The penalty to a contractor who misclassified a minority firm in a city sewer project – loss of a nearly $6 million contract.

The penalty to taxpayers – an extra $340,000 handed to a politically connected contractor.

The Board of Estimates yesterday approved a higher bid from P. Flanigan & Sons – paver of the Grand Prix racetrack last summer and identified by The Brew as among the biggest contributors to Mayor Stephanie Rawlings-Blake’s reelection campaign – after both the lowest bidder and second-lowest bidder ran afoul of the city’s minority and women’s goals program.

The contract, involving the excavation and installation of sewer lines at the Orchard Ridge subsidized housing project in East Baltimore, is an example of the scrupulous application of minority goals that manages to cost the taxpayer a bundle.

In this case, the overall cost of the project ballooned by 6% as a result of improper paperwork regarding a 1.7% share of the project.

Minority Contracting Maze

The spending board, which includes Rawlings-Blake, accepted the reasoning of the city’s minority contractor overseer, Shirley A. Williams, that the low bidder misclassified Best Fence Inc. as a WBE (women business enterprise) instead of a MBE (minority business enterprise). Williams is head of MWBOO, the Minority and Women’s Business Opportunity Office that operates within the City Solicitor’s Office.

According to Williams, the mistake was a result of Best Fence being sold by its female owner to an African-American buyer, which changed its classification from a WBE to a MBE.

The contractor, Daisy Concrete of Wilmington, Del., was unaware of the sale and had placed Best Fence in its bid papers as a WBE instead of a MBE. This meant that the bid had 16% MBE and 2% WBE participation, instead of the 14% MBE and 4% WBE participation stipulated in the bid.

“Minor Irregularity”

Daisy’s lawyer, Scott A. Livingston, told the spending board that the error was a “minor irregularity” that could have been corrected had the city notified the company and given it a chance to substitute a new WBE.

The Brew published an article on another instance where Williams’ office disqualified the low bidder for a correctable infraction of MBE/WBE rules. In that case, the Board of Estimates awarded the job to P&J Contracting Co. whose bid was 74% above the low bid.

P&J is owned by Pless B. Jones, head of the Maryland Minority Contractors Association and a member of the host committee that raised $600,000 at a Rawlings-Blake fundraiser last January.

On the other hand, MWBOO sometimes approves contracts that fall short of minority goals  – or waives the goal altogether. That practice came under criticism from the Baltimore NAACP following a Brew article about the handling of Head Start grants.

Williams has defended her actions as following the city’s complex MBE/WBE rules. She plans to retire from city government at the end of this month.

Political Giving, Contract Receiving

In yesterday’s Orchard Ridge contract, Williams also rejected the second lowest bidder for including a non-certified landscaping company. The error meant that American Infrastructure’s WBE participation was 3.1% rather than the stipulated 4%.

By unanimous vote, the spending board awarded the contract to Flanigan – even though its bid was $339,240 more than Daisy Concrete and $178,580 above American Infrastructure.

The board was equally generous to Flanigan three months ago, handing it $637,741 for an extra work order (EWO) appended to the Grand Prix paving contract.

Neither Daisy Concrete nor American Infrastructure appear on the Maryland Elections Board database of political contributions to Mayor Rawlings-Blake or other city officials in the 2011 city elections.

P. Flanigan & Sons (including its principals) has given Rawlings-Blake $13,500 since 2008, The Brew found in its review of  election board records.

The contractor was also a “gold” corporate sponsor – the second highest sponsor category – of the Mayor’s Inaugural Ball held last month at the Baltimore Hilton.

Other Contracts and Loans

In other action, the board – which includes Rawlings-Blake, City Council President Bernard C. “Jack” Young, City Comptroller Joan Pratt, City Solicitor George Nilson and Public Works Director Alfred H. Foxx – approved the following:

• $1.5 million to Rummel, Klepper & Kahl (RK&K) for “on-call” consulting for the bureau of water and wastewater for an evaluation of the city’s stormwater drain system. The agreement lasts three years.

• $170,077 to RK&K for “on-call” consulting for four sewer contacts and one water contract. The consultant “will provide project management assistance, claims, change order and schedule reviews and litigation and negotiation support,” according to the spending board’s agenda.

• $1.1 million to Verizon to provide enhanced 911 service for the Police Department. This was a no-bid extension of an existing contract because Verizon “is the sole provider of enhanced 911 service in Maryland.”

• $1 million to Correlli Inc. for aftermarket parts and service for heavy equipment for the fleet management section of the Department of General Services. This award increases the amount awarded to the White Marsh-based company to $3.5 million since the contract was awarded in late 2007.

• $1 million to Waste Equipment Sales & Services for parts and services for Mitsubishi trucks for the fleet management section. This is an increase of a $750,000 award for parts and services approved by the board in 2010.

• $600,000 to Power & Combustion Inc. for boiler repair and other services for various agencies.

• $737,400 to Allied Contractors for rehabilitating the paths at Riverside Park in South Baltimore for the Department of Recreation and Parks. Machado Construction Co. had a lower bid than Allied Contractors – $675,071 – but the bid was rejected by the board yesterday because Machado was late in applying for its yearly prequalification and was not prequalified when the bid was accepted on Nov. 2.

While saying he was sorry about the rejection, City Solictior Nilson faulted Machado for not allowing “reasonable predictable processing time” for prequalification.

• $500,000 loan to the National Aquarium in the Inner Harbor to renovate the stingray tank, including reinforcing the concrete walls and upgrading the electrical system “to improve the overall visitor experience.”

• $182,437 to GWWO Inc. for “on-call” architectural design services for the new Clifton Park Recreation Center gymnasium

• $104,924 to Century Engineering for “on-call” consulting on the Inner Harbor East bulkhead and streetscape design. The work will include designing an ADA-compliant pedestrian ramp and marina dock access structures.

Extra Work Orders (EWOs) Approved

• $582,738 to Monumental Paving and Excavating to build a retaining wall and bulk loading area for the Super Citizen Convenience Center, a drop-off for trash and recycling on Sisson Street.

In order to complete this project on time last October, the Department of Public Works used a “live” contract with Monumental instead of bidding out a new contract, Public Works Director Foxx said yesterday. Foxx said his agency had called on the Department of Transportation to supply a contractor, and DOT came up with Monumental, which had been doing $18 million of excavation work for the city’s Uplands housing project in Edmondson Village.

The price for the Sisson Street job was reached after negotiations between DOT and Monumental, without direct input from Public Works, Foxx said yesterday.

“I have to investigate the price,” he said after the board meeting yesterday. Asked if he believed the price was too high, Foxx said, “The price is probably reasonable. I do want to see how much was internal work,” referring to work done by DOT crews and not by Monumental.

• $655,000 to Am-Liner East, Inc. for the television inspection of sanitary sewers that use cured-in-place pipe. This EWO is on top of the original contract of $1.75 million.

• $244,000 to Cianbro Corp. for rehabilitation of the Pennington Ave. Bascule Bridge.

This is the 18th EWO for this project, which has ballooned the contract from the original bid price of $14.5 million to $25.5 million. The latest cost increase will be covered by the Maryland Vehicle Reserve Fund allocated for the Hanover Street Drawbridge and a federally-funded reserve fund for a project at Argonne Drive and 39th Street, according to the board’s agenda.