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Monday, December 18, 2006

'Disadvantaged' Contractor Dumped From Set-Aside Program

COLUMBUS (TDB) -- A 200-employee firm that received Ohio contracts for highway construction safety signs, lights, road striping and supplying related equipment has been disqualified from receiving future state jobs as a ''disadvantaged business enterprise,'' or DBE. The company, A&A Safety Inc., had been taking part in the government program created to help businesses controlled by Ohioans considered economically and socially underprivileged.

State officials portrayed its female owner as a front for her sons. They contend she knew little about the day-to-day activities of the business.

A&A is based in Amelia, a Cincinnati suburb, and has branch offices in Cleveland and Dayton. The chairman is Ruth Luttmer, who started the company in 1982 with her eldest son, Francis, and owns 55% of the stock. The company has been in the state program for several years and on Monday sued the Ohio Department of Transportation claiming its suspension was unjust.

"A&A's designation as a DBE constitutes a valuable property right that entitles A&A to, among other things, preferential status in the bidding of certain contracts, and due process of law before said property right may be taken away. The action of ODOT in connection with decertificaton of A&A as a DBE constitutes an unlawful deprivation of a property right under color of state law without due process of law,'' the company's lawyers, Thomas R. Yocum and Bradford C. Weber, said in a U.S. District County filing in Cincinnati. (Southern District of Ohio, 1:06-cv-866). They are seeking an injunction, and an order that would force the state to recertify the company.

Mark G. Kelsey, an ODOT deputy director in the division of contract administration, notified A&A in writing last June that it had found the company ineligible. Kelsey said an onsite visit to the company raised suspicions.

''Also, at the onsite review, Ruth Luttmer spoke about her frequent trips to the Dayton office. Ruth states that she travels regularly to this office, as well as other locations. However, upon further conversation about the Dayton office, it became apparent that Ruth did not know the name of the office personnel there,'' Kelsey wrote. "Time and time again, questions were asked regarding business operations and Ruth would defer to her son, Bill. At those times, Ruth would ask if we wanted to get Bill to answer the question. Further, during the onsite review, Ruth Lumter implied multiple times that her company did only temporary striping on roadways. However, during the tour of the business facility, it came to light that the company does perform permanent roadway striping. Ms. Luttmer was completely unaware of this fact."

Her lawyer, Yocum, responded to the the state in writing and maintained that his client legally had authority to delegate some management functions to her immediate family. ''Mrs. Luttmer's control over the operations, management and policies of A&A Safety are real, substantial, and continuing," he said.

The case has been assigned to U.S. District Judge Michael J. Barrett, who will have to decide if the state's actions were unjust.

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