Small Business Law
BY Shulamit Shvartsman for Lawyers.comsm
The bidding process for Atlanta's airport advertising contracts has been riddled with conflict and scandal. Since 2003 there's been a legal battle over billboard advertisements in Atlanta's Hartsfield-Jackson International Airport, accusing the bidding process of being a sham.
Atlanta businessman, Billy Corey, owns Corey Airport Services. He says his company bid for an advertising contract at the airport years ago. But they lost to Clear Channel Outdoor Advertising even though his proposal would have generated more money for the city.
Corey accuses the city of unfairly rigging the bidding procedure so that Clear Channel would win. He alleges this because its partner in the venture, Barbara Fouch, was a close friend of Atlanta's mayor, whom the airport is named after.
When an airport or other entity like a hospital has a large project, companies must submit bids that are reviewed and eventually selected. Project owners get credit if their proposals include "disadvantaged business enterprises" or DBEs in the mix. DBEs are small companies run by minorities or women, often certified as such.
Corey Airport Service had a minority partner as part of its bid package, Maureen G. Malone. However, Clear Channel teamed up with Ms. Fouch, who also contends to be a DBE and a friend of the mayor. Clear Channel won the bid.
What Is the Purpose of DBEs?
DBE were created to make sure companies owned by women and other minorities receive fair consideration when bidding on contracts in Department of Transportation' (DOT) projects. To qualify, they must meet certain guidelines such as:
- "In general, to be eligible for the DBE program, persons must own 51% or more of a "small business," establish that they are disadvantaged within the meaning of DOT regulations, and prove they control their business" (from the U.S. Department of Transportation )
Lack of Independence
One of the requirements to be a DBE is the firm must be truly independent. Corey accuses Ms. Fouch of being an extension of Clear Channel, a huge national broadcasting and outdoor advertising company. She rented office space from Clear Channel and had no employees in Atlanta.
Corey argues that if the city officials investigated Ms. Fouch's business, they would' realize her DBE was a sham. Other accusation such as Fouch doesn't meet the other requirements of a DBE, as she is fairly wealthy and left the net worth portion of the DBE application blank.
Corey began the lawsuit to expose these unfair practices and favoritism. He's also trying to seeking to change the policies of bidding on airport contracts.
It seems ironic that practices meant to help disadvantaged groups actually end up assisting the people who need it less. This lawsuit seeks to correct this injustice.
Questions for Your Attorney
- How can I apply for a contract with my DBE?
- How can I create a DBE? Is it different from starting a regular business?
- Can I lose my DBE by unfairly competing for contracts?