The oversight report Ward 3 Councilmember Mary Cheh released this week regarding City Administrator Rashad Young’s interference in a competitive bid solicitation over a Department of General Services contract is bad news for the Bowser administration, but it has also placed a separate $100 million contracting controversy in high relief.
Taken together, the two dubious procurements strongly suggest that D.C. officials are kidding themselves if they think companies—particularly small ones—seeking to do business with the city believe they can get a fair shake without a politically connected ally advocating for them behind the scenes.
Cheh’s troubling DGS findings are, in other words, in good company.
In April, LL reported on Young’s office intervening in a five-year, $100 million contract awarded by the Department of Energy and the Environment to Vermont Energy Investment Corp. to run the D.C. Sustainable Energy Utility (DCSEU) program. The Burlington-based firm has held the contract since 2011 despite a record of obscuring its performance failures and billing the city for inappropriate costs.
Initially, local bidder Public Performance Management learned from the Department of Small and Local Business Development (DSLBD) that it had received CBE (Certified Business Enterprise) points that would tip the scales in favor of it getting a contract award. As LL has reported, that notification came from the DSLBD person who processed the paperwork, after consulting with the contracting officer in the Deputy Mayor for Planning and Economic Development’s office.
Four months later, however, the contracting officer, who has ultimate authority over the decision, decided to deny the points and award the contract instead to Vermont Energy. And based on what government officials are saying, it came down to a matter of one day on a routine certification over which reviewing officials have broad discretion under the statute.
According to government emails, Public Performance Management submitted its CBE application on April 11, 2016. Bids, which were due on April 18, are supposed to include the CBE certification. The company submitted its bid on time, minus the certification. On April 19, Melissa Resilof DSLBD sent an email to PPM’s president Rob Thorne, stating that the deputy mayor’s contracting officer would accept the CBE certification once it was awarded. On April 21, Resil notified the contracting officer, Jacque McDonald, and Thorne, that her office had issued the CBE certification and awarded 12 preference points to the firm. Thorne soon learned that PPM had amassed the highest score.
Word hit the street that Thorne had won the contract, while DCSEU’s managing director Ted Trabue let it be known that he had lost. Four months later, in August, however, word was out from the deputy mayor’s office that McDonald had changed her position and denied the determinative 12 preference points because Thorne’s CBE certification had not been reviewed and awarded at the precise time of his bid submission on April 18. LL has confirmed that the city administrator’s office actively participated in this decision, just as it did with the troubled DGS contract.
Both Thorne and Trabue are politically connected inside Mayor Muriel Bowser’s office: Thorne’s top associate not only had a close personal relationship with the mayor, but his firm was also represented by Green Team mainstay Earl “Chico” Horton. Meanwhile, Trabue is a friend and former colleague of Bowser’s senior advisor Beverly Perry. Government contractors are conditioned to know that under such circumstances, the side with the more juice wins the award.
But Tommy Wells, director of the Department of Energy and Environment, says the decision was a matter of principle. Young, whose oversees DSLBD, told staff early on that “we will follow what the law says.” And because Thorne filed for his certification on time but did not receive it from the contracting officer until after the bid deadline, Young and others recognized there could be grounds for a bid protest if the city waived that one day. Of course, they also recognized that if they held that one day delay against Thorne, who had met all requisite deadlines and was at the mercy of the system, he could argue that he relied on assurances that his application was in order.
The legal review took a “circuitous route,” Wells says, before McDonald decided, on the advice of Nancy Hapeman, general counsel to the Office of Contracting, to deny Thorne the preference points that he had been told he was entitled to. LL has confirmed that Young’s general counsel and lawyers with the mayor’s office were involved in the deliberations. “In the end, the attorney in charge of the process made the call that the certification was not done in time,” says Wells. “She followed the law.”
LL has a hard time envisioning Thorne filing a bid protest, as it would risk undermining his standing in the government contracting world. Likewise, it’s hard to envision why a decision to deny him preference points he had been told he was entitled to would take four months. Industry sources say it’s all part of the game, though, and that losers know to take their lumps and hope to have the right people behind them next time.
Wells, however, is satisfied with the outcome, and believes that Young’s office acted responsibly. “I thought Rashad was ethical, honest, and straight up in supporting this award. It does not feel steered or influenced in any way.”
Unlike the DGS contract dispute, in which Councilmember Cheh determined Young clearly intervened to favor Fort Myer Construction, a Bowser campaign contributor.