WSDOT leader: Not our fault minority contracting program is in trouble

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by SUSANNAH FRAME / KING 5 Investigators

Bio | Email | Follow: @SFrameK5

KING5.com

Posted on May 24, 2012 at 10:50 PM

Updated Sunday, May 27 at 6:21 PM

Washington state's top transportation official said her agency isn't to blame for a broken certification process that led to abuses in a highway contracting program.

Instead, Washington State Department of Transportation Secretary Paula Hammond said she began raising concerns two years ago about the agency tasked with policing which companies qualify for road contracts reserved for minority and women-owned businesses.

"I take our responsibility very seriously in state contracting and state administration," Hammond said. "We operate by performance, and when we see an agency that isn't performing, that is frustrating."

In a series of reports, the KING 5 Investigators revealed numerous problems at the agency in question -– the Office of Minority and Women's Business Enterprises. Agency officials approved companies for the minority contracting program that should not have qualified, and at least one employee was pushed out after she refused to sign off on an investigation of one contractor.

Gov. Chris Gregoire (D) ordered the Washington State Patrol to investigate OMWBE after the first report aired. Since then, KING 5 News has learned that the FBI and the inspector general of the U.S. Department of Transportation are looking into companies that benefited from OMWBE actions. The director of the small agency resigned two weeks after the series began.

Reaching the breaking point

Hammond's WSDOT is required by Washington law to use OMWBE to evaluate contractors' eligibility for a federally required minority contracting program. The payoff can be significant for businesses that qualify; some of the companies profiled in the KING 5 series have landed millions in state contracts.

According to Hammond, WSDOT began to complain about OMWBE's handling of contractor certification in 2010, after her department found that minority-owned companies were waiting months and months to be certified as eligible to bid on state work.

WSDOT also concluded that OMWBE wasn't acting quickly to oust contractors that shouldn't have been admitted to the minority contracting program in the first place, contractors who were found to be gaming the system to obtain government work, and others that had grown so big that they no longer qualified.

"I think my frustration reached a peak in the fall of 2010 after two annual audits that showed there were problems," Hammond said, explaining why WSDOT didn't act sooner.

At that time, Hammond asked Gov. Gregoire to free WSDOT from having to contract with OMWBE for minority certifications.

Gregoire didn't act on that request. Instead, she pushed an effort to bring a number of similar programs under a proposed single agency -– a new Office of Civil Rights. Legislation to create such an office was introduced in the legislature in 2011, but it died.

The problems at OMWBE continued, but it was Hammond's agency that was responsible in the eyes of the federal government.

Last year, the U.S. Department of Transportation sent a terse letter to WSDOT documenting failures to police the minority contracting program and reminding WSDOT of its responsibility to make sure federal laws and rules are followed.

"Failure to address concerns," the feds warned, "could result in the loss of federal aid" on highway projects.

Hammond said her agency acted quickly enough.  "No, I think we did what we were supposed to do."

A top-to-bottom review of OMWBE ordered by the governor could return the minority contracting program certifications back to WSDOT, Hammond warned.

"It's not our core mission. We're really in the construction and transportation services function, so I would rather there be a place that is efficient, timely and an accurate place, to have the work done. But it's really up to the governor to decide."

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