Rejection of Fountain St. bid comes as MoDOT under scrutiny

When the Missouri Department of Transportation rejected the bids for Fountain Street in Cape Girardeau, it was the first time in at least five years that failure to meet affirmative action goals halted a local project in Southeast Missouri.

At the request of the Southeast Missourian, MoDOT reviewed local transportation projects financed with federal funds in the 14-county District 10. Of about 100 contracts awarded over the past five years, there were no other instances of MoDOT rejecting a bid for failing to meet guidelines for using minority- or women-owned subcontractors, said Bill Robison, district planning manager.

The rejection came while MoDOT is under scrutiny for how it handles what is known as Disadvantaged Business Enterprise participation. Those affirmative action goals must be met on any project using federal funds. In response to complaints from the Missouri State Conference of the NAACP, the Federal Stimulus Oversight Board's Office of Inspector General is reviewing MoDOT's compliance.

The inspector general is expected to report soon, said Lester Woods Jr., director of MoDOT's Office of External Civil Rights.

The department will be found to be in compliance, Woods said, adding that the rejection was not related to the inquiry. "We have not changed any of our practices," Woods said. "We are operating our program according to the guidelines."

Debra Young, president of the Southeast Missouri chapter of the NAACP, said data compiled by the civil rights organization shows a different story. The NAACP was preparing a lawsuit against MoDOT earlier this year, she said, but is now waiting for the inspector general's report.

"There is an issue here with MoDOT giving money to organizations that will not employ a minority worker as well as not giving these contracts to women-owned businesses either," Young said.

The rejected contract would have paid Nip Kelley Equipment Co. $1.02 million to build a two-block extension of Fountain Street from Morgan Oak to William streets. The project is funded by two federal transportation grants and a federal Community Development Block Grant, with city funds making up any shortfall.

Federal guidelines call for the winning bidder to spend 6 percent of the contract's value on services or materials provided by a certified Disadvantaged Business Enterprise. Kelley's bid proposed only 1.2 percent of the contract's value to such a business, Road Runner Safety Services of Jackson, owned by Mary Shepard.

MoDOT could have granted a waiver based on a good-faith effort, but instead the department rejected the bid.

After additional communication with Kelley, the department decided a waiver couldn't be issued, Robison said. "They know the goal going in," he said.

Vince Kelley, president of Nip Kelley Equipment Co., did not return a call seeking comment.

When the city council voted Monday to reject Kelley's bid, there was some griping that a new round of bidding may increase the price. "I have an issue with saying we have to spend more money to help traditionally disadvantaged minorities," said John Voss, councilman for Ward 1.

That comment drew a pointed response from Young. "I have a problem with any city councilman stating that he has a problem spending money for disadvantaged businesses. That sounds to me like a racist statement."

The comments were an expression of frustration with delays and potential added costs, Voss said. "They were not made in the spirit of singling anyone out. I do believe we are stewards of taxpayer money and it is important for us to make the wisest choices with taxpayer money."

The focus on price, rather than federal guidelines, is misplaced, Young said. Voss "doesn't seem to have a problem with using federal dollars, but he has a problem with using federal dollars for hiring disadvantaged businesses. He doesn't want to put out the effort."

There are eight certified Disadvantaged Business Enterprises in MoDOT's District 10. Six are in Cape Girardeau or Jackson. One business, Kenco Enterprises Inc. owned by Jackie Payne, sells brick and stone, including the kind of paving stones that will be used to give a distinct look to Fountain Street.

In its bid, Kelley said it would buy pavers from Drive Stone Brickpaving at a cost of $188,157, or 18.5 percent of the contract value. Payne said submitted a price to Kelley. She believes it was rejected because her price included the cost of delivering the materials to the work site while Drive Stone's price was based on Kelley sending trucks to pick up the paving stones.

If she had been asked to provide a price without delivery, Payne said, her cost would have been comparable. She did not fault Kelley and said she has a good relationship with the company. "Honestly, I think when it is a product your company specializes in, you can always be competitive."

Kenco provided paving stones for the Kauffman Stadium renovation in Kansas City, Payne said. "It didn't cost anybody any more money, and as a small-business owner I was able to participate in a large project."

For Road Runner Safety Services, which owner Shepard said provides "anything orange and white" at a road construction site, being a certified Disadvantaged Business Enterprise has been important for success. It was especially helpful when she started the business 11 years ago, she said, because the program can push contractors to look at newly formed companies.

"You have to prove yourself and be a competitive bidder, and nothing is given to you," Shepard said.

rkeller@semissorian.com

388-3642

Pertinent address:

200 S. Fountain St., Cape Girardeau, MO