- The Washington Times - Friday, February 28, 2003

The D.C. Office of Contracting and Procurement violated its rules when it awarded a $10 million-a-year contract to an auditing and consulting firm owned by an accountant with close ties to Mayor Anthony A. Williams last month.
The District's contracting agency said it had made a mistake and canceled the health services contract with Thompson, Cobb, Bazilio and Associates on Feb. 5 after The Washington Times inquired about it and two unsuccessful bidders filed a formal appeal.
However, city contracting officials said they allowed Thompson, Cobb to continue working on the contract after Feb. 5 until today to meet a federally mandated deadline of April 1. Officials said they will reissue the contract today.
"They didn't follow proper procedures," said Tony Bullock, spokesman for Mr. Williams. "They admitted they messed up, and they're doing [the contract] again. What else can they do?"
The contract award violates the maximum ceiling of $999,999 a year set by the D.C. Supply Services Schedule, a list of contractors qualified to do business with the D.C. government. Contracting officials did not say how they mistakenly approved a contract more than $9 million over the established limit, according to city documents obtained by The Times.
"The District has a compelling reason to cancel the [contract] because the definitized contracts can not be awarded against the D.C. Supply Schedule as indicated in the solicitation," officials wrote in a Feb. 4 letter to the D.C. Contract Appeals Board. "An award could not be made based on this mistake in the solicitation."
Jeffrey Thompson, a major contributor to Mr. Williams, is the founder and principal partner of Thompson, Cobb, Bazilio and Associates, one of the largest minority-owned accounting firms in the nation. Mr. Thompson also sits on the boards of the University of the District of Columbia and the Metropolitan Washington Airports Authority.
The contract a one-year deal that could be extended to three years implements the city's compliance with the federal Health Insurance Portability and Accountability Act (HIPAA), which regulates access to patient information.
The full contract, which was awarded Jan. 7, is worth $11.5 million a year. Thompson, Cobb received a $10 million share of the contract, and Digital Safetynet, an information technology company, received a $1.5 million share for its technical support.
Contracting officials said the management portion of the contract will be reissued by using the federal General Services Administration Schedule, which has no ceiling.
Two information technology companies that had bid on the contract William Adley & Co. and MVS Inc. filed formal protests with the Contract Appeals Board late last month, citing unfair contracting practices and conflicts of interest.
The companies said there is an inherent conflict of interest in Thompson, Cobb implementing HIPAA compliance for medical providers. The Thompson accounting firm would be required to assist all companies and agencies involved in the city's health care, including D.C. Chartered Healthplan Inc., a private, for-profit health maintenance organization owned by Mr. Thompson.
The companies also accused procurement officials of violating their own regulations by allowing a contractor who was involved with the assessment phase of the HIPAA requirement to bid on the compliance phase of the contract.
According to city documents, Thompson, Cobb received a $1.5 million, sole-source work order for a "HIPAA program management office" during the assessment phase last March. What's more, that work order emerged from a contract that had been limited to $999,999.99 but was modified in November 2000 to $5 million a year for five years.
Thompson, Cobb officials said there was no problem with the contract, adding that a different contractor ABSS and Convansys did the assessment work. They said there is no conflict of interest overseeing D.C. Chartered Healthplan Inc. and its competitors because they have hired a subcontractor to do the compliance implementation.
"That is not relevant, has nothing to do with this," Mr. Thompson said in a phone interview, adding that all contracts with the District, except for one four years ago, have been competitive.
"All work we do for the District is competitive," he said. "All these contracts have been competitively bid. We do not market for sole-source contracts."
Mr. Thompson said his firm does not receive preferential treatment. "My firm has gotten [unfair treatment]," he said. "We lose so much more than we win."


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