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Baltimore leaders imposed rare sanctions Wednesday on a longtime business partner for repeatedly failing to make timely payments to a West Baltimore company, a decision they hope sends a signal about the city’s commitment to upholding requirements for women- and minority-owned businesses.
The city’s five-member Board of Estimates unanimously approved a two-year ban on contracts with the New Jersey-based Metra Industries for a series of late payments to a Black-owned subcontractor, and for misrepresenting the reason for these missed payments over a monthslong investigation. Along with the ban, the city cancelled its $8.4 million water infrastructure contract with Metra, which has done work with the city for over 20 years.
“It’s a new game in town,” said City Council President Nick Mosby after the vote. There have long been “whispers” in Baltimore about large contractors behaving like Metra, but the council president vowed that elected leaders are going to be proactive about protecting minority- and women-owned contractors going forward.
Metra has long been the subject of scrutiny over its adherence to city contracting requirements with minority- and women-owned businesses, even drawing a rebuke from Mayor Brandon Scott when he was council president. But Wednesday’s sanctions came in response to more narrow allegations of repeated late payments to a West Baltimore-based subcontractor called Economic International Construction Company Inc., or EICCI.
A spokesperson for the Department of Public Works, which contracts with Metra, did not respond to a question Wednesday afternoon about total dollar amount for the company’s agreements with the city.
Christopher Lundy, chief of the city Minority and Women’s Business Opportunity Office, outlined a series of payments that Metra failed to make to EICCI, in one case taking a full two years to fulfill an invoice. Under the city’s regulations, Metra was required to complete payments to the subcontractor within seven days. The office’s investigation revealed similar problems with other Metra contracts as well, Lundy said, but board members constrained their decision Wednesday to the EICCI payments.
This pattern of behavior shows an “utter disregard” for the city’s minority and women’s business program, said Lundy, who requested the maximum two-year ban for Metra. Prior to Wednesday, the city has only sanctioned one other company for its failures to meet minority business requirements, Lundy said.
After months of missed payments, EICCI stopped doing work for Metra, a decision that Lundy said the larger company misrepresented to his office. The city began looking into the situation in March of 2022, and Lundy testified that it was only after the investigation began to threaten Metra’s contract with the city that they took serious steps to cover the missed payments. EICCI filed a formal complaint against Metra in October of last year, and didn’t receive more than $40,000 in late payments until December 15.
An attorney for Metra did not dispute the allegations of late payments, but urged the board to consider a lighter penalty. A two year ban on Metra’s work with the city is overly severe for late payments on what amounts to a small share of its close to $560,000 contract with EICCI, especially considering the confusion and delays that were common during the first years of the pandemic, argued Venroy July, Metra’s attorney.
The city’s perpetual payment problems hindered Metra’s ability to fulfill its subcontracts, July said. The attorney disputed some aspects of the city’s investigation, as well as the precise amount of total late payments. Metra had withheld payment from EICCI after determining the West Baltimore company was in breach of its contract, July said, not realizing at the time that the company was still required by city law to fulfill those payments.
“We just think that this is an excessive punishment for this particular wrong,” said July, who argued the Metra ban would have detrimental consequences for the city’s aging water system, as well as downstream impacts for minority- and women-owned businesses, which he said the company is committed to supporting in paying in a timely manner going forward.
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The panel of city leaders balked at Metra’s explanations, accusing the company of “deception” and questioning July’s suggestion that tens of thousands of dollars in late payments shouldn’t warrant a severe penalty. That amount of money makes a big difference to many of the city’s minority-owned businesses, Acting City Solicitor Ebony Thompson said. “It is a big deal.”
Growing stern with July at one point, Comptroller Bill Henry said he was impressed that Lundy was able to get through his entire presentation without uttering a few choice words: “They lied.”
In a statement ahead of Wednesday’s meeting, EICCI attorney Thiru Vignarajah celebrated the expected sanctions against Metra. “It shouldn’t take this much to prompt the city to do the right thing. But better late than never,” he said.
Vignarajah, who has run unsuccessful campaigns for mayor and state’s attorney, has held numerous news conferences in recent weeks calling attention to Metra’s track record of missed payments to his client.