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EXCLUSIVE: Allegations of Corruption and Cronyism Surround LACCD’s Award of $100 Million Bond Management Contract

 

 

 

By Brian Hews

Hews Media Group-Community News has obtained documents that allege officials at the Los Angeles Community College District violated their own procurement process by awarding the $100 million dollar bond management services contract for Proposition A and AA/Measures J and CC to Jacobs Engineering over AECOM Engineering.

The documents indicate Jacobs omitted information and provided misleading information to win the bid, while also alleging LACCD officials were negligent during the evaluation process.

Seemingly validating the explosive allegations, AECOM’s bid was $11.7 million lower than Jacobs and the LACCD failed to negotiate with AECOM.

HMG-CN was told that most observers in the industry were shocked that Jacobs won the contract with one observer saying, “no one in the industry could comprehend it, Jacobs is small potatoes compared to AECOM, and AECOM still had an existing contract with LACCD, incumbent contracts always carry more weight.”

Sources are telling HMG-CN that LACCD lawyers, at a recent closed-session meeting, beseeched the LACCD Board to hold off awarding the contract knowing that AECOM would protest.

But the lawyers were reportedly rebuked by LACCD Chancellor Francisco Rodriguez and other Board members in the meeting.

Later, when the Board went back into public session, Chancellor Rodriguez, with the support of Board Member Steve Veres, indicated that LACCD would move forward with the Jacobs award and “if they found any irregularities they would look into them.”

The vote was 4-3 with President Sydney Kamlager, and Trustees Steve Veres, Gabriel Buelna, and Andra Hoffman affirming.

 

VOTED YES: From (l-r) President Sydney Kamlager, Trustees Steve Veres, Andra Hoffman and Gabriel Buelna.

 

 

The bid award was finally posted Aug. 9, signed by Rodriguez and Interim Chief Facilities Executive Thomas Hall.

Many are questioning the lucrative award, hurling accusations of political pay-to-play inside the LACCD Board and outright prejudice and favoritism by LACCD officials.

Phase 1 and 2

The bidding process involved two Phases; Phase 1 one was “technical,” Phase 2 was based on “oral presentations.”

The LACCD used six evaluators for scoring with the District taking a weighted value for the final score.

When the scores were tallied, Jacobs surprisingly beat out AECOM in every Phase, with a weighted point total of 814.5 versus AECOM’s score of 802.3, a difference of only 12.2 points.

Phase 1 Scoring

HMG-CN obtained and examined the Phase 1 scoring, which included 96 categories, ranging from Organizational Structure to Corporate Responsibility.

Jacobs scored 789.4, AECOM scored 779.8, for a difference of only 9.6 points.

Out of the 96 categories, AECOM scored higher in 61, with Jacobs scoring higher in only 20; the two companies tied in the remaining 15 categories.

Yet somehow Jacobs came away with the higher score, and it was that skewed ratio that had AECOM and its lawyers crying foul.

Questionable Personnel

Phase 1 categories contained “Personnel Qualifications” requiring each company to “describe the team, including sub-consultants and key personnel.”

Under California contract law, the key personnel in any public contract must “demonstrate trustworthiness, quality, and capacity to perform the work.”

An examination of Jacobs’ team showed that many of their key personnel failed the standards of California’s contract laws – and basic rules of morality – which should have substantially lowered Jacobs’ score under the Personnel Qualifications guidelines and thus awarded the contract to AECOM.

Racist Emails

Ernie Camacho, owner of Pacifica Services and a Jacobs team member included in the bid, has well-documented history of questionable practices that a simple internet search by LACCD officials would have found.

HMG-CN exclusively published several stories about Pacifica and its relations with Central Basin including the execution of several no-bid contracts valued at over $5 million in favor of Pacifica by then-General Manager Art Aguilar.

 

Political Contributor Banked Millions From Central Basin Municipal Water District Contracts

 

In 2015, the FPPC fined Director Leticia Vasquez $222 for not reporting $1,797 worth of food donated by Pacifica Services.

But it is the actions of Camacho’s current and former generals that should have raised red flags during the bid process, while drawing the ire of LACCD Board President Sydney Kamlager, who is African-American.

But surprisingly, neither the LACCD nor Kamlager objected.

An exclusive March 2014 report by HMG-CN showed that several top executives at Pacifica Services exchanged thousands of highly racist emails during a three-year period that disparaged Muslims, Palestinians, Hispanics, Asians, and Blacks.

HMG-CN obtained more than 2,500 emails from a public records request between Mike Sisson, a high-ranking Vice President at Pacifica Services, and several other people sent from his office computer system located at Central Basin. The emails were written and exchanged during regular business hours.

Many were also sent by Pacifica Services Executive Scott Hennessey and Executive Vice President Steve Carpino; Hennessey’s Linkedin account shows he remains a Pacifica employee.

 

EXCLUSIVE: Pacifica Services, Central Basin Officials Exchanged Thousands of Offensive Emails Bashing Obama, Gays, Ethnic Groups

 

Additional Questionable Personnel

Also included as a key Jacobs team member was Edwin Van Ginkle, who, according to a 2010 Press-Telegram article, was suspended by the Los Angeles Unified School District in connection with an internal probe that revealed cost overruns, perceived conflicts of interest, and violations of the LAUSD’s ban on sub-consultants.

Another key player left off the evaluation was Rory Lorenzo, who was removed from a TradeTech College project at the direct request of the President of the college, Laurence Frank, based on poor performance.

Questions and allegations will certainly surface as to why the information about Pacifica personnel was not revealed to LACCD evaluators.

Jacobs’ total score under Phase 1 would unquestionably have been negatively impacted, likely giving the contract to AECOM.

Jacobs beat out AECOM’s Phase 1 score by a mere 9.6 points.

Omitted a $3.27 Billion Acquisition?

An important part of the Phase 1 evaluation was “Financial Capacity,” worth 125 points, with the evaluators calculating several ratios to ascertain each company’s financial health.

Jacobs, who is substantially smaller in financial terms than AECOM, scored 81.9 points.

The much larger and more financially healthy AECOM scored only 7.8 points, 74.1 points lower than Jacobs; it was the reason why AECOM lost the bid.

But according to AECOM attorneys, Jacobs omitted crucial financial information that would have negatively impacted Jacobs’ Financial Capacity score while also violating LACCD’s procurement guidelines.

On August 2, 2017, seven days before LACCD posted Jacobs bid award, Jacobs announced the acquisition of another engineering firm, CH2M, in a massive deal valued at more than $3.27 billion.

The deal included Jacobs assuming significant liabilities of CH2M including over $400 million in “net debt.”

But the LACCD process did not take into account the CH2M acquisition and its effect on Jacobs financial position, the LACCD and its evaluators only concentrated on Jacobs’ current ratios.

Once again, similar to the “Personnel Qualifications” category, if the information about Jacobs’ acquisition of CH2M was included, as it should have been, Jacobs’ “Financial Capacity” score under Phase 1 would unquestionably have been negatively impacted.

Violated LACCD’s Bid Guidelines

Massive transactions similar to CH2M’s take months, sometimes over a year, to negotiate and finalize.

Under the LACCD’s “Guidelines and Methodology for Evaluation and Scoring,” Jacobs was required to notify the District of any acquisition expected “within the next twelve months during the bid process.”

The bond procurement RFP was sent out March 10, 2017; Jacobs announced the acquisition five months later on Aug. 2, yet LACCD officials ignored the acquisition and awarded Jacobs the contract.

Editor’s note: Phase 1 had an “Overall Evaluation” category worth 50 points. AECOM scored 39.8 and Jacobs scored 33.3. All evaluators scored AECOM higher than Jacobs in this category.

Phase 2

Phase 2 included the group of evaluators listening to bond procurement presentations from both companies followed by a question and answer session, a highly subjective part of the evaluation process.

The Phase consisted of 25 categories, with Jacobs scoring higher in 16 versus AECOM’s 9.

Jacobs’ final tally was 767, AECOM’s was 752.5.

Of note is the “Overall Performance” score of each company: Jacobs scored 86.3 while AECOM scored 85.

Failed to Negotiate With AECOM

The documents also indicate that LACCD, after selecting Jacobs and AECOM as finalists, failed to negotiate with AECOM for an even lower bid.

By not negotiating with AECOM, LACCD failed to secure the best value for the District and its taxpayers, while once again blatantly violating its own procurement process.

AECOM lawyers slammed LACCD for lack of negotiations, “failure to negotiate with an equally responsive bidders who’s technical proposals scored substantially similarly strongly suggest that either the district did not intend to find the best value through negotiations, or that the bidding process may not have been conducted in good faith.”

First Response From LACCD

On Sept. 6, AECOM received a response letter to its Aug. 7 protest; not from Chancellor Rodriguez or Hall who signed the award, but from David Salazar, LACCD Chief Facilities Executive.

Salazar sternly stated, “My final decision is to reject your protest.”

Shockingly, Salazar indicated that the LACCD was turning a blind eye to Jacobs’ errors and omissions.

Salazar said that Jacobs hiring of questionable personnel along with the alleged omission of the CH2M acquisition that violated LACCD procurement guidelines basically did not matter.

“Jacobs represents the best overall value to the District,” said Salazar. “To the extent that there are any deviations, irregularities, errors, or omissions in compliance with the requirements of the bid documents, such deviations, irregularities, errors, and omissions are hereby waived.”

AECOM’S lawyers once again blasted the district.

“The district limited its discussion to the conclusion that Jacobs represents the best value. This suggests that the district has not acted in good faith and improperly favors Jacobs over AECOM.”

The lawyers then cited the Board of Trustees vote that awarded the contract to Jacobs Aug. 9, one month before the District issued its final decision regarding AECOM’s bid protest.

Once again, the vote was 4-3 with President Sydney Kamlager, and Trustees Steve Veres, Gabriel Buelna, and Andra Hoffman affirming.

HMG-CN was told that lawyers for both sides were meeting Wednesday with an outcome to be determined.

President Kamlager, and Trustees Steve Veres, Gabriel Buelna, and Andra Hoffman will have to explain their vote to affirm Jacobs, as will Chancellor Rodriguez and Thomas Hall.

 

 

 

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