No Competitive Bids: Agency to Pay $5 Million to Settle Lawsuit

In 2010, the Washington, DC Metropolitan Area Transit Authority (Metro) awarded a $14 million federally funded contract without competition to a consulting company hired to oversee an integration of the agency's financial and business computer systems.  

Settlement:  In a settlement of a whistleblower lawsuit, Metro agreed on August 20, 2014 to pay more than $5 million to settle the case, without admitting any wrongdoing.  Metro will also pay $390,000 to the worker who alleges he was fired for raising concerns about the lack of competition.

Federal audit:  Metro's procurement problems goes beyond just this one contract.  In an audit commissioned by the Federal Transit Administration, FTA found that Metro's procurement practices allowed award of other contracts without competition and contracts were awarded to preferred vendors without adequate qualifications.  As a result, FTA has restricted Metro's use of federal funds until Metro implements procurement reforms that demonstrate an ability to properly manage procurement processes.

Additional information:  Click on the links below for more about Metro's procurement issues:

• Metro agrees to pay nearly $5 million for role in no-bid contract, by Lori Aratani, Spencer S. Hus, and Paul Duggan, The Washington Post, August 20, 2014

• Settlement Agreement of whistleblower lawsuit

• Report questions Metro's handling of billions in federal funds, by Lori Aratani, The Washington Post, March 28, 2014

Lessons learned:  The following are some of the issues raised by Metro's problems:

• Policies:  Have clear procurement policies and practices that comply with applicable laws and best practices.

• Chief Procurement Officer:  Ensure the agency has a chief procurement officer with sufficient authority to ensure compliance with procurement requirements, even when political pressure is exerted by elected officials and agency leadership.

• Training:  Regularly train agency leadership and staff on procurement policies.

• Grant compliance:  Ensure compliance with federal grant requirements.

• Review waivers of competition:  Establish a process with sufficient internal checks and balances for when goods and services may be obtained without competition.

• Documentation:  If no competition is used, document the basis for waiving competitive selection processes.

• Public perception:  Consider the perception of how waiving competitive selection procedures will be viewed in the newspaper and on social media 

Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC
http://PublicContracting.blogspot.com