Gov. Chris Gregoire laid down a public ultimatum Wednesday for a troubled state agency to quickly fix its work or face a breakup of its functions.
The order targeted the Office of Minority and Women Business Enterprises, which certifies minority- and female-owned businesses so they can bid for a share government contracts.
Its certifications not only help small businesses get a piece of government contracts but are relied on by general contractors, governments and others who must meet federal requirements for giving a share of subcontracted work to historically disadvantaged groups.
The agency signed a contract in February 2011 with the Department of Transportation pledging to meet terms of a corrective action plan. It had been failing for as long as five years to complete certifications on time for the DOT, which is one of OMWBE’s biggest customers, accounting for 25 percent to 30 percent of its work.
After a report Wednesday showed OMWBE was slipping again after showing progress last year, Gregoire put the agency on notice in a very public way.
“In my estimation … time is up. Change has to be made,” Gregoire said in a blunt exchange with the agency director, Cathy Canorro. Gregoire’s remarks came during a meeting of Gregoire’s GMAP, or Government Management Accountability and Performance program, that was aired by TVW, the public-affairs network.
“I agree with you, governor,” Canorro said.
Gregoire, a Democrat, has had the agency on an administrative short leash for two years — first suggesting in 2010 that it be combined with other agencies that serve racial minorities. After the Legislature balked, OMWBE entered into the corrective action plan with the DOT.
At issue is the agency’s failure to turn around certifications quickly enough to satisfy federal standards. Both the state Department of Transportation and Federal Highway Administration have complained that the delays are a problem for general contractors that hire minority-owned firms and also for the minority-owned firms themselves.
Ultimately, federal funds for highway projects could be put at risk, although none is immediately in peril, according to Steve Reinmuth, chief of staff for the state DOT.
Canorro did not respond to requests for further comment. But she told Gregoire during the GMAP exchange that the agency has improved and has hit some of its targets 87 percent of the time. But Gregoire said there is no room for anything but 100 percent compliance with certifications needed under federal rules.
Canorro said the agency has struggled to put its records into digital form, which is necessary to keep it from drowning in paper but also slows its work. Canorro also said new staffing authority in the just-passed budget can help the agency move more quickly.
“This is not the first warning shot. There’s been several,” said Cory Curtis, spokesman for Gregoire, who said she wants OMWBE to lay out options “to get to 100 percent compliance” and to identify the options within “the next couple of weeks.”
“She wanted it yesterday; she wanted it six months ago,” Curtis said.
Reinmuth said the DOT has helped the struggling agency with its website and with digitizing, because the slow processing is costing the agency time.
OMWBE faces other challenges, too. It recently came under scrutiny of the state auditor over a no-bid consulting contract it awarded. The state Executive Ethics Board is looking into that and four other cases that deal with the agency and its staff.
On Wednesday, Gregoire also took aim at the state Department of Labor and Industries, telling director Judy Schurke to get better control over medical costs. Gregoire said medical inflation is running over 4 percent and is much higher than the 2.4 percent seen in Medicaid.
Gregoire told Schurke to meet with the state’s Medicaid director, Doug Porter, to see what he is doing to control costs that L&I is not.
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