- The Washington Times - Friday, May 26, 2000

Metro officials Thursday refused to divulge details about a report resulting from a federal investigation into the transit authority's hiring of high-priced consultants.

General Manager Richard White in a statement said the Federal Transit Administration's report notes "administrative and process issues," adding that he gave the Metro a grade of "B" for its performance.

But Mr. White and his spokesman, Ray Feldmann, would not provide details about the FTA's audit of the publicly funded subway system's procurement procedures.

"This is all we are going to say," Mr. Feldmann said after a closed-door Metro board briefing on the audit. "We will release it when we feel it is appropriate to release it. We will release it to the public when we feel it is timely.

"We do not feel it is appropriate to comment about a draft report."

The FTA began its audit March 8 after The Washington Times reported that Metro had paid $25 million to hire 108 high-priced contractors while laying off about 100 employees because of a lack of work for them.

The contractors, which include a $53-an-hour clerk and $168-an-hour engineers, have performed much the same work as the laid-off employees, but at more than twice the cost.

Federal and Metro sources have told The Times that the investigation has uncovered several violations of FTA policies in the transit system's purchasing departments and has recommended tightening procurement procedures.

Among the violations is Metro's failure to document how it estimated the costs of consultant contracts, the sources said. The FTA requires transit agencies to do comprehensive pricing estimates on federally funded projects before bids can be taken.

George Harris of Harris Consulting, the company hired by the FTA to conduct the audit, Thursday briefed the Metro Board of Directors about the findings, saying that Metro had violated federal regulations in nine of 51 areas, Metro employees said.

The auditors will complete a draft of their report by June 1, and Metro will have 30 days to respond. The FTA will not release a copy of the report until Metro responds to it, an agency spokeswoman said.

A second audit is being conducted by the Transportation Department's inspector general into Metro's hiring of consultant Wayman H. "Ray" Lytle, whose sole-source contract grew from $100,000 to $333,065 within a year without the Metro board's knowledge.

The Times first reported that Mr. Lytle was hired under a $100,000 contract in October 1998 by Panagiotis P. "Takis" Salpeas, Metro's assistant general manager for transit systems development.

Mr. Salpeas previously had worked for Mr. Lytle as a consultant at the Bay Area Rapid Transit system in the San Francisco area.

Metro officials ignored recommendations by their own auditors not to hire Mr. Lytle for $165 an hour because the consultant could not justify his fees. A series of contract modifications increased the Lytle contract's value to $333,065.

Mr. White, who characterized the Lytle contract as an oversight, ended the contract in January after The Times inquired about it. By then, Mr. Lytle had been paid more than $275,000.

One of the most severe problems noted in the FTA audit is that Metro exercised poor control over modifications that increased the cost of contracts, said a Metro worker familiar with the investigation.

Metro officials changed some of their procurement policies after The Times reported about the Lytle contract. The new procurement policies, which were announced in February, require contractors to justify their fees or else be denied job opportunities with Metro.

Without revealing details of the FTA report, Mr. White Thursday said the violations noted in it will be corrected.

"We agree with the FTA in the nine areas that need correction, and we will make those corrections as quickly as possible," he said in a statement.

"All of the areas identified by FTA as needing to be corrected were administrative and process issues and certainly nothing irregular and improper."

Mr. White noted that, of the 51 areas reviewed by the FTA, Metro performed "exceptionally well" in 10 of them.

Metro Board Chairman Gladys Mack, who represents D.C. Mayor Anthony A. Williams on the panel, did not return phone calls seeking comment.

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