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Minority businesses get near-zero share of Head Start contracts

The NAACP calls on Mayor Stephanie Rawlings-Blake to beef up minority participation in local contracts

Above: A three-year-old participates in a Head Start program in Baltimore.

The Baltimore Board of Estimates today approved $16 million in contracts to Head Start providers whose level of minority and women’s business participation is less than 1% – far below the city’s target goals.

The grants were parceled out to seven non-profit agencies, mostly church groups, that will serve nearly 2,300 low-income 3-5 year olds and their families over the next year. None of the contracts included more than $32,500 for minority businesses. In three of the contracts, there was no involvement by women’s firms at all.

The low level of minority and women’s participation in Baltimore city contracts – and the issuance of waivers that exclude many contracts from minority participation – has become a matter of controversy. Two groups have questioned the city’s commitment to the 1986 ordinance designed to assure that non-white and women-run businesses aren’t left out of government contracting.

Tessa Hill-Aston, president of the Baltimore NAACP, has called on Mayor Stephanie Rawlings-Blake and other city officials to develop a strategy “to reduce waivers and increase the level of minority contractors benefiting from contracts awarded with Baltimore City taxpayer funds.” This followed a report by The Brew about the granting of waivers to contracts going before the Board of Estimates.

At today’s board meeting, Arnold M. Jolivet, president of the American Minority Contractors and Businesses Association, denounced the city’s “lackadaisical approach” to the 1986 ordinance.

“The program is not working the way it should,” Jolivet said, “and I ask the board to take a new look at what they’re doing.” The board turned aside his request that the city solicitor’s office conduct a study of the law’s effectiveness.

Head Start Programs Fall Short of Goals

A review of the Head Start contracts approved today shows that only $129,410 – or 0.8% – of the $15.9 million allocated by the city will go to minority- and women-owned subcontractors.

Shirley A. Williams, chief of the Minority and Women’s Business Opportunity Office (MWBOO), said, “We cannot assume that because there are few African-American firms, there has been discrimination.”

In an interview with The Brew, Williams said, “There is no mystery about how we determine minority targets or why some contracts do not have minority participation. We have to waive the [minority] goal if we can’t identify a minority firm to participate. Or it may be a case where the contract cannot be segmented for minority participation.”

The latter was the case for today’s Head Start contracts, she said. Providers were asked to list in their budgets “proprietary and nonsegmentable items” – such as salaries, fringe benefits, rent, utilities, phone expenses, travel and “Head Start specific training.” All of these items qualify as nonsegmentable costs that are exempt from minority utilization provisions.

After taking the nonsegmentable items out of the contracts, MWBOO applied a goal of 27% minority and 10% women participation for the Head Start providers.

Williams acknowledged that none of the providers achieved that goal.

The closest to the goal was the Harvey Johnson Head Start Center at Union Baptist Church, whose joint minority-women’s participation was $34,500 compared to the goal of $54,837 .

The least compliant program was administered by St. Vincent de Paul of Baltimore, which got $6.1 million today to run Head Start programs in Park Heights and East Baltimore.

De Paul subcontracted out only $7,500 to minority and women’s firms – compared to the MWBOO goal of $293,505. (De Paul also listed $3,500 going to a minority subcontractor who is not qualified to bid on city contracts.)

In another case, a $135,456 award was listed as going to minority-owned Charm City Caterers. The firm is currently in trouble with state tax authorities and cannot participate in city contracts. Williams said she will look into why Unity Methodist Church listed the catering company as part of its minority utilization program.

Describing the importance of putting minority goals in a broad context, Williams said, “Remember that these are non-profits that provide necessary community services, and most of those that benefit from the programs are minority children.”

Minority Participation Waived

In her September 2 letter to city officials, NAACP’s Hill-Aston said the civil rights group was “concerned that there appears to be an inordinate number of waivers granted on city contracts” excluding minority and women’s participation.

The letter was cosigned by members of the NAACP’s economic development committee, including City Councilwoman Helen Holton and former state House of Delegates member Walter Dean.

In today’s Board of Estimates session, 14 contracts had waivers from MWBOO. They ranged from a $124,000 contract to a homeless shelter to a $68,000 award to a Virginia vendor supplying benches to the Department of Recreation and Parks.

These and the Head Start contracts were passed without comment by the five-member board that includes City Council President Bernard C. “Jack” Young and City Comptroller Joan M. Pratt. Mayor Rawlings-Blake was in Washington D.C. today and not present at the session.

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