Contractor sanctioned for violations
Metra Industries found to have ‘utter disregard’ for minority, women subcontractor rules; barred from city work for 2 years
A contractor found to have an “utter disregard” for Baltimore’s requirements to hire women and minority-owned subcontractors has been barred from working with the city for two years in a move city officials said they hope sends a message to vendors.
The Board of Estimates voted unanimously Wednesday to sanction Metra Industries, a New Jersey-based company, for its delayed payments to one subcontractor. City officials said Metra is the subject of complaints from other subcontractors, as well, that still are being investigated.
“It’s a new game in town,” Democratic Council President Nick Mosby said afterward. “We are serious about growing our women and minority-owned businesses.”
Beginning last year, the company was investigated by the city’s Minority and Women’s Business Opportunity Office. It found Metra violated a requirement to pay Baltimore-based minority-owned subcontractor Economic International Construction Co. Inc. within seven days of receiving payment from the city, as required.
Further, Metra misrepresented to the city the reason Economic International Construction stopped working on the contract at one point and Metra only paid the subcontractor after city officials said it was a requirement for a change order to be approved to increase the size of Metra’s contract.
“It was only when the overall contract funds that would serve to benefit Metra were at risk that they took seriously their code and contractual obligation to pay their subcontractors,” wrote Christopher
Lundy, chief of the minority business office, in a 10-page investigative report on Metra. Lundy said he found Metra’s pattern of behavior “very troubling.”
Lundy told the Board of Estimates on Wednesday that the city cannot continue to reward contractors who don’t follow the rules. Otherwise, qualified women and minority-owned businesses will be dissuaded from doing business with the city, he said.
“If we’re going to be serious about greater participation, we have to hold people accountable for those terms,” Lundy said.
Metra disputes the findings of the minority business office’s investigation. In a statement filed ahead of Wednesday’s meeting and in an appearance before the board, attorney Venroy July argued the city’s decision to bar Metra from contracting is a punishment too severe for the violation.
“We’re talking about potentially banning an institutional contractor that’s been servicing the city of Baltimore for 20-plus years,” July said. “I think that’s excessive.”
The five members of the Board of Estimates felt otherwise. Democratic Comptroller Bill Henry questioned whether July considered the $41,000 paid late at one point to Economic International Construction would be “a lot of money” to many of the smaller firms the minority business office deals with.
July acknowledged it was.
“Once you acknowledge that’s a big deal,” Henry said, “you should also be acknowledging the board’s moral responsibility to take that seriously and produce a penalty that is also a big deal.”
July argued the late payment in question represented only 7% of the $558,247 it paid Economic International Construction on the contract. The attorney acknowledged the subcontractor was paid later than within the required seven days, but noted that the city itself frequently pays vendors late.
“The city’s continuous failure to make timely payments impacted Metra’s cash flow and availability of capital, and its ability to make timely payment, particular during and on the heels of the COVID pandemic,” July wrote in his statement to the board.
Metra has a contract with Baltimore to replace and do emergency repairs to water mains. The contract in question is worth $8.5 million and was last renewed in December 2021, according to board records.
The dispute between Metra and Economic International Construction dates to at least May, when Metra wanted to replace the company with another subcontractor. Metra said at the time that Economic International Construction was refusing to do the work unless it was paid more for materials.
Economic International Construction officials told the city they stopped work because Metra owed them money.
The Department of Public Works told Metra that month that it would not pay
The dispute between Metra and Economic International Construction dates to at least May.
Metra’s outstanding costs until Metra paid Economic International Construction.
In October, Economic International Construction filed a complaint against Metra, after which city officials said Metra continued to “misrepresent” Economic International Construction’s position on why it had stopped work. On Nov. 3, Metra was paid $249,102 by the city toward the contract.
But more than a month later, Metra representatives told officials with the minority business office they didn’t know whether Economic International Construction had been paid. The company wasn’t paid until Dec. 15 when a check for $43,430 was issued, the investigation found.
The exact figure owed to Economic International Construction has been disputed. Metra told the city it owed $41,974 via an email, but it argued Wednesday the sum was actually $38,483.
“I know you’re not trying to minimize the $41,000, but it is a big deal to our WBEs (Women Business Enterprises), to our MBEs (Minority Business Enterprises) when we’re trying to get them incorporated, to right some of the many wrongs from years ago,” City Solicitor Ebony Thompson said. “It is a big deal.”
Lundy said additional complaints filed against Metra by other subcontractors remain under investigation. The board agreed to disregard those complaints for the sake of Wednesday’s decision.