The consultant hired to temporarily head MARTA’s information technology department is under fire by auditors of the Washington D.C. transit system who contend he received millions of dollars in contracts there because transit executives improperly steered work his way.
The Washington Metropolitan Area Transit Authority’s decision to award $4.3 million in contracts, subcontracts and task orders to nMomentum Corporation between 2008 and 2011 may have violated federal regulations, according to an audit by Helen Lew, the inspector general for the agency.
The authority circumvented its own rules for hiring consultants by, among other things, ordering its contractors to subcontract with the company owned by Shyam Dunna, the audit contended.
The Washington transit agency’s management disagreed with many of the findings of its inspector general, a watchdog appointed by the agency’s board of directors. In addition, Edward Johnson, MARTA chief administrative officer, said the contract with Dunna to temporarily run MARTA’s information technology department is paying dividends in cost savings because of Dunna’s decisions to cut outside consultants and prioritize system improvements.
Still, it’s the third time this year the financial dealings of a top MARTA official — although this time a temporary one — have come under scrutiny. Dunna, 46, is being paid $25,000 a month at MARTA as a consultant until a permanent IT chief is hired to replace a former general manager who left this summer under a cloud of questionable financial dealings
Dunna, a former top official at MARTA who is president of nMomentum, said he felt blindsided by the WMATA audit that implied his small Suwanee-based company only received the contracts because of improper intervention by WMATA executives.
“This has just come out of left field,” said Dunna of the audit that became public in August. “There are things in there that are just not true.”
He said he had no special relationship with John B. Catoe Jr., then WMATA’s general manager, or other past or current top WMATA officials that would have caused work to be steered his way.
Lew’s auditors, however, zeroed in on contracts that they said were awarded to nMomentum despite the company only being rated as “marginal” by the WMATA team that vetted bids for contracts. Catoe and other top executives set the “tone at the top” in favor of nMomentum, the audit said.
The audit gave no indication of why nMomentum may have been selected. It is a disadvantaged business enterprise, a classification that increases a minority-owned company’s competitiveness for contracts.
The audit slammed WMATA officials for not having documentation to justify support for nMomentum — work which in some cases was already included in contracts to other consultants. For instance, lower-level officials recommended that $3 million of the $4.6 million in contracts awarded to nMomentum go to another consulting company whose contracts already covered the tasks but were “overruled,” the audit said.
“Most of the … employees and contractors interviewed were well aware of the ‘tone at the top’ and as a result continued to provide unquestioned support for” nMomentum, the audit said.
Another consultant was told Catoe demanded it take on nMomentum as a subcontractor, the audit said. That consulting company was so concerned that it added the phrase “as directed by WMATA” to the subcontract “to reduce the liability coverage on each of the 16 (nMomentum) task orders issued to them,” the audit said.
The audit noted that, in one bid for a contract, nMomentum’s proposal was “rated ‘unacceptable’ and judged weak by the evaluation team” but the company still received a share of the work. Dunna, who was MARTA technology chief from 2002-2005 when the breeze-card system was developed, said his company is a national expert in fare-collection systems.
The audit also criticized nMomentum for not supplying all the documents, especially concerning billing, that auditor requested. Dunna said he does not keep all the types of records that are maintained by larger consulting companies since his is a small company that hire staff on an as-needed basis.
Lew and her team also recommended transit officials seek to recover $1.4 million in what they suggested were “improper” payments to Dunna’s company. They contended Dunna had billed at a rate reserved for full-time employees rather than independent contractors.
But last month in a written response to the audit, WMATA executives said nMomentum had been paid the contracted amount and blamed its staff for the “egregious error” of failing to do a cost analysis before accepting the rate. Dunna said his rate was highly competitive.
WMATA revamped it policies in response to the audit of the nMomentum contracts.
Johnson hired Dunna in June to run the information technology division after MARTA suspended its assistant general manager Ben Graham for possible “asset misappropriation.”
A recently completed forensic audit by Big Four auditing firm KPMG found support for about a dozen of the 18 allegations against Graham, who resigned in July, said Johnson, chief administrative officer at MARTA. Graham was hired to the $140,000-a -year job despite once being fired from MARTA in 2001 for repeated unauthorized purchases as the manager of networking engineering.
Robin Howard resigned as assistant general manager for audits at MARTA in April after being indicted on charges of embezzling as much as $50,000 from a professional association he headed in Virginia. He was hired a year before despite having a history of five-figure liens.
Johnson said he did not know about the WMATA audit when the agency contracted to hire Dunna in June to run the IT department. But he said the $25,000 monthly salary is a bargain compared to what other consultants charge for such a posting.
He commended Dunna for stellar work in prioritizing technology projects and reforming the department’s consulting contracts in favor of having the work done by salaried MARTA staff. That resulted in cutting the number of outside contractors from 147 to 54, Johnson said. The average contractor makes about $200,000 a year, he said.
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