Jonetta Rose Barras, The Examiner
2008-06-19 07:00:00.0
Current rank: Not ranked

WASHINGTON -

Logic escapes the D.C. Council more often than anyone wants to acknowledge. And its form of liberalism can be crippling, perpetuating a victimhood that stifles growth. Consider the Local, Small, Disadvantaged Business Enterprise program as a relevant example.

Initially, LSDBE laws and programs were conceived to aid small, minority businesses. Similar to the federal model, the LSDBE program is like affirmative action. It is an attempt to level the playing field for those businesses historically and systematically kept out of the game.

The problems found in affirmative action also are in the LSDBE program. Companies that have benefited continue to benefit — although they have developed the muscle and expertise to compete. Truly small and disadvantaged businesses remain at the end of the line, kept away from the trough by the more adept companies.

On my way to determine why the Office of Contracting and Procurement had solicited a $150 million multiyear contract for a company — any company — to help recruit workers for the Office of the Chief Technology Officer, I was waylaid by LSDBE. I discovered two facts that prompted this renewed call to abolish the program or substantially reform it.

For the uninitiated, LSDBEs receive points based on the category in which they fall: A small business gets three points, and a disadvantaged business gets two points. This week I learned that a “longtime” business receives 10 points. I missed the council action two years ago that added this new definition. It flies in the face of the initial intent of the law.

Why should a 10- or 15-year-old business remain in a sheltered market? Can you imagine breast-feeding a child that old?

These “longtime” companies can accumulate a maximum of 12 points under the system, giving them a decisive advantage over other LSDBEs that greatly need the assist. True small or disadvantaged companies rarely can accumulate the points needed to see the trough, to say nothing of feeding there.

District taxpayers also aren’t benefited by the system: The LSDBE point system is applied during the contract bidding process but doesn’t necessarily result in a reduction in actual cost for services.

For example: Two companies, one LSDBE, bid the same amount, $100,000, for a contract. Applying the 12-point advantage, the government treats the LSDBE’s bid as $88,000 —12 percent less. The other company’s bid is treated as a full $100,000, according to Sara Gebhardt, spokeswoman for the Department of Small and Local Development.

In truth, it’s just the government’s imagination running away with it. Both contract bids are still $100,000. District taxpayers don’t save one dime.

Have mercy!

Where is the way out of this madness? The council could trash current LSDBE laws. But, if it feels the need to continue a sheltered market, it should kick out companies with demonstrated sustained growth. Further, it should ensure that District taxpayers are the absolute, unquestionable beneficiaries of the system.

Short of that, what’s the point?