Contracts for airfield repairs, general contractors and a closed circuit television system at the world’s busiest airport may have been incorrectly awarded, according to documents from a City of Atlanta audit.
For the three contracts, the companies’ bids or proposals appeared to be missing documents or information, which could have disqualified them from winning, according to the city auditor’s office. Combined, the contracts are worth more than $12.5 million.
The audit report said poor documentation and errors in contracting “raise red flags” that indicate an elevated risk of fraud. And it said spotty reviews by the procurement department “prevent reasonable assurance of a fair and transparent process.”
The mayor’s office says the city’s then-chief procurement officer — Adam Smith, who has since pleaded guilty to taking more than $30,000 in bribes and been sentenced to prison — “had discretion to waive” the issues raised “as non-material.”
The city auditor’s office launched the review amid the massive $6 billion airport expansion and renovation. Hartsfield-Jackson International has awarded hundreds of millions of dollars worth of contracts, all run through the city’s procurement department.
‘Progress on reforms’
One example of unclear documentation in the contracting process: Although Smith had the authority to waive certain requirements,”We found no indication in the files to indicate that requirements were waived,” according to city auditor Amanda Noble. The mayor’s office said the auditors “never said that the contracts were definitely awarded in error, only that the documentation did not reflect the basis for the waiver.”
The audit report did not indicate that Smith acted illegally.
After the report was issued in February, The Atlanta Journal-Constitution requested work documents from the audit, which show the contracts involved in the errors and which companies won them.
The companies were not named in the audit report itself because there was no indication of wrongdoing by the companies.
The city’s current interim chief procurement officer Susan Garrett in a memo to the Atlanta City Council transportation committee in response to the audit acknowledged that the contract files reviewed by the auditors “unquestionably reflect the need for improvement in completeness, accuracy, and consistency of recordkeeping,” and said the department is making progress on the reforms. But the audit report “does not conclude that any of these errors should be attributed to fraud or corruption,” according to her memo.
All three of the contracts that appear to have been incorrectly awarded were struck during Smith’s term as head of procurement. Smith led contracting for the city of Atlanta from 2003 until Feb. 21, 2017, when he was fired on the same day federal agents entered his office with a subpoena for his work computer, phone, e-mails and materials.
Smith was sentenced to 27 months in federal prison for his role in a City Hall bribery scheme.
What was missing
Yates-FS360, a joint venture of W.G. Yates and Sons Construction and FS360, won a contract in 2013 for managing general contractor services at the airport, even though documents from the auditor’s office said the financial disclosure in the company’s proposal had incomplete and missing statements.
In 2014, Johnson Controls won a contract for the consolidation of closed circuit television systems at the Atlanta airport, even though there were no forms submitted by its joint venture partner, according to the documents.
And in 2016, the documents show that GSC Atlanta won a contract for airfield repairs even though it was missing utility documentation.
The companies were able to win the contracts in spite of lacking certain required information in their proposals or bids, according to the auditor’s review.
Yet in other instances, companies have been disqualified for missing documents. During contracting for a massive round of concessions contracts in 2011, for example, Smith said “if your form is incorrect, you’re going to be deemed non-responsive” and disqualified.
And in 2015, Smith canceled a contracting process for a batch of new airport restaurants because 40 percent of the proposals submitted had not properly filled out E-verify documents required by the state.
At the time, Smith said he was restarting the contracting process from the beginning because he wanted “robust competition” for airport concessions, and the errors on the forms “drastically reduced the pool” of eligible firms.
In a fourth contract, for architectural and engineering design services at the airport awarded to Hartsfield-Jackson+Partnership, the auditor’s report said calculation errors may have resulted in an incorrect award. But the mayor’s office countered that the error did not affect the contract award, because contracts were awarded to the highest-scoring companies in two separate categories.
The audit report said there appear to be 16 other calculation errors and five incorrect determinations on whether companies’ proposals should have been deemed qualified to compete — though those errors did not affect who won.
“Calculation errors affect the credibility of the procurement process and put the city at risk,” the audit report said. “Strengthening documentation of the procurement process could better protect the city against fraud and the appearance of corruption.”