The men rewiring the president's living quarters in the White House usually work for a white-owned Gaithersburg electrical firm. On this job, however, they are paid by another company whose minority ownership helped it get the $161,000 contract without competitive bidding.
County Construction Co., the firm that was awarded the contract, is owned by Ronald S. Y. Hsu, who won the job under a Small Business Administration program designed to help the "socially and economically disadvantaged."
Each Thursday, the Chinese-born architect, who says he considers himself socially disadvantaged because of his race, drives to the executive mansion -- often in a 1979 Mercedes that cost $15,500 -- and personally delivers the electricians' paychecks.
On the White House job and several others awarded under the program, Hsu has hired white-owned firms to do most or all of the work. In several instances, employes of the white-owned firms have simply gone on County Construction's payroll, cloaking their connection with the other companies.
Hsu has taken advantage of a legal provision that permits virtually any firm owned by a member of a minority group to be given special consideration for government work without competitive bidding. At the same time, contractors who qualify under the program do not have to meet strict affirmative action goals that other contractors must attain to win federal contracts.
Government officials claimed to be unaware of Hsu's hiring practices but noted they would be technically within the law as it was interpreted when the White House and other contracts were awarded to Hsu.
Agency contracting officers outside the Sba said they were more impressed with County Construction's performance than concerned over hiring practices.
"You work with a number of these (minority) firms, you get very frustrated," said David Sutfin, contracting officer on the White House job. "I think he's definitely one of the better companies in the program."
The president of the Gaithersburg company Hsu hired to do his work for him under the contract called the program "discrimination in reverse" because he isn't permitted to vie for the government jobs set aside for minority contractors like Hsu.
But Hsu, a 46-year-old naturaized American born in Shanghai, said: "People like me, I survive because of this program."
Behind his desk in the company's Bethesda office is a bas-relief dragon, the Chinese symbol, Hsu said, of power and control.
"Control is the big key word" in determining who qualifies for the special program, said James Chisholm, acting director of SBA's Washington district office. Hsu, he said, should not be "strictly a middle man."
"They borrowed our men and used them on our job, just to keep my good men busy when we're slow," said Joseph Frick, president of the Gaithersburg company who receives a $250 weekly "consulting" fee from Hsu to supervise his own electricians rewiring the White House.
Although Frick could not compete for the White House job, since it had been set aside for a minority contractor, he said his work for Hsu is credited toward the affirmative action goals his own company must meet in order to bid on other goverment work.
"The theme (of the SBA program) was always business development," said Leon J. Bechet, until recently the director of the Washington office. "Just hiring people to do the job, I can't see how that would involve business development."
Sutfin said, "The real issue is whether he's able to manage the company and is he responsive to the client. I think he's definitely striving to develop himself."
Since the company's beginnings in Hsu's basement in 1976, County Construction has received $2.7 million in negotiated government contracts. The figure accounts for most of the firm's work.
Hsu regards himself as something of a monument to the SBA program's success, and he proudly gave a reporter a list of some 40 jobs under way or completed by his company. In many cases, however, the dollar amounts on his list were padded.
Hsu acknowledged that most of his office employes and field workers have been white. With the exception of the skeletal office staff he maintains, Hsu said. "Everybody is hired to do a particular job."
County's skeletal office staff includes, in addition to Hsu, an Oriental secretary, a black office manager, a white bookkeeper, two white project managers and a white construction expert Hsu describes as "my right hand man." One project manager and the construction expert are paid as consultants.
"They rent office space from me, but I'm their major client," Hsu said.
Until October, Hsu held 51 percent of County's stock. A white partner and his wife held the rest. A bitter battle between the two men led to a lawsuit against Hsu and a settlement under which Hsu bought out his partner's shares for $156,000. Hsu is now County's sole owner.
"County is one of the few 8A (minority-owned) companies that is competent, but that was because I was a builder," said the former partner Robert Woollard. "I used to try to get him to bid on jobs and get out from under 8A, but that isn't what he wants because the good money lies with -- 8A," the federally run contracting program.
Hsu insists that his goal is to operate independently of the government program. "Almost every week, I'm bidding on a job," he said. "I'm hoping to be on my own."
Hsu emigrated to the United States in 1960 from Taiwan, where he had been an air force pilot, an architect and a writer. He became an American citizen in 1972. His wife, a computer systems suprvisor at the International Monetary Fund, retains her Taiwanese citizenship.
Hsu has worked as an architect for the Marriott Corp. and for a large construction firm that let him go in 1976, he says, because of his race.
Since then, under the protective umbrella of the Small Business Administration and aided by Alice Hsu's salary of more than $50,000, Hsu has persevered. The family lives in a large brick home bordered on two sides by woods in Carderock Springs off Seven Locks Road near Potomac Hsu and his wife also won with other investors rental properties in Montgomery and Prince George's counties.
In November 1978, Hsu sold the 1976 family Volvo, which he still occasionally drives, along with a 1971 Ford station wagon, to his company. As County's president, he paid himself $6,775 for the two cars.
The Hsu family still has a 1979 Mercedes sedan, purchased for $15,439 in cash last January and held in Alice Hsu's name. One day last week, Hsu left the car in a Roy Rogers parking lot near his office building rather than let a reporter see him driving it. "I don't want complicate things because they are already too complicated," Hsu said later, when asked why he had tried to conceal they fact he was driving the car.
In its first year, Hsu said, the company had a few home remodeling jobs and little else. The first government job obtained under the SBA monority program was for $4,433, in December 1976, to build a security wall at the vice president's house.
The following year, County Construction received seven negotiated government contracts worth nearly $500,000. In 1978, there were 11 such contracts valued at $1.1 million.
On three jobs, Hsu hired Joe Koppers and his iron-work crew from Koppers Fabricators, a Seat Pleasant company. "On some of the bigger ones," Koppers said, "I let him do the payroll on the job and subtract (the payroll) from (our) contract price. In the end, I pay the wages because it's deducted from my contract amount. But it keeps me from having to fill out government payroll forms every week."
County's largest government job, a $582,000 contract to build emergency generators at Fort Belvoir, Va., is its only formal joint venture with a white-owned construction company. Such an arrangement was needed to obtain necessary bonding.
The Fort Belvoir job, however, has turned out to be County's least successful venture. The government has complained repeatedly of delays and nonperformance. A white subcontractor who says he went broke on the job has filed a lawsuit that is pending in federal court.
To salvage the project, Hsu called on Frick and his electricians, who worked, as in the White House contract, on the County Construction payroll. w"I have to give the man credit," said Frick of Hsu. "He's a worker and a hustler, and he won't take no for an answer."
"I feel very proud of my work with the (government) agencies," said Hsu. "I hope I'm one of the examples of the program's success."