Ousted small-business owners claim racial bias in garbage hauling

A pair of black small business owners have accused the Solid Waste Authority of failing to live up to its commitment to help small businesses by ignoring their complaints when a large hauling company dumped them.

By not forcing the large hauler to retain the companies, the authority failed to assure that business opportunities filter down to all parts of the community, the small business owners say.

Their complaints offer a window into the acrimonious, high-stakes battle over whether and how the authority and the county as a whole should make sure businesses owned by women and minorities get at least a share of lucrative government work.

Brilliant Minds Strategies and James Jr. Enterprises say Southern Waste Systems promised to pay them a combined $1.63 million from the $45 million hauling contract it won in 2013, one of four large contracts the authority awarded to pick up garbage and recycling in unincorporated portions of Palm Beach County. Southern paid the firms only $141,221 before it stopped using their services, according to the complaint.

The owners of the firms, Tina White and James Little Jr., say the authority did nothing to make sure Southern honored the terms of the bid through which the hauler won the contract in the first place.

Southern replaced the black businesses with white-owned companies and it continued to pay all of the white-owned subcontractors who were part of its bid proposal, an SWA complaint filed by the pair states.

Authority rules require firms to make “a bona fide effort” to fulfill the terms of their bids, and the authority can pull the contracts of prime contractors who don’t. But that didn’t happen.

“They are electing not to do anything about this because we are black,” White, Brilliant Minds’ outspoken owner, said of the Solid Waste Authority. “They are contributing to the active discrimination.”

The companies have sued in U.S. District Court and filed an administrative complaint with the Solid Waste Authority.

Officials for the authority deny that they are advancing discrimination through inaction. They say they reviewed the allegations and found that the firms were cut for different reasons — Brilliant Minds because of a contract dispute after White complained about Southern to the SWA board, and James Jr. Enterprises because the firm did not acquire necessary equipment.

Still, Paul Dumars Sr., the authority’s chief financial officer, said the agency has hired an outside attorney to review the allegations.

Big questions, big stakes

How the battle plays out could determine which firms get some of the roughly $450 million in hauling contracts the authority will issue in February. And the county, using proceeds from a sales tax increase, is in the midst of a $700 million-plus boom of road, bridge and building improvements that is generating hundreds of juicy contracting opportunities.

On Wednesday, authority officials unveiled race- and gender-specific contract goals for haulers. The county’s existing haulers blasted the new goals as unrealistic and unworkable.

Citing her own experience as a subcontractor, White has been at the forefront of the contracting fight, appearing at county meetings and pressing for the re-establishment of race- and gender-specific programs aimed at helping firms owned by minorities and women get government contracts.

In Florida and across the country, such programs have been opposed by some white business owners, who see them as a form of reverse discrimination. They also say there are not enough women- and minority-owned firms available to partner with, leading to searches that are costly, time-consuming and frequently fruitless.

In recent years, the commission and the SWA have not relied on race and gender goals but have instead required inclusion of small-business owners.

Minority and women business owners, meanwhile, point to a pair of recent studies — one conducted for the authority and the other for the county — that showed firms owned by women and minorities got far fewer and less lucrative government contracts than their presence in the marketplace suggested they should have received.

Setting goals for small business inclusion, they argued, wasn’t enough.

Palm Beach County commissioners, sitting as the SWA’s governing board, voted 5-2 in June to re-establish race- and gender-specific assistance programs for the authority. They are expected this fall to consider the re-establishment of similar programs for the county.

Beyond concerns about being sued by white business owners opposed to race- and gender-specific goals, commissioners — specifically, Melissa McKinlay, Hal Valeche and Steven Abrams — have raised questions about whether the assistance programs will result in higher costs to ratepayers. McKinlay joined the majority voting in favor of the programs.

Franklin Lee, a Maryland regulatory compliance attorney who recommended race- and gender-specific goals for the hauling contract, said any short-term costs are more than made up for by having, over time, a larger number of firms interested in bidding for contract work. Lee also said fairness — making sure women and minorities whose tax money pay for projects get a better shot at participating in that project work — also has a value.

Racially charged debate

During a tense June meeting, White accused Abrams of “racial profiling” and of working to advance the “good ol’ boy system” after the commissioner questioned the wisdom of establishing assistance programs that could help out-of-state firms.

White lobbied for two Louisiana firms interested in bidding on the county hauling contracts as prime contractors, not subs.

“We had at our last meeting a representative of a Louisiana-based company come in — minority-owned, I believe — who was very glad about this because now that company was going to have an opportunity to respond and ultimately, under whatever we adopt, perhaps receive a preference,” Abrams said.

“I still for the life of me don’t understand why we’re passing on additional costs to bring in a Louisiana company,” he said.

White followed up with an email to Abrams, noting that her Louisiana clients won’t be bidding as subcontractors and wouldn’t benefit from race- or gender-specific assistance programs. She accused Abrams of knowingly making “untruthful, slanderous, offensive racist statements.”

Abrams responded by writing to White’s clients, calling their attention to her comments and objecting to White’s characterizations of him.

“No one has ever made such comments about me in my 26 years of elected service (although it is hard to discern exactly what she is saying, as there are so many errors of syntax in her email),” Abrams wrote. “My remarks were made in the context of the ongoing public policy discussion surrounding the SWA’s disparity study, and the only reason I cited your companies was because your attorney had appeared at a prior SWA meeting and testified on the topic. In no way was I ‘racially profiling’ your companies.”

Abrams concluded: “In short, I was engaged in legitimate policy debate, not some intolerant outburst, as Ms. White implies. Ms. White’s outlandish comments and email are uncalled for. She is entitled to her opinion, but I would hope I would not be subjected to further attack by Ms. White at our next SWA board meeting.”

White shot back in an interview.

“Commissioner Abrams’ depiction of an attack was offensive, and, as an admitted member of the Florida Bar, his email was tortuous interference of my business with my clients,” White said. “As an elected official, he should be committed to helping small black female companies grow instead of writing emails intended to cause financial harm and create a business situation in which my clients had to decide if they would be penalized by his vote if I was not silenced.”

Abrams later said he wasn’t trying to get White in trouble with her clients.

An attorney for the firms, Metro Service Group and Richard’s Disposal, responded to Abrams, offering to meet to clear up any misconceptions.

“I want to assure you that neither Metro Service Group, Inc. (“Metro”) nor Richard’s Disposal, Inc. (“Richard’s”) condones personal attacks on you or any other commissioner for the Solid Waste Authority,” attorney Daniel Davillier wrote.

Both subcontractors removed

Southern had agreed to use Brilliant Minds to help find small business partners and to comply with SWA rules. It agreed to pay her firm $125,500 per year for five years.

But White said her firm received only $113,257 before Southern was sold to Waste Management, which took over Southern’s SWA hauling contract — giving the industry giant two of the SWA’s four service areas.

In February 2015, White took to the lectern to tell the authority that Southern wasn’t honoring its commitment to partner with Brilliant Minds and James Jr. Enterprises. Five months later, she sent an email to the authority saying “SWS fraudulently represented” that it would work with her firm.

In court documents, Southern deemed those public complaints to be cause to let her go.

Her firm and Little’s sued Southern in U.S. District Court in 2015, alleging breach of contract, fraud, unjust enrichment and impairment of contract rights based upon race.

In February, U.S. District Court Judge Dave Lee Brannon threw out one breach of contract claim and claims of fraud, unjust enrichment and impairment of contract rights based on race. He found that the firms did not provide enough evidence to back up those claims.

But in allowing a second breach of contract claim to go forward, he said a jury could disagree with Southern’s determination that it had cause to let Brilliant Minds go.

While SWA required Southern to provide a letter of intent to use small business subcontractors, White and Little said Southern never signed a contract with them.

Without a contract, Little found himself in a bind. He promised to buy a special truck, called a grapple truck, but to get the financing he needed to show his lender a contract. But Southern wouldn’t provide a contract, he said, so he couldn’t get the truck.

Little, who was to have been paid $199,600 a year for five years, said Southern “wouldn’t shoot straight” and that the firm’s refusal to partner with him “means I can’t advance and grow.”

Brannon found Little’s argument compelling, allowing that claim to move forward.

In a separate complaint to the authority, Little argued that SWA didn’t live up to its responsibilities by failing to force Southern to fulfill the terms of its bid.

“It’s written in their own policy that they should have overseen this,” he said. “They haven’t done the things they are supposed to do. They kind of skipped their own rules.”

Combined, White and Little said their firms received $141,221, far less than the $1.63 million they would have received if Southern had followed through with the promises it made in its hauling bid.

West Palm updating goals, too

White said her experience with Southern highlights a fundamental weakness of assistance programs: They are only effective if the government or agency operating them stands behind them.

Frank Hayden, director of procurement for West Palm Beach, underscored that point in urging county commissioners to establish race- and gender-specific goals and hold firms accountable if they don’t stick to them.

Using an abbreviation for “small business enterprise” to describe small businesses, Hayden said the city didn’t stand behind its goals.

“Vendors would bid on those contracts and not submit the use of an SBE as a participant,” Hayden told commissioners. “The city of West Palm Beach allowed that to happen. We were as much a part of the problem as the vendors who were out there.”

After a study found contracting disparities in West Palm Beach, Hayden said he plans to recommend race- and gender-specific goals to augment the city’s current program, which he criticized for the very reason White is critical of the SWA.

“It was a lousy program because they didn’t have anything in place to ensure the fact that people were meeting their obligations and goals,” he said.

Even after a successful push for the re-establishment of race- and gender-specific contract goals, White said she remains concerned about enforcement.

The complaint her firm and James Jr. Enterprises filed with the authority raised eyebrows in the black business community.

“If true, the concerns Mrs. White raises would represent a monumental setback in the already fragile public trust in the SWA, which has waned greatly after years of active and passive discrimination as documented in your disparity study,” Brian Johnson, president and chief executive officer of the Minority Builders Coalition, wrote in April to the SWA’s managing director, Dan Pellowitz. “Frankly, this incident (if true) would signal to the community that SWA staff are not sincerely committed to new ways of thinking.”

Firms are supposed to make what the Solid Waste Authority determines to be a “bona fide effort” to put in place the plans they laid out in their bids, including use of subcontractors. Failure to make such an effort gives the authority the power to pull the contract.

When Waste Management bought out Southern, it also refused to fulfill Southern’s promises to White and Little, they said in their SWA complaint.

They claim the authority has engaged in “historical institutional discrimination” against black small businesses and that Southern and Waste Management have engaged in “commercial discrimination” against Brilliant Minds and James Jr. Enterprises.

“(With) SWA staff and governing board staunchly refusing to take any actions to enforced (sic) its policies,” the companies argue they have been unable to hire workers and grow.

Dumars said the agency has looked into the complaints.

“The authority concluded that the complaints, with the exception of James Jr.’s inability to perform, were related to a contract dispute between the parties,” Dumars wrote in an email to The Post. “The authority also asked Waste Management to respond to the allegations and they provided a written response explaining why they were not using the Brilliant Minds Strategies.”

That Jan. 22 letter from an attorney for Waste Management concedes that Southern hired the firms “to comply with the (small business enterprise) participation goals set by the authority.” It says when Southern changed subcontractors, it “may not have sought prior authority approval for that modification.” Such prior approval is an SWA requirement.

Dawn McCormick, director of communications and community relations for Waste Management, said neither Brilliant Minds nor James Jr. were among Southern’s small business subcontractors when it bought Southern.

Because of that, she said, Waste Management is under no obligation to use either firm.

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