Two recent audits by Washington Metropolitan Area Transit Authority Inspector General Helen Lew and independent auditor CliftonLarsonAllen both concluded that Metro failed to follow federal contracting rules while spending $5 million of federal stimulus funds. Specifically, Metro staff used stimulus money to award a no-bid contract worth $14 million to the McLean-based company Metaformers after telling Metro board members that the work would be competitively bid.
This was not just an innocent blunder or another example of Metro management's legendary incompetence. This was an act of deception intended to mislead both the feds and the transit agency's own governing board. The fact that Lew's report concluded that Metro "may not have selected the contractor offering the 'best value' " is a slap in the face to Metro riders who just got socked with another fare increase back in July.
As The Examiner's Kytja Weir first began reporting in August, Metro granted the first stimulus-based $256,800 contract to assess how to fix mistakes in its PeopleSoft program to Metaformers in 2009, after it was competitively bid. A year later, however, Metro failed to solicit bids for the actual work, which makes no sense. Auditors also found a lack of documentation for key decisions involving Metro's financial system and business processes that run contrary to industry best practices.
The news that Metro is guilty of no-bid contract chicanery comes right on the heels of another audit report from the U.S. Department of Transportation's inspector general, which found that the Metropolitan Washington Airports Authority -- which is building the $6 billion Silver Line project for Metro -- was also awarding no-bid contracts worth $6 million to companies with ties to MWAA staff and current and former board members, putting millions more dollars of federal funds "at significant risk of fraud, waste and abuse."
There is simply no excuse for an entity entrusted with public funds to award contracts without competitive bidding. This indefensible practice is a violation of federal contracting standards and basic good governance principles precisely because it's an engraved invitation to fraud and corruption. Wherever no-bid contracts are allowed, conflicts of interest, undue influence and kickbacks soon follow.
Neither Metro nor MWAA officials can plausibly argue they didn't know that awarding no-bid contracts was wrong. The fact that both independent authorities were caught doing it anyway says volumes about their appalling lack of transparency and trustworthiness.