Today, Mayor Vince Gray announced a new pilot project that would create a carrot for employing District residents on six public school modernization projects: A five percent premium for general contractors that meet District resident hiring requirements negotiated in their contracts, and a bonus paid to subcontractors equal to 10 percent of the payroll of District residents on the job. City Administrator Allen Lew estimates that if this program boosts the percentage of District residents working from 22 percent to 35 percent, the projects will cost one percent more overall.
But, you say, don’t we already have a First Source law that requires projects built with city funding to employ 51 percent District residents? Well, not quite—it only stipulates that contractors have to make 51 percent of their new hires from the District. Many of them bring a crew from project to project, or even do their hiring right before the project officially starts in order to skirt the requirement. So that results in tiny numbers on the site overall. Gray called this pilot project a “positive way to close an unintended loophole in the First Source law.”
Very positive for the contractors, who now get paid more for every District resident they hire!
Council Chairman Kwame Brown decided not to be so nice. Along with Councilmembers Michael Brown and Harry Thomas, he introduced legislation a few weeks ago that would change the benchmark contractors must meet from new hires to total hours worked. The baselines are broken down by category of job, ranging from 20 percent of all non-construction hours to 70 percent of all common laborer hours. On top of that, rather than incentives, the bill increases fines for non-compliance from five percent to ten percent of the value of the contract. Probably appropriate to call that a stick.
It’s a little strange to see Gray trying to “close a loophole” in a law that hasn’t been successful in getting residents hired by just throwing more money at contractors—and after all, what’s the point of a pilot project if you don’t think it could work on a larger scale?—while Thomas and the Browns actually fix the law. Does Gray not think they’ll be successful? It’s not an example of using all the tools in the city’s toolbox to get D.C. residents back to work, because the two approaches represent different conceptions
of a contractor’s responsibilities: Should they be expected to hire District residents as a condition of getting city contracts? Or is it a special bonus that they can choose to do or not?
Brown is very proud of the Council’s independence, and Gray doesn’t want to tell him what to do. But I feel like this one could be sorted out over a couple of beers.