Loading ...
Sorry, an error occurred while loading the content.

Re: Kilpatrick's pal thrives on city contracts

Expand Messages
  • detroiter43
    So, Ferguson s expertise is in excavation, Translation: digging holes. He is really digging a hole here/. ... least ... Water ... 2002. ... since ... the ...
    Message 1 of 5 , Jun 11, 2008
    • 0 Attachment
      So, Ferguson's expertise is in excavation, Translation: digging
      holes. He is really digging a hole here/.


      --- 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
      >
    Your message has been successfully submitted and would be delivered to recipients shortly.