Two years ago, Theodore R. Hagans Jr., one of Washington's wealthiest black businessmen, won a multi-million dollar noncompetitive contract under a Small Business Administration program to aid "socially and economically disadvantaged" minority businessmen.
The contract was to run the 3,300-space parking concession at Dulles International Airport. At the time, Hagans had no experience in the parking field, yet he won the contract over at least one other black - a Philadelphia man said to have 15 years experience in the parking business.
Hagans set up a corporation, Hagans Parking Co., Inc., specifically to do the Dulles job. To overcome what federal officials described as concern over his lack of experience. Hagans hired as a consultant an old friends, Leonard B. Doggett Jr., one of Washington's most successful white parking lot owners.
A. Philip Towsner, a lawyer for the Philadelphia man, immediately claimed his client was "shut out" in a power play by influential parking interests and that Hagans was "fronting" for white businessmen.
Towsner said his client has always worked for others and has "never had a chance" to start his own business. "He's black, he's disadvantaged, that's the whole point of the program," said Towsner.
But federal officials said they think Hagans is a legitimate participant in the program and say they are delighted with the high quality of the work Hagan's firm continues to perform at Dulles.
The officials said the Philadelphia man. Ladell Bivins, applied for the DUlles parking contract too late, that Hagans was first in line. This was so, they said, even though Bivins applied for the contract half a year before Hagans won it.
Neither Bivins nor Doggett could be reached for comment.
"I'm not fronting for anyone," said Hagans yesterday. The real estate entrepreneur and developer of the $300 million Fort Lincoln new town said he was sole owner of his parking business and that more than half his 25 employees are black.
The entire SBA minority program has come under fire in Senate hearings because of allegations that blacks have fronted for whites, who then reaped millions. SBA Administrator A. Vernon Weaver halted the program last Friday, saying it would be overhauled to prevent further abuses.
Hagans and his parking contract did not come up in the Senate investigation.
The story begins with Leaford Williams, a section chief in the Federal Aviation Administration's office of civil rights. The FAA operates Dulles and National Airports.
"We have been in touch with TeD (Hagans) for a long time," said Williams, who has long sought to have a minority businessman operate the parking concession at a major U.S. airport.
The parking lot industry has been dominated by a few big companies, Williams said, especially the Airport Parking Company of America (APCOA), an ITT subsidiary until it was sold a few years ago to a group of private investors.
APCOA ran the Dulles concession but didn't do a good job, according to FAA officials. When the contract expired in 1975, Williams seized the opportunity to bring the lucrative contract into the SBA minority program and thus attempt to create a national showcase.
He called Hagans. After some months of dealings, Williams got his showcase: the only blackoperated parking concession at a major U.S. airport.
Clyde Bingman, an FAA financial man for Dulles, helped negotiate the contract with Hagans. Bingman said that expenses, revenues and profits had to be carefully projected because the contract was noncompetitive.
Bingman said Hagans's firm was to receive about $400,000 in revenues the first year of the five-year contract, and that $50,000 to $60,000 of this was to be profit.
The profits in the first two years of the contract have actually been higher than anticipated, Bingman said, because of good management, a rate increase and an unexpected increase in traffic.
He said he did not know the actual profit figures for the first two years of the contract, which end in November. He said the revenue figures, and allowable profit will be reassessed before Hagans begins the next three years of the contract.
Gross revenues were $1.4 million from the parking concession in 1976, Bingman said.
"Since Hagans took over the lot there has been a complete turnabout," said Bingman. "We're extremely happy with the way the lot is managed . . . The complaints have dropped to near zero."
Hagan's manager is black, Bingman said, and two white consultants from Doggett's Parking Co., Inc. come to the airport periodically to check the finance and operations.
Bingman remembered talking with Towsner and with a man from Philadelphia who "had some experience . . . and a good comprehensive of what we were looking for."
But, he said, "He wasn't certified by SBA (in the minority program) and that kinda tied our hands." Bingman also said there seemed to be an advantage in having a "local" who could "stay on top of things."
Bingman said Hagans' "overall competence" in business was impressive and, "He did have Doggett as a consultant. He did have expertise to draw on."
Bingman said this made the FAA feel better about choosing Hagans. He said that he was convinced that Hagans represented a "legitimate minority firm" despite any connection with Doggett.
"Doggett was my idea," said Hagans yesterday. "I just wanted to be sure I had someone with enough parking expertise so I didn't make any mistakes." He said Doggett took the job for friendship, not for money, and that he, Hagans, is "very appreciative" of Doggett and is "indebted" to him for the help.
Hagans said Doggett receives 2 1/2 per cent of Hagans's gross as a consulting fee. That would have been about $10,000 on the $400,000 revenues projected to go to Hagans in the first year of the contract.
"If you're black in America you're always socially disadvantaged," said Hagans, explaining how he qualified under the SBA program.
Economically, he said a black man with a billion dollars would be disadvantaged by comparison with a white man with the same amount because the white's opportunities for investment would be greater.
Hagans said that "substantial contracts" have to be set aside for minorities unless they are to be confined to a "Mom and Pop status."
Leon Bechet, chief of the Washington area SBA office that approved Hagans under the minority program, said Hagans has been so successful that he's been "graduated from the program."
"The only reason we considered him in 1975 was because his organization . . . couldn't get this type of contract (competitively) because they didn't have the required fiveyears experience as a major parking concern," said Bechet. "We told him that 'completion of this contract would qualify him competitively to bid for other contracts."
Thus Hagans is not eligible for other noncompetitive parking contracts, Bechet said.
Bechet said that the application from Bivins, the Philadelphia man came "too late." Bechet also said hagans had an advantage in having "a certain amount of (business) resoures" that would enable him to handle a big contract.
"His management background, financial capability, and technical support from Doggett's company are considered adequate to perform the contract." Bechet wrote to Towsner, Bivins lawyer, three months before Hagans won the contract.
"Although we do not currently have available additional (minority) opportunities for parking lot concessions, I suggest that your client, Mr Bivins, contact his local SBA . . . to be considered for any such future opportunities," Bechet suggested.