Choice of Dog Licensing Company Questioned : Finance: Suit is threatened over city’s shift to a new firm run by a man who was fired by the previous contractor for allegedly misspending federal funds. Winner says contract was gained fairly.

The city of Los Angeles last month awarded a $300,000 dog licensing contract to a company that did not exist at the time of the award and will be run by a man fired by the previous contractor for allegedly misspending $500,000 in federal funds.

The city’s shift of the contract last month from Mid-Valley Manpower Consortium, an El Monte-based nonprofit job training program, to Timely Concepts Inc., has drawn protests from Mid-Valley, which has appealed the award and is threatening to sue.

“The city is going from a tried and true contractor which has performed admirably for eight years to a company with no employees, no track record and no experience,” said Mid-Valley’s attorney, Michael Colantuono. “We think the taxpayers of the city are entitled to ask why.”

Mid-Valley’s contract was up for renewal in April but it lost out to Timely Concepts, which was represented by Douglas Shaw, Mid-Valley’s former executive director. The contract involves going door to door to see whether residents have licensed pets and offering renewals if they lack the licenses.

Shaw, 51, was dismissed last year by Mid-Valley for alleged misuse of $500,000 in federal funds. He is under criminal investigation by the U.S. Labor Department.

Colantuono claimed that the fledgling company won the bid by relying on Shaw’s insider information and his personal relationships with two department employees who were on the three-person team that ranked the bidders. Incorporation papers dated April 28 show that Timely Concepts did not legally exist when it got the city contract April 8.

Officials from the Department of Animal Regulation would not comment on the contract award. But in a letter to Mid-Valley, Gary Olsen, the department’s general manager, said none of the three raters were biased or had a relationship with Shaw.

Dennis McGorman, co-owner of Timely Concepts, insists that his company, though new, won the contract fairly by hiring experienced consultants such as Shaw and Sol Belinky, who also has run a door-to-door dog license canvassing program.

“We felt that was our weak point in our proposal, us being a new company, hence the reason for retaining Doug Shaw’s expertise,” McGorman said. The company expects to hire up to seven employees by the contract start date, June 16, and expand to 30 later, he said.

Timely Concepts delayed incorporating until after it secured the city contract to avoid paying more than $2,000 in business fees unnecessarily, said the company’s attorney, Leon Katz. The attorney said delaying incorporation is a common practice.

McGorman said he and another businessman, Mario Cardenas, were approached by Shaw and Belinky to start up the commercial dog licensing business. Shaw does not handle financial matters for the new company but will provide operational help, McGorman said.

“Personally, it’s my belief that the man is entitled to earn a living,” McGorman said. Federal investigators declined to comment on the investigation.

Shaw was dismissed May 12, 1993, after 15 years with Mid-Valley, when a county audit revealed that he had misspent money by paying the salaries of two Bradbury city employees over seven years and by purchasing personal items with Mid-Valley funds. Also, $300,000 was unaccounted for in Mid-Valley accounts.