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Yesterday, D.C. Councilmember David Catania forced his colleagues to show where their true loyalties lie when it comes to the city’s broken Certified Business Enterprise program. It wasn’t pretty.
The program gives preference to the small fraction of D.C.-based companies that sign up to be CBEs when bidding on city contracts. The city also requires that publicly assisted construction projects employ a certain percentage of subcontractors who are registered as CBEs. Overall, the program affects how hundreds of millions of public dollars, if not more, are spent each year in D.C.
During a vote on legislation that would tweak some of the city’s CBE rules, Catania proposed an amendment that would limit the amount of preference points a CBE could receive unless at least half of its workforce were District residents. In other words, CBEs that don’t employ mostly D.C. residents would get less of an advantage in bidding. The rationale is easy to grasp: If the purpose of the program is to keep local money local, then rewarding companies that employ District residents would help.
But Catania’s amendment never had a chance and was swiftly defeated. Councilmember Vincent Orange, the self-appointed champion of the CBE program whose bill Catania was trying to amend, said Catania’s proposed changes hadn’t been properly vetted and could have unintended consequences that could hurt the city’s current CBE-certified companies. In essence, Orange was arguing on behalf of companies that have enjoyed a preference when bidding on city contracts—in some cases for many years—whose workforces are less than half D.C. residents.
Catania said he enjoyed watching some of his colleagues who continually harp on the need to get more District residents jobs scrambling to “find a rabbit hole” in order to vote against his proposal. Catania says he thinks the reason his amendment never had a chance is because many CBEs who might have been affected by his proposed changes are politically connected.
Speaking of politically connected CBE firms, one of the largest is road-paving behemoth Fort Myer Construction, whose head of corporate relations is the Council’s newest member. Anita Bonds voted against Catania’s amendment, which, depending on the make-up of Fort Myer’s workforce, could have reduced the company’s clout in bidding. Bonds says she doesn’t know offhand if the majority of Fort Myer’s workforce are District residents (its owners, by the way, are not) but concedes that it’s possible they are not.
That means there’s a strong chance that Bonds voted against a measure that would have made her company less competitive when bidding on city projects. But Bonds says she didn’t feel like there was a potential conflict of interest with her vote. “I don’t see it that way,” she says, adding that she voted against the amendment because she felt like it was a “knee-jerk” proposal that needed more study. But she says she doesn’t see a potential conflict in her vote against the amendment because the proposed legislation wasn’t specific to her company.
It’s worth noting that the city paid a rival of Fort Myer $225,000 in 2008 to settle a lawsuit involving the CBE program. The rival alleged in court records that the city had quietly increased the preference points to companies that had been active in the city for more than 20 years, which had the effect of giving an unfair advantage to the only road paving company in the city that met that criteria: Fort Myer.
Bonds wasn’t the only one with a potential conflict of interest, though—so was the author of the amendment. Catania’s employer, M.C. Dean, is not a CBE, but some of its competitors or potential competitors either are CBEs or one day could be. For instance: M.C. Dean is currently locked in a battle with a French-owned company called Citelum D.C. for a $100 million streetlight contract. Citelum D.C. is considering putting its headquarters in Ward 8 at the St. Elizabeths campus, which, depending on its corporate structure, could entitle it to become a CBE. (Other large companies with headquarters outside of the District have local spinoffs that are CBE certified, like Miller & Long D.C. and Smoot Construction of D.C.) Were it to become a CBE, Citelum’s preference points could have been affected by Catania’s amendment if it had passed.
Catania refused to discuss the effect his amendment could have had on any of M.C. Dean’s competitors.
Photo by Darrow Montgomery