Though it’s anything but disadvantaged, Mark One Electric Company gets minority-hiring contracts

Let's role-play for a moment.

You work in a business started by your father. The business prospers. The family diversifies into real estate. An older brother runs for Congress. In 1994, the year you turn 36, you replace Dad as the company's president. The good times continue. In 2002, the business does $22 million in revenue.

Feeling blessed, no? Life gets even better. In 2005, Jackson County voters approve a tax to pay for renovations at the Truman Sports Complex. The people in charge of the project say they're committed to making sure that disadvantaged businesses get some of the work.

Guess what? You qualify!

Such is the charmed life of Rosana Privitera Biondo, the president of Mark One Electric Company.

Privitera Biondo took the reins from her father, Carl "Red" Privitera, who also developed Rosana Square, the shopping center in Overland Park that he named for his daughter.

Privitera Biondo became president over brother Joe, who is a year older and has worked at Mark One since it was formed. In fact, three Privitera brothers work at Mark One as vice presidents. But officially, their sister calls the shots. The city requires that women and minorities own at least 51 percent of a company if they want their companies to compete for work as disadvantaged businesses, as Mark One does.

Of course, Mark One's suspend-your-disbelief ownership structure isn't really the issue. It's Mark One's size that's the problem.

Mark One has three contracts to do electrical work at Kauffman Stadium. To date, these contracts have paid more than $27 million, which represents three of every four dollars awarded to woman-owned businesses during the ballpark's renovation. Mark One has roughly $13 million in contracts at Arrowhead.

To the layperson, Mark One probably doesn't look too disadvantaged. The company seemed pretty well-off to a federal judge, too, who sided in 2005 with a rival who complained about the preferences enjoyed by Mark One.

Yet Mark One continues to benefit from the affirmative-action program. The company is the subcontractor equivalent of the rich kid who goes to a Royals game, sits in a box seat, and goes home with a foul ball and a bellyful of nachos.

How does this happen?

Let's back up a bit and move away from the stadiums to downtown Kansas City.

In 2004, the construction manager of The Kansas City Star's new press building invited bids for above-ground electrical work. A company in Raytown, Electrical Corporation of America (ECA), submitted the winning bid of $5.5 million.

Or so it thought. The Star building got a tax break, making it subject to the city's affirmative-action program. ECA tried but couldn't meet the city's goals for subcontracting with minority- and woman-owned businesses. So the job went to Mark One.

ECA sued the city. Part of the claim involved Mark One's size. ECA argued that Mark One did not qualify for preferential treatment because its sales were more than $12 million — the threshold for electrical contractors who hope to participate in affirmative-action programs. (The city uses numbers set by the Small Business Administration.)

Mark One's sales exceeded the threshold, as ECA had claimed. But a former head of the city's Human Relations Division, Michael Bates, made it a practice to classify some specialty contractors (such as an electrical company) as general contractors. Why? General contractors could have sales up to $28.5 million and still receive preference. Bates said he did this to keep specialty contractors viable and to encourage them to expand.

Bates' replacement, Mickey Dean, put an end to the practice after ECA sued. The judge in the case, Howard F. Sachs, agreed with Dean, calling Bates' methods "legally unsound." Sachs took the common-sense position that Mark One Electric Company was, well, an electrical company and should be classified as such.

Mark One's status then became a bit of a mess. After Sachs' ruling, the city dropped Mark One from its directory of minority- and woman-owned businesses. Mark One sued, arguing that Sachs had not barred the company from seeking classification as a general contractor.

Pending further review, the city put Mark One back in the directory. On September 27, 2005, the city certified Mark One as a "women's business enterprise" (WBE) in some areas but, because of its size, denied WBE status for Mark One in others.

Mark One finally dropped the suit on February 23, 2006, after coming to an agreement with Dean's successor, Phillip Yelder, the current head of the Human Relations Division.

Yelder objected to the term "agreement" when I asked last week for more information. "The City does not broker or negotiate certification with MBE/WBE companies," he told me in an e-mail. "The city certified Mark One based upon their area of eligibility, which was for general construction utility work."

But negotiating is precisely what occurred, according to documents in the case file.

On January 4, 2006, Mark One's lawyer, Steve Miller, wrote an e-mail to an assistant city attorney stating that Privitera Biondo said she had received a "verbal commitment" from Yelder to grant certification in two additional areas. In exchange, Privitera Biondo agreed to drop the case.

A year later, Mark One entered into its first contract to perform electrical work at the stadiums. Mark One became a subcontractor for the Taylor Kelly Construction Company, doing $250,258 worth of work. That amount counts toward the project's WBE goal, as have all subsequent Mark One contracts.