Russell Moore’s professional biography is rich with accomplishments as a Baltimore contractor, including work for the University of Maryland Medical System, the Maryland Zoo in Baltimore, a Six Flags theme park and the city of Baltimore water and sewer system. It lists working relationships with top area contractors, such as the Whiting-Turner Contracting Co.

But Moore’s company, Economic International Construction Co. Inc., along with six other Black-owned contractors, notched another accomplishment on March 15—this one more unusual.

That was the date when the city, following a complaint by Moore and a campaign driven by those minority business enterprises and their attorney, investigated the MBE subcontracting practices of longtime city prime contractor Metra Industries, and suspended it for two years.

The Baltimore controversy provides an unflattering glimpse into a municipal MBE subcontracting program at a time when race-based remedies to past discrimination are once again on front pages. Following the U.S. Supreme Court majority last month finding affirmative action in college admissions unconstitutional, 13 Republican state attorneys general sent a letter on July 13 warning Fortune 100 companies against using race-based remedies to counter past discrimination, specifically mentioning contracting. 

In the matter involving Metra Industries, the MBEs had a high-profile attorney speak for them. And at one point Metra filed, and subsequently withdrew, a defamation lawsuit against Economic International Construction Co. Inc.

Baltimore's M/WBE program started in 1976, and in the four years from fiscal 2016 to 2019, a 2022 disparity study reported, it awarded $2.2 billion of construction work (excluding architectural and engineering services) to all contractors. Of that, about $334 million went to African-American-owned contractors. 

The next biggest amounts awarded went to Hispanic American firms and non-minority female firms, $201 million and $153 million, respectively.

The problems with the program are already known. Last October, Baltimore Comptroller Bill Henry reported following an audit that the city's law department does not routinely monitor fulfillment of minority contracting goals on city contracts and that the task is left to individual agencies. Henry said the Baltimore Minority & Women's Business Opportunity Office, which as of last year had a staff of only seven, was working to improve monitoring. Last summer the office acquired a new diversity management system that among other things will help it limit the need for waivers due to a lack of certified M/WBEs. 

In March 2021, MBE frustrations triggered rallies and protests by advocacy groups. According to the 2022 disparity study, the protests "revolved around limited opportunities for minority firms" and "concerns about prompt payment to prime contractors, which prevent timely payment to minority subcontractors." The city Inspector General last October cited a late city payment, unrelated to MBEs, to a supplier of drinking water chemical additives. The late payment had interrupted deliveries, exposing West Baltimore residents to unsafe water that was not fully treated.

To make their point about subcontracting deficiencies, the coalition of Black contractors held three press conferences last winter to share concerns and pointed to Metra, a water infrastructure contractor based in Little Falls, N.J., with which Moore had worked as a subcontractor for several years. Calling Metra a “habitual violator” of city rules to meet minority subcontracting goals, the MBE group sought to block any pending new awards.

City Program Blasted

The allied MBEs also harshly criticized the Baltimore MBE program for failing to deliver them more work.

The contractors were driven to act by the “broken MBE system here in Baltimore and, frankly, across the state and across the nation,” said Thiru Vignarajah, their attorney and a former candidate for city mayor. That statement came in February at the last of the press conferences. 

He claimed that under the current system, the Baltimore-based MBEs were left only “scraps that fell off the table” instead of more substantial work.

Metra officials respond that they have become the target of ugly falsehoods that have little to do with the realities of what happened or with the company's successful history of working with and paying other MBEs.

"The irony is that we had spent many years mentoring [Moore's firm] and only opted for other more responsible MBEs in our last bid, after [it] repeatedly refused to even submit proposals for the work that we had set aside ... on prior jobs," said Stephan Dioslaki, Metra vice president for administration. "It wasn’t until we chose not to write [Economic International Construction Co.] into our last proposal that they went on this smear campaign."

Baltimore officials, however, have focused on prime contractors possible failure to meet subcontracting goals.

Baltimore's Board of Estimates, as early as winter of 2020, had expressed concern when weighing approval of a new contract to Metra about three prior Metra contracts that had zero MBE participation. At that time a city official speculated to the board that the contracts may have been "urgent needs" contracts requiring hurried repairs.

But a member of the board also stated at the time that approving the new Metra contract, based on what he heard at that brief presentation, could reflect badly on the city and board. "What does that say about us?" he asked. Vignarajah has cited that 2020 comment in denouncing Metra.

Low Bids Rejected

By April 2022, Metra, which is owned by Gary Stivaly and has 60 to 100 employees depending on its workload, was having trouble with its low bids being disqualified for being unbalanced. The company argued against the determinations, saying the value of Metra's three rejected low bids "is over $22 million, representing more than 80% of Metra’s annual revenue." And Metra wrote in a letter to Timothy Wolfe of Baltimore's Office of Engineering and Construction that it suspected it was being victimized by a de facto "Metra ban."

On March 15, when Christopher R. Lundy, chief of Baltimore's Minority & Women's Business Opportunity Office, convinced the city Board of Estimates to suspend Metra for two years, he did not speak to the broader injustices alleged by the subcontractors. Instead, he cited Metra’s request to replace Moore's firm on an existing contract that included installation of fire extinguishers and the prime contractor's admission it had violated the city's seven-day MBE payment rule on about a roughly $40,000 payment owed to Economic International Construction Co.

"This instance was more egregious due to the length of time that the funds were withheld and the lack of candor" regarding the funds owed the minority subcontractor," Lundy said in an email to ENR. "We will not allow these businesses to be put in vulnerable positions."

In the March 15 hearing before the Board of Estimates, Metra’s attorney said punishment to his client was far out of proportion to what had occurred, noting that Metra has worked in good faith with numerous Baltimore MBEs over the years, including Moore's firm, while often hurrying to respond to city requests to fix Baltimore's fragile water delivery system and fix water main breaks during nights. 

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Minority-owned contractors gather at a Baltimore press conference in February 

Photo: Facebook page of Thiru for Baltimore

Some events that preceded Metra's suspension arose from the historic inflation and material supply chain impacts to construction in 2021 and 2022. Under an existing city subcontract, Metra had pledged to use Economic International Construction Co. as a subcontractor to acquire fire hydrants on a pipe replacement project. 

When the price of hydrants leaped from $4,000 apiece to $5,700, Metra asked for relief and a price adjustment from Baltimore, which was refused, and from the subcontractor, which also refused to absorb its added cost to purchase them. Metra then asked the city to replace Moore's firm with another minority-owned subcontractor for remaining work under the contract. When Economic International Construction Co. learned that Metra wanted to replace it, the MBE informed the city that in its opinion, the prime contractor owed the subcontractor for unpaid work on three prior contracts on which it had been Metra's sub.

After discussions and emails with city officials, Metra quickly sent a $40,000 payment owed the subcontractor that was cited by minority business opportunity chief Lundy.

'An Untimely Payment'

Despite the payment, Lundy wrote in a memo to the Board of Estimates, "this is clearly an untimely payment that was not made to [the] MBE subcontractor within 7 days of Metra being paid by the City."

How extensively Baltimore's minority and women's business office investigated the broader problems cited by the MBEs is not clear. Also unclear is how much Metra owes Economic International Construction Co. and how much Baltimore owes the contractor.

Economic International Construction Co. submitted a chart to the city, claiming that Metra owes it $7.29 million related to seven different sewer and water contracts referenced in the sub's letter. Attorney Vignarajah made the chart a centerpiece of the firms' February press conference, but it is not clear how the figure was calculated.

The sum was not for work performed, Metra replied, noting that the subcontractor never invoiced for the work. Instead, Metra claims the $7.29 million total appears to have been based on work Economic International Construction Co. was originally pledged but which was eliminated due to size and scope reductions of the contractor's awards and differing conditions from project plans.

In other instances, Metra says, the subcontractor declined to perform certain tasks Metra had originally planned for it.

Economic International Construction Co.  "did not do the $7.2 million at issue–and [the subcontractor] did not invoice for that work," argues Metra Vice President Dioslaki. "How could they if they didn’t do the work?"

Metra says it submitted all contracting details to the Board of Estimates— and even provided signed copies of waivers from Maryland's Dept. of Environment that showed the contractor in compliance with state MBE requirements in each instance.

"The approved changes that we got waivers for were brought about by reductions in scope and size by the city, changed conditions encountered at the site or [the subcontractor's] refusal to do the work," says Dioslaki.

 A city Dept. of Public Work spokeswoman also could not be reached for comment on the Metra suspension, MBE compliance or late payments.

Participation Never Fulfilled

Todd Jefferson, president of T.E. Jeff Inc., who was at the February press conference, said his company was working with a prime contractor that also withheld expected work when the contract was done, so MBE "participation was never fulfilled."

Moore declined to comment directly to ENR on the controversies with his firm, saying he preferred to have attorney Vignarajah speak for him. 

The city "is barely noticing when the primes fail to meet their contracts," says the attorney.

Metra is saying that during the course of work, the city and the state are aware and informed that it adjusted the percentage of the minority subcontracting goal. 

Significantly, in recent months, the city has renamed the Minority & Women's Business Opportunity Office as the Mayor's Office of Small and Minority Business Advocacy & Development. That indicates that Baltimore Mayor Brandon Scott is making MBEs a priority and intends to hire more staff to monitor and investigate compliance. Another goal, city official say, is more minority and women-owned businesses that will serve as prime contractors.

Whether and how the revamped Mayor's office will be communicate scope changes, goal adjustments or late payments by the city agencies to the prime contractors is not clear. The emphasis is on supporting and nurturing MBEs, Lundy states, by ensuring "that our small and minority and women-owned businesses are utilized in accordance with the commitments made in the prime contractors' bid submission." 

This story was updated July 21, 2023 to include replies to inquiries by Christopher R. Lundy, who was director of the Baltimore Minority & Women's Business Opportunity Office, and continues as director of that office under its new name. The story was updated again, on July 24, to include information about the legal aspects and the volume of contracts Baltimore awarded to MBEs from 2016 to 2019.