By Peter White
NASHVILLE, TN – Black businesses are getting stiffed by Metro’s Purchasing Department as illustrated by two systemic problems with the city’s Procurement Nondiscrimination Program. Metro’s contract with LPS Integration, Inc. for computer “Storage Area Network and Infrastructure Hardware and Services” is an example.
A good faith requirement to include minorities can easily be manipulated and avoided. The Business Assistance Office (BAO) averted its eyes to the game the prime contractor played regarding Contract No. 353208.
Only two contractors showed up for a meeting, Todd Sanford of LPS and Alex Coure of IT Solutions By Design, Inc. Coure could not meet the service requirements of the contract, so when Sanford approached him by email to join their bid as a subcontractor, he told Sanford he was interested.
But then, “He avoided me,” Coure said. “Instead he contacted businesses that do not really play in that storage network area industry segment. ”
Sanford submitted three names as part of the Procurement Nondiscrimination Program (PNP) documentation, affirming LPS Solutions had made a good faith effort to include minority subcontractors.
LPS did not mention Coure’s company in its bid but did submit a list of three subcontractors who had declined LPS’s offer. “That’s because they didn’t play in that space,” says Coure.
Coure was in that business specialty but he wasn’t really invited to bid even though Sanford had asked him to.
Coure complained to buyer Kevin Edwards but the deadline for protest had passed. Even so, BAO’s Bryan Gleason, who handled the contract, failed to recognize the inclusion form that IPS Solutions submitted listed firms that weren’t qualified to do the job. LPS was the only company that bid on the job, so rather than disqualify them and reposting the Request for Proposal (RFP), Gleason let it slide. End of problem for Gleason and LPS except the qualified minority subcontractor, Alex Coure, was excluded.
The second problem has to do with contract extensions, which happens in ways that also exclude minority businesses from participating.
The original RFP for network storage was for a one-time buy worth $108,000, but it morphed into a $1 million five-year contract, and later amended up to $10 million over five years. Since there were no minority subcontractors in the original proposal, there were none in the extended contract either.
In another example, Ricoh copiers’ two contracts with Metro Schools and Metro Government are a variation on the same theme. Ricoh’s original contract with Metro Schools in 2012 was for up to $5 million over 5 years. Coure was a minority partner in that contract. But two months after the schools contract was signed, Ricoh obtained a separate five-year $7 million no-bid contract from Metro. It did not have Coure or any other minority partner.
The contract was later amended to $10 million. With the Ricoh contract, the subcontractor, Coure, was thrown a bone with 7 per cent of the $1.6 million school contract but excluded from the extended $10 million contract with the city that would have given Coure $714,000 worth of business.
“That is what they do, “ Coure said. “They bid on a specific solution set but the contract is written for substantially more than the bid and minorities are typically excluded from the additional increase in the contract. So it’s basically bid and switch.”
But there is a solution.
Rob Horton worked for the Nashville Airport Authority, Metro schools, HCA, and the Metro Transit Authority as a diversity consultant. He spent eight years in Nashville before moving to St Louis to manage its inclusion program.
Horton said he found success in a requirement built into St. Louis city contracts. Any contractor doing business with the city has to include 25 percent minority participation and 5 percent woman-owned business participation. Nashville’s Procurement Nondiscrimination Program has no such requirement.
“After the review of the diversity studies have not shown any growth it is now time to raise the bar and set standards that will be put in place so that minority vendors are included in Nashville government’s procurement opportunities,” Horton said.