Gray announces crackdown on D.C. shell companies

D.C. Mayor Vincent Gray on Wednesday rolled out major reform plans aimed at cracking down on companies in the District that are used solely to gain an edge in bidding for city projects because they are locally owned, but inevitably don’t play a main role in the work done.

The preference given to bidders with a locally owned business partner, or Certified Business Enterprise, has come under scrutiny in recent years as several joint ventures have been found to be abusing the system. “Shell companies,” or companies that claim to be locally owned but simply have a mailing address in the District, are still obtaining CBE status from the city and being attached as majority partners on bids for city projects.