Councilman: D.C. driving out its small-business owners | Liz Farmer ...

At-large D.C. Councilman David Catania said he plans to craft legislation that will give more incentives to D.C.'s struggling small businesses to hire residents and make it easier to compete for city contracts, often worth millions in revenue to a company.

The District's higher taxes and fees make it harder for its own residents to win lucrative city contracts, he said, even as the mayor is pushing for city businesses to hire more residents and more than one in 10 residents remain unemployed.

"For a small business in the city -- regardless of whether you are a disadvantaged business or not -- it is an expensive, heavily regulated, onerous place to start a business and succeed, even with the preference points the city offers," Catania said after a hearing on the topic.

Some business owners say the city's policy of giving extra weight to minority-owned or disadvantaged businesses that bid for city work often isn't enough to help D.C. businesses edge out competition from Maryland and Virginia companies, ultimately sending that money beyond city limits.

In the District, a small business can qualify as disadvantaged if it is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged.

Last week's hearing focused on a recent $1.2 million city contract for grass cutting and snow removal that was awarded to two companies. The contract formerly belonged solely to Community Bridge Inc., a disadvantaged business owned by D.C. resident Denise Shelton that employs mostly D.C. residents.

The contract was rebid ward by ward two years ago. Lorenz, a Maryland landscaper, took six of the city's eight wards from Shelton's company. Lorenz's prices undercut the rest of the D.C.-based competition by half, Shelton said at the hearing.

That's when Shelton's daughter, Shawn Nance, opened up the company's Maryland-based affiliate.

"I can offer grass cutting for half the price in Maryland because it just doesn't cost as much to do business [with] the District," Nance said.

The city's procurement office should be more diligent about making sure contract winners hire D.C. residents for work, other council members said, noting that Lorenz didn't have any D.C. residents on its payroll.

lfarmer@washingtonexaminer.com

Source: http://washingtonexaminer.com/local/2011/10/councilman-dc-driving-out-its-small-business-owners

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