DWP Sued Over Nearly $1 Million in Unpaid Fees : Litigation: A coalition of 21 computer consultants claims race and sex discrimination. The agency says an audit uncovered ‘contract irregularities.’


A group of minority and women computer consultants, whose fees of nearly $1 million have not been paid after an audit by the Los Angeles Department of Water and Power, have sued the agency, claiming race and sex discrimination.

Their lawsuit, filed Tuesday in Los Angeles Superior Court, contends that the DWP feels free to breach its contracts with businesses owned by women and ethnic minorities because most such businesses are small and cannot afford to take on a powerful bureaucracy.

The 21 plaintiffs, who say they are owed a total of $960,000, claim that they were subjected to unfair scrutiny during a DWP audit last November of computer work done by its consultants.

A DWP spokesman said the audit uncovered “contract irregularities very difficult to resolve” involving subcontractors who got DWP work through Schad Automatic Systems, a Los Angeles computer consulting firm.


Spokesman Ed Freudenburg, who refused to discuss the specifics of the audit, rejected allegations that the agency discriminates against businesses owned by women and ethnic minorities, pointing out that 22% of the department’s contractor work is with such firms.

“The charge that discrimination is an issue in this work-performance dispute is completely without merit,” Freudenburg said.

But the plaintiffs disagree, saying they were singled out for intense scrutiny during the audit.

Some of the plaintiffs said Wednesday that they have not been paid for more than a year, making future work virtually impossible since the DWP refuses to give references to potential employers as a result of the dispute. Some have depleted life savings or have borrowed from relatives to stay afloat.


“I’m living off my mother and unemployment right now,” said Wilma Haley of Walnut, who said the agency owes her more than $100,000.

After the audit, “other people got paid but I didn’t,” said Haley, who is black.

The plaintiffs’ lawyer, William Jennings of Los Angeles, said the DWP’s refusal to pay his clients is part of a continuing pattern by the agency to renege on contracts with small businesses and independent consultants.

One landscaping contractor who is not involved in the lawsuit, Rodney Hamilton of Los Angeles, told of similar problems in trying to get the DWP to honor a one-year contract with him.

Hamilton, who is black, said the agency refused to pay an estimated $50,000 because of reported performance deficiencies. But he accused some DWP officials of being biased against blacks.

Haley and the 20 other computer specialists gained DWP work through Schad in late 1988 when the agency wanted to integrate personal computers into its main computer system.

They said the work--setting up PCs and training executives and others on their use--routinely involved 12- to 18-hour workdays.

“I kept a sleeping bag in my car and slept out on the floor (at DWP downtown headquarters on Hope Street),” said Sedalia Jones, a Los Angeles computer specialist and one of the plaintiffs. “Whatever they wanted you to do, you did it.”


For more than two years, the specialists said they worked on the agency’s system in its Information Services division.

At times, the plaintiffs said, they continued to work for the DWP despite the lack of a written contracts.

“They told me, ‘Oh, you’ll get paid. Just keep on working,’ ” Jones said.