Constructed criticism

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To many people, the city's $21 million project in southwest Orlando would appear to be a prime example of how far city government has come in awarding construction contracts to minority firms.

The 490-acre site is in a minority district. Orlando's elder minority statesman, Ernest Page, presides over the District 6 area, where an elementary school, a park and environmental center will be built. The featured attraction will be two adult bald eagles, who have nested near the Kirkman Road and Raleigh Street site since 1987.

In early July, Central Florida's largest black-owned contractor, Construct Two Group, was selected as the project's construction manager, which will oversee the entire Eagle Nest plan. The construction manager is responsible for scheduling, cost estimating, contractor payments and quality control.

Anyone who remembers the 40 black businessmen who marched on City Hall in 1993, protesting racial economic injustice, would consider Construct Two's involvement another step forward in local race relations.

But it was apparent even before the start of the Aug. 14 Orlando City Council meeting that the combination of Page and Construct Two would be a combustible mix. Standing behind his chair in Council Chambers and gesturing toward the empty seats, Page predicated he would be involved in "a bloodbath."

No blood was shed. But in the ensuing scrum, Derrick Wallace, president and CEO of Construct Two, heard -- perhaps for the first time -- his company's sterling reputation tarnished in public.

As Page saw it, Construct Two isn't a legitimate company but a "front" or a "straw," "sucking up" money as a black-owned firm awarded public contracts based on its minority status, but whose work and profits actually are handed to large, white-owned construction firms.

Page explained that the problem is rampant throughout the construction industry. Companies like Construct Two are paid to be a minority face, though they don't do any of the construction work, Page alleges. White-owned firms continue to surreptitiously gain hefty profits through public-work projects. Governments, meanwhile, can soothe their consciences by having proof that they awards contracts to minorities. The loser, Page says, are the "legitimate" minority firms locked out of a good-old-boy network that includes token blacks.

Page, a developer and property manager, bases his argument on the financial report Wallace's company gave to Dun & Bradstreet in March 1999. The report says Construct Two had a net worth of $390,000 on $20 million in sales. Based on usual developer's fees and other markups, Page says, Construct Two's net worth should be much higher -- more than $2 million.

Where has the money gone? Funneled to white-owned firms, Page speculates.

And with a too-small bank account and several major projects in the works, Construct Two would struggle to complete the Eagle Nest project on time, Page argued. "If this was a private business and we sent staff out to get the best contractor, I don't think this would pass muster," Page said.

His arguments were enough to persuade the council -- which was absent commissioners Patty Sheehan and Don Ammerman -- to table the decision. "When I go out and want somebody to do business with, I want to make sure they have enough money to take care of me," Commissioner Betty Wyman said.

At the center of the controversy is Wallace, a 1971 graduate of Jones High School and a former accountant before becoming a general contractor. His is probably the last business anyone would suspect of being involved in a scheme. The 20-year-old company has been mentored by several large national contractors, won a number of big-money construction contracts and become the darling of the Florida business media.

This spring, Construct Two was listed as the fourth-fastest growing company in Inc. Magazine's list of top 100 inner-city companies. The company has won awards from the Chamber of Commerce, the Small Business Administration and Florida State University. It has letters of recommendation from Linda Chapin, Buddy Dyer, Corrine Brown, church pastors, engineering companies, the YMCA, representatives of Disney and Universal as well as Orange County Public Schools.

Wallace denies his company is fronting for anyone, claiming the figures Page quoted were taken from dated information. "It's hard to deal with," Wallace said in an interview last week, "when someone is lying and you don't have the ability to prove at that point that he's lying."

Wallace points out that Construct Two has undergone intense scrutiny to win the Eagle Nest project. Construct Two went through the evaluation process not once but twice. After Construct Two won the bid in May -- receiving a perfect score of 10 -- Page insisted that the three finalists reinterview for the job. "I've never gone through what I've gone through here," Wallace says.

Unfortunately, Wallace didn't endear himself to Orlando's council when in May he asked for more money to complete Mable Glen Estates, a $1.6 million development of 66 single-family homes in unincorporated southwest Orange County. The city is interested in annexing Mable Glen once it is built. Consequently, the council authorized $725,000 for development of the homes. Wallace asked the council for an additional $121,000 to cover the cost of adding dirt to the 14-acre site. The council told him to look for funds elsewhere.

"I am concerned with this company and its ability to project cost," said Commissioner Vicki Vargo, "and other things related to construction."

To be sure, the battle between Wallace and Page is partly due to politics.

In last spring's election, it was no mystery whom Wallace supported: Arthur Lee Jackson, Page's District 6 opponent. Wallace donated only $25 to Jackson's campaign, but he rented a house with an Old Winter Garden Road address to Jackson, who claimed the home as his residence during the campaign.

Page said repeatedly that there was "nothing personal" about his opposition to Construct Two. But several City Hall insiders say revenge is the motivation for Page's opposition to Construct Two.

According to some of those same insiders, however, politics also played a hand in awarding Construct Two the project. Besides helping Jackson, Wallace contributed $500 to Mayor Glenda Hood's campaign, and Construct Two added a $500 contribution. The theory is that Hood, who also endorsed Jackson (Charlie Hood, Orlando's First Husband, donated $1,500 to Jackson's campaign), rewarded Wallace's political endorsements by ensuring that he win the Eagle Nest project.

Page implied as much at the Aug. 14 meeting. "I think this process is used in a lot of areas," he said, "whether at the school board of Orange County government, to fund fronts and straws to channel money through minority organizations to get it to the majority companies that want to have it."

That led to strong denials from Hood and public-works director David Metzker. Metzker, who said he has never had to defend the bidding process so vigorously in his 12 years with the city, said he was "professionally taken aback" by Page's comment. "We're not here trying to promote any particular firm to be part of the project," Metzker said. "We're looking at qualifications."

Indeed, Construct Two was the only firm who presented specific details for the Eagle Nest project. Company officials called Orlando's Parks and Recreation Department to find out information for the park. They identified engineering specs for a nearby bridge. And they provided schedules and cost estimates.

Some of the comments given by the panel to Construct Two included "they did homework better than anyone else" and "they have the best site work team."

Says Wallace: "We brought what they wanted."

Additionally, it isn't clear how Hood would have had control over the six-member panel that chose Construct Two for the Eagle Nest project. Three of the panel's members were employees of the Orange County Public School system, which had agreed with Orlando officials to work on the project together.

One of the Orange County employees, Terry Adsit, guaranteed at the Aug. 14 meeting that the process was not biased.

Moreover, a search by the Weekly of Eagle Nest documents and e-mails sent between panel members showed no signs of a conspiracy. Most of the information pertained to scheduling and personnel.

Lastly, the Eagle Nest project was not awarded under the city's minority business program, which sets a goal for city-backed contractors to hire 18 percent of its subcontractors from minority firms. Construct Two won Eagle Nest without being part of the program because city officials consider the company large enough to compete on its own. So if Construct Two was competing against majority-owned firms, why would a large contractor need Construct Two to front for them in a minority capacity?

Page, on the other hand, will have to tackle his own credibility issues should he continue to back a different company for the project. Page insists that the company that finished No. 3 in the process, Clancy & Theys, be awarded the contract. His argument again relies on financial viability. Clancy & Theys is worth over $26 million and could, if needed, perform almost every aspect of the multifaceted construction job itself.

Construct Two, meanwhile, must rely on a large general contractor to do most of the project's heavy lifting.

But Clancy & Theys, which filed a grievance with Page's office over awarding Construct Two the Eagle Nest project, has allied itself with Eastshore Properties, a minority-owned firm that has connections to Page.

The connection has nothing to do with campaign contributions. Rather, Page and Eastshore have worked separately on projects with former county commissioner Lee Chira. Eastshore did cabinet and drywall work on several of Chira-owned apartment complexes. Page's nonprofit organization, Southwest United Communities, provides services for a senior apartment complex owned by Chira.

Page's lobbying for Clancy & Theys breaks no ethics laws. He apparently has no stakes in either company. However, if Eastshore is the reason he is lobbying so hard for the No. 3 choice, he should be more upfront when Eagle Nest comes before the council again.

It's uncertain when that will be. But when it does, Metzker says nothing has changed. Construct Two will still be ranked No. 1. Walker & Co., the construction firm that came in second, has written a letter to Metzker, emphasizing that it should be selected before Clancy & Theys. Lance Walker, president of the company, says he had no problems with the city's selection process. "As far as we were concerned, Construct Two was No. 1," he says. "We're comfortable with that."

Others aren't so sure. "There's a perception in the marketplace that the city of Orlando needs to work on its awarding bids," Vargo said.

Doug Head, executive director of the Orange County Democratic Executive Committee, said it would help if the city changed its process. In Orange County, for example, commissioners make the final selection from among the top companies, rather than have staff members endorse one. But Metzker argues that such a process is more, not less, political.

Head says, though, there might be fewer secrets if the final selection were done in an open forum. "This belief that the staff can't be swayed is ridiculous," Head says. "They have favors done for them all the time."

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