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Amid unparalleled demands for racial and gender equity, an aggressive city audit examining failures in public contracting appears to have stalled.
Last month, Portland City Auditor Mary Hull Caballero released a damning evaluation of a 2012 program approved by the City Council to give women, people of color and emerging companies more opportunities to win certain city construction contracts.
The audit tackled a sore point in the construction trades: White male-owned firms get most of the city's business and always have. The city sought to address that inequity with a 2012 policy that makes it easier for women and people of color to win construction and professional service contracts. Small contractors have long grumbled that the city's program is ripe for abuse, particularly by companies that claim in the state certification process to be owned by women or people of color but are not.
Auditors found many problems.
"City officials responsible for administering the contracting equity system report being disempowered, disengaged, and without requisite funding and oversight," they wrote. "The result is dissatisfaction from top to bottom, inside and outside the government."
A central contention: that companies bidding for city contracts under the 2012 policy were fronts for established companies owned by white men.
Even before publicly releasing the findings, the auditor's office took the unusual step of sending a formal letter to the City Attorney's Office asking for further investigation, pointing out that some contractors that won business under the program "may be fraudulently certified."
"The City Attorney's Office and Procurement Services should use their powers to investigate these companies' certifications and take appropriate action if lawbreaking is found," the auditors' letter, dated Aug. 26, said. "We request notification of your decision whether to investigate or take any other action."
Auditor Hull Cabellero says her office has not yet been informed of any follow-up by city officials.
"The city has a responsibility to make sure that those who are supposed to benefit from these initiatives are being served," Hull Caballero says.
The City Attorney's Office says it is still pondering what to do. Penalties could include loss of certification and a fine.
"We are currently reviewing the auditor's findings," Chief Deputy City Attorney Robert Taylor says. "We understand the importance of the allegations and plan to discuss them, as well as the city's future options, with our client."
In the letter to the City Attorney's Office, the auditors raised questions about whether three firms were properly certified as "socially disadvantaged."
Here are the three companies the auditor forwarded to the city attorney.
Company: Iron Horse Excavation LLC, of Fairview
Listed owners: Carlie and Kathy Moore
Value of contracts: $1.9 million
Auditors found company is closely related to: Firms owned by Roy Moore, Carlie's father and Kathy's husband
What the auditors' letter said: "Ties between Iron Horse and non-certified firms owned by Roy Moore may affect Iron Horse's eligibility for state certification."
What the owners said: Iron Horse's attorney, Tyler Howell, sent the city a 95-page rebuttal letter on Oct. 12. Howell says any allegation that Iron Horse is improperly certified is false. "Many of the allegations in the audit services letter are simply not true, or do not constitute a condition that would render a company disqualified for certification," Howell wrote.
Hull Caballero says she stands by her auditors' work.
"We follow professional standards," Hull Caballero says. "They require we collect evidence and it be relevant and we document it. All those steps were followed."
Company: D3 Excavation LLC, of Boring
Listed owner: Chris Dukart
Value of contracts: None awarded
Auditors found company is closely related to: Duke Construction & Excavation LLC
What the auditors' letter said: D3 Excavation "appears to be a new company started by the same LLC members as Duke Construction with shared resources and not a company operating independently."
What the owners said: Did not respond to calls or emails seeking comment.
Company: LCP LLC, of Aloha
Listed owner: Allison Rhea
Value of contract: $100,000
Auditors found company is closely related to: Titan Utilities LLC
What the auditors' letter said: "LCP does not appear to be operating independently of non-certified firms."
What the owners said: Did not respond to calls or emails seeking comment.
