Escalating the controversy over a mass transit consulting contract, public relations firm Communications Pacific Inc. has sued the city, accusing two administration officials of violating state procurement law by directing the contractor to change the project team at the 11th hour and include a company that wasn't evaluated in the selection process.

Communications Pacific alleges in the lawsuit that Mary Patricia Waterhouse, director of the Department of Budget and Fiscal Services, and Toru Hamayasu, acting deputy director of the Department of Transportation Services, broke the procurement code by directing Parsons Brinkerhoff Quade & Douglas Inc. to include Community Planning and Engineering Inc. for the "public involvement" portion of the project.

Community Planning is an engineering firm headed by Joe Pickard, a friend and political supporter of Mayor Mufi Hannemann. The firm was not part of the team of subcontractors that Parsons Brinkerhoff assembled to compete for the $9.7 million contract, which was awarded Aug. 26 and calls for an analysis of mass-transit alternatives for the city.

Before awarding the contract, the defendants required Parsons Brinkerhoff to make the last-minute change and, as a result, Communications Pacific's role was greatly reduced, according to the lawsuit that was filed Tuesday in Circuit Court.

The city yesterday denied any wrongdoing. "It's unfortunate that the city will have to spend taxpayer dollars to defend what we believe is a lawsuit totally without merit," city spokesman Bill Brennan said.

The lawsuit is only the latest spat in what has become a growing debate over how the contract was handled.

Last month, City Councilman Charles Djou asked the federal Department of Transportation to investigate the contract award, saying the city may have abused its authority by requiring the contractor to divert nearly $900,000 in work to a politically connected subcontractor that wasn't part of the original team.

More than $7 million in federal transportation money will be used to pay for the overall contract work.

Djou's request prompted Hannemann and U.S. Rep. Neil Abercrombie, D-Hawai'i, to accuse the councilman, who voted against increasing the general excise tax to pay for a transit system, of trying to delay the project.

Hannemann and Abercrombie sent their own letters to the Transportation Department, suggesting an investigation was not warranted.

Communications Pacific previously asked the state Procurement Policy Board to investigate how the contract was handled, but state comptroller Russ Saito concluded neither he nor the board had jurisdiction to do so.

Kitty Lagareta, chief executive of Communications Pacific, said she tried to work with the city and the state board to fix a practice the city says has been used before and one she believes is improper. When those efforts failed, Lagareta decided to file the lawsuit.

"How this happened seems so incredibly wrong," she said.

Reach Rob Perez at rperez@honoluluadvertiser.com.