A federal regulation giving a preference to veteran-owned and disadvantaged contracting companies may force the government to ignore the possibility of saving money on a parking ramp project in Madison.
The Wisconsin Department of Veterans Affairs, through Monday, is conducting a survey to see if enough qualified companies are interested in bidding on the design-build project, which is scheduled to be awarded in September. The cost is estimated at between $5 million and $10 million.
Qualifying candidates include service-disabled veteran-owned small businesses, veteran-owned small businesses, small disadvantaged businesses or companies in historically underused business zones. The HUBZone program provides federal contracting opportunities for small businesses in distressed areas.
If at least three such companies indicate they are interested, bidding will open only to companies that qualify, said John Meyers, the DVA’s contracting officer.
If the survey doesn’t draw at least three qualifying responses, any contractor will be free to bid on the project, Meyers said.
DVA projects typically have set-asides for service-disabled veteran and veteran-owned businesses, Meyers said, while other federal projects can require set-asides for small disadvantaged business or HUBZone projects. In 2004, then-President George W. Bush issued an executive order requiring the protections for businesses run by service-disabled veterans.
The problem, Meyers said, is that the protections do not always guarantee the best deal. If enough federally protected contractors are interested in the project — a parking ramp for the William S. Middleton Memorial Veterans Hospital in Madison — the contract will have to go to one of them rather than to a general contractor that could do the project for less money.
“It’s federal law,” Meyers said. “Whether I agree with it is another story.”
It’s difficult to argue with giving disadvantaged businesses a fighting chance in the open market, said Bill Jackson, vice president of marketing and business development for Verona-based Engineered Construction Inc.
“I’m 100 percent behind veterans,” he said. “I have family members that have served, and I completely respect the sacrifices they’ve made. But some of the stuff we’re talking about with these contracts is just too far above and beyond.
“It runs conversely to the free market and it hurts taxpayers.”
Jackson said construction companies throughout Wisconsin are scraping for whatever jobs they can get, and a multimillion-dollar parking ramp project would appeal to many of them. The federal protections, he said, are just making an already difficult bidding climate even tougher.
“There are a lot of good contractors out there, be it union, nonunion or merit shop,” he said. “Giving someone a contract just because of who lives where or who did what isn’t right. Make it a merit point, that’s fine. But if you’re limiting who can bid on a project, it’s just a disservice.”