Minority Report

In San Francisco, nondiscrimination is more than just a good idea. It's the law.

But as the City Hall retrofit project shows, enforcing the law isn't always as straightforward as it might seem.

Under city ordinances administered by the San Francisco Human Rights Commission (HRC), contracts awarded for public works projects must either meet goals for participation by minority- and women-owned businesses or demonstrate a good-faith effort to meet those goals. The idea is to give smaller companies and those owned by groups that have been discriminated against in the past the chance to have a piece of the city's pie.

And on the City Hall project, the bid submitted by general contractor Huber, Hunt & Nichols met the HRC's requirements. Out of the $103 million total bid, some $28 million in work is subcontracted to firms owned by ethnic minorities or women. Overall, that's 27.1 percent of the total bid -- 21.8 percent to firms owned by minorities, and 5.3 percent of the bid to women-owned companies.

"As you can see from the above, Huber, Hunt & Nichols exceeded the MBE goal of 18.6 percent and met the WBE goal of 5.2 percent," a June 1995 memo from the HRC to the chief administrative officer states.

But of those companies, two have recently owed back taxes, one was not properly certified at the time the job went out to bid, and another was the subject of a bid dispute from a local labor union.

In addition, one company was certified as a minority-owned business specifically for the huge City Hall retrofit project, and another appears to have moved into San Francisco shortly before the six-month eligibility requirement for certification for the City Hall bid.

According to records maintained by the various city offices:
¥ Handypersons Inc., a city-certified woman-owned business that has a $2.9 million contract to do wood restoration and protection at City Hall, owed $40,391.48 in back taxes to the state and federal governments from 1988 to April 17, 1995, when the most recent lien was paid off. Gitane Waterproofing, a certified minority-owned business that has a $370,000 waterproofing contract for the seismic retrofit, had a $568.31 state tax lien filed against it in October 1994; the lien was paid off five weeks later, in December 1994.

At the HRC, Mary Gin Starkweather says back taxes owed are not a consideration in terms of evaluating a business for certification.

"I don't know hardly of any businesses that haven't experienced that at some time or another in their history," Starkweather says.

¥ Handypersons, whose contract includes glass restoration, was the subject of a bid dispute filed with the city by the local glaziers' union, which contended that the company was not properly licensed to do the work. The matter was referred to the Contractor's State Licensing Board, which ruled that Handypersons was properly licensed.

¥ Landavazo Brothers Concrete, a minority-owned business that has a $750,000 contract to do concrete work on the City Hall job, was not actually certified while bidding on the project. According to HRC files, Landavazo Brothers had been certified as an MBE since 1993, but that certification expired on Dec. 31, 1994, and the company made no attempt to renew it until Nov. 24, 1995 -- two days after SF Weekly called to inquire about the certification status. This means that during the time that the company bid on City Hall, in February 1995, Landavazo was not actually certified as an MBE but was counted toward the MBE goals.

"That's not that unusual," Starkweather says. "Technically when somebody's certification expires they're supposed to notify the HRC within, like, 30 or 60 days, but a lot of times with MBEs they can't keep track of all of this."

¥ Carrara Marble, a minority business enterprise that has an $11.2 million contract for stonework on City Hall, is based in Los Angeles and has had a San Francisco office for two years. For most of those years, the company -- which has done work in Caesar's Palace in Las Vegas, the Simon Wiesenthal Museum in Los Angeles, and Disney Headquarters in L.A. -- was not certified as an MBE. But in January 1995, Carrara wrote to the city saying it was "very interested in bidding City Hall as an MBE." The company qualified as an MBE and status was granted. The dollar amount of Carrara's contract for City Hall makes up 40 percent of the general contractor's MBE and WBE total.

¥ Aladdin Builders, which has a $1.5 million contract for wood restoration at City Hall, is listed on the HRC's City Hall sheet as a certified woman-owned business with offices in the Builders Exchange on South Van Ness. But the HRC's own computer data base lists Aladdin not as certified but as registered, a lesser qualification that would not allow the company to count toward HRC goals. The reason for the discrepancy: In order to be certified under San Francisco law, businesses must have offices in the city for at least six months before requesting certification, and the HRC's computer shows Aladdin as based in Alameda, at the same address listed with the Contractor's State License Board. But the records of the San Francisco Business Tax Office show that Aladdin took out a San Francisco business license on March 1, 1994, listing the 850 South Van Ness offices of the Builders Exchange as its local office.