- Wayne Washington Palm Beach Post Staff Writer
Firms owned by women and minorities may not be assured of getting a piece of garbage hauling contracts worth as much as $450 million from the Palm Beach County Solid Waste Authority because it has failed to respond promptly to a study that found women- and minority-owned firms have not had a fair shot at SWA contracts in recent years.
That’s the contention of County Commissioner Mack Bernard, who said the SWA — knowing it would be awarding the lucrative, seven-year hauling contracts in February — deliberately impeded the completion of a disparity study, withheld from board members a review of it and allowed a third consultant known as an ardent opponent of disparity studies and set-aside programs to oversee the process.
A disparity study is conducted to show what disparity, if any, exists between contract awards to white-owned businesses and those owned by women and minorities.
Now, in the absence of the gender- and race-based set-aside program that the study recommended, Bernard said he’s worried women- and minority-owned firms will be locked out of SWA work for the next seven years. He plans to press the case for changes during a special SWA board meeting on Tuesday, when he could move from the board’s vice chairman to its chairman.
Documents obtained by The Palm Beach Post indicate that, in 2014, the SWA hired a consultant, George La Noue, to help craft the request for proposal for a disparity study and to advise SWA on “the current law governing disparity studies” as well as what would be “politically and legally defensible when finished.”
La Noue is not an attorney and has never conducted a disparity study. He is a political scientist who has testified frequently in cases challenging set-aside programs.
Dan Pellowitz, the SWA’s managing director, disputed the characterization of La Noue as someone who opposes set-aside programs, frequently referred to as minority/women business enterprise programs.
“We can assure you that he never made such a statement or conducted himself in any manner that indicated that,” Pellowitz said. “As an expert who has testified in cases involving disparity studies and who was fully knowledgeable of the methodological flaws that result in successful challenges, he was in perfect position to help ensure that the authority produced a legally defensible study.”
La Noue said he has helped a few municipalities design disparity studies so they can withstand legal challenge. He also said most of the time when he has been hired as an expert witness in legal disputes, it’s been by plaintiffs challenging the legality of set-aside programs.
In an interview with The Post, an angry Bernard — the only minority on the County Commission, which also serves as the board overseeing the SWA — said the SWA’s response to the study and its open-ended contract with La Noue amount to “a fireable offense” for SWA leadership.
SWA Executive Director Mark Hammond said his agency did not delay the release of the review. He said he and his staff wanted additional time to go over it before sharing it with commissioners.
La Noue was hired, Hammond added, because “authority staff had no experience or expertise in conducting a disparity study.”
Pellowitz added: “Our objective was to produce a study that could support the establishment of an M/WBE program, and that would not expose the authority to litigation that would certainly delay or impede the implementation of a program.”
The dispute over the SWA’s disparity study offers a preview of what could take place when an even larger study covering overall county contracts is released. That study, whose completion has been delayed multiple times, could set the stage for the re-establishment of a county-wide gender- and race-based program.
Even before its expected release this fall, the $750,000 county-wide study has churned a brew of race, money and politics made more potent by the $800 million in projects the the county will undertake over the next decade with proceeds from the sales tax increase approved by voters last year.
Women and minority business owners say they aren’t getting a fair shot at county contracts. The Florida East Coast Chapter of the Associated General Contractors, meanwhile, has had its chief executive officer, Michelle Anaya Depotter, raising questions about the county-wide study and whether it is being undertaken to make sure “various groups get what they think is their fair share of the pie.”
Disputes over government contract work are not limited to Palm Beach County.
After decades of complaints from women and minority business owners in the 1970s and ’80s, local and state governments nationwide have established set-aside programs that guaranteed women- and minority-owned firms a share of government contracts. Some programs were designed to give additional points in the bidding process to white-owned firms that agreed to share some of the contract with firms owned by women and minorities.
White business owners, however, challenged the set-aside programs in court, arguing that they amounted to reverse discrimination. They won a landmark ruling in a 1989 case, Richmond v. Croson, when the U.S. Supreme Court determined that such programs would have to meet “strict scrutiny.”
To withstand that scrutiny and have a legally justifiable program, governments would have to show that women- and minority-owned firms received disparate treatment in the awarding of government contracts.
Consulting firms across the country were established to conduct disparity studies, which are frequently time-consuming and expensive.
Mindful of the threat of lawsuits or unwilling to undertake the expense of a disparity study, governments moved away from gender- and race-based programs in favor of ones that sought to help small businesses, reasoning that many such businesses were owned by but not limited to women and minorities.
Palm Beach County had a gender- and race-based program but scrapped it in 2002 in favor of its current small business enterprise program. The SWA continued its own gender- and race-based program to 2012, when it, too, moved to a program aimed at helping small businesses, Pellowitz said.
Women- and minority business owners have complained that, without a specific program aimed at helping their firms, they don’t get a fair chance to compete for government contracts.
Women- and minority-owned firms got 2.5 percent of county work in 2014, according to figures from the county’s Office of Small Business Assistance. That percentage dropped to 2.2 percent in 2015.
Mason Tillman Associates of California is conducting the county-wide disparity study, and it did the SWA’s $361,000 disparity study, finding that firms owned by women and minorities have not had a fair shot at getting SWA contract work.
Its SWA study, completed in March, found disparities in the awarding of both prime and sub-prime contracts.
“For the record, staff agrees that there are disparities and is committed to addressing them,” Pellowitz said.
Mason Tillman recommended that the county’s small business enterprise program be expanded and that a gender- and race-based program be established.
As Mason Tillman completed portions of its study, the SWA — with La Noue’s assistance — raised detailed questions designed to impede the study, according to sources who requested anonymity because they fear the county won’t hire their firms if they are known to have criticized how the SWA responded to the study.
La Noue’s review of the study was unnecessary, those sources said, because SWA also hired a Maryland attorney, Franklin Lee, to go over Mason Tillman’s methodology.
Lee, whose career focus has been administrative and regulatory law, has extensive experience advising governments on disparity studies and set-aside programs.
Lee has been paid $33,600 for his work. So far, La Noue, public policy and political science professor emeritus at the University of Maryland, Baltimore County, has been paid $68,000.
“The hiring of Mr. La Noue, who is only hired to kill any and all policy directives to support M/WBE programs, is in itself evidence of processes intended to exclude, bar, deny and ultimately discriminate against minorities and women businesses in contracting with the Palm Beach County Solid Waste Authority,” Lia Gaines, executive director of the Center for Enterprise Opportunity, wrote in a statement she plans to provide to commissioners.
La Noue disputes the notion that he was hired to impede the study. “When I was first hired there was not RFP (request for proposal),” he said. “At that stage of the game there was no way to know what the study might show.”
Hammond said he and his staff were not acting to delay the completion of the disparity study or to keep a set-aside program from being established before the massive garbage hauling contracts are awarded.
He said La Noue “worked with staff to determine what data already existed and what would need to be gathered.”
The SWA had Lee’s review of the study by Aug. 23 but had not shared it with commissioners when they met on Aug. 30, Bernard said.
At that meeting, Bernard tried and failed to get his colleagues to delay the garbage hauling contract process by 30 days.
Commissioners voted 3-4 against a delay, with commissioners Melissa McKinlay, Steven Abrams, Hal Valeche and Paulette Burdick opposing it. Commissioners Bernard, Mary Lou Berger and Dave Kerner backed the delay.
Bernard said he would have liked to have known that the study and Lee’s review of it were completed when that board meeting was held. Commissioners were told that Lee’s work was complete when they met earlier this month.
“There is no reason why these documents should be withheld,” Bernard said of Lee’s review. “African-American, Hispanic and women-owned firms have been treated unfairly. If staff does not move to implement a program to remedy this, they need to move aside.”
Hammond said his staff was still in the process of going over the review when a public records request was made for it. Since he complied with that request, he gave it to commissioners, believing they “should have the information if it was released to the public, even though staff was not finished preparing for a workshop on the issue.”
He insisted that a broad array of firms will have an opportunity to compete for SWA contract work.
The authority expanded its small business enterprise in June to “improve outreach,” Hammond said.
As for the hauling contracts, Hammond said they can be amended if the SWA establishes a gender- or race-based program. The winning bidders would have to “exercise the same bona fide effort to utilize the services of M/WBE firms of the race/gender identified by the authority for preference as it is committed to do with SBE firms.”