AA Engineering's Rosalie Adnan says the company's lack of a large stockyard doesn't mean it isn't a legitimate supplier. Most of the concrete pipe the company sells, she says, is customized and has to be shipped directly to a job site. "We've basically dealt in products that can't be warehoused," she says. "It isn't anything you go in a store and shop for."

Adnan says her husband was the "key person" at the company and that out of respect for him she must decline to comment specifically on Hydro Conduit's allegations. "I have to let that go," she says.

But even Carder Concrete, which ended its relationship with AA about a year ago, now says that AA acted only as a broker on city contracts. Don Grzesiek says that about 95 percent of the time, Carder supplies the pipe it makes directly to contractors. The only time Carder used AA Engineers, Grzesiek says, was when it was necessary to meet government affirmative action goals. "If we had our choice, we would rather do it direct," Grzesiek says. "There's one less person in the chain."

MOCC's Lupita Gusman says the city investigated AA Engineering and found that the company was legitimately supplying concrete pipe and other construction material. "We did at least two site visits, maybe even more," Gusman says. "We were satisified with what we found."

But Debra Gallegos, who oversees the state's minority contracting program, says the state took AA off its list of disadvantaged concrete pipe suppliers two years ago, precisely because its facilities did not appear to meet government guidelines. "We made a determination that AA Engineers did not fit the eligibility standards as a regular dealer," Gallegos says. She notes that the state still considers the firm to be a bona fide source of engineering services.

It's easy to tell when a minority-owned supply company is not just a broker.
Take Chavez Sheet Metal in northwest Denver. Founded by Robert Chavez in 1980, the company has grown to become the largest supplier of ducts and vents for commercial heating and cooling systems headquartered in Colorado. It employs about seventy workers in a 75,000-square-foot shop on West 42nd Avenue. The company has invested hundreds of thousands of dollars in computers and manufacturing equipment and has customers from Pueblo to Miles City, Montana.

Chavez's son, Robert Jr., complains that brokers thrive under the current affirmative action program. "It's frustrating," he says. "We brought this [problem] to the city's attention years ago. They just turned their head."

Bonnie Riley of Colorado Wire says she has a simple smell test to separate brokers from real suppliers. "A legitimate supplier has a warehouse, inventory, forklifts, an overhead crank, delivery trucks," Riley says. "They have credit with the manufacturers, and they have a line of credit with a bank. In other words, they have a cost of doing business."

Not everyone agrees. Sue Fickle, president of Architectural Interior Products, a city-certified supplier of doors, lockers, toilets and other products, admits she works mostly out of her home in Highlands Ranch. The company does have a small warehouse off of Broadway in Denver, she says, but most of the time she has her manufacturers ship material directly to job sites. "A lot of people would consider me a broker," she says.

But Fickle insists that she performs a commercially valuable service. She hunts up business. She reviews architectural plans and draws up the orders--something most of her manufacturers don't want to do themselves. And she takes a financial risk on each order, since she pays for the supplies with her own money and then has to bill the general contractors to get repaid. "We have to bankroll the job," Fickle says.

Denver City Councilman Hiawatha Davis, however, says he's even heard complaints about supplier/brokers from a number of local black-owned construction firms. According to Davis, many black contractors feel that the city shouldn't give minority-owned supply outfits equal status with construction companies when trying to meet MBE goals. "They have some real concerns about the same amount of weight being given" to both types of work, Davis says.

Davis voices strong support for the MBE/WBE program overall, saying "government rightly has a responsiblity to try to shape economic equity." He agrees that this year has been "particularly tough" for the program's reputation. But he says he doesn't think the MBE program is in any mortal danger. The city ordinance authorizing the program expires next August, but Davis says he expects a majority of his fellow councilmembers to support its renewal.

However, at least one member of the council says that unless the problems can be corrected, the council's only alternative may be to kill the program. "We've got to modify the ordinance to make sure we take care of the problem areas," says Councilman Ted Hackworth, a frequent critic of the mayor who is supporting Crider in his mayoral bid. "If we can't find a way to legitimize it, we may not have another option."

Councilwoman Mary DeGroot, herself a mayoral challenger to Webb, says Crider's audit suggests that the city hasn't installed proper checks in the affirmative action program. Minority brokers were a big problem when the council last revised the MBE ordinance in 1990, DeGroot says, and it doesn't seem as if the problem has gone away. "It looks to me like all of the safeguards that city council insisted be put in place never got implemented," DeGroot says.

Whatever the program's fate, Bonnie Riley says wholesale changes need to be made if the "rampant" abuses are to be stopped. "I don't know how to clean it up," says Riley. "But there's got to be some way, because the public's getting scammed.

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Having worked in an online sphere of electrical supplies and wholesalers, I think that such misreporting by businesses has become more common in all parts of the world. More people buy electrical products online than how many of them buy these products from their local markets. That's what poses new challenges to the local sellers and they are getting involved into such crimes. On behalf of http://schnap.com.au/ which is one of the leading electrical suppliers of Sydney, Melbourne and Brisbane, Perth, etc. I would never say these practices are good from any angle.