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Stimulus funds fed minority businesses that served as middlemen


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stimulus-funds-fed-minority-businesses-that-servedWashington Times:

WB Construction & Sons Inc. is a 10-employee, minority-owned firm that received $7.5 million in five stimulus contracts from the federal government, but it did not do close to that much work.

Every one of the stimulus contracts it received followed a pattern: Win a contract roped off for minority-owned businesses, where only one other company put in a bid. Then pay Apeck Construction Inc., a non-minority business, to do the vast majority of the work, while keeping a 10 percent cut for itself.

One might expect that nearly $8 million in construction projects would create jobs at WB. Instead, in keeping with its role seemingly as a pass-through that fills out paperwork rather than building, WB simply hired a new “office clerk.”

Federal agencies are required to give 23 percent of their business to disadvantaged contractors, including small businesses and minority- and veteran-owned firms. Agencies decide when to limit the pool of applicants who can bid on a particular contract, known as “set-asides,” to members of one of those groups.

National Black Chamber of Commerce CEO Harry Alfred said the program has a great intent and has played an instrumental role in “the majority of successful black businesses in the U.S.” But he said it is being abused.Scissors-32x32.png

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