We are reprinting excerpts from an April 23 letter to Honolulu Councilmember Ann Kobayashi from Honolulu Attorney John C. McLaren who wrote “on behalf of former Governor Ben Cayetano and other unidentified people” according to the May 6 Advertiser. Kobayashi and Cayetano are key supporters of Neil Abercrombie. The allegations contained in the letter have been forwarded to the State procurement office for investigation.
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Honorable Ann Kobayashi
City and County of Honolulu
In March 2005, City Auditor Leslie I. Tanaka noted in his report, “Audit of the City’s Sole Source, Emergency, and Professional Services Procurement Practices,” that “certain sole source, emergency, and professional services purchases approved by the city have either violated the state procurement code or city policies.”
The suspected violations of the Code included in this letter are related to contracts for professional services and, specifically, contracts for design professional services of engineers, architects, land surveyors and landscape architects….
The most egregious example of this is the August 26, 2005 contract award to Parsons Brinckerhoff Quade & Douglas, Inc. (“Parsons Brinckerhoff’ nka PB Americas, Inc.) for the Technical and Professional Services for the Honolulu High Capacity Transit Corridor Project in the initial amount of $9,700,000.00 in spite of Earth Tech, Inc., being ranked first ahead of Parsons Brinckerhoff.
There were also only two ranked firms for this project, which is a violation of HRS § 1 03D-304(g)…. The total contract payment was $10,200,000. This contract was for Parsons Brinckerhoff to produce an Alternatives Analysis and draft environmental impact statement (“EIS”) for the rail project, which includes the now controversial airport rail alignment that will require the realignment of two runways or realignment of the rail line at significant City taxpayer expense.
Other examples that are documented in Attachment 10 of the City’s violations of selecting the first ranked person are:
- Shimabukuro, Endo & Yoshizaki, Inc. was awarded the contract for the Design of Bus Stop ADA Accessibility Improvements, Phase V Project, in the amount of $137,170 without appearing on the Short List.
- Environet, Inc. (“Environet”) was awarded the contract for Consultant Services for Sand Island Waste Treatment Plant Expansion, Primary Treatment, Soil Management Project, in the amount of $700,000.00 despite Earth Tech, Inc., being ranked first ahead of Environet.
Since January 2005, the City and County of Honolulu has also failed to submit a Short List containing a “minimum of three persons” to the department head and, as a result, violated the Code requirement by contracting for design professional services a total of 13 times with persons listed on Short Lists not containing the minimum of three persons (Attachment 11).
The most egregious an example is InfraConsult, LLC (“InfraConsult”) (formed by three former Parsons Brinckerhoff employees) that was awarded a contract for Project Management Support Services for the Honolulu High Capacity Corridor Project in the amount of $36,727,162.00 from a Short List listing only InfraConsult and no other persons.
The InfraConsult contract was awarded on November 19, 2009 and the award was posted the following day on the State & County Professional Service Awards website. This appears to be an exceptionally short time period in which InfraConsult had to:
- complete scoping all of the details of work specified in the contract proposal,
- complete all negotiations with the City, and
- obtain all signatures and approvals, for such a large contract,
unless InfraConsult knew well in advance of November 19, 2009 that it was assured of receiving this award, and it had also completed virtually all of these steps before the award was announced….
Parsons Brinckerhoff was also a major consultant on the H-3 highway project which was originally estimated to cost $70 million but after more than 20 years of lawsuits, it cost $1.3 billion. The lawsuits were based on flawed EIS and archeological studies. The U.S. District Court ruled in favor of the plaintiffs, Stop H-3 Association v. Andrew L. Lewis, 538 F.Supp. 149 (D. Hawaii 1982), and on appeal to the U.S. Ninth Circuit Court of Appeals, the judgment was affirmed….The selection criteria in FIRS § 1 03D-304(e)(2) is: “Past performance on projects of similar scope for public agencies or private industry, including corrective actions and other responses to notices of deficiencies.”
In addition, “[a] public administrative agency possesses only such rule-making authority as is delegated to it by the state legislature and may only exercise this power within the framework of the statute under which it is conferred, Administrative rules and regulations which exceed the scope of the statutory enactment they were devised to implement are invalid~and must be struck down.” Haole v. State, 111 Hawai’i 144, 152, 140 P.3d 377, 385 (2006) (quoting Stop H-3 Association v. State Department of Transportation, 68 Haw. 154, 161, 706 P.2d 446, 451 (1985) (underscored added).
The Honolulu Advertiser reported on April 9, 2010 that to avoid the substantial costs of moving runways 22L/4R and 22R/4L, the City is now proposing to move the rail station on Lagoon Drive to the Ualena Street intersection. Mr. Yoshioka said this proposal will require further study of the affected properties, and approval by the Federal Transit Administration. This alternative should have been investigated by Parsons Brinckerhoff and the City long before the City’s announced alignment change to the City Council on April 8, 2010. If this new alignment is not in the Alternatives Analysis or in other EIS documents prepared by Parsons Brinckerhoff, an environmental assessment (“EA”) or an additional supplemental EIS may have to prepared….
MAR § 3-126-38, Remedies after an award, states in relevant part…
If the violation cannot be waived without prejudice to the State or other bidders or offerors and if performance has begun, the chief procurement officer or designee shall determine in writing whether it is in the best interest of the State to terminate or to amend, ratify, and affirm the contract. Termination is the preferred remedy….
BAR § 3-126-38(b)(6) states:
“If a state or county employee knowingly and willfully lets a contract contrary to law; that employee may be personally liable for his or her actions.”
The City … violated the central safeguards required in the selection of design professionals of having a minimum of three persons on the Short List and negotiating first with the first ranked person. Why was Earth Tech, Inc., not awarded the August 26, 2005 contract that the City awarded to Parsons Brinckerhoff, in spite being ranked first ahead of Parsons
The City has never explained this award or any other award where the first ranked persons did not receive the contact. The City’s violations of these clear, basic, and essential safeguards for the public interest indicates that City government officials are intentionally violating the Public Procurement Code.