Excalibur-No Bids or Advertisement, but Friend in High Place – IN PROGRESS
“local tax spending is the local’s business”
Purpose
To continually deter improprieties in procurement, contracting, and financial practices of our local government(s).
We wish to note to readers that Council members Deborah Scott and Peter Murphy have been extremely helpful in seeking the truth in this matter, and we appreciate their willingness to ask questions.
Current Status
Based upon all information, we have filed a complaint to the Homeland Security Fraud Office and the Tennessee State Comptroller. It is our money and government too, and publicly funded projects and bid processes must be fair and equitable to ensure good government. Here is our complaint filed Jan. 19, 2012. Click on the image to enlarge.
Introduction
Little Chicago Watch began a series of reviewing questionable contracting practices and conflicts of interest in the execution of publicly funded purchases. We currently have 10 more cases with similar circumstances that we will publish. The facts contained in this piece required 3 months due to the City of Chattanooga’s delayed response.
There are definitive bid and purchase regulations set forth by the State of Tennessee Comptrollers Office, and City of Chattanooga Purchasing Policies. In general, these rules are intended to ensure fair and equitable opportunities for business to compete for government contracts.
Without writing an entire piece on these regulations, we will limit discussion to laws and regulations that are applicable to this particular case:
Tennessee municipal governments are subject to state purchasing laws and policies that require advertisement of contract opportunities as an equitable means for businesses to compete, and for taxpayers to obtain competitive pricing for public goods and services, as set forth by Tennessee Code Annotated, Title 12, Part 3, Section 1007. There are exemptions for local governments to bypass advertising and bid regulations.
The first exemption for local government to bypass the advertising requirement for bids is to declare the goods or services as only available from one source or vendor, called a “sole source.” This means our City government may declare there are no other sources or vendors to provide the same goods or services. In turn, advertisement of the business opportunity is not required.
The second exemption from competitive bidding is for the municipal government to purchase from existing State of Tennessee contracts for the same goods or services, already bid by the Tennessee Department of General Services. Municipalities may purchase from the state contracts without duplicating the bid process.
Applicable TCA Sections
T.C.A. 12-3-1007. Competitive bidding.
(b) In any municipality, county, or metropolitan government, notwithstanding any charter provision, private act, or other provision of law, a purchase, lease, or lease-purchase must be preceded by competitive bidding or competitive proposals only if the purchase, lease, or lease-purchase exceeds ten thousand dollars ($10,000).
T.C.A. 12-3-1001. Purchases for local governmental units.
(a) The department of general services may, upon request, purchase supplies and equipment for any county, city, municipality, special district, school district, or other local governmental unit of the state. The purchases shall be made on the same terms and under the same rules and regulations as now provided for the purchase of supplies and equipment by the department. The cost of any purchase made pursuant to this section shall be borne by the local governmental unit concerned. The department has the power to promulgate all rules and regulations necessary for the operation of this section, subject to the approval of the board of standards.
Link for State Bid Requirements for City
Again, the purpose of bid laws and rules are to ensure fair and equitable execution of contracts and purchases with public dollars by advertising the opportunity to provide equal opportunity for businesses to compete for the work.
Questions
1) What if business opportunities with the City are not advertised, and the sole source vendor designation is used to abate advertising and bid competition to ensure that the contract is awarded to a specific business?
2) What if false state contract designations are assigned for equipment and consulting purchase orders to ensure that the contract is awarded to a specific business?
Little Chicago Watch believes: that bid and purchasing laws and policies were intentionally bypassed to ensure outcomes. Here is why:
October 12, 2011
Little Chicago Watch was notified via Tipsters through info@LittleChicagoWatch.com that the City of Chattanooga has been contracting long-term with a company named, Excalibur Integrated System for equipment and consulting services without the benefit of advertising or bidding the contract opportunity, using false designations of sole source vendor, and raised concerns about the money laundering and kickback background.
A preliminary review was conducted by identifying City of Chattanooga records of purchases with Excalibur Integrated Systems. A search of city resolutions was conducted, where contracts exceeding $10,000 are voted on by city council (Resolutions 2005-2011). A resolution could not be located for any purchases with this company. An additional search of council minutes yielded numerous consulting contracts and equipment purchases under the color of sole source vendor and purchase order, rather than advertise for competitive as required by the City’s purchasing policies and the State of Tennessee Comptroller (City Council Minutes 2005-2011). Additional review yielded that the City of Chattanooga IS Department had issued purchase orders for consulting and equipment purchases as state contract items, when the equipment was never listed on the state contract.
The Tipster(s) also alleged that Excalibur Integrated System was previously convicted of money laundering and kick backs. This coupled with the preliminary findings that advertising and bid laws were intentionally bypassed, forced our spokesperson to file a formal complaint seeking inquiry to our elected representatives on City Council. We provided a list of questionable transactions, and supporting documents with this complaint.
October 27, 2011
T.C.A 12-4-602. Prohibition on solicitation of government contracts by those convicted of certain offenses.
(a) ”Employment on any contract” means to perform services or provide materials to the state or subcontract to perform such services or provide such materials.
(b) It is unlawful for the following persons and business organizations to solicit employment on any contract let by the state or by other state entities or any contract funded wholly or in part by the state or by other state entities, for a period of twenty-five (25) years from the date of such person’s or organization’s conviction, except as provided in §§ 12-4-605 and 12-4-606:
(1) Persons, partnerships, joint ventures, firms or corporations who have pleaded guilty or nolo contendere to or have been convicted of violations of the Sherman Antitrust Act, codified in 15 U.S.C. § 1, mail fraud, codified in 18 U.S.C. § 1341, or any other federal or state criminal statute in connection with any contract let or funded wholly or in part by the state of Tennessee or by other state entities or arising out of official investigation of such offenses;
Excalibur Integrated Systems, Principal, Rodger Dale Jenkins
Acknowledgment of Business Relationship
Our complaint original complaint was submitted on October 27, 2011.
January 13, 2012
On January 13, 2012, we received the following response on this link (please note items highlighted in yellow, and the auditor found that Excalibur was not a “sole source” vendor). Click on this link.
City Auditor, Stan Sewell, Response to Complaint January 13, 2012
Final Response January 13, 2012 from LCW
