Not only does D.C. NOT deserve "statehood," but the Feds need to take
control of the city's major operating departments. Especially
"procurement."
More than $1.2 million spent, no-bid, on a TRUCK, used three times in
four years!
To stop the egregious loss of taxpayer dollars, the D.C. procurement
department needs to revert to Federal control! D.C. "officials" are
both dishonest and incompetent. But then, you knew that.
=============
"District Dodges Spending Laws"
Companies Snare Contracts With Connections, Not Competition
By Dan Keating and David S. Fallis
Washington Post Staff Writers
Sunday, November 27, 2005; A01
District officials routinely violate city spending laws, avoiding
competitive bidding, masking purchases under unrelated contracts and
paying vendors without contracts or legal authority, according to D.C.
records.
Out of $2.5 billion in purchases last year, the city spent roughly $425
million in unauthorized payments and no-bid contracts, according to a
Washington Post review of thousands of documents, including the
database that lists every dollar spent by the city over the past five
years. Studies of no-competition contracts elsewhere indicate that the
city is overpaying by $50 million a year.
In one case, the city has given a start-up computer consulting company
146 no-bid contracts worth a total of $13 million since 2003. The
company has grown to 54 employees and has new offices in Northwest
Washington.
The examination found problems that go far beyond sloppy paperwork as
employees skirt the laws designed to prevent waste and fraud. In making
purchases from riot gear to consulting services, for example, employees
repeatedly send lucrative contracts to favored companies and pay huge
cost overruns without getting permission for the spending.
"We screwed up," said Anthony F. Pompa, head of accounting for Chief
Financial Officer Natwar M. Gandhi, when he was shown hundreds of
millions of dollars in unauthorized checks. "We shouldn't do those
things. We're going to clean it up."
The violations enrich well-connected companies at the expense of fair
and open competition. Officials at a health agency used a technology
contract as an open account to hire favored consultants and cover more
than $1 million in unrelated expenses. Lottery agency officials paid an
extra $900,000 so they could hire a telecommunications company they
wanted without any bidding. The cable television agency paid more than
$200,000 in cost overruns for a new truck without any spending
authority.
To get around the rules, officials exploit loopholes not used in other
cities.
The District spent about $225 million last year, for example, through a
back door that allows payments without any authorization, violating
policies that require approval from procurement and other officials.
Under city policy, such "direct voucher" payments should be only for
court-ordered judgments, monthly utility bills and other payments that
cannot be negotiated. But they are used for computers, consultants,
capital projects, special education services and furniture, among other
things. The improper use of the practice is growing and approaching 10
percent of city spending, records show.
Deputy Mayor Herbert R. Tillery, who took over the contracting
department last fall, insisted in an interview that it is impossible to
spend money without a contract.
"That can't happen," he said. "If you can identify who . . . we'll know
who to put in jail."
When shown records of more than $400 million that had been spent
recently without authorization, Tillery turned to his staff and asked
for an explanation.
Gandhi said that the city's purchasing system has "profound" problems,
leaving him no choice but to pay bills for which there are no
contracts.
"We have to manage a badly functioning bureaucracy to get it to provide
badly needed services," he said. "The problems all come to my
doorstep."
Gandhi has independent authority granted by Congress over every dollar
spent by the District. But he said if he strictly enforced financial
laws, many services would stop.
"I will be damned if a child is without textbooks or an AIDS patient is
without medicine just because some bureaucrat did not file the
paperwork right."
City officials also spent about $200 million last year through no-bid
contracts that are intended to be used only when bidding is impossible.
A loophole approved in 2002 by the D.C. Council greatly expanded their
use, allowing the contracts to go to any company that agrees to charge
according to a published schedule of prices. Studies of no-bid
contracts nationally have found that the lack of competition drives up
costs by as much as 39 percent.
The spending problems have drawn little attention, in part because city
income has grown dramatically with rising property values. Mayor
Anthony A. Williams (D) has been credited with transforming the
financial health of the nation's capital, bringing it from near
bankruptcy a decade ago to a $320 million surplus this year. But even
as the city has balanced its books, records indicate it is violating
its own rules.
National contracting experts said the District's spending policies are
unique among cities and states across the country. Other cities do not
allow their buyers to use direct vouchers. And experts said the city is
also unusual in creating a loophole that allows no-competition
contracts even when many companies could bid for the job.
That combination wastes taxpayer money and opens the door to
misspending and fraud, said Kirby Behre, a former federal corruption
prosecutor, who called it a "breeding ground for the District to be
taken advantage of."
City leaders were aware of the abuse of direct vouchers at least a
decade ago, although any efforts to stop them failed. When he was chief
financial officer in the mid-1990s, Williams issued two memos banning
the payments for standard purchases. "Agency controllers are required
to adhere to these instructions carefully," he wrote in 1995 and again
the following year.
Still, some of the spending problems have worsened with the city's
streamlining efforts over the past three years, which reduced layers of
approval and expanded the number of no-bid contracts. Those changes led
to a vast increase in discretion for agency employees in charge of
buying.
In response to The Post's findings, Gandhi's office said it would try
to eliminate the improper use of direct vouchers through a new
monitoring system that began last month.
Williams's spokesman, Vince Morris, in response to two requests over
the past month for an interview, said the mayor was not available.
D.C. Auditor Deborah K. Nichols said that, although she believes
financial management in the District is less troublesome than it was a
decade ago, employees are still allowed to bend the rules.
"I am really shocked, very disappointed, that you have an
administration that aligns itself with some of this nonsense," she
said. "It certainly doesn't protect our resources."
Spending without contracts or authority through direct vouchers is so
ingrained across agencies that the city is customizing its new $80
million computerized financial management system to allow it as
standard practice. For others who bought the same software, including
several states, large banks and universities, the program is
specifically designed -- similar to a safety on a gun -- to prevent
unauthorized spending. The District paid to have that safety removed.
Larry Daniels, director of the District's accounting managers, said the
city added the direct-spending shortcut "because the District does our
business in our own way."
City agencies have used that method 58 times in the past five years to
pay Professional Products Inc. of Gaithersburg, a company that consults
regularly for the District. When the city's cable television office,
which carries the mayor's and D.C. Council's activities, wanted to buy
a satellite transmission truck, it did not seek competitive bids but
instead turned to the Gaithersburg company. To justify the no-bid
contract, city buyer Kevin A. Green said in a memo that his research
proved that the company's proposed price of $900,000 was fair.
The bill came in at $991,910, and the agency paid it. Later, the
company sent an additional invoice for $219,000.
In a 2002 memo, the cable office's Director of Operations Robin M.
Yeldell said the agency would pay the bill with a direct voucher. And
despite laws requiring D.C. Council approval for purchases of more than
$1 million, city officials did not seek permission from the council
when the truck's cost rose above that figure.
In the next year, the city gave two more equipment contracts -- again
without competition -- to Professional Products, at a total cost of
$2.8 million.
The cost of the truck went up when the company recommended additional
equipment, said its president, Bruce Kaufman. He said his company's
expertise and longstanding relationship with the city led to the no-bid
contracts.
"D.C. has been a very good client," Kaufman said. "D.C. has been a very
aggressive technology city."
In the past two years, the city has paid consulting firm Deloitte &
Touche $9.4 million under a contract to track children under the watch
of the Child and Family Services Agency. When the firm sent an
additional $1.8 million in bills for costs that ran over the contract
figure, the city paid through direct vouchers.
Deloras A. Shepherd, associate chief financial officer at the agency,
said in an interview "it shouldn't be" paid with direct vouchers, but
they are commonly used. She said Deloitte & Touche was paid entirely
through the vouchers until a few years ago, when she insisted a
contract be written.
A Deloitte spokesman said the company did not want to comment on the
contract costs.
Gandhi has complained about the direct payments, but his office uses
them as well. In one case, the method was used to pay computer
consultant Thomas F. Cosgrove III, who received more than $1 million
from 2000 through 2002. That work was covered by a contract, except for
a three-month period during which city officials neglected to write a
new contract or seek approval for the funding. When Cosgrove submitted
bills that totaled $125,000 for that period, the office paid him
through a direct voucher. Pompa, Gandhi's head of accounting, said he
mistakenly thought someone else had written the contract.
City agencies sometimes find creative ways to avoid competition.
The Lottery and Charitable Games Control Board, for example, wanted to
hire GTech Corp., a national company it had worked with for years, to
run the network of terminals that sell lottery tickets across the
District, records show. But the agency said it was too rushed to put
the contract out to bid. The fastest way to hire GTech was to add it as
a subcontractor to an existing contract held by a company that has
since been bought by Lockheed Martin Corp.
Contract records specified that GTech would do the work, and the prime
contractor would get $626,000 as a fee over the five-year agreement.
With other management and oversight fees, the extra charges amounted to
$900,000, or one-third higher than the average paid by other states,
according to the lottery agency's survey of comparative prices.
The network was plagued by slow performance and frequent outages,
according to lottery agency documents. "Retailer satisfaction is
extremely low," lottery officials wrote in a memo.
GTech spokesman Robert Vincent said, "We have not been made aware of
any substantial complaints."
The Lockheed Martin arrangement expired last year, but the city kept
GTech, paying it more than $1 million since then, without writing a
contract or requiring competition.
The same method -- using one company as a pass-through to hire others
-- is standard practice at the Office of the Chief Technology Officer,
the city's computer department. Many of the pass-through contracts are
granted without competition using the loophole adopted by the D.C.
Council in 2002.
The biggest beneficiary has been DBTS Inc., a start-up company founded
by Carrie-Ann Barrow, a 32-year-old entrepreneur from Northern
Virginia. Barrow had been a $95,000-a-year consultant at the technology
office when she decided to start a computer company in 2000.
The firm is now the agency's biggest local vendor and has received 146
no-bid contracts worth $13 million since 2003.
When the technology office wants to hire computer programmers, it
notifies DBTS. The city sets the salary and the markup DBTS can charge.
The firm then hires the programmers, although they work on agency
projects in city offices. The process, which was described in
interviews by Chief Technology Officer Suzanne J. Peck and contracting
officer Bruce Witty, allowed the employees to work for the city without
going through the normal hiring process or competitive bidding.
In one case, Peck's agency told the firm to hire the son of a city
employee as a summer intern. The agency told DBTS that he should be put
on the company's payroll, specifying that he would receive $12 an hour
and the firm would be paid a $6-an-hour markup.
Barrow questioned the agency in an e-mail, asking if that would create
a "conflict of interest situation" that could endanger her ability to
get more contracts. "I'm trying very hard to follow all the rules," she
wrote.
Officials at the agency said the employee's son was given the
internship, but there are no records to determine which of many
consulting companies was used to pay him. Barrow said her company never
hired him.
Peck said she has done so much business with Barrow because she is
reliable.
"She has done very well for us and we for her," Peck said, noting that
DBTS is considered a small, local business that the city is committed
to support.
Barrow declined three requests to be interviewed or answer questions in
writing about her firm. "We are proud of the work we have done for the
D.C. Government," she wrote in an e-mail.
Peck, a demanding, energetic leader who spent much of her career in
private industry, said she bristles at the constraints of government
purchasing. When she wants to hire someone, she wants it done quickly,
without the delays of bidding and competition. She said she told Witty
to stay within the law, but "exploit the hell out of the gray area."
Witty said the streamlining in D.C. contracting has made it easy to
send work to DBTS or any other company without open bidding.
"Once you start working with someone, you hang in there with them," he
said. "You form your partnerships and keep them. You have to do it
within the law, but that's how you work today."
The D.C. Inspector General released a study this spring of sole-source
contracts in Peck's office, including some from DBTS, and found that
every one of the contracts examined should have been put out to bid and
estimated that the agency overpaid by 24 percent.
Peck, however, said her approach saves money because it allows her to
hire good workers as consultants rather than city employees. And, she
said, her deputies negotiating for sought-after specialists get lower
prices than she would get through competitive bidding.
"With the government pay scales, I can have more mediocre people or I
can find creative ways around it," she said, "and I find ways around
it."
Among those she relies on to negotiate is Sandy Lazar, a Pennsylvania
consultant who had worked with Peck in private industry.
Lazar is directing an $80 million project creating a massive computer
system to revamp the way the city coordinates spending, procurement,
personnel and payroll. He was hired four years ago, after the D.C.
Council gave Peck a waiver to bring in consultants as managers. Until
officials noticed the problem last year, the law put him in the unusual
position of approving his own consulting contract on behalf of the
city.
City records show he has been paid $1.4 million since 2001 and recently
has been given an additional contract for $719,000.
"I'm proud of what I've done," Lazar said. "I've been remunerated
fairly, and I've given back many times over."
In early 2002, Debi Gasper, co-owner of a D.C. public relations firm,
The Ad Agency, was sitting in Peck's office working on an agency
project when Lazar came by. He asked if she'd be interested in
promoting his new software, which was being rolled out to city workers.
Gasper's firm prepared a proposal and began work that March. That first
contract, for $15,000, was too small to require competition under city
rules. But four months later, when a $40,000 follow-up project was on
the table, city rules required competition.
With Gasper's existing proposal in hand, the city needed two other
bids. But rather than advertise the job to gather competing bids, a
contracting officer wrote that he contacted two other companies, and
they declined to bid. That was considered sufficient competition, and
the contract went to Gasper.
Officers at the two businesses listed in records said they did not
remember being asked to bid on the project. One of them, John Vance,
managing director at Levine and Associates, said the firm was seeking
work at that time and, "I can't imagine anyone here picking up the
phone and saying we wouldn't bid."
Lazar said competition for the contract was fair.
Over the next two years, The Ad Agency received a series of sole-source
contracts as "good will ambassador" for the project, records show. It
created posters and did other work to encourage city workers to get
training on the new computer system. The total price was more than
$680,000.
"We just really work hard," said Gasper, who added, "We give the
government very good rates."
In one case, when the money under the contract was gone, the firm
submitted another bill for more than $58,000. The agency paid it with a
direct voucher.
Gasper's firm received another direct voucher payment, for $250,000,
about the same time. She produced a proposal and an invoice saying the
funds were used to buy advertising to promote the city as a destination
for technology companies. But city officials said they could find no
contract or invoices for the payments.
The city said it also put out for competition a contract that
ultimately went to former city official Harry Black, though there were
no competing bids. Black had held several administrative jobs for the
city in the 1990s, including deputy director of the contracting
department.
In 2003, his former contracting office colleagues needed consulting
help to review and approve a backlog of contracts. They didn't
advertise the job but sent faxes to two firms, one of them Black's.
When the other firm didn't bid, Black had no competition. Despite city
rules requiring three competitors, the officials sought no more bids
and granted the contract to Black for $64,000, records show. The
business was extended several times and the city ended up paying
$128,000.
Last year, when the city was seeking a consultant to review its buying
rules, the city manager's office chose Black and sent his proposal to
the contracting office without any competition, records show. The city
later called two other consulting firms to request bids, and one
replied. Black's price was 9 percent higher, but he was awarded the
contract for $86,000.
In the past two years, records show, Black's firm was paid more than
$550,000 through no-bid contracts or through competitive bidding when
he was the only bidder or the high bidder. Black said his understanding
was that competition for all contracts was fair.
Black said city contracting problems persist despite adequate laws to
prevent employees from squandering money. City government has not
developed a culture that holds people accountable for failing to live
up to the laws, he said. "We don't attack the issues because we don't
deal with the human element."
The urgency of solving spending problems, he added, has been lost amid
the attention to the surplus caused by rising tax revenue.
"The beautiful thing with D.C., not like other jurisdictions, is the
economy is booming so much that the inefficiencies get overshadowed."
Staff researcher Bobbye Pratt contributed to this report.
� 2005 The Washington Post Company
http://www.washingtonpost.com/wp-dyn/content/article/2005/11/26/AR2005112601139.html
=======
Note: This most recent example of misfeasance and stupidity by
elements of the ever-failing District of Columbia government is but one
of countless instances of incompetence, dishonesty, greed, criminality,
waste, fraud, and cronyism that has typified the city’s
dysfunction since its receiving "home rule" in 1973. In essence, the
city is "governed," however miserably, by and for its members, its
welfare and civic pride be damned!
A brief review of some of D.C.’s most galling and egregious
missteps provides a snapshot of a city that has never had much success
- except in areas of astronomical taxation and serial destruction of
habitat and services for its neediest citizens.
1) In the 1970s and 1980s, nearly 100 D.C. government officials were
chauffeured to and from work in government vehicles, most of them
limousine class.
2) To this day, the dysfunctional and fractious D.C. education board
cannot accurately state how many city students are enrolled.
3) D.C. employees, including police and fire and rescue workers, are
notorious for retiring on ultra-generous early disability pensions -
then promptly securing other positions in the public and private
sector, with no discernable disabilities!
4) Fully half of all public school "teachers" are deemed unqualified
in their field; about
one-half of these test functionally illiterate.
5) Fully one-half of the city’s public schools, many of which
are more than 65 years old, are in desperate need of repair and
maintenance. Leaky roofs, broken plumbing, malfunctioning or
non-existent air conditioning and heating systems are among the
problems that cause many schools to open each academic year late
because building inspectors refuse to allow students in the classrooms
until fixes are made. But parents, community and business leaders, and
all residents concerned about the city's schools should be worried
about the priorities of the District's elected officials. While
classroom ceilings are falling, boilers are breaking down and school
bathroom facilities become health hazards, the mayor and the D.C.
Council are moving in lock step toward dipping into the city's limited
treasury to join with Howard University in building a $400 million,
250-bed, state-of-the-art hospital that cannot be justified either by
cost or purpose.
6) Private gun ownership is prohibited, yet the city’s thousands
of criminals - including children
as young as 10 - have easy access to a flourishing gun trade.
Approximately one-half of
public school middle- and high-schoolers tell reporters that they
are fearful going to, during,
and returning from school each day. Many students admit to
carrying concealed weapons -
pistols and blades - to class.
6) Hundreds of streets and street corners in the city are the
"province" of hordes of drug dealers, who kill almost daily to protect
their territory. The police, many of whom are reputed to be corrupt
and on the take, are said to be "powerless" to take any action.
7) D.C.’s dysfunctional schools turn out totally illiterate
diploma "graduates," who attend class at their peril because of
gun-toting thugs and gang members. A half-dozen students were
murdered in schools or on the grounds in the past 10 months.
8) The courts system and its judges and staffers are fraught with
corruption and incompetence.
9) Judges routinely fail to obtain and review lawbreakers’ court
records before releasing repeat
violent offenders, and they frequently incarcerate disabled
citizens in the general jail population
without regard to their health or safety.
10) Ex-Mayor Marion Barry, whose alcohol, drug and women woes are
universally acknowledged,
(and witnessed) was typical of black D.C. politicians, who are
elected and serve because of, or
in spite of, the "Adam Clayton Powell" syndrome. Under this
ploy, benighted voters "stick it
to whitey" by supporting those candidates whose behavior is the
most obnoxious, dishonest,
libidinous, greedy, and self- serving, attributes the electorate
applauds and approves.
11) Of course, Barry who, thanks to that Powell syndrome is now a D.C.
council member, admitted in Oct. ’05 to not bothering to file
income tax returns for the past 5 years (tsk-tsk).
12) As we breathe, former officials of the D.C. teachers union are
being tried for pilfering millions of dollars from union funds.
13) The D.C. police force, whose office-hugging, early retiring
membership is replete with ex-cons and resume falsifiers, was unable in
over a year to find the body of Chandra Levy, despite claiming to have
"searched" the very area in which her bones were found by a man walking
with his dog. The Chief was rewarded with a substantial pay increase,
and awards aplenty were passed out to "the force." Meanwhile, citizens
in the most crime-ridden sectors ask, "Where are the police?’
14) D.C. employees are notoriously incompetent and unhelpful. From the
city’s underperforming Department of Motor Vehicles, where
applications for licenses, registration and other services routinely
take taxpayers a full day to complete - to a Department of Social
Services, which frequently loses track of the children under its
purview, often until one is found dead or missing - to the city’s
numerous non-operating computer systems that in any case cannot
communicate with each other, it’s no wonder visitors to City Hall
and other buildings report that the workday of the average civil
servant seems like "one long coffee break." Bu not to worry, many of
these misfits are merely waiting to retire, early if possible, and
begin collecting a very generous lifetime pension that’s indexed
to cost-of-living increases.
15) But even pensions in the D.C. government are mismanaged. Many
deceased or ineligible "employees" collect pensions because the system
is incapable of detecting such mistakes. But, hey, it’s only tax
dollars we’re talking about, right?
16) Personal computers are a real sore point among the city’s
governing elite. Most students have to share ancient PCs with numerous
classmates. Funds appropriated to upgrade classroom PCs are routinely
redirected to "other," presumably more urgent programs.
17) Under current Mayor Tony Williams, "gentrification" of the
city’s run-down areas means
granting building permits to wealthy and influential developers to tear
down poor people’s
homes and neighborhoods for expensive and gleaming new housing and
commercial real estate.
18) As Williams prepares to kiss D.C. goodbye, he leaves the
city’s poor in much poorer circumstances while helping shake down
the heavily-taxed citizenry with funding for $600- million baseball
stadium for Major League Baseball owners that the majority of D.C.ers
will never be able to visit- except maybe as custodians.
19) D.C. police officers are arresting and jailing drivers who have as
little as .01 percent blood alcohol content -- less than from drinking
a glass of wine or beer -- in their systems - under the city’s
"zero tolerance" alcohol policy! This from a dysfunctional government
that can’t seem to find the money or time to repair its education
system.. One D.C. official described the policy as, "Out of order,
out of bounds and outrageous."
20) Numbness compels me to conclude this sad and sordid recitation, but
not before positing a
dire warning: Whither D.C.-type problems? Why, they’ve been
migrating in recent years to
neighboring Prince Georges County, Maryland, where politicians, like
their D.C. counterparts
enjoy the spoils and rewards of "The Adam Clayton Powell Syndrome."
Good luck, PWC!
NOTE: There remains significant political factions devoted to
eventually obtaining (don’t laugh) complete statehood for the
District of Columbia--to become the state of "New Columbia". They put
up candidates for local elections, and are rooted in the desire of the
majority of conscious D.C. residents to have complete autonomy and full
voting rights. They are unswayed by arguments that D.C. is mostly an
inner city, and lacking its own suburban wellspring of wealth and
competence. In fact, the city HAS been a state - a state of chaos -
the solution to which is, realistically, establishment by the federal
government of martial law, to rid the city of the criminals,
reprobates, and malfeasants who’ve had control for decades.