Conflict of Interest Charges Lead to Bid Protest

A bid protest was filed on April 5, 2012 with the Charleston (SC) International Airport by the second low bidder on a $150 million passenger terminal redevelopment project.

Inside Information?  The basis of the protest is that an Airport board member owns a construction company that is part of the winning contractor's team, and that the board member was inappropriately involved in decisions and had inside information about the project.  

Involved in Decision Making for Project?  Board member Joey Jefferson, owner of Palmetto Civil Group, LLC, recused himself from the project in a letter dated the date the contract was awarded by the board.  However, the second low bidder maintains that Jefferson was involved in a variety of prior meetings related to the project.  He was apparently involved in the selection of the architectural firm for the project.  It is also alleged that he participated in a meeting that narrowed down the list of bidders and dealt with the contractor selection process.

Unfair Advantage Alleged:  The protest letter from Holder Construction Co. notes that 

"During these meetings, Mr. Jefferson - and by extension the Hitt team [Palmetto is a subcontractor to Hitt, the local partner to Austin Commercial LP] - was privy to inside information regarding the selection process that other firms were unable to learn.  This provided Hitt with an unfair advantage that materially taints the solicitation."

Lessons Learned:  While all of the facts have not yet come out, if Mr. Jefferson was involved as alleged, it would represent a breach of ethical standards applicable to public officials.  

• Public Interests Come First:  Elected officials, as well as appointed officials, have a high standard and duty to ensure their private business dealings are not in conflict with their public duties.  They must remember that their primary obligation is to the public and not to their own financial interests.

• Require Signed Conflict of Interest Statements:  A best practice is for anyone involved in contractor or consultant selection to be required to file a signed statement that they have no conflict of interest with any of the competing firms.

• Regular Ethics Training:  Public agencies should require elected officials and key management personnel to attend yearly ethics training to be reminded of ethical issues.

More Information:  Click here for an April 7, 2012 article from The Post and Courrier.

Mike Purdy's Public Contracting Blog 

© 2012 by Michael E. Purdy Associates, LLC 

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