The High Cost of Low Bids

The county needs contractors to do its construction work. The contractors need minority subcontractors to satisfy county regulations. And taxpayers need an explanation.

The water and sewer department's Clemente, who had the final say on which bidder to recommend to the county commission, agrees with Pierce. He said in a recent interview that he recommended to the county commission that Harry Pepper & Associates be awarded the contract as the lowest "responsive" bidder because they secured a signed letter of intent within the allotted two days after bid opening -- and Poole and Kent didn't. The M.A.R.S. letter of intent was submitted after the deadline of August 2, and, therefore, didn't count. Clemente also says the threat of a lawsuit by Harry Pepper & Associates was on his mind. Clemente notes, "Pepper was the low responsive bidder, and so we felt that [had it been awarded to Poole and Kent] there would have been the potential for a legal challenge that would have delayed the project."

But according to retired P&K executive Ed Smith, Poole and Kent was considering its own legal challenge to the contract decision. The firm's attorney mentioned the possibility of filing a lawsuit, he says, but no action was taken. Even so, Smith is still angry at the maneuverings of Pepper and Adkins. ''Once the bids were opened and Pepper saw that Consolidated was both our minority sub and theirs, they went and renegotiated behind our backs, and then got us disqualified," charges Smith. "We had a deal [with Adkins] to do the job for a certain price and then the next thing we know he's claiming he's never talked to us before. It's as simple as that -- when he saw he could get more money from the second bidder, he just refused to sign our letter, even though it's going to cost a whole lot more than it should have."

Adkins and representatives of Harry Pepper & Associates declined to answer phoned and faxed inquiries from New Times. Broome, Pepper's executive vice president, says company policy forbids him, or any other employee, from speaking with the media. Executives currently at Poole and Kent also refused to answer questions from New Times; president William Thomas said in a faxed letter, "As to your questions, a formal hearing was held, and the depositions of all concerned parties are public record."

That record offers insights into Adkins's perspective. At the hearing, he denied any wrongdoing and says he was merely looking out for his own interests. "We felt the numbers were in place," Adkins testified. "I made a business decision."

Ed Smith also insists Poole and Kent did nothing wrong and should have been granted a 48-hour extension to find a replacement subcontractor. At the very least, he contends, all bids should have been thrown out so the bidders could start over. "How much money does the county have to throw away before we realize how much waste and abuse is going on with this [Black Business Enterprise] program?" Smith asks. Pierce says the county has been improving the program. "It's not perfect yet, and with any program there's the possibility of abuse, but we think we're working out some of the problems."

Smith also says he is surprised by Poole and Kent's silence now on the issue A particularly since the firm's president vowed in a meeting with Clemente to protest the contract at an October 19 county commission meeting that officially awarded the disputed contract to Harry Pepper & Associates. But according to Ed Smith, Poole and Kent decided not to discuss the matter with the media, agreed not to file a protest, and agreed not to sue.

Why the change of heart? Smith says it was a simple matter of money. "Poole and Kent does an awful lot of business with the county and they want to maintain a good relationship. So its really wasn't in their best interest, financially, to push this any further." Smith says the water and sewer department's Clemente and Poole and Kent's Thomas had a "handshake deal not to go public with this." Clemente is adamant in his denial of Smith's charges: "There was no deal of any type made" -- and Thomas declined to answer questions on the contract dispute.

Clemente, however, admits to meeting with Thomas just prior to the October 19 commission meeting. He says Thomas mentioned the possibility of a lawsuit and of a formal protest in front of the commissioners. Clemente says he stood firm with Thomas and defended his decision to recommend Harry Pepper & Associates. On October 19, when the county commission awarded the contract to Harry Pepper & Associates, Poole and Kent did not protest, and no one mentioned anything about the controversy. Clemente says today he does not know why Poole and Kent decided not to pursue the matter.

Smith says he's disgusted with his former associates for "selling out." He says media exposure and a lawsuit would have shed much-needed light on what critics say is a flawed county program.

For years detractors have labeled the Black Business Enterprise Program wasteful, inefficient, and poorly managed. Last year, for instance, the State Attorney's Office began an investigation into a large white-owned construction firm, Balfour Beatty, for allegedly trying to bribe a black subcontractor. Under the alleged scheme, Balfour Beatty would list the black firm as a subcontractor while bidding county projects. Once the job was won, Balfour Beatty would purportedly do much of the work itself -- at a lower cost -- and then funnel money through the black firm's books. And earlier this year, the county denied certification to a black firm after investigators from Owens's economic development agency suspected that the firm was being controlled by a company headed by Cuban exile leader Jorge Mas Canosa.

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