Tag Archives: contracts

Dispute develops over awarding multi-million-dollar state radio communications contract

The state Department of General Services is in the process of awarding a new five-year contract, potentially worth millions of dollars, for all radio communications equipment and its maintenance, repairs, parts and accessories – and some of those considering bids are suggesting the deck is stacked in favor of one company.

Further from Richard Locker’s report:

The state’s procurement process flared briefly into controversy during a conference with potential bidders Sept. 4 when a vendor suggested the current contractor appeared to have drafted some of the procurement documents. The vendor made the assertion after clicking on the “properties” tab of a computer file among the documents given to vendors for review, which listed as its “author” the Tennessee sales representative for Motorola Solutions Inc., the current contractor. The conference ended as other vendors asked about the fairness of the process.

But spokesmen for Motorola and the state Department of General Services said the company had no role in drafting the documents and that the assertion was based on a misunderstanding.

…(S)ome potential vendors say only Motorola, the industry giant in public-service radio equipment, could qualify for several of the nine categories of radio equipment for which contracts will be awarded under the current draft requirements. The state plans to award a single contract for each category, and each category has sub-categories of radio equipment.

Some vendors have written to the department’s Central Procurement Office asking to consider multiple contracts for each category, which would allow more vendors to bid, increasing cost competition. Some vendors meet the specifications for some sub-categories but cannot bid on the full category because they don’t manufacture all the radios in all the sub-categories.

The General Services Department says it is considering that request.

Note: Motorola Soultions Inc. has provided $17,500 in corporate contributions during the 2013-14 election cycle to the Senate Republican Caucus, the House Republican Caucus and political action committees operated by Lt. Gov. Ron Ramsey, Senate Majority Leader Mark Norris and Senate Republican Caucus Chairman Bill Ketron. The company also operates a national PAC registered in Tennessee. It’s only Tennessee donation reported this cycle is $2,500 to Gov. Bill Haslam.

Four accused of lying to get government contracts

GREENEVILLE, Tenn. (AP) — A North Carolina construction company owner and his business partners are accused of lying to obtain millions of dollars in government contracts.

According to an indictment, Rickey Lanier; his wife, Katrina Lanier; and Latoya Speight falsely claimed that two construction companies operated by the trio were owned and operated by other people. The indictment says the Laniers and Speight lied to obtain government contracts set aside for small businesses and disabled veterans.

They obtained more than $14 million in contracts.

Emanuel Hill, of Louisville, Kentucky, is accused of conspiring with them to create one of the companies.

All four defendants pleaded not guilty at a Tuesday hearing in federal court in Greeneville, Tennessee. All were released on $20,000 bond except for Hill, who was released on $50,000 bond.

Out-of-state firm gets $60M contract to promote ‘Made in Tennessee’ campaign

NASHVILLE, Tenn. (AP) — Tennessee officials have signed a five-year, $60 million contract with a Kansas City, Missouri firm to produce the “Made in Tennessee” tourism campaign.

The marketing agency VML, which has opened a Nashville office, produced two 30-second TV commercials promoting getting outdoors in Tennessee. The ads feature with dramatic waterfalls, green rolling hills and horseback-riding amid a forest scene. The ads will play in about a dozen markets around the country.

The head of the state’s tourism department, Susan Whitaker, told WPLN-FM in Nashville (http://bit.ly/1pzZ6VM ) at a time when other states are investing heavily in tourism promotion, Tennessee needs to keep up. Whitaker also cited ABC’s “Nashville” as sparking new interest in visiting the city. VML’s ad campaign is aimed at turning that interest into a visit.

Governor Bill Haslam’s current budget included a nearly $11 million tourism budget, $6 million of which is being dedicated to the VML contract. It’s a 5-year agreement, and the firm’s total maximum payout is $60 million, though that doesn’t guarantee that’s what the company will be paid.

Whitaker said publicly-financed advertising yields big turns. For every taxpayer dollar invested, around $19 are sunk back into local and state coffers, she said.

Whitaker said if tourism efforts continue to receive strong funding, they’ll be able to hit their goal of making it into the top 10 states for tourism. Right now, in terms of revenue, Tennessee is ranked 17th.

“Part of the reason for that, and I don’t broadcast this to people when they come, is that we have a very high sales tax,” she said.

Republicans kill Democratic bill banning ‘organizational conflicts of interest’ in state contracts; OK an alternative

Senate Republicans have rejected a Democratic bill to ban state contractors from having an “organizational conflict of interest” – such as the comptroller deemed the case in a state building management contract – and instead adopted a measure governmental entities to develop a policy on the matter.

Senate Democratic Caucus Chairman Lowe Finney of Jackson sponsored the bill inspired by Jones Lang LaSalle’s contract for management of state buildings (SB1447). A comptroller’s review found an organizational conflict in that the contract called for JLL to recommend actions on state buildings, then profit when the state followed the recommendations – for example, closing a state building and renting alternative space with JLL getting a commission for negotiating the rental agreement.

Republican members of the Senate State and Local Government Committee, including Chairman Ken Yager, R-Harriman, contended Finney’s measure was unnecessary.

“There just some fundamental problems with the bill,” said Yager. “L et the agencies we have created make these policies… rather than one-size-fits-all approach.”
Yager’s alternative bill, SB767 as amended, instead calls on the state’s Central Procurement Office, the State Building Commission and the state Department of Transportation to “establish policies and procedures to define and identify organizational conflicts of interest.”

Finney said that does not go far enough and it would be much better to have a clear prohibition as part of state law to “put some teeth in it make it count.” He said that his bill includes a penalty provision, namely termination of the contract by the state comptroller.

Comptroller Justin Wilson, whose audit raised the issue, said he preferred Yager’s approach because state contracting is a “a very rapidly changing situation” and policies could deal with issues as they arrise.

Yager’s bill was approved 7-0. Only the two Democrats on the committee voted for Finney’s bill, while four Republicans voted no and two abstained. Five yes voted are needed in the committee for a bill to be approved.

Sunday column: Following the niceties to keep JLL inquiry alive

A group of state legislators plan to file a bill that would knock two years off the state Department of General Services’ legal lifespan because of questions about the handling of a contract for management of state buildings by Jones Lang LaSalle.

In doing so, the Republican leaders of the House and Senate Government Operations Committees stressed that they weren’t really interested in terminating the existence — or “sunsettting” — of a major arm of state government’s executive branch.

They were just following what House Government Operations Vice Chairman Rep. John Ragan called “legislative niceties” to ensure that the proper procedural steps were taken to hold a special meeting of the House and Senate panels during this year’s session devoted to the Jones Lang LaSalle arrangement and other contracts through the new state procurement system.

“This is not an intent to kill the agency,” Ragan told General Services Commissioner Bob Oglesby and other department officials on hand at the meeting, adding the lawmakers do not wish to be seen as launching “a Spanish Inquisition.”
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Legislators want more answers to Jones Lang LaSalle questions

With questions piling up on the Jones Lang LaSalle contract and other aspects of the state’s procurement system, the the House and Senate Government Operations Committees have decided to bring the contract and other issues back before the legislative committees in the coming session, reports Andy Sher.

“There were just a lot of questions from the members and we knew we didn’t have time,” Senate Government Operations Committee Chairman Mike Bell, R-Riceville, said over the weekend.

Bell noted that the state made a “pretty radical change” to the procurement process.
“And I know there have been some aspects to it that have not been fully understood by the Legislature or the public,” he said. “And it’s looked bad.”

The lawmaker quickly added that “whether the appearances of impropriety are actual, I’m not sure. I haven’t seen any evidence of it and, again, it may be that this is a business model that will benefit the state in the long run.”

Among other things, the comptroller’s audit echoed questions raised in news accounts about potential conflicts of interest. The company is in charge of making recommendations about leased office space needs and also is paid commissions on deals struck with real estate firms.

Haslam says the overall outsourcing will save taxpayers more than $200 million over 10 years. Jones Lang LaSalle also now runs many state office buildings and was put in charge of assessing state office needs and the condition of existing buildings, as well as consolidating state office space.

…At the Dec. 18 hearing, members delved into the conflict issue as well as how the contract with Jones Lang LaSalle expanded. The contract grew from an initial $1 million assessment of state real estate functions into what was envisioned as a $19 million per year contract estimated at $100 million over five years.

Thad Watkins, general counsel for General Services, disagreed with the audit’s conclusion that the scope of the original contract was too broad or that it grew even more by amendments beneficial to JLL.

“We want to put to rest once and for all that this contract grew from its original conception,” Watkins said.

He pointed out that the original contract, as approved by the State Building Commission, “was planned from the very beginning to be grown by amendment as funds became available.”

Rep. Joe Carr, R-Lascassas, was skeptical of a General Services official’s assertion that lists of services attached to the original contract were either specifically set forth or “logical extensions” of the contract.

“So if the amendments were an obvious and expected extension of the contract … then why are they amendments?” Carr asked. “Why aren’t they part of the contract as originally written and proposed?”

Told that they weren’t included because the money wasn’t available, Carr said, “your logic poses some challenges.”

Senate Minority Leader Jim Kyle, D-Memphis, pounced on the issue.

“That is probably true,” Kyle said. “And if it is, it has to be the greatest disrespect I’ve ever seen to the General Assembly’s budgeting process in 30 years — ‘We know we’re going to be spending the money, but we’re not going to tell you we’re going to be spending the money.’”

Kyle said he didn’t know of anyone in the Haslam administration ever making a presentation to a legislative committee discussing how the administration planned to embark on a major change in state policy.

Note: WTVF-TV did a one-hour special on Jones Lange LaSalle dealings, coupled with a review of Haslam’s contracting with lobbyist Tom Ingram. IT’s available HERE.

Haslam defends moving contract; Democrats want investigation

Gov. Bill Haslam says charges his administration rigged contracts to steer state business to an out-of-state moving company are off base, reports WZTV (video of newscast HERE)

Democratic Party leaders are calling for a full investigation into changes in contract language that resulted in a single company being hired to move several state government departments out of the Cordell Hull building downtown and into the Tennessee Tower. (Note: Previous post HERE)

Haslam says the administration’s procurement policy is focused on getting the best return for the taxpayer’s dollar. The moving contract is the subject of a lawsuit.

(Previous post HERE)

The gubernatorial quote, via Nashville Post Politics:

“We had a very complicated moving process going on. We literally were moving almost everybody in the state, the state worker, and to do that there were certain requirements for companies to be able to keep, to keep us in business,” Haslam told reporters Friday.

“It’s like changing the train while it’s still moving. We had to keep the state in business so we had to have moving firms that could do that on the size and the complexity we needed,” he said.

Note: State Democratic party’s news release is below.
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Another questioned state contract: ‘We’ve broken several laws’

Phil Williams has a new report questioning the Haslam administration’s handling of state government contracts, this one on cancellation of a contract held by Sanders Moving Company of Nashville. Sanders has filed a legal claim against the state and contends the contract was wrongfully canceled so the state’s business would go instead to Flood Brothers Moving of Atlanta.

“This is not a company that is afraid of competition,” said Harold Donnelly, attorney for Sanders Moving. “They are fierce competitors. They just want everybody to be following the same rules.”

In emails that Sanders’ lawyer filed with the state’s claims division, Kurt Herron — a career employee in the Tennessee Department of General Services — said bluntly: “We’ve already broken several laws.”

He specifically blamed Atlanta native Leah Shrock, an employee of Jones Lang Lasalle. That’s the big corporation that the Haslam administration put in charge of the state’s real estate.

“I know we redid [the statewide contract] four months early so Leah could get Flood Brothers on there,” Herron wrote.

Donnelly said the emails speak for themselves.

“The original contract was broken, according to these emails, in order that Flood Brothers be brought on to the contract,” he added. “You shouldn’t breach the contract and you shouldn’t break the rules and regulations just so one bidder could be favored.”

JLL has been supervising a multimillion-dollar redesign of state offices that has required the relocation of whole departments.

In one email, the career state employee wrote, “JLL only wanted to use the bigger companies and therefore made the requirements so strenuous that the smaller companies couldn’t compete.”

This summer, Haslam administration officials told lawmakers that the contract was redone partially so that durable shipping crates like the ones shown in a Flood Brothers video could be used for the moves.

“This is unprecedented, unprecedented moves,” the governor’s chief of staff, Mark Cate, told the legislature’s Fiscal Review Committee. “So to do that, we had to get the right, we needed the movers that could do this in a way that was the most efficient.”

Still, the emails indicate that diversity experts within the Department of General Services had “has declared the mandatory use of crates to be discrimination” against smaller moving companies that might want to compete for the work.

In addition, the claim filed by Sanders Moving alleged that state officials also allowed Flood Brothers to illegally change the prices on its bids to undercut its competitors.

In a statement, JLL admitted that it has worked with Flood Brothers in the past, but insisted that any suggestion that it steered state business to anyone is “entirely false.”

Here is the company’s statement:
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New allegations of state ‘contract shenanigans’

There are new allegations of “contract shenanigans” by the Haslam administration, reports WTVF, in a legal claim against the state Department of General Services.
It essentially accuses state officials of bid-rigging.

At the center of the controversy is the Haslam administration’s massive plan to remodel all state offices requiring a highly orchestrated effort to move employees in and out of state buildings for the construction.

That plan has been dubbed Project T3, a shorthand reference to Transforming Tennessee for Tomorrow.

When the process first started, Ted R. Sanders Moving Company had the state’s moving contract.

But, last fall, the company suddenly learned that the Haslam administration was cutting that contract short, according to the legal claim filed against the state, alleging “breach of contract.”

“The Department has provided varying stories on why it ‘needed’ to cancel said contract,” says the claim, filed by Nashville attorney Harold Donnelly.

“Sanders submits that the primary reason, if not the sole reason, was because it desired an out-of-state moving company … to be added to the contract.”

That company was Flood Brothers Moving, out of Atlanta. The claim hints at a connection between Flood Brothers and an official at Jones Lang Lasalle — the big corporation that the Haslam administration put in charge of the state’s property.

While the governor has insisted everything is above board with the state’s contracts, the claim alleges that Flood Brothers was even “allowed to submit a new bid” — after its competitors submitted their prices.

The claim calls that “a frantic, unlawful, improper attempt to bring Flood’s bid up to par so that the Department could then turn around and award the contract to Flood.”
It adds, “The Department’s actions beg the question: why was Flood winning this contract so important that the Department employees would flout the law?”

As a result of those efforts, Sandersk Moving claims it lost out on more than $300,000 in state business and should be reimbursed for its losses.

A spokesperson for the Department of General Services declined to comment, saying the matter is now in the hands of state lawyers.

Cates Leaving as Comish of General Services

News release from Gov. Bill Haslam’s office:
NASHVILLE – Tennessee Gov. Bill Haslam today announced Department of General Services (DGS) Commissioner Steve Cates will be leaving state government to return to the private sector in the coming weeks.

As commissioner, Cates has focused on the state’s assets and liabilities through a comprehensive review of state-owned properties across Tennessee, and as a result he has worked to ensure that space is being utilized and facilities are being maintained in the most efficient and effective way for the taxpayers of Tennessee.

He has also played a key role in the state’s implementation of a new Central Procurement Office to create more savings and efficiencies through leveraged purchasing by state government.

“Steve has put a lot of work into bringing state government into the 21st Century,” Haslam said. “We now have a reliable inventory of state properties; we have a plan to maintain those properties instead of deferring maintenance costs until there is a crisis; we’re creating more functional and cost-effective work spaces for our employees; and we’re leveraging the state’s buying power to save taxpayer dollars. These are significant changes that are making state government better, and I am grateful to Steve’s dedication to see these projects through.”
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