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Orange wants investigation of contracting procedures

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A key D.C. Council member said Wednesday he will introduce a disapproval resolution related to a questionable $12.7 million contract to overhaul city-owned United Medical Center.

D.C. Council member Vincent B. Orange, chairman of the Committee on Business, Consumer and Regulatory Affairs, said he hopes to see the contract for the Southeast D.C. hospital — and the city's local contracting procedures — investigated to root out what he said could be possible fraud and abuse.

The comments stem from a contract recently awarded to Chicago-based Huron Healthcare and its local partner, Compass Solutions. The contract, to prepare the hospital for an eventual sale, is pending council approval but has been the subject of concern from numerous parties involved with the competitive bidding process, which began in September.

The Washington Times, citing emails, city records and interviews with other bidders, reported Wednesday that city contracts chief James Staton and healthcare finance Director Wayne Turnage had been notified repeatedly that Huron submitted a proposal with a subcontractor that was not certified as a local minority firm, as is required by D.C. law.

Later, the emails and interviews showed, after the Office of Contracts and Procurement delayed the review process and ordered an unusual second round of "best and final" offers, Huron dropped the non-certified local firm and added one that was certified.

D.C. law states that any local minority subcontractor "has to be certified at the time of the submission of the proposal or be considered non-responsive."

"My view is that Huron was unresponsive and should have been disqualified," said Mr. Orange, at-large Democrat.

Council member Yvette M. Alexander, Ward 7 Democrat whose constituents are served by United Medical Center, plans to cosponsor the disapproval resolution.

Mr. Orange also noted that Huron's substitute local subcontractor, Compass Solutions, is well known to the same officials handling the United Medical Center contract. The company has been awarded a sole source contract just under $1 million, the threshold above which council approval for a contract is required. City records show that Mr. Staton, Mr. Turnage and Olinda Fuller, the contracting officer overseeing the United Medical Center contract process, approved that sole-source contract awarded to Compass.

Compass officials said Wednesday that they directed the firm's corporate counsel to handle press inquiries, but no lawyers contacted The Times in response to questions.

Huron officials did not return numerous calls and emails seeking comment.

Mr. Staton's office has said it cannot comment while the hospital contract is pending before the council.

Mr. Orange pointed out that a recently passed law that would remove waivers of minority contracting requirements from Mr. Staton's purview and place them with the director of small and local businesses awaits Mayor Vincent C. Gray's signature.

"The business community is seeking to veto that law but this [UMC contract] is why such legislation is needed," the council member said. The Office of Contracts and Procurement "has missed the mark here, and I'm concerned about fraud and abuse in the [local contracting] arena. I urge the mayor to act on this new legislation."

The mayor's office did not respond to calls for comment.

Mr. Orange said he is considering separate emergency legislation that would strengthen the certification process for local minority firms.

In August, when Mr. Staton addressed bidders on the UMC contract, he stressed that "time was of the essence" and the "integrity of the process is most important," according to the emails obtained by The Times.

Yet that declaration was followed by peculiar delays and other concerns called to his attention and the attention of other contracting officials.

Mr. Turnage, who also received emails expressing concern, deferred contracting questions to Mr. Staton, but on Tuesday offered that he saw the second round of "best and final" offers as part of an agency-wide attempt to re-assess pending contract awards in the wake of an unrelated adverse ruling by the Contract Appeals Board.

During the delay, however, Huron dropped subcontractor HGM Management and Technologies, which city records show was not certified as a local minority business, and added Compass, which is.

Eventually, Huron was awarded the contract, originally budgeted for $10 million, with an additional $2.7 million added to the price.

One highly regarded local businessman involved with the competitive bidding process said it "totally reeks."

"What one looks to do is play by the rules, and in this process the rules changed," said the businessman, who spoke on condition of anonymity because he has business pending before the city. "Someone wanted to hire Huron, and they found a way to do it."

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