Voluntary ... or Else

David Bearden would rather have been digging a sewer trench on October 1 than sitting in the front row at a Houston City Council meeting, listening to a cranky four-hour debate over the wording of the upcoming referendum that will determine the fate of the city’s affirmative action program.

Like most of his white male colleagues in the heavy construction industry, Bearden, a storm sewer contractor and former president of the Houston Contractors Association, is skeptical of affirmative action. But he isn’t flat-out opposed to sharing the wealth of city work with blacks, Hispanics and women, either.

In fact, two years ago Bearden was among a group of contractors who endorsed Mayor Bob Lanier’s decision to increase the percentage of subcontracting work doled out under the city’s Minority, Women and Disadvantaged Business Enterprise program.

But one month before the November 4 election, Bearden has dropped his support of the MWDBE program and joined with fellow members of the Houston Contractors Association in endorsing the Houston Civil Rights Initiative, the anti-affirmative action group led by Republican activist Edward Blum.

Bearden says he decided to support Blum’s effort after Lanier continued to insist that the city’s MWDBE policy was a “voluntary, goals-oriented program.” Bearden also challenges Lanier’s oft-repeated claim that city contractors are only required to make a “good-faith effort” to set aside 12 percent of construction contracts for minority- and women-owned businesses.

To prove his point, Bearden sent councilmembers a series of letters he received last year from city officials who were threatening to pull a nearly $1 million contract awarded to Bearden Contracting Company unless he met the MWDBE goals.

In a cover letter addressed to each councilmember, Bearden wrote, “I find it appalling to know that elected officials will publicly testify that the city of Houston MWDBE program is voluntary.”

At the October 1 Council meeting, however, Councilman Jew Don Boney dismissed Bearden’s experience as an isolated incident.

“It’s not like we’re out there twisting people’s arms,” Boney said.
Likewise, Lanier argued that some 400 city contracts have fallen short of the hiring goals set by the MWDBE ordinance since the current program took effect in March 1995, yet not a single contractor has been “sanctioned.”

The mayor rejected Bearden’s complaint as “one person, one letter.”
But by the next day, when the HCA jumped to his defense, Bearden had plenty of company. HCA members are routinely threatened for failing to meet the program’s goals, said D’Ann Mattox Marro, executive director of the 400-member organization. “In response to recent reports we’ve heard that the city’s program is a volunteer program,” Marro said, the HCA will contribute $5,000 to Blum’s organization.

Blum could use the money. His group sued the city last week after Council rejected Blum’s original wording of the proposed city charter change and approved new ballot language drawn up by the Lanier administration. A state district court judge refused to hear the case, and Blum has asked the Texas Supreme Court to intervene.

More significantly, perhaps, Lanier does not need any more high-profile opposition to the city’s approach to affirmative action. According to recent polls, there appears to be a good chance that voters will overturn the MWDBE program.

Until this week, the contractors association — which sued Metro over the transit agency’s affirmative-action policy in 1994 — had declined to take a position on a program it once endorsed. Many of HCA’s individual members have been strong supporters of Lanier, who has probably spent more public money on the kind of infrastructure work that HCA contractors specialize in than any mayor before him.

A couple of months ago, however, Lanier blew up the bridge he’d built with the contractors association. At a fundraiser for the upcoming $545 million bond issue, the mayor blasted a roomful of HCA members for questioning the way the city has administered the MWDBE program.

“He alluded to ‘greed’ and ‘racism’ and said, ‘You know, this is a voluntary program. Why are you getting so upset about it?’ ” recalls Don Conrad, an infrastructure contractor. “Everybody perked up and said, ‘Enough is enough. This is a lie.’ “

“It is so misperceived by the public that, because we’re fighting the program, it’s a racial issue,” Conrad adds. “It’s not. Everybody ought to know what it’s really like to work for the city. They ought to at least know the truth and judge for themselves whether their tax dollars ought to go toward a program that doesn’t work.”

Unlike professional services such as consulting, the city’s construction projects are awarded almost without fail to the lowest bidder. Contractors obtain a proposal from the city, calculate the cost to complete the project and submit their bids. Every Thursday, the city holds a public bid opening at City Hall.

After the Public Works and Engineering Department tabulates the low bid for accuracy, the contractor is notified and given ten days to, among other things, determine what minority-owned businesses will be used as subcontractors on the project. If the contractor falls short of the MWDBE goal — usually 12 percent — he or she must be able to prove a “good-faith effort,” which includes providing detailed written notices of available work to all companies listed in the city’s MWDBE certification directory that specialize in whatever specific task the contractor needs done, all contractor associations whose members are minority- and women-owned companies and all media outlets that “focus toward” minorities and women.

While those requirements may seem reasonable, consider a contractor who needs hauling services. There are more than 50 companies that have been certified as legitimate MWDBE hauling firms by the city’s affirmative-action department. There are also more than a half-dozen associations that represent minority and women contractors, and who-knows-how-many newspapers and magazines that cater specifically to black, Hispanic or Asian audiences.

One might think minority- and women-owned companies would be clamoring for a subcontract. But few have the knowledge or resources to solicit work by estimating the cost of a job and submitting quotes to the low bidder. That means the responsibility for finding adequate minority participation in a contract often lies with the prime contractors, who are usually plenty busy submitting several bids a week to the city.

The penalties for violating the city’s MWDBE ordinance are onerous. Contractors who fail to meet their goals risk being barred from doing city work for five years. That fate hovers over even those who make the most honest effort to employ minority- and women-owned businesses under the city’s “voluntary” program.

“Usually you get a phone call,” says Don Conrad. ” ‘Did you meet your goal? You didn’t? Well, we’re not going to send this to Council.’ I’ve received calls saying it’s being held up by somebody on Council, and I need to go out and get some more subcontractors. Sometimes it’s a letter from the city saying, ‘You haven’t shown your good-faith effort, you’re in jeopardy of losing this job.’ That happens all the time.”

Paving contractor Jerry Brown says that when he fell short of his goal by half a percentage point on one project, city officials told him that he had failed to exercise a good-faith effort. Brown met his goal by buying a few loads of stabilized sand from a company that he knows is a sham.

“They go to the regular supplier, and all you’re doing is paying them an extra 50 cents a ton as a premium,” Brown says. “In reality, there’s no way you can take the chance of being penalized or losing the contract, so you manipulate it. We all make the goals one way or another.”

A few weeks ago, Dave Bearden finally decided he could no longer pretend the city’s MWDBE program was working.

The episode that changed his mind began last September, when Bearden Contracting Company won a $988,800 contract from the city to replace sewer lines in the Gulf Meadows area. Bearden submitted a list of six minority subcontractors, including four African-American-owned trucking companies that he had used many times before.

A few days later, he received a letter from an assistant director in the public works department telling Bearden that his black subcontractors had not been certified by the city’s affirmative action department and could not be counted toward his MWDBE goal.

“Your minimum MWDBE percentage must be 12 percent,” the letter read. “If you do not meet this schedule, the city reserves the right to find your firm in noncompliance of the post-bid procedures and subsequently award this project to the second low bidder.”

Bearden was incredulous. “I called the guy and said, ‘I thought it was voluntary.’ He laughed.”

In a written response, Bearden told the city that his truckers were not staffed to handle the cumbersome paperwork required to be certified. He asked that the city reconsider and allow the otherwise qualified firms to have the job. The city refused.

Bearden found another trucker, only to discover that he charged a higher rate per hour, throwing Bearden’s original bid proposal out of whack. When Bearden asked to replace that firm with a certified trucker that would charge the lower rate, the city again refused.

Bearden eventually finished the job using his own subcontractors. Meanwhile, the trucker who wanted to charge the higher rate forced him into an independent arbitration. Bearden was notified on October 3 that he had won. Good thing: Had the decision gone the other way, Bearden would have been forced to pay that trucker the same $54,000 he paid the company that actually performed the work.

All that, just because I wanted to use legitimate, black-owned companies that had been working for me for years,” Bearden says. “I thought that’s what affirmative action was for.”

During the October 1 Council meeting, Bearden probably should have been in the field, monitoring the roughly $12 million in sewer repairs his company is completing for the city. But in his letter to councilmembers, the contractor said he hoped for a few minutes to explain how affirmative action really worked in Houston.

Unfortunately, he never got the opportunity. Instead, Bearden was quickly dismissed as a disgruntled contractor, while Bob Lanier congratulated himself for exposing Edward Blum as a man willing to use deceptive language to fool voters into eliminating affirmative action at City Hall.

“What I worry about in my heart, and I don’t need this with three months to go, is that it’s a worse situation if they pass this and the people feel deceived,” the mayor said. “I am pursuing candor and integrity with the strength of every fiber in my body.”

Dave Bearden listened closely, but could detect no trace of irony in the mayor’s voice.