Minority-contracts office sees turnaround

More than seven months after Gov. Chris Gregoire sent in a new manager to fix Washington state’s troubled minority-contracts office, there are signs of a turnaround.

Chris Liu took over as director at the Office of Minority and Women Business Enterprises in June, and he says the agency has cleared away most of an 1,800-case backlog of requests from businesses wanting to be certified as minority- or women-owned.

The minority-contractor certifications are required by federal law and are key on federally funded highway projects that must give a share of subcontracted work to historically disadvantaged groups. Certifications not only help small businesses get a piece of government contracts but are relied on by general contractors, governments and others who must follow federal rules.

“We only have 225 left. We’re actually declaring the backlog completed today,” Liu said Friday afternoon.

The remaining cases include requests from businesses that have asked for more time — or extensions — on their applications, Liu said. Or the applications require so little information that “we think they’ll be completed by the middle of January,” he added.

Interviews with other managers and employees suggest that morale is also improving at the agency, which is moving forward with its next great challenge: converting millions of pages of paper documents into electronic records.

Liu and his deputy director, Debbie McVicker, say they hope to finish a test project in February and then start converting records in earnest with help from the state Department of Transportation. It remains to be seen how quickly they can go, but their target is to finish in June.

But not all troubles are solved.

The FBI is investigating allegations of fraud involving contractors or businesses that improperly obtained certification, according to Fred Olson, deputy chief of staff for Gov. Gregoire. Allegations of fraud surfaced last spring when KING-5 television began airing reports about dysfunction in the agency and abuse of the minority-contracting laws.

FBI spokesmen declined to confirm or deny any investigations that are ongoing, but Olson said contractors that received or sought certification were the focus of the investigation — not state employees.

Five employees in the agency — more than one-quarter of the 17-employee work force — also faced formal ethics complaints last year before Liu arrived. One case involved the former director, Cathy Canorro, who gave a $65,000 no-bid consultant’s contract to a longtime friend. The ethics board dismissed the complaint, saying the charge was “cured” because Canorro had followed state rules and received approval from the Office of Financial Management.

But ethics board executive director Melanie deLeon’s investigation found Canorro “used her position and friendship with (a friend) to award the contract to him.”

Two other employees paid fines for using state resources to help themselves or their families. One man spent 45 hours of work time day trading stocks over the course of many months was fined $3,000, half of it suspended, and had his pay cut.

Another worker, who has since left the agency, paid a $2,500 fine for soliciting Christmas gifts for a needy family that wound up being her son’s family and for asking agency workers to donate extra sick leave to help a woman who, it turned out, was her daughter.

Two other employees still face formal complaints at the Executive Ethics Boards that they violated state laws by using state resources for the benefit of themselves or their families.

Olson oversees small agencies for the governor and helped bring in a consultant in June to evaluate what was wrong in the agency — as well as to develop a business plan with Liu.

Among the findings from the Coraggio Group, a Portland-based consultant, was low morale, acrimony between employee groups, poor agency focus, management that was ill-equipped for the job, and a paper-based filing system that slowed everyone’s work.

Employees said there also was poor communication and little awareness of what others in the agency were doing — or why.

“I think the biggest change is we have goals. Weekly goals. Monthly goals. And we’re held accountable for the goals,” said Sarah Erdmann, a certification supervisor.