Stop pick­ing on small busi­nesses

The Washington Post Sunday - - LOCAL OPINIONS - Jonet­tarose@ya­

The Dis­trict is re­viv­ing its rep­u­ta­tion as an un­friendly place to do busi­ness. Don’t take my word for it— talk to the mem­bers of the Na­tional Busi­ness League of Greater Washington, who, dur­ing a re­cent meet­ing, lamented egre­gious vi­o­la­tions of small­busi­ness con­tract­ing rules.

Other busi­ness own­ers have de­cried reg­u­la­tory en­force­ment reg­i­mens such as the Zip Code Pro­ject. An ini­tia­tive of the Depart­ment of Em­ploy­ment Ser­vices (DOES), the Zip Code Pro­ject sounds harm­less. DOES of­fi­cials visit busi­nesses to pro­vide no­ti­fi­ca­tion about re­quire­ments and penal­ties in the new Wage Theft Preven­tion Amend­ment Act.

Those vis­its may have gone too far, said some own­ers. They com­plain that DOES de­manded en­try into pri­vate of­fices. Em­ploy­ers who re­fused al­legedly have been threat­ened with re­turn vis­its.

The Ven­able law firm chal­lenged the in­spec­tions. In an April 29 memo, it as­serted the in­spec­tions are “sub­ject to war­rant re­quire­ments of the Fourth Amend­ment,” and the agency “may not place ob­ject­ing em­ploy­ers on a list that will sub­ject them to a higher scru­tiny.”

Deb­o­rah A. Car­roll, DOES’s di­rec­tor, said no threats were made. “We es­sen­tially heard con­cerns from em­ploy­ees be­cause they didn’t have au­thor­ity to al­low any­one into the busi­ness.” Ap­point­ments were sched­uled. She in­sisted the agency has the right to in­spect em­ployer records with­out re­ports of a vi­o­la­tion. “I re­ally dis­pel the no­tion that we have to wait for some­one to be vi­o­lated in or­der to do an in­spec­tion.”

The D.C. Bar As­so­ci­a­tion’s Pro Bono Pro­gram, con­cerned about the im­ple­men­ta­tion of the Zip Code Pro­ject and the “lack of clar­ity around im­ple­men­ta­tion,” held a two-hour train­ing ses­sion this week. “We want to make sure re­ally small busi­nesses with­out large staffs know how im­por­tant this is and how crip­pling the fines could be,” said Darryl Maxwell of the Pro Bono Pro­gram.

At-large Coun­cil mem­ber Vin­cent B. Or­ange (D), chair­man of the Com­mit­tee on Busi­ness, Con­sumer and Reg­u­la­tory Af­fairs, said DOES may be push­ing the en­ve­lope, but “things will be more ef­fi­cient and more ef­fec­tive and ev­ery­one should have the high­est qual­ity of life.”

Help. Where is the at­tor­ney gen­eral? Karl A. Racine told me he re­cently learned of the prob­lem and is “do­ing a le­gal anal­y­sis.”

Car­roll ad­mit­ted that “em­ploy­ers have been hit with so many dif­fer­ent laws over the last fewyears.” She doesn’t help the prob­lem. Small busi­nesses are the well­spring of the econ­omy. Dis­trict of­fi­cials talk about the im­por­tance of such com­pa­nies but fre­quently un­der­mine their growth and suc­cess.

Con­sider that In­spec­tor Gen­eral Daniel W. Lu­cas re­cently re­ported that in fis­cal 2014 dozens of agency di­rec­tors vi­o­lated a law man­dat­ing they spend 50 per­cent of their ex­pend­able bud­get with lo­cal busi­nesses. Those lo­cal com­pa­nies were de­nied a share of $1.2 bil­lion — a sub­stan­tial por­tion of which could have been re­cy­cled in the lo­cal econ­omy.

Or­ange de­clared that the prob­lem has been fixed: Be­fore Oct. 1, each agency must iden­tify its ex­pend­able bud­get and of­fer a plan for spend­ing it with lo­cal busi­nesses. “We will mon­i­tor what they are do­ing.” A public round­table is sched­uled for July 10.

Wait, wait. The gov­ern­ment has­sles busi­nesses to fol­low the law. But Dis­trict mangers get a talk fest.

Is that the elixir for a pro­gram that re­quires con­trac­tors set aside 35 per­cent for lo­cal, cer­ti­fied busi­nesses?

Or­ange said a law will re­quire the main con­trac­tor to iden­tify the lo­cal sub­con­trac­tors and spec­ify ex­actly what those groups will get, sup­pos­edly en­sur­ing they meet the set-aside re­quire­ments and aren’t gam­ing the sys­tem.

Waivers are per­mit­ted, how­ever. “The flood gates have opened in the last quar­ter or two for prime con­trac­tors to by­pass the 35 per­cent re­quire­ment,” said busi­ness owner Mal­colm Lewis Barnes.

Unity Health Care, part of the city’s Health Care Al­liance pro­gram has held the health-care con­tract at the city jail since 2006. It has never met the 35 per­cent set-aside goal, Unity Pres­i­dent and Chief Op­er­at­ing Of­fi­cer Vin­cent A. Keane told me. Unity re­ceived a par­tial waiver for a 20 per­cent set-aside, and it met that us­ing a Unity-cre­ated busi­ness. But that com­pany closed, said Keane, who made $387,744 in 2012.

Unity is poised to have its con­tract re­newed. Keane ad­mit­ted that Unity has had “a hard time” find­ing qual­i­fied sub­con­trac­tors. “We are con­sid­er­ing es­tab­lish­ing our own [cer­ti­fied busi­ness] as an op­tion.” That cer­tainly doesn’t re­flect the spirit of the law.

At the Na­tional Busi­ness League’s break­fast, Racine promised to con­vene a meet­ing with busi­ness lead­ers, the newdi­rec­tor of the Depart­ment of Small and Lo­cal Busi­ness De­vel­op­ment and oth­ers to ex­am­ine the prob­lems as­so­ci­ated with the set-aside pro­grams, in­clud­ing waivers. He will pull the group to­gether within the next “four weeks.”

It’s sur­pris­ing to me that lo­cal busi­nesses haven’t sued the gov­ern­ment for sys­tem­at­i­cally fail­ing to fol­low its own law. We know what would hap­pen if the shoe were on the other foot.

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