Audit: WMATA only offered $14m contract to one source

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Photo - A Metro information-technology contract funded with $5 million in federal stimulus money is being investigated. (Examiner file photo)
A Metro information-technology contract funded with $5 million in federal stimulus money is being investigated. (Examiner file photo)
Local,Transportation,Kytja Weir

Inspector general finds Metro 'may not have selected the contractor offering the best value'

Metro failed to offer a contract for competitive bids before it was given to a McLean-based company, despite telling its board members the work was going to be offered to others, the agency's inspector general has found.

An audit issued Monday by Inspector General Helen Lew described problems with a contract given to a company called Metaformers. Lew said in the audit that the agency "may not have selected the contractor offering the 'best value.' "

Her office found that Metro did not solicit at least three bids as federal rules require when it awarded what became an approximately $14 million contract to Metaformers and instead offered it only to that company. And Metro created a conflict of interest by allowing the company to prepare the underlying ground work for the contract, the audit said.

But Metro disagreed with some of the findings. Agency spokesman Dan Stessel noted that the audit found that Metro complied with its own policies and procedures at the time. The agency has already made a change to its practices for similar contracts to meet federal rules. "In light of the report, Metro's senior management will go through additional training, beginning today, to ensure compliance with proper procurement procedures," he added.

Metaformers did not return a call for comment Monday.

The latest audit comes after The Washington Examiner reported last month that an independent auditing firm hired by Metro as part of an annual review had also found that Metro violated federal contracting requirements when it awarded the contract to Metaformers. The outside auditors also found problems with the work, including inconsistencies in documentation used to make key decisions. They said Metro relied on the contractor to control some of the system's security, too, even after the system was launched.

The Metaformers contract was intended to fix multiple costly mistakes made through other contracts. The agency had invested $48 million for a system to manage its business operations, but the PeopleSoft program it used had problems. Metro then spent another $6.9 million to fix it, but Lew previously found that even that "did not meet expectations" by failing to finish on time or within budget.

Metro initially awarded Metaformers a $256,800 stimulus-funded contract in 2009 to assess how to fix the remaining problems. That first contract was competitively bid with six initial proposals, the audit said. But then in July 2010, Metro asked Metaformers to do that very work as part of a $9.15m contract, with $4.7 million of it paid for with stimulus dollars. The cost was later increased. But this time, the agency did not solicit offers from at least three sources. And the agency created "the appearance of an organizational conflict of interest" by letting Metaformers essentially establish the "ground rules for the second contract."

The inspector general's office found documents given to Metro's board claiming the contract would be awarded competitively. But the office found no evidence showing any other companies were notified of the work.

kweir@washingtonexaminer.com

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Kytja Weir

Staff Writer - Transportation
The Washington Examiner