BART construction contract may be canceled due to potential conflicts of interest – CBS San Francisco
OAKLAND (BCN) – BART may have to cancel most of a $40 million construction contract after discovering the project manager works for the contracted company and her husband is a current employee, according to a report. from the transit agency office. of the Inspector General.
The unnamed BART employee oversaw the awarding of two contracts, one in 2019 and one in 2020, to San Francisco-based architectural engineering and consulting firm PGH Wong Engineering.
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According to the OIG report, the employee did not disclose a form required by the California Fair Political Practices Commission indicating that her husband and one of his siblings worked for PGH Wong and that her husband received dues annual contributions to the retirement account as part of his employment.
The OIG report said PGH Wong did not disclose that the BART employee previously worked for the company or that her husband and brother currently did.
The company also submitted signed declarations for its contract proposals over the two years stating that the projects would have no conflict of interest. Affected PGH Wong employees took some steps to recuse themselves from BART-funded projects, but the OIG called those steps “inadequate.”
As a result, BART could be required under state law to cancel the $27 million of work remaining on the contract. The transportation agency could also be prevented from paying some $5.4 million in bills.
BART officials removed the employee from work related to contracts with PGH Wong in January and, according to the OIG, have since issued additional guidance to employees on the proper submission of documents revealing potential conflicts of interest.
Cliff Wong, president of PGH Wong, told the BART board Thursday during a presentation on the OIG report that the BART employee’s connection to the company was well known and disclosed, but was not officially documented.
“As the IG noted, the requirement to disclose in writing was not clearly stated in the (RFPs),” Wong said.
Neil O’Donnell, the attorney for PGH Wong and attorney for the law firm Rogers, Joseph and O’Donnell, argued that retirement account contributions distributed to the BART employee’s husband should not be considered as a financial interest to the employee, as it is not based on the company’s profits or revenues during a given year.
“The amount of this (contribution) pool from year to year did not correspond to the revenue or profitability of the company, and the amount that any individual like the spouse of the BART director received was determined by a fixed formula, and that formula was based on factors like position, years of service, age and number of other plan members,” O’Donnell said.
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BART management has agreed to implement half a dozen OIG suggestions to improve the agency’s contracting processes and ensure that a similar conflict of interest does not remain undisclosed to the coming.
However, the agency disagreed with the OIG’s recommendation to seek an outside opinion on whether the employee’s undisclosed conflict of interest violated state law. BART officials arguing that the employee had no financial interest in the contract.
BART deputy general manager Michael Jones told the board that it would not be possible to consult with the FPPC because the commission does not advise on events that have already happened, and argued that court decisions in similar cases of potential conflicts of interest had had varying effects. definitions of what constitutes a financial interest in a contract.
“Given that there is no clear opinion or direction on this, and that BART management strongly believes and is not satisfied that a financial interest exists with the employee in question, we believe that rescinding this contract would be detrimental to the Bay Area, detrimental to BART, and damaging to PGH Wong and their sub-consultants, all of whom have been honest and dedicated partners in the district,” Jones said.
BART Inspector General Harriet Richardson suggested that preemptively voiding the contract would be the easiest method to resolve any potential violations of state law rather than waiting for the FPPC to launch an investigation or member of the public takes legal action.
“I would be more inclined not to risk it being a breach and void the contract, rather than leaving the contract in place and taking the risk that if a lawsuit is filed and judged against the district, there could be heavier penalties for (PGH Wong) and it may be more damaging to the business,” she said.
Although the board took no action on the OIG report, most board members and members of BART’s audit committee, who met jointly with the board, said they were in favor of maintaining the contract in place.
“There’s always a risk every day that it could happen for literally anything,” board director Janice Li said of a potential lawsuit or complaint. “So I don’t think ‘a lawsuit could be filed’ or ‘a complaint could be filed’ is like the threshold for us to take one action or another, but we have to weigh the complexity of it all.”
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