Hawaii firm got $7.3 million in nonbid work
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By Jim Dooley
Advertiser Staff Writer
By Jim Dooley
Five nonbid Department of Hawaiian Home Lands consultant contracts worth $7.3 million were awarded in 2003-04 to an engineering firm by department employees with past ties to the company, possibly violating a state procurement law enacted by Gov. Linda Lingle's administration to combat cronyism.
Community Planning and Engineering Inc. was awarded the contracts by a DHHL selection committee that included two new department employees recommended for their government jobs by Community Planning officials, according to records and interviews. The third member of the committee had previously worked for the company.
Based in part on experience gained under the first five contracts, the company later received six more nonbid DHHL jobs worth an additional $7.6 million.
The 50-year-old consulting firm is headed by Republican fundraiser and contributor Joseph G. Pickard, who purchased it in 2003, at which point the company began winning DHHL consultant contracts.
Pickard, his family members and business interests have been donors to Lingle's campaigns and the Hawai'i Republican Party, giving more than $70,000 to the GOP and the campaigns of Lingle and Lt. Gov. James "Duke" Aiona since 1998, according to records of the state Campaign Spending Commission and the Federal Election Commission.
The company received no DHHL contracts and very little work from other state agencies from 1993 to 2003, according to a statement of qualifications the firm filed with DHHL.
The contract awards coincided with the Lingle administration's launch of an ambitious and expensive program to develop thousands of new homes for Native Hawaiians.
DHHL director Micah Kane, past chairman of the Hawai'i Republican Party, defended the contract awards, saying the company was well qualified for the jobs and has performed excellent work for the department, much of it under the supervision of Bernard Kea, a respected part-Hawaiian engineer who sold the company to Pickard but stayed on with the firm in a part-time status.
Pickard's political support of the GOP had nothing to do with the contract awards, Kane said.
Lingle spokesman Russell Pang said the governor has no involvement in consultant selections.
"The procurement process is designed to be, and ultimately is, open and transparent. All departments follow the proper procurement procedures," the written statement from the governor's office said.
Pickard said the contracts were awarded because Community Planning is "the best subdivision engineering company in the state."
The company's expertise and efficiency will save DHHL "tens of millions of dollars in construction costs," Pickard said.
But the first five DHHL jobs given to Community Planning may have violated a section of state procurement law, enacted by the Lingle administration in July 2003, that members of consultant selection committees must be "impartial and independent," according to Aaron Fujioka, head of the state Procurement Office.
Committee members Larry Sumida and Joseph Blevins had begun work at DHHL just weeks before the first contract award and among those who recommended them for employment were Kea and Pickard, according to records and interviews. The third committee member, William Makanui III, worked for Community Planning from 1984 to 1996.
Given a description of the backgrounds of the three selection committee members, Chief Procurement Officer Fujioka said the impartiality of the committee "may be questionable."
Sumida, now head of the DHHL land development division, had been working at the department a week when the selection committee for the DHHL consultant contracts was formed.
Sumida's sole job reference when he was hired by DHHL on Oct. 16, 2003, was Kea of Community Planning, according to department records. A week later, on Oct. 24, 2003, Sumida was on the committee that selected Community Planning as "best qualified" for its first nonbid DHHL consulting contract, a $984,000 job to plan and engineer the Kaupe'a housing development in Kapolei, department records demonstrate. Another selection of Community Planning for a $250,000 contract followed five days later.
Sumida is a real estate broker by trade who was hired by DHHL as a noncivil service "real estate development specialist" and had no prior experience in government service or familiarity with state procurement laws.
Reached at home by telephone, Sumida referred questions about consultant selections to Kane and Lloyd Yonenaka, public information officer for DHHL.
Kane called Sumida "a brilliant man" who should get credit "for the lion's share of our success at the department right now."
The department declined to allow Sumida to be interviewed about the contract awards. "Employees have specific duties and media interviews are not part of those duties," Yonenaka said. Interviews could cause "workplace disruption," he said.
Kane was asked if Sumida's service on the selection committee so soon after Kea recommended him for the DHHL job met the "impartial and independent" requirement of the procurement law: "I think he was hired based on his qualifications and whether (the committee appointment) is a week or one year later, I don't think it matters," he replied.
Blevins, the second member of the selection committee, served as DHHL land management division chief from September 2003 to July 2005. He told The Advertiser that Pickard recruited him for the DHHL job in mid-2003.
"He called me on Kaua'i and said the job was available," Blevins said of Pickard. "I never even put in an application. I flew over, had an interview with Micah and I was hired."
Pickard said, "I don't believe I ever called Joe Blevins about that job. I've got to talk to Joe Blevins and find out if that's the case, but I don't believe so."
Blevins is an electrician and construction manager from Kaua'i who holds a master's degree in engineering management.
An active Lingle campaigner in the 1998 and 2002 gubernatorial elections, Blevins was named to the DHHL post by Kane on Sept. 15, 2003, five weeks before the selection committee awarded Community Planning its first contract.
No job application or resume for Blevins could be located in DHHL personnel files, according to department spokesman Yonenaka.
Asked if Pickard recommended Blevins for the job, Kane said, "He may have provided a recommendation, I don't recall, but it would have no bearing (on the employment decision). Absolutely not. If he's not qualified, cannot perform, he's not going to be, he would not be hired."
Blevins held the DHHL job until June 30, 2005, when he resigned to return to the private sector.
The third member of the selection committees, Makanui, is a civil engineer who worked at Community Planning from 1984 to 1996 when he moved to a job in the DHHL land development division.
A request to interview Makanui about the consultant selections also was denied.
Lingle spokesman Pang said Sumida and Blevins "were recommended for their current positions by many individuals in the community." Makanui hadn't worked for Community Planning for seven years when he served on the DHHL selection committees, Pang pointed out.
"I do not believe Mr. Makanui's past employment, seven years ago, alone prevents him from serving appropriately on a selection committee with (Community Planning) as a bidder," Pang said.
Files for the first five Community Planning contracts contain no letters of appointment from Kane naming Sumida, Blevins and Makanui to the selection committees, although such appointment letters are customarily included in government contract files.
Also missing from the five files are score sheets routinely filled out by selection committee members who must evaluate prospective consultants on such criteria as experience, past performance on similar projects and ability to accomplish the required work in a timely manner. Each file does contain a summary of the committees' decisions that Community Planning was best qualified for each job.
Kane said the department "followed the practices in place at the time" he took office but has "since improved our procurement practices."
Blevins said he never filled out score sheets.
"We were new. We didn't know how it was supposed to be done," Blevins said.
"We didn't have a procurement policy as far as I knew. When I found out we were doing it wrong, I brought in a procurement specialist ... and we established a policy."
Blevins said he remembers discussing the first contract awarded to Community Planning with Sumida and believes the company was qualified to receive the job.
He remembers no other meetings of the committees that picked Community Planning for four more contracts in 2003-04.
He said he recalls signing reports, prepared by Sumida, which found Community Planning best qualified for the jobs.
He said he "just signed them and sent them along to Micah."
Kane said he believes the consultant contract awards have been made impartially and independently.
"If we felt that it was not impartial then we wouldn't have acted on it," he said. "I'm very comfortable with our procedures and what we go through to select consultants."
When the governor signed the new law requiring that selection committee members be impartial and independent, she said it was needed to "put to rest the appearance of impropriety in nonbid contracts."
Fujioka's office sent a directive about the requirements of the new law to all department heads, including Kane, on June 16, 2003. The statute was part of a purchasing reform package that the governor said would end cronyism in consultant contract awards.
"The term nonbid contract will become irrelevant," Lingle said in signing the measure into law.
This was a theme endorsed by Pickard in his efforts to raise money for the Lingle campaign.
For instance, in May 2004 Pickard served as chairman of a golf tournament fundraiser for the GOP, soliciting "major sponsors" to donate anywhere from $500 to $5,000 apiece.
"We have made progress by reforming the state's procurement system (and) bringing fiscal discipline in the way government spends taxpayer's hard-earned money," Pickard said in the solicitation.
When Pickard wrote that, Kane had awarded Pickard's company three nonbid contracts worth $3.46 million and was about to award another worth $1.25 million.
Pickard and his businesses also have made political donations to Democratic politicians, including Mayor Mufi Hannemann. Gifts to the Hannemann campaign total some $7,000 since 2001.
After Hannemann won the 2004 election, Pickard served as a member of the mayor's transition team.
More recently, the selection of Community Planning as an $860,000 subconsultant on the city's mass-transit project sparked a state court lawsuit and demands for a federal investigation of the selection process.
The suit was filed by Communications Pacific Inc., a public relations firm headed by University of Hawai'i regent Kitty Lagareta, a longtime friend and political backer of Lingle.
Lagareta alleged that the last-minute selection of Community Planning violated state procurement law. The lawsuit was dismissed last year by a state circuit judge. That decision is now under appeal to the state Supreme Court.
Reach Jim Dooley at email@example.com.