Baltimore Cancels $8.4M Infrastructure Contract

MONDAY, MARCH 20, 2023

Citing late payments and disregard for women- and minority-owned business requirements, the City of Baltimore has terminated a multi-million-dollar infrastructure contract with general contractor Metra Industries.

Metra, which has reportedly done work with the city for over 20 years, is also barred from doing business with the city for the next two years.

Investigation Findings

On Wednesday (March 15), the city’s Board of Estimates unanimously approved the two-year ban on contracts, as well as canceling a $8.4 million water infrastructure contract.

“I think it sends a message of enforcement and compliance,” said Christopher Lundy, chief of the Minority and Women’s Business Opportunity Office. “We're not going to tolerate prime contractors abusing and mistreating our minority and women's business community.”

A year-long investigation led by Baltimore’s Minority and Women’s Business Opportunity Office reportedly found that Metra was failing to make timely payments to subcontractor Economic International Construction Company Inc. (EICCI), a Black-owned commercial construction company.

In May last year, Metra sought approval to replace the subcontractor in May last year, with the MWBOO reporting that Metra falsely claimed EICCI raised its costs and was no longer available to work the project. In October, EICCI filed a complaint over late payments.

“Metra did not acknowledge that EICCI was willing to continue work on WC 1403 if the outstanding balance owed to them was satisfied,” said Lundy. “Metra’s substitution request stated that the EICCI unavailability was due solely to cost increases.”

Lundy testified to the board that a string of subcontractor payments were either late or unpaid, including one invoice that hadn't been paid for two years. Metra is reportedly required to pay any subcontractors within seven days of being paid by the city for work completed as a general contractor.

While the exact amount of money Metra still owes EICCI is unclear, officials estimate that it’s between $38,000 and $41,000. EICCI reportedly stopped working with Metra due to lack of payment.

“In the past, a lot of minority- and women-owned businesses have not felt comfortable bringing forth some of these allegations of utilization and a lack of payment,” said Lundy, adding that when EICCI came forward last spring, it allowed his office to actually open an investigation during an ongoing controversy.

“This was an active contract, where we were able to look into all the records, identify all of the payment history, have extended conversations with Metro and get information from EICCI.”

Lundy said that complaints submitted by other subcontractors are currently under investigation.

However, in a letter to the Board, Metra Attorney Venroy K. July urged them to vote against Lundy’s request and consider a lighter penalty. He cited the COVID-19 pandemic, confusion over raw material costs, and the small dollar amounts due as reasons as to why the payments were not made on time.

“Metra acknowledges that subcontractors are entitled to timely payment on work that has been completed, and while it does not excuse its own late payments, prime contractors are similarly entitled to timely pay for work completed for the City,” July wrote.

“The City’s continuous failure to make timely payments impacted Metra’s cash flow and availability of capital, and its ability to make timely payment, particular during and on the heels of the Covid pandemic.”

Additionally, July claimed that Metra actually overpaid EICCI, stating EICCI had already been paid $558,247.40 for prior work before their complaint was ever filed.

“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.

According to reports, the city now plans to solicit bids for a replacement company to complete the work previously handled by Metra. The company was reportedly three years into a water rehabilitation and improvement project with the Department of Public Works.


Tagged categories: Contractors; Contracts; Ethics; General contractors; Government contracts; Infrastructure; Infrastructure; NA; North America; Ongoing projects; Program/Project Management; Project Management; Subcontractors; Water/Wastewater

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