compete in special set-aside programs and to be paid more for competitive bidding projects than would otherwise be acceptable.
But it is often a nightmare to administer the programs and make them work as they were intended.
One of the chief problems in the open market, officials and minority contractors say, is that once a contract is let to a prime contractor, he can pick and choose his subcontractors using any criteria he wants. The only stipulation they must follow is that, within the total project, they must have a certain level - usually 10 percent - of minority participation.
This can often mean that the subcontractor with the lowest bid does not necessarily win the job.
Officials for minority firms say they are particularly vulnerable to this practice. Some said they were so vulnerable that they rarely criticize "front" companies openly because they fear they might anger prime contractors and lose work.
In contrast to the open market, the District of Columbia government has created a special sheltered minority market from which nonminorities are excluded in competition for selected prime contracts.
The District is empowered to accept bids offered by minority firms on these contracts that may range up to 10 percent more than had been estimated by District planners.
Under a 1976 D.C. law, the city must award 25 percent of all money it spends on contracts to certified minority firms. These firms are certified by the Minority Business Opportunity Commission (MBOC) of the D.C. government.
Just what entitles a firm to the appellation "minority" is a problem, too. Carl Cannon, director of Minority Development for the multibillion-dollar Metro construction project, said that firms currently qualify as minority businesses simply by providing Metro with a written statement attesting to their being minority-owned.
It is largely a reflection on poor federal guidelines, he said.
"In fact," he said, "sometimes . . . federal regulations . . . permit some companies to exist and get contracts from Metro that they should not have."
News reports have indicated that fewer than 50 percent of all minority firms doing work for Metro may actually be true minority firms.
But Metro is not alone in having problems. Peter Taylor, president of the minority firm Community electric Company and a commissioner for the D.C. Minority Business Opportunity Commission, said he was recently "bumped out of a $560,000 contract to improve science labs in two District schools," by the A. A. Beiro Construction Company. Beiro is now under investigation by Metro and by the MBOC concerning its minority status.
When asked about the situation Taylor spoke of, A. A. Beiro, president of A.A. Beiro Construction Company, told a reporter: "If you have any questions, you ought to check with someone making the rules. We are just players in the game." CAPTION:
Picture 1, Contractor Vesharn Scales lost a contract to a minority firm he says was fronting for a white-owned company. By Tom Allen - The Washington Post; Picture 2, Status of David Blessing, who claims Indian ancestry, has been questioned. By Gerald Martineau - The Washington Post