In an April 10, 2013, article entitled “Minority contractors ‘game the system,’ find havens in DC homes,” two reporters for The Washington Times wrote what they evidently believed to be an expose of the District of Columbia’s Certified Business Enterprise (CBE) program, which is designed to help small, local, and minority-owned businesses.
The article, by Luke Rosiak and Jeffrey Anderson, noted with concern that “nearly 40 percent of the city’s 1,200 CBEs share a location with other CBEs, according to data analyzed by The Washington Times, and a close look raises questions about whether occupants are actually based in the city and whether they are receiving public contracts without ever lifting a shovel or manufacturing a good.”
The reporters went to the stated headquarters locations of the companies and often found nothing but shared offices. They didn’t find any construction equipment at the headquarters of construction companies, for example. They found that 22 of the CBE businesses shared one location. Is that, in itself, suspicious? How many companies are located in any of the office suites located along the K Street corridor?
While we don’t condone or endorse the abuse of legitimate government programs designed to help minorities or others, there may be facts that these investigative reporters overlooked. We also don’t know what companies the reporters looked at, so we can’t defend or criticize individual companies.
We do know that it is quite irrelevant whether the owners of the CBE companies are based in the District or not. That is not a requirement of the program, nor should it be – since one of the purposes of the program is to attract businesses from outside the District and to entice them to set up their headquarters in the District.
It also doesn’t appear relevant that the reporters couldn’t find construction equipment at the headquarters. That equipment should be at the job site while it’s being used. To the extent that construction companies own their own equipment, unless they are located in zoned industrial parks, they now keep the equipment in secured construction equipment yards or warehouses. Janitorial supplies are usually kept in secure warehouse facilities.
Personnel of these construction or plumbing companies usually report to the job site, not to company headquarters, which may well be just a desk with a phone and a computer. The idea of the D.C. program is to bring in the headquarters to the District, and it appears from the article that this is where they are.
If the companies are located on a “bleak industrial strip near budget hotels” and “occupy an eerily quiet 1960s-style office complex,” it should not be forgotten that they are start-ups, after all, that are trying to make their way in a difficult economy. They can’t afford downtown digs.
If the owners of these small companies are not at their desks in headquarters, why should they be? Shouldn’t they be out in the field, supervising a project, or at a client’s location, trying to obtain new business or work a problem out with the client? In any case, we believe that there may be more to the story than the reporters seem to think.