DeKalb acts on contractor’s sewer-project problems

March: Work begins again, under a new bond. The county grants Desmear an extension because of the delay, for work to be completed by June 30. Desmear requests a second delay, through August 2013, citing rain and weather. DeKalb refuses. The county also notifies the company that it will enforce a penalty of $1,000 per day if the June 30 deadline is not met.

Aug. 26: A representative from Desmear notifies the county that the project will not be completed until February 2014.

Sept. 4: County inspectors visit the construction site and notice problems with the retaining wall being built. An internal review begins, to be done in conjunction with a review of all companies named in the special grand jury's report into allegations of corruption in DeKalb contracts.

Week of Sept. 16: The Atlanta Journal-Constitution begins asking about the awarding of the contract to Desmear, after revealing discrepancies in the company's financial information.

Sept. 19: In response to AJC questions, DeKalb County officials confirm several instances of poor work and lax oversight at the Desmear construction site and uncertainty about oversight on the project.

Sept. 20: DeKalb County orders all work to halt at the Desmear site, as an internal investigation continues.

Sept. 26: DeKalb County says the Desmear project will be rolled into a second phase of its sewer construction plan, which likely means Desmear won't be given a chance to complete the job.

How we got the story

The Atlanta Journal-Constitution is digging into how contracts are awarded in DeKalb County, especially its water and sewer department. A special-purpose grand jury last month released a yearlong investigation that found evidence of widespread corruption in DeKalb contracting. Reporters April Hunt and Bill Torpy are among the AJC reporters who are reviewing DeKalb contracts to find out if they are awarded fairly and if taxpayers are getting quality work for their money.

DeKalb County officials moved Thursday toward firing a company that had been working on a sewer plant project, days after they pulled it off the job citing sub-par work. The company was named in a special grand jury report looking into corruption in county contracts.

The hiring of Desmear Systems, a small Tucker company whose president gave indicted CEO Burrell Ellis a $2,500 political contribution as it was preparing to submit a bid last year, is an example of systematic failure in the county’s contracting process, county officials said.

Desmear, according to civil court records, had trouble coming up with a performance bond in 2012 after it was approved for a $7.7 million project to excavate the land at the Snapfinger wastewater treatment plant. Desmear, which had recently paid off a large lien and was being sued for nonpayment by an insurance company, later provided a bond that proved to be fraudulent, court records state.

The contract it received was the first major contract awarded in a planned $1.35 billion overhaul of DeKalb County’s aging sewer and water system.

Officials shut down the Snapfinger job Friday citing shoddy work, including a structurally unsound retaining wall meant to protect the plant expansion. Neither the company nor its owner has been accused of any crime. Ellis denies any wrongdoing.

Interim DeKalb CEO Lee May said he and other leaders have decided the remaining work, and any repairs needed, will be rolled into the second phase of the Snapfinger project, slated to start next year. By then, officials expect to know where the process failed and will take action.

“There will be firings,” May said, referring to any contractors and county workers found to be at fault.

A person answering the telephone at Desmear said the owner was not available to speak. In a lawsuit filing this year, Desmear said it was defrauded by a crooked insurance agent when obtaining the second bond.

Desmear is also having problems completing a high-profile streetscape project on Tenth Street near Piedmont Park.

“They are significantly behind,” said Shannon Powell, chief operating office of the Midtown Alliance, the organization overseeing the project that includes improved sidewalks and lighting, repaired street pavement and landscaped medians with trees. She said the contractor has had to redo some work but what has been done so far has met standards.

Powell said Desmear was a vendor qualified by both the city and state and was the low bidder at $924,000, almost $200,000 less than the next-lowest bid. The project started in October 2011 and was to be completed in November 2012. “Like so many construction projects, this project experienced delays for a variety of reasons including rain (and) change of scope,” she said. “The progress has been very slow and disappointing.”

A former subcontractor said Desmear was unprepared. Cornelia Spence, president of C&S Construction & Consulting, said he came onto the job in March 2012 and, “those guys didn’t have the first piece of equipment. They didn’t even have a Port-a-Potty up.”

Spence said he was to receive $760,000 from Desmear but had problems when he started asking for payments and was terminated.

Desmear, in a letter sent to Spence in June 2012, said C & S was slow and not performing quality work.

DeKalb leaders admit they knew little about Desmear’s reputation. They didn’t know Desmear’s president, Omotayo Idowu, had been indicted in Nevada in 1999, accused of paying $6,000 to a company official to give him favorable treatment on a subcontract. He was acquitted the following year. His attorney there said Idowu was the victim of shady middlemen.

May said the sewer-project episode demonstrates “we need to ensure people vying for these huge projects have the ability and the capacity to do them. Our system has got to change so we can uncover that.”