Here's what's happened since the Springfield Towing Alliance got the news, late last month, that the City of Springfield was terminating its contract to handle all police-ordered towing in the city:
STA has held a press conference criticizing an extensive report, put together by the city auditor, outlining numerous contract violations and finding the company owes the city $130,000. It's had prominent community members and elected officials—among them, state Reps. Ben Swan and Cheryl Coakley-Rivera and City Councilor Jose Tosado—come to its defense and call for investigations into the audit. It's gone to the Finance Control Board and the local media (well, at least some of the local media) to insist it's the aggrieved party.
Its president, Bobby Jones, has written to Mayor Domenic Sarno asking that he reinstate the contract or explain why it was terminated. Its operations manager, former School Committee member Bob McCollum, has attacked the auditor's report as a "hatchet job," and its attorney, Mickey Harris, has described what he calls a "blatant attempt at character assassination on the towing alliance."
STA officials insist they were in compliance; in particular, they've attacked Mark Ianello, the city auditor, insisting his report was misinformed and claiming that, in fact, the city owes them money—about $350,000. The specifics of their defense are unclear. Neither Jones nor his attorney, Harris, have returned calls from the Advocate. McCollum initially agreed to talk to a reporter, albeit reluctantly— "[I]t appears you have already picked a side," he wrote in an email—but has since ignored follow-up attempts at an interview.
Ianello stands behind his report, which was based on data compiled by the Police Department. In putting together the audit, he noted, his department ran into the same problem the Police and Law departments did: getting consistent, complete information from the STA, as clearly required by the contract. "They just don't want to cooperate," Ianello told the Advocate.
Ironically, many of the problems that emerged during the 18 months the STA has held the contract were accurately predicted by a committee put together to evaluate bidders for the job. In the committee's draft report, dated February, 2007, the committee offered a crystal-ball view of what was to come, noting numerous concerns about the company's ability to fulfil the contract.
The report also contains evidence that the political counter-offensive launched by STA in an effort to save its contract is nothing new. According to the report, Alliance representatives repeatedly tried to meet with committee members and had community leaders and elected officials call or write to members in support of its bid, despite explicit directions from the committee that bidders or their supporters were not to contact anyone in the city who could influence the decision. "This constitutes a direct violation of the City's [invitation for bids]," the report noted.
The lobbying on behalf of STA continued, despite three reminders by the committee that this violated bid regulations. "The committee does not believe that calls of support received by the City from elected officials from other communities were random acts by multiple officials," the report stated. "Rather, the committee is certain that these were part of an effort by the bidder to influence the bid process."
It continued: "The committee lacks direct evidence of the bidder's attempt to inappropriately influence the bid process, though it remains convinced that it has done so."
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The bid review committee—whose members included Steve Lisauskas, executive director of the Finance Control Board; Eddie Corbin, the city's purchasing director; and representatives from the Law, Police and Public Works departments—had been put together in the fall of 2006 to consider bids submitted by three companies: CJ's Towing, which had held the contract since 2000; Roy's Towing, which held the contract prior to CJ's; and STA, which had bid under the corporate name CF/Towing Alliance.
The committee rejected Roy's bid in short order, saying the company failed to prove it could meet the requirements of the contract due to existing legal tangles. CJ's, meanwhile, fared better; despite initial concerns that the company had failed to submit all required documents, the committee decided in the end that CJ's was qualified to fulfil the contract.
The committee's evaluation of both Roy's and CJ's bids only took up four pages of the report. The remainder of the 17-page document focuses on the Towing Alliance; as the report noted, "The Committee has spent the vast majority of its time attempting to discern the qualifications of CF/Towing Alliance."
What they found was not promising. The Towing Alliance, the committee wrote, failed to provide required information, starting with "evidence of the firm's practical knowledge of the services to be provided." In addition, the report lists multiple documents the Alliance failed to submit with its bid, including evidence of its financial stability and of its towing experience.
The Alliance also failed to provide required certifications demonstrating that none of its owners or principals had filed for bankruptcy in the previous 10 years. Public records show Jones did submit a document certifying that the corporation (which, in fact, had been formed specifically to bid for this contract) had no history of bankruptcy. What he failed to disclose, however—despite the fact that the information was required in the bidding process—was that he personally had filed for bankruptcy within the previous decade.
The committee waived for the Alliance—but not for the other bidders—a requirement that it show proof of insurance and a performance surety; instead, if chosen, the company would have to submit that information within 15 days of receiving the contract. This issue, too, remained unresolved.
While the committee gave the Alliance several extensions to provide the required information, the company repeatedly failed to come up with all the documents—a preview, it turns out, of STA's failure to provide required documentation to the city after it was awarded the contract.
The report also noted that STA made changes to its list of subcontractors in the midst of the bid process, despite a requirement that bid specifics could not change once they were submitted. This raised red flags for the committee, whose members stated, "The committee is deeply concerned that the bidder—if awarded a contract—will continue this behavior and will change subcontractors during performance of this contract without authorization." The changing of subcontractors—four in all—also called into question the company's stability, according to the report.
In addition, the committee was troubled by the Alliance's failure to provide information necessary for the city to conduct criminal and sex offender records checks on its drivers, as it does with all employees of city vendors. Again, the committee saw this as a bad sign: "The bidder's behavior—if continued—will create significant liability for the City if a subcontractor is changed or employees hired without the required checks being conducted." This issue, too, remained unresolved throughout the time of the contract.
"Based on the bidder's actions to date, the committee has no faith that the bidder will comply with contract provisions," the report noted. The Alliance, the committee wrote, "is currently 'putting its best foot forward' in seeking the contract to provide these services. If the bidder undertakes the above actions during this period of time, the committee is quite concerned that it will undertake & inappropriate action during the performance of the contract."
In the end, the committee recommended that the city reject both Roy's and CF/Towing Alliance's bids and award the contract to CJ's Towing. As a final note, the committee acknowledged that rejecting the Alliance's bid "will be criticized because it is commonly believed to produce more revenue for the City than competing bids. This is not the case." The Alliance's failure to meet the minimum bid requirements, despite the waivers and extensions granted by the committee, meant that "an analysis of potential revenue from the bidder is spurious," the report stated.
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Given the numerous, serious concerns raised by the bid review committee, how did STA end up winning the contract?
In fact, the city's original intent had been to split the contract between STA and CJ's, awarding each company coverage of half of the city. CJ's declined the offer; STA President Bobby Jones, meanwhile, wrote to then-Mayor Charlie Ryan that a split contract would not be financially viable for his company, although he then went on to accept the deal.
Some in City Hall suggest that political concerns had made Ryan wary of rejecting STA's bid outright. Bobby Jones is African-American, as is Bob McCollum. In recent years, thanks to pressure by community activists, the city has attempted to increase the number of minority-owned firms with which it does business, with middling results. Awarding a major piece of business like the towing contract to a black-owned business would be seen as a major step toward that goal.
It would also spare Ryan, who is white, attacks by critics who accused him of being disconnected from the city's minority population. Those criticisms reached back 40 years to Ryan's first tenure in the mayor's office, when he had requested the National Guard come to the city during a march on City Hall in response to a major police brutality incident at an African-American night club. Then, in early 2007—the same time the towing contract was being decided—Ryan's chief of staff, Michele Webber, was accused by Coakley-Rivera (a former Ryan supporter) of making racist comments. Webber denied the charges but resigned that February.
Whether STA won the contract for political reasons or simply because it was the only choice after CJ's bowed out, it didn't take long for tensions to develop between the company and City Hall, as predicted by the bid evaluation committee. Memos and letters from the Law and Police departments to STA reveal numerous problems with the contract, including the company's failure to supply necessary paperwork as well as repeated failures to make required payments to the city on time. These concerns were underscored by the auditor's report, which cited numerous other contract violations, including a finding that STA had subleased part of its tow yard, which it rents from the city, to another company.
Sarno, who defeated Ryan in last November's election, was silent on the tow contract question for months, despite the mounting problems. Complicating matters were Sarno's political connections to STA's president: Jones was a client of political consultant Charlie Kingston, the controversial former city tax collector and convicted tax evader who is a family friend and political ally of Sarno's. Jones was also an active supporter of former state rep Ray Jordan, whose daughter, Denise, is now Sarno's chief of staff. (Interestingly, as the Sarno/Ryan race heated up last October, Jones made a $250 campaign donation to Ryan, but none to Sarno, whom few expected to beat the incumbent. Jones also has made recent donations to Tosado and Swan, both of whom have come out in support of STA.)
City Councilor Tim Rooke—who has emerged as Sarno's strongest critic—took up the issue, drawing attention to the concerns raised in the auditor's report and calling for the contract to be terminated. Finally, in September, Sarno, Police Commissioner William Fitchet and Lisauskas of the Finance Control Board issued notice to STA that the company was not in compliance with its contract. On Sept. 30, the city informed STA that it was terminating the contract, effective Nov. 1. Under the terms of the contract, the city did not have to give a cause for the termination, but simply had to give the contractor 30 days' notice. A second letter by City Solicitor Ed Pikula called for the company to pay $140,000 owed the city.
STA is not going without a fight, however. And clearly, the issue of race will continue to be part of the battle. The Black Men of Greater Springfield, the New England Black Chamber of Commerce and the Massachusetts Latino Chamber of Commerce have all come to STA's defense, and in his letter to Sarno, Jones called it "bad public policy" to terminate a contract held by a minority-owned business.
But according to Rooke, the city doesn't necessarily have to lose a minority contractor. CJ's Towing, which Rooke sees as the logical choice to take over the contract, also qualifies as a minority-owned business.
