All in all, June 25, 1990, was not a bad day for the campaign of Honolulu Mayor Frank Fasi. People across the country seemed to be rallying ’round his cause, even though he would not be up for re-election for another two years.
From Glen Head, New York, the personal check of Michael Hartunian arrived, in the amount of $2,000 – the maximum contribution allowed in the primary election campaign cycle. Richard L. Holland, of Stonehenge Farm in Bechtelsville, Pennsylvania, contributed $2,000 as well, as did Whitney A. Sanders, of Wyomissing, Pennsylvania.
A company called STV/Lyon Associates, with headquarters in Pottstown, Pennsylvania, weighed in with a corporate donation of $2,000. Closer to home, Frank Lyon, of Honolulu, showed his support for Fasi with still another $2,000 check.
Apart from their apparent love of Fasi, the four individuals share another trait: all are directors of STV/Lyon Associates, an engineering firm that has been registered to do business in Hawai’i since 1984.
Three days after the checks were received, a “Notice to Consultants” appeared in the Honolulu Advertiser classified section, announcing that the City and County of Honolulu was seeking proposals from consultants for 180 different projects, including Project No. 913017, calling for preparation of a solid waste management plan update. Before the year was out, STV/Lyon got the nod for the contract, which, by the time it was finally signed in May of 1992, would be worth $350,000 to STV/Lyon.
Also Rans
STV/Lyon and three other firms responded with proposals to undertake Project No. 913017. Environment Hawai’i was told that the proposals are not on file any longer, and in any event they would not be available for review by the public inasmuch as they might contain proprietary information.
The other three companies are Barrert Consulting Group, Inc., Parametrix, Inc., and GMP Associates, Inc. And the corporate directors of all but Parametrix would seem to share the enthusiasm of STV/Lyon’s directors for Fasi’s administration.
On June 8, 1990, Barrett Consulting Group anted up, with contributions of $1,500 each from the company itself and its three directors: Frank H. Barren, Jr., Scott Kvandal, and Felix Limtiaco, for a total of $6,000.
GMP Associates made its mark on August 23. On that day, the Fasi campaign recorded five separate contributions of $2,000 each from the corporation, from Lee Mansfield, a director, from Wagdy Guirguis, its president, and from two Guir-guis family members (Magda and Wahib), for a total of $10,000.
No Bids, Thank You
When the city issues a Notice to Consultants, as it did in the case of the solid waste management plan update and the hundred-plus other projects advertised on June 28, 1990, the services are not put out for competitive bidding. Instead, the responses are evaluated by a technical review committee, composed of the city budget director, finance director, and such other persons as they may appoint.
By December of 1990, the technical review committee had selected STV/Lyon Associates as its preferred consultant for the project. The recommendation went to Fasi’s chief aide, Jeremy Harris, who approved of the selection on January 18, 1991. Final approval came from the mayor himself, who on January 22, gave his formal concurrence.
The Department of Public Works had estimated the cost of the project, in 1990, to be $250,000. For this, the Department of Public Works told the Finance Department, in justifying the allocation of these funds, the contractor would “produce a recommended plan for the processing and disposal of solid waste over the next 10 years,” “evaluate all facets of the existing solid waste management system on O’ahu, including recycling, collection, transfer and disposal. Determine alternate solid waste systems in terms of reliability, cost, environmental effects, existing and emerging technology and existing and pending state and federal regulations.”
Raising the Stakes
About the time STV/Lyon was being selected, the state Department of Health’s Solid Waste Task Force was attempting to work out, among other things, a statutory framework for addressing problems of solid waste management statewide. Included on the task force were representatives from the four counties, citizen and environmental groups, and other interested parties.
One of the sticking points in the task force’s work concerned how counties could be urged by the state to develop responsible, comprehensive waste management plans. Each county balked at accepting a mandate from the state without the state providing the funds needed for them to undertake that mandate. The end result was a recommendation, approved by the Legislature in the 1991 session, that the state provide to each county $100,000 for the counties to spend as they saw fit, so long as the expenditure was for projects that would bring the counties closer into compliance with the new statutory goals of waste reduction.
Although task force members were informed that the City and County of Honolulu had already selected a consultant, Honolulu was to receive the $100,000 grant as well. Members of the task force believed that the city would use the state funds to offset city funds already appropriated for the consultant’s work.
What the city did instead was to increase the overall payment to the consultant by the full amount of the state grant. In other words, the city does not have an additional $100,000 available in general funds, but instead will be paying the consultant $330,788 for preparing the solid waste management plan update, with $1,000 available for reimbursable costs and an additional $18,212 being set aside for possible future tasks to be performed by the consultant if the city finds those tasks necessary.
Although people involved with the task force were led to believe that the city was moving quickly to develop a solid waste management plan – that is, it appeared not to be waiting for passage of a state law or award of a state grant – the reality was otherwise. STV/Lyon had indeed been selected in 1990 for the contract, but no contract was signed, nor would any work appear to have been done, until May 18, 1992.
The final contract with STV/Lyon shows that the city is to pay $88 for an hour of the project manager’s time; $80 an hour for senior engineers; $76 an hour for senior environmental experts or senior engineers; $70 an hour for staff engineers or environmental specialist; $48 an hour for technical support people; and $36 an hour for data processors.
The staff initially assigned to the project was not experienced in the area of waste management, however. Off the record, people in the state, city, and private sector made no secret of their disappointment and dissatisfaction.
The Stealth Computer
The contract calls for work to be completed within 365 days of the city’s giving the consultant notice to proceed. Other counties are nearly ready to take their solid waste management plans out for public hearing, as required by state law. The city is lagging behind. An engineer with the city’s Refuse Division stated in late June that parts of the plan have been drafted, but have not yet been shown to the advisory committee. She indicated the committee might expect to see something within the month.
Other specifications in the contract are generally unremarkable. However, Special Provision No. 22 is noteworthy for the degree of detail as well as the fact that it would appear to require the consultant to purchase expensive equipment on behalf of the city. That provision reads in its entirety:
“(22) Purchase and provide on or before final draft report submittal, an IBM PS2 Model 55SX, 16 Mhz, 80386SX, 80 MB hard drive; with a NEC III-DS monitor or equivalent NEC monitor, IBM token ring 16/4 adapter/A token ring cable and DOS version 5.0 (3.5″ diskettes) to be used to develop computer models for waste stream analysis.”
When Robert Young, director of the Refuse Division, was asked about the computer, he indicated he had no direct knowledge of it and referred us to an engineer in the Refuse Division. The engineer, Wilma Numanutt, was vague when questioned as to who developed the computer specifications. Several days later, she reported that the computer would be identical to several that the Department of Public Works already had.
Numanutt was asked why the computer was being purchased through a consultant rather than through standard procedures, which require purchase through an approved vendor. She replied that the city made sure that the consultant would provide the computer at the same price the city would be paying through an approved vendor.
The contract, however, does not give any indication as to how much the computer represents of the total contract price, and therefore, it would seem to be impossible to know how much the city is paying for the consultant provided computer. When Numanutt was asked about this, she agreed that the city indeed had no way of knowing for sure how much it was paying for the computer.
Asked whether this was a means of acquiring a computer without going through normal approvals, Numanutt defended the inclusion of a computer in a consultant services contract as legitimate.
“We chose to do it this way,” she said. “I don’t know if it’s a normal way. It is a way.”
Numanutt did not know if the consultant had purchased the computer yet. She acknowledged that it would be used for tasks in addition to the stated purpose of waste stream analysis. To confine the computer to that task alone would be ridiculous, she said. “You can’t do waste stream analysis 24 hours a day.”
Volume 3, Number 1 July 1992