September 27, 2012

Major paratransit contracts fail to meet minority business targets

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MTA Mobility van

MTA Mobility van.

By Sam Smith
Sam@MarylandReporter.com

The Maryland Transit Administration is trying to boost minority business involvement in two multi-million dollar paratransit contracts worth $42 million that have failed to achieve a required 25% Minority Business Enterprise goal. Veolia Transportation Services, Inc. only reached 13% participation, while MV Transportation, Inc. hit the 11% mark.

Terry Owens, MTA’s chief public information officer, said that the two companies have been responsive with the MTA’s efforts to help them improve their MBE performance.

“The companies are meeting with the MTA Office of Fair Practices and are developing a plan of corrective action,” Owens said.

Jolivet protests award

The deficiencies came to light last month when Arnold Jolivet, managing director of the Maryland Minority Contractors Association, brought the issue to the attention of the Board of Public Works in a letter dated Aug. 17 and in person at the Aug. 22 board meeting in Annapolis when the two contracts were due for reauthorization.

Transit Administrator Ralign Wells, left,  and Arnold Jolivet of the Minority Contractors Association.

Transit Administrator Ralign Wells, left, and Arnold Jolivet of the Minority Contractors Association.

The two contracts, $25 million for Veolia and $17 million for MV Transportation, are for transporting people with handicaps or disabilities that keep them from using regular transit.

“I know that the Board is being placed between a rock and a hard place in terms of this is an on-going contract and the services are obviously very much needed,” Jolivet said. “In both of these cases, they have willfully ignored the MBE provisions. Send a message that is loud and clear that the minority business utilization goal is a very important part of the contract for the board, and the MTA and the whole state of Maryland will fully intend that the contractor will comply with it.”

Only a six-month extension granted

The MTA had requested the board approve one-year renewals for both contracts. The board only granted six-month extensions and the MTA will evaluate bids and provide appropriate awards by the end of the year.

Jolivet alluded to a similar situation with a procurement in Baltimore City where the city took steps to rectify the violation.

“They renewed the contract but they didn’t just let the contractor to go forward while the contractor was still in the default,” Jolivet said. “They made the contractor enter into a completely new agreement where the contractor was required to meet certain goals.”

Creating a more realistic goal

MTA Administrator Ralign Wells said the MTA has taken steps to ensure MBE compliance and has lowered the utilization goal for the newest paratransit procurement contracts to 17%.

Zenita Wickham Hulrey, special secretary for Minority Affairs

Zenita Wickham Hulrey, special secretary for Minority Affairs

“We want to make sure that we have the right goals set,” Wells said. “It’s more realistic to the environment of this type of procurement.”

Although the MTA has lowered the MBE goal for paratransit contractors, the administration’s goal is for all contractors to meet the state’s utilization goal, Owens said.

“There are some industries where it is more difficult, but our job is to hold contractors accountable and provide assistance where possible to help them succeed,” Owens said.

The Department of Transportation MBE Manual includes a contract compliance monitoring procedure when contractors can’t achieve the specified MBE participation. On a quarterly basis, the contractor is required to submit a MBE participation report. The report includes a list of MBEs working with the contractor, the percentage of the goal the MBE is responsible for achieving, and how much money is involved in the participation and a complete roster of the contractor.

Minority Business Enterprises include not just those owned by African Americans, but all minority groups includes women, Asians and Hispanics.

“We have asked and the MTA has committed to engaging in that formal process and coming up with a final determination,” Secretary of Minority Affairs Zenita Wickham Hurley said.

MV responds, Veolia doesn’t

Lauren Davis, MV Transportation communications manager, said the company is seeking help from the MTA to identify potential MBE partners.

“We have consistently searched for strong MBE partners to work with on the MTA contract,” Davis said. “MV is also a longstanding member of the Maryland Washington Minority Contractors Association. Our company began as a minority owned business and understands the importance and the value of working with MBEs.”

Veolia did not respond after several requests for comment by phone and email over several days.

Updated technology will help monitoring

MBE participation rates are being included in the MTA’s statistics program, so the MTA will have an easier time tracking contractors’ MBE compliance.

“We have the technology now that can alert us if their rates are not where they should be. The contract manager, as well, will be able to go there and look,” Wells said.

Hurley said the new tools will allow the MTA to better evaluate the responsibility of contractors.

“We recognize that we need additional enforcement tools. This past year, we created those tools. We need the BPW to issue regulations. We are working with the BPW on that. Moving forward, we will have additional tools,” Hurley said. “Right now, what we can do is take that into consideration for future procurements whether that vendor is responsible enough to accept an award.”

  • Concerned Citizen

    This demonstrates just how unnatural and ineffective the 25 percent MBE goal is. If one studies the MBE system, you will find that there are only a handful of contractors even available to even consider, and even fewer who have the experience, leadership and financial wherewithal to carry out the contracted work. Moreover, with such a small number of qualified MBEs in the state, this program is a real gift horse for a few. This program actual hurts minorities who work for “majority” owned firms (what an insult to the rest of Maryland). This is a divisive program that appears to be a handout to politically connected.

    We need to return to the 10 percent requirement and be done with this, unless the goal is to drive up costs for taxpayers so that we are forced to reduce services in all areas of State Government.

    I thought our motto was One Maryland?

  • Cindy Walsh

    I believe Concerned Citizen is wrong on all counts. We have plenty of MBE businesses that are qualified but only a few connected get the work. Given that minorities represent greater than 50% of the general population, I think you are taking it the wrong way…..it should go up. You are right about the bids going to a select few.