City to contracted vendors: Do the job and do it right
Nick Gahr, a PWE supervising engineer, demands strict compliance from contracted vendors at the Sims Bayou wastewater treatment plant.
Photo and story by John Perry
“The Tire Repair Story” has become contract compliance folklore.
“Cougar Tire Service was contracted to do tire repairs on city vehicles,” said Tony Henshaw, contract compliance supervisor in Public Works & Engineering. “Until they were caught padding the bill.”
Confident they could prowl below contract compliance radar, Cougar became brazen.
They billed PWE for repairs on the same vehicle at multiple locations. And worse, they forged an employee’s signature on the bill, Henshaw said.
“They didn’t believe we would check the invoices,” said Henshaw of the 1998 fraud.
Cornered by city auditors, declawed Cougar didn’t dispute the wrongdoing and didn’t collect on the fraudulent billings.
“Unfortunately, manipulation of the truth by vendors isn’t uncommon,” Henshaw said. “We must remain vigilant.
“Sometimes a vendor will want to get away with partial compliance,” Henshaw said. “It’s our responsibility to monitor the contracts and make sure the vendor is providing all that’s been agreed to.
“Remember, it’s the taxpayers who bear the ultimate brunt.”
The contract technical representative is the first line of defense, Hensahw said.
“By checking invoices and approving them for payment after verifying the service was performed, the CTR helps prevent fraud, poor performance and waste.”
Monitoring contractors is the best way to track vendor performance. That means the city has a physical presence at the job site, Henshaw said.
“I’ll do unannounced site checks to make sure that everything is on the up and up,” said Nick Gahr, a CTR and supervising PWE engineer. “The challenge is that we’ve got so many sites with so much activity it’s hard to find time to do as many as I want. Basically, it’s an issue of not having enough time.”
“Keeping good records is the key,” said Nicole Montgomery, assistant city attorney, speaking at a Feb. 22 compliance seminar at the E. B. Cape Center. “The CTR needs to document everything. If we need to disqualify a payment for nonperformance, we have to back up our decision.”
City slaps slackers
Three Houston construction companies learned the hard way that Mayor Bill White, City Hall and the Controller’s Office mean business when it comes to city business.
Some contracts are set up with timelines and milestones – incremental work that must be completed in an agreed upon time before a percentage of payment is made.
Stephens Construction Co., Primis Construction Corp., and Jackson Construction Services Inc. were banned for two years from city contracts after falling too far behind on their separate jobs.
Stephens failed to show adequate progress finishing work on a Clear Lake fire station. When City Council voted to ban the company on Jan. 11, 2006, it marked the first application of the Public Works Contractor Debarment Ordinance since Council approved it in 2000.
Primis and Jackson were debarred March 1, 2006, for irresponsible practices. Primis had abandoned work on a fire station, and Jackson had failed to complete roofing services on three city facilities.
Issa Dadoush, director of Building Services since 2004, said the city insists on contract compliance.
“Time is money. A lack of performance will not be tolerated,” Dadoush said. “We want the citizens to understand that we are watching their tax dollars.”
City officials are working to rectify noncompliance issues.
Changes to Texas Statute 252.043 expanded the way a municipality may award a contract by considering the “best value.” The city may consider the purchase price when awarding a contract, but also the reputation of the bidder providing goods or services to other entities, as well as a past relationship with the city.
For example, 3/D International Inc., hired to undertake the $14.9 million renovation of the downtown Jesse H. Jones Library, was awarded the contract based on a range of criteria that provided the best value – not just the lowest bid.
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