|On the right track?|
|Blue Line Extension tests minority vendor program|
|Published Thursday, February 7, 2013 7:10 am|
Charlotte’s revamped Disadvantaged Business Enterprise program is being put to the test on the Lynx Blue Line Extension.
The $1.1 billion project – the largest in North Carolina history – has drawn scrutiny over minority contractor programs and outreach.
Because Charlotte Area Transit System receives federal funds, the city of is required to administer a DBE program to give minority- and women-owned businesses equal opportunity to compete for contracts. Charlotte’s DBE program, which was approved by the federal regulators last year, maintains a goal of 11.8 percent participation by minority- or women-owned businesses.
“One of the biggest changes is how the goals are set,” said Arlanda Rouse, CATS’ civil rights officer. “Rather than have an annual goal, now we have to set our goals every three years. For the most part, everything else is pretty much set and regulated by federal regulations.”
CATS, along with the Charlotte Department of Transportation, Charlotte-Douglas International Airport and Engineering and Property Management, all use the DBE platform.
The BLE doesn’t have a specific participation goal, Rouse said, because work was under way before changes to the DBE. As a result, the Blue Line – estimated to require up to 40 contracts over multiple years – is subject to the current 11.8 figure.
“The Blue Line Extension started nearly four of five years ago, that’s why it’s near impossible to place a goal on it,” Rouse said. “The Blue Line Extension is more of a conglomerate of projects. The bulk of it is going to occur in the next three or four years. It’s going to make up a large portion of our triennial goal for 2014, 2015 and 2016, so right now, there is no goal on the Blue Line Extension.”
CATS is also required to maintain outreach programs in accordance with federal mandates. The next event is scheduled for March or April.
“Every DBE program is required to do outreach, ” Rouse said, “so because CATS has this large project occurring we were doing outreach with DBEs to let them know things that were going to occur and the opportunities that were happening.”
David Smith, operations manage of DEW Electric in Charlotte, said CATS hasn’t put enough rigor into its standards to protect DBEs. His family’s business, which did electrical work on the original Blue Line, sued prime contractor Mass Aldridge Joint Venture for fraud after not being paid $430,000 for work on the project.
DEW ultimately settled for a smaller sum and was nearly wiped out in the process, Smith alleges, because CATS paid MAJV instead of subcontractors.
CATS officials counter its contracts are with prime contractors, who then hire and pay subcontractors.
“That’s how they absolve themselves every time,” said Smith, whose complaints to federal officials resulted in U.S. Department of Transportation and FBI probes of CATS. “No matter how they say they’re in compliance, there’s no checks and balance in place.”
The overhauled DBE program requires prime contractors to agree to provisions that protect DBE rights. Before a minority subcontractor is hired, a copy of the contract must be forwarded to CATS for review, potentially giving the city authority to veto deals for breach of contract.
“We now check to insure that the proper federal flow-down language is included in all subcontracts,” Rouse said. “We …simply added that language to their contracts and placed a clause in their contracts that we can actually force negotiations and cancellation of their contract if they don’t place that language in.”
Smith, who has battled contractors and CATS for five years in the courts, isn’t convinced prime contractors will do the right thing by subcontractors who depend on major project income to stay in business.
“They’re like birds,” he said. “They’ll come in and eat, then leave.”
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