A 'go-to' nonprofit impresses

Chimes: A respected provider of jobs for the disabled also has drawn complaints from competitors.

By Jay Hancock | Sun Reporter

October 22, 2003

In two decades as a government administrator, Roy Lafontaine figures he has dealt with dozens of nonprofit agencies delivering services to the disabled. Few, if any, he said, have been as sharp and competent as Baltimore-based Chimes Inc. and its affiliates.

"I can honestly say that Chimes is the consummate professional service organization," said Lafontaine, deputy director of Delaware's Division of Developmental Disabilities Services. While Chimes is "not perfect," he added, "their bottom line, to my thinking and based on what I've seen them do over the years, is the safety and well-being of the people they're serving."

In an industry sometimes known for poor management and for performance that doesn't match intentions, Chimes has gained a reputation as a rapidly growing, crackerjack outfit that runs like a business.

"They've become kind of a go-to agency for us," said Robert Sullivan, a senior manager with NISH, a group that brokers federal set-aside contracts for nonprofits that employ the disabled. "They can take a problem situation and turn it around. It's not just advertising. They do what they say they're going to do."

Chimes, one of the largest employers of disabled janitors in the country, boasts revenue that many for-profit companies would envy. Founded in 1947 as a church-based school for the mentally retarded, the group has grown into a large, aggressive provider of jobs and services for the disabled.

Chimes' consolidated revenue, mostly from the federal government and the states, more than doubled from $39.9 million in fiscal 1997 to $107.5 million for the fiscal year that ended June 30, 2002. Chimes' revenue exceeded expenses by $741,708 that year.

Chimes, based in Seton Business Park, off Northern Parkway, offers group homes, day-care programs, vocational training and other services in addition to managing government contracts set aside for disabled workers. Chimes serves more than 5,000 people from New Jersey to North Carolina.

"We make judgments. We are aggressive," said Chimes Chief Executive Terry A. Perl. "We don't apologize for growing the organization to serve more people with disabilities. We do not apologize for utilizing federal and state programs to create jobs for a large section of people who are unemployed and unable to get jobs."

Much of Chimes' recent growth has come through the federal Javits-Wagner-O'Day program and similar state arrangements, in which government agencies award no-bid contracts for custodial services, landscaping or other work to nonprofit groups that employ the disabled.

These jobs, which generate more than $40 million in annual revenue for Chimes, include the cleaning of Baltimore-Washington International Airport, the Library of Congress, Andrews and Bolling Air Force bases and the Metro-West Social Security complex in Baltimore.

Federal procurement official Ivy Skidmore oversees Chimes in its capacity as Javits-Wagner-O'Day custodial contractor for the Fallon Federal Building complex in Baltimore. She worried that Chimes might not be up to the job.

"I had some experiences that were less than stellar" with other nonprofit groups, said Skidmore, contract officer for the Fallon job. "But those skepticisms were all removed. [Chimes] delivered."

She ranks Chimes, which likes to hire managers with commercial cleaning experience for its custodial jobs, in the top three among the scores of contractors she has dealt with, including for-profit companies, in 16 years in the business.

State and federal Chimes jobs such as the Fallon contract have created employment for more than 1,000 people certified as disabled, a category that can include recovering substance abusers as well as the developmentally disabled.

But this type of set-aside has been criticized by those who say it takes jobs from low-income workers, hurts for-profit contractors, charges taxpayers too much, often pays disabled workers less than federal minimums and enriches nonprofit executives.

"They're grabbing these contracts without having to compete for them," said H.T. Brown, president of Safeguard Maintenance Corp., a Cockeysville janitorial company that is fighting the possible loss of two big federal cleaning jobs to Chimes and Melwood Horticultural Services, another Maryland nonprofit.

"That represents more than 50 percent of my sales. Of course, being a small business, losing 50 percent of your sales will put you out of business," Brown said. "The whole crux of it comes down to my employees - the guys that make $9 and $10 an hour and are getting bumped out."

Javits-Wagner contracts, which totaled almost $1.5 billion in fiscal year 2002, are awarded through nonprofit brokers by the Committee for Purchase, a small federal agency. Federal customers negotiate prices with nonprofit contractors for Javits-Wagner jobs, but there is no competitive bidding.

An internal federal study obtained by The Sun under the Freedom of Information Act shows that based on a survey made in the first quarter of this year, Javits-Wagner nonprofits charged taxpayers much more for janitorial services than conventional contractors charged.

The General Services Administration, the big federal landlord, found that non-JWOD contractors charged the government an average of 6 percent less than a cleaning price benchmark published by the Building Managers and Owners Association, adjusted for locale.

JWOD nonprofits, on the other hand, charged the General Services Administration 7 percent more than the benchmark, on average - a 13 percentage point swing that represents millions of dollars a year in higher costs to taxpayers.

Chimes' $1.65 million annual price for cleaning the Fallon complex is "competitive" with for-profit firms and less than some other Javits-Wagner nonprofits might have charged, federal officials said.

"Normally when we think of these workshops" for the disabled, "we think of very high costs," said Anona Eckenrode, property manager for the Fallon facility.

Because many disabled people are not as productive as the non- disabled, nonprofits such as Chimes are often allowed to pay them less than the federally set "prevailing wage" for a given facility.

At the Fallon complex, for example, Chimes employs 33 disabled custodians. Nine make the full prevailing wage of $10.70 per hour; the others earn $6.10 to $9.85, according to Chimes. The lower wages ensure that taxpayers are not overpaying less-productive workers, Chimes said, and even those making less than $10.70 receive full health and pension benefits.

But some say the lower pay and other aspects of the Javits-Wagner program are unfair to the disabled.

"They're also denied the right to join a union," said Ian Birlem, spokesman for Local 82 of the Service Employees International Union in Washington, some of whose members work for Safeguard Maintenance. "There's little or no upward mobility for these workers. And often they don't have a significant share of upper-management jobs."

Chimes executives, who see their organization as an "entrepreneurial nonprofit," vigorously defended their set-aside contracts, expanding revenue and business practices. It all helps the disabled, who often have no other prospects, they say.

"Ask a person with a disability - who also may be and often is poor, minority ... ask them what having a job means to them, not only economically but in terms of their personal self-esteem," said Perl. "People without disabilities have a better chance of getting a job than the 60 to 70 percent of people with disabilities who want to work and who are unemployed."