County renews contract with Public Works employee’s company
HILO —Two years after the Hawaii County Council rebuffed Mayor Billy Kenoi’s attempt to ban county employees from securing county contracts for their private businesses, a company at the center of the controversy has again won a contract to clean roadside drywells and culverts.
The company, Kamaaiana Pumping, is owned by Randy Riley, a Department of Public Works division head. Riley is in charge of the county’s Automotive Division and had no input into how the request for bids was written by a colleague heading the Highway Maintenance Division, DPW Director Warren Lee said last week. Riley did not return calls Monday at either his county job or his private business.
Riley’s company significantly underbid the only other bidder, B&B Pumping Services, in a request for bids that was changed over the previous one to include a component for debris disposal. Kamaaina is not charging a disposal fee, while B&B tacked on $95 per ton. The disposal charge is not enough to change the winning bid, however.
Kamaaina has been dumping the debris at the county Public Works baseyard, which Lee said is acceptable because the debris, which he said includes a lot of topsoil, is used in other county projects.
The contract is for one year, with an option for two additional years.
Kamaaina Pumping has held the lucrative contract since 1996. In 2009, the Kenoi administration yanked a bid solicitation while officials investigated allegations of bid-rigging after the specifications were changed so that Kamaaina Pumping was the only qualified bidder.
Lee conducted an investigation, finding no evidence of collusion or bid-rigging but recommending bids be re-solicited and internal controls tightened, according to a severely redacted 2009 report obtained by West Hawaii Today under the state’s open records laws.
The county paid Kamaaiana Pumping $714,167 for drywell cleaning during the last fiscal year, $917,167 the previous year and $701,675 during the 2009-2010 fiscal year, according to data provided by the Finance Department. That’s less than the $1.1 million and $1.3 million paid to the company in the two years before the controversy.
Kenoi tried for 14 months to tighten procurement laws so county employees couldn’t win government contracts, especially within their own departments. His attempts to get the Board of Ethics to endorse his plan failed, as did the attempt to get the County Council to change the ethics code.
Kenoi said Monday he plans to reintroduce the ethics legislation to the new County Council.
He stressed he’s not targeting any particular business or particular county employee; he just thinks the ethics code should be stricter so as to “prevent questions later.”
“People can choose to be either an employee of the county or a vendor of the county, but not both,” Kenoi said. “We will be reintroducing this to the council.”
A 2009 audit of Public Works says taxpayers would save even more if the entire operation were brought in-house.
The audit, conducted by former Legislative Auditor Colleen Schrandt, says that a new pumping truck could be purchased and two full-time employees assigned to do the work for about $500,000 a year. The 115-page report warned that Public Works is ripe for misappropriation and malfeasance because of inadequate controls over its $27.5 million highway fund.
The county ethics code allows county employees to contract with the county, as long as the contract is awarded by closed bid. The code forbids employees from using their position to secure advantages or contracts over others.