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43401Re: Kilpatrick's pal thrives on city contracts

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  • black_detroiter1
    Jun 10, 2008
    • 0 Attachment
      Water contracts

      A breakdown of Detroit Water and Sewerage Department contracts
      by year, including subsequent increases, awarded to companies owned by
      Detroit contractor Bobby Ferguson since 2000. Breakdown also includes
      Ferguson's share of the contract after subcontractors and partners are
      paid.
      * Year awarded: 2000
      Project: Water main replacements
      Status: Ongoing. Ferguson has received five extra years to
      finish the project.
      Original amount: $5.3 million (before Kilpatrick)
      Current amount: $12.8 million (after Kilpatrick)
      Ferguson's share: $12.8 million
      * Year awarded: 2003
      Project: Security systems upgrade at various booster pumping
      stations
      Status: Ongoing. Ferguson has received an extra 14 months to
      finish the project.
      Original amount: $21.3 million
      Current amount: $21.3 million
      Ferguson's share: $923,719
      * Year awarded: 2004
      Project: Water system improvements along Broadway
      Status: Finished. Ferguson received almost three extra years to
      finish the project.
      Original amount: $720,195
      Final amount: $1.7 million
      Ferguson's share: $1.7 million
      * Year awarded: 2004
      Project: Water system improvements along Washington Boulevard
      Status: Finished. Ferguson received an extra 16 months to finish
      the project.
      Original amount:$821,475
      Final amount: $3.1 million
      Ferguson's share: $3.1 million
      * Year awarded: 2004
      Project: Water system improvements on various Detroit streets
      Status: Ongoing. Ferguson received an extra three years to
      finish the project.
      Original amount: $2.2 million
      Current amount: $2.2 million
      Ferguson's share: $2.2 million
      * Year awarded: 2006
      Project: Construction management/services for water system
      improvements throughout Detroit
      Status: Ongoing
      Original amount: $16.3 million
      Current amount: $43.7 million
      Ferguson's share: $3.6 million
      * Year awarded: 2007
      Project: Sewer repairs on west side of Detroit
      Status: Ongoing
      Original amount: $30 million
      Current amount: $30 million
      Ferguson's share: $19.5 million
      * Year awarded: 2008
      Project: Water system improvements on various Detroit streets
      Status: Pending approval by City Council
      Original amount: $1.9 million
      * Year awarded: 2008
      Project: Water system improvements on various Detroit streets
      Status: Pending approval by City Council
      Original amount: $2.4 million
      Source: Detroit Water and Sewerage Department


      --- In Detroiters@yahoogroups.com, "black_detroiter1" <visionary1@...>
      wrote:
      >
      > Kilpatrick's pal thrives on city contracts
      > Change orders pump up cost of Ferguson's deals; Kilpatrick, water
      > board deny there's favoritism
      > Robert Snell and Ron French / The Detroit News
      >
      > DETROIT -- A friend of Mayor Kwame Kilpatrick's has received at least
      > $170 million in city contracts -- $109 million from the Detroit Water
      > and Sewerage Department alone -- since the mayor took office in 2002.
      >
      > Bobby Ferguson, who has been at the mayor's side at black-tie social
      > events and on the backs of motorcycles, has long claimed the
      > relationship hurts his general contracting company's ability to land
      > contracts. But an analysis of records by The Detroit News shows his
      > share of water department contracts has jumped more than 20-fold since
      > Kilpatrick took office. Half of them have doubled, tripled or almost
      > quadrupled in price because of additional work -- a cost that is
      > spread among customers in 126 communities across southeast Michigan.
      >
      > Councilwoman Sheila Cockrel called The News' analysis "explosive."
      >
      > "It's a question of appearance," Cockrel said. "If you are part of the
      > inner circle of the mayor, there must be boundaries on how much work
      > you do with the city.
      >
      > "The numbers you've shown me raise questions that require serious
      > investigation to determine if procedures were followed and whether
      > there is material evidence of improper influence by the mayor's office
      > in the awarding of contracts."
      >
      > In one case, a rival contractor said he was forced out of business by
      > Ferguson, whom he accused of underbidding competitors only to reap big
      > profits later through unbid, uncompetitive contract increases --
      > called change orders.
      >
      > Ferguson did not respond to an interview request or a list of
      > questions e-mailed to him.
      >
      > Water and sewer spokesman George Ellenwood said Ferguson has not
      > received preferential treatment. Others in the department say Ferguson
      > does a good job with excavation and other work.
      >
      > "There is no favoritism," Ellenwood said. "These are competitively bid
      > contracts, and it's my belief that contracts awarded through this
      > department probably have closer scrutiny than contracts generally
      > awarded by the city."
      >
      > Kilpatrick faces perjury, misconduct in office and obstruction of
      > justice charges in connection to text messages that appear to
      > contradict testimony he gave in a 2007 police whistle-blower trial.
      > Other text messages seem to indicate that former Chief of Staff
      > Christine Beatty and Ferguson discussed city contracts.
      > Changes pump up contracts
      >
      > Using the Freedom of Information Act to gain access to city records,
      > The News examined all Water and Sewerage Department contracts awarded
      > to companies associated with Ferguson. The News then compared
      > Ferguson's contracts and change orders with those received by other
      > companies. Among the findings since Kilpatrick took office:
      >
      > � Ferguson, who had received one water contract worth $5.2 million
      > with the city before 2002, has received eight in the six years since,
      > with a value of about $109 million. Two more contracts, worth $4.2
      > million, have been approved by the utility's commission and are
      > awaiting approval by the City Council. Once partners and
      > subcontractors are paid, Ferguson's company will collect at least
      > $42.8 million, according to city records.
      >
      > � Ferguson's companies also won $42 million in contracts from the
      > Detroit Building Authority and $3 million in demolition contracts from
      > the Building Safety and Engineering Department. The News has not
      > examined complete records of other departments, but news reports noted
      > $7.2 million from the Downtown Development Authority and $5.4 million
      > from three other quasi-city agencies such as the Detroit Economic
      > Growth Council, records show.
      >
      > � Ferguson gets more money from change orders than any other water
      > department contractor. Ferguson has received $39 million in change
      > orders, which are ordered for various reasons, including additional
      > work under the same contract. Under Kilpatrick, 46 companies and joint
      > ventures have been awarded change orders. Contracts associated with
      > Ferguson account for 29 percent of total city cash spent on the orders.
      >
      > � On average, water and sewer contracts increased 14 percent from
      > their original amount. Ferguson's jumped 48 percent.
      >
      > � A quarter of Ferguson's water contracts bypassed normal City Council
      > approval and oversight. Kilpatrick awarded the contracts through
      > emergency orders.
      >
      > The department argued that Ferguson's contracts appear inflated
      > because many result from emergencies, such as last-minute repairs to
      > improve the city before the Super Bowl in 2005. But even among
      > companies receiving emergency contracts, Ferguson fared better. His
      > contracts for downtown water pipe work in 2005 more than tripled to
      > $4.8 million from $1.5 million. Hayes Excavating, in contrast, saw a
      > 28 percent increase in its contracts, to $2.8 million from $2.2 million.
      > Rival contractor upset
      >
      > If a contractor knows he could get large change orders, he could
      > underbid his competitors, thus undercutting the concept of competitive
      > bidding, said Bill Hayes of Hayes Excavating.
      >
      > Ferguson is "living off change orders," Hayes said. "Nobody else can
      > do that."
      >
      > Ellenwood, the water department spokesman, said change orders are
      > meant to be small supplements to contracts.
      >
      > The department tries to keep change orders to less than 10 percent of
      > the original contract. He didn't know why Ferguson's contracts had
      > grown an average of almost 50 percent.
      >
      > "The numbers are the numbers that you have," Ellenwood said. "So they
      > would indicate that, yes, during that period, he had a higher rate
      > than the average of other contractors."
      > Company a virtual unknown
      >
      > Before Kilpatrick was elected in late 2001, water department officials
      > had barely heard of Bobby Ferguson's Detroit construction company,
      > Ferguson Enterprises, confusing it with a similarly named company
      > suspended from getting certain federal contracts. Ferguson had been
      > the recipient of one contract, a $5.3 million project to repair and
      > replace sewer lines on the city's west side. That contract was held
      > for further review as Ferguson had never done business before with the
      > water department, records show.
      >
      > That changed when a friend became mayor.
      >
      > Ferguson and Kilpatrick met in 1996, soon after Kilpatrick won a seat
      > in the state House of Representatives, when Ferguson's company helped
      > plow snow for some elderly residents in Kilpatrick's district for no
      > charge, Ferguson said in previous published interviews.
      >
      > Kilpatrick stuck with his friend when Ferguson was convicted of
      > pistol-whipping an employee, visiting the contractor in jail.
      >
      > Most water department jobs awarded to Ferguson were bid on by at least
      > a half-dozen other companies, records show. Ferguson has earned a
      > reputation for doing good work for the city, said Darryl Latimer, the
      > water department's contracts and grants general manager.
      >
      > "A lot go after bigger jobs," he said. "His niche is excavation ...
      > and he's good at it."
      >
      > Hayes has a different opinion. The veteran Detroit contractor said he
      > had steady contract work with the city for 40 years, but is now
      > defunct. He accused Ferguson of underbidding competitors only to make
      > more money later through change orders.
      >
      > "He (Ferguson) put me out of business," Hayes said. "He told me, 'Old
      > man, it's time for you to go.' "
      > Friendship defended
      >
      > Peter Henning, a law professor at Wayne State University and a former
      > federal prosecutor, said the amount of contracts given to a friend of
      > the mayor "raises questions," but cautioned against drawing conclusions.
      >
      > "Friendship is not a conflict of interest," Henning said.
      >
      > Kilpatrick doesn't have any influence over the awarding of city water
      > contracts, mayoral spokesman James Canning said in a statement.
      >
      > "Contracts are granted in accordance with the city of Detroit
      > purchasing ordinance and require the approval of both the Board of
      > Water Commissioners and City Council," Canning said.
      >
      > But not always.
      >
      > At least $4.8 million in contract change orders given to Ferguson
      > never received City Council approval, city records show. Those change
      > orders were approved by Kilpatrick under emergency powers granted the
      > mayor as special administrator of the water department under an order
      > from U.S. District Judge John Feikens. As special administrator,
      > Kilpatrick had the power until 2006 to award contracts to anyone the
      > mayor "deem(s) necessary and appropriate."
      >
      > You can reach Robert Snell at (313) 222-2028 or rsnell@...
      >
      >
      >
      > Find this article at:
      >
      http://www.detnews.com/apps/pbcs.dll/article?AID=/20080609/METRO/806090379
      >
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