$1-Million El Toro Study Grant in Danger : Reuse: Officials were counting on Pentagon money to help pay for another report on the base’s future, but defense agency contends guidelines weren’t followed in the hiring of a planning company.

Orange County is poised to lose a crucial $1-million grant for a reuse study of El Toro Marine Corps Air Station because local officials did not follow Pentagon guidelines in awarding a contract to a planning firm, a Defense Department spokesman said Monday.

The county will be required to rebid the contract, awarded to P&D; Consultants, if the Board of Supervisors wants the federal funds, Pentagon spokesman Paul Reyff said.

Reyff is an official with the Pentagon’s Office of Economic Adjustment, the agency that oversees the closing of military bases and their conversion to civilian use. The Board of Supervisors has been recognized as the official planning agency for the base’s conversion.

“It doesn’t look like [the grant] is going to be allowed. They will have to go out and do another round of bidding. That’s essentially the situation,” Reyff said.

At issue was the county’s interpretation of Defense Department rules when the contract to P&D; was awarded in August.

Orange County Chief Executive Officer Jan Mittermeier said at the time that federal regulations required the county to hire the best qualified bidder, even if it meant paying a higher fee.

But that interpretation was disputed by Pentagon officials in September, and again Monday. The county did not do an adequate cost comparison in awarding the contract to P&D;, Reyff said.

“Reasonable cost has to be a factor. The lowest bid doesn’t necessarily have to be taken,” Reyff said. “It’s just that all of the bids have to be compared to ascertain reasonableness. You can still look at qualifications, as long as a cost comparison is done.”

The first phase of the base reuse study was done by a firm called Post, Buckley, Schuh & Jernigan Inc., which was paid $900,000 by the county. Several of Post Buckley’s subcontractors, led by Bill Vardoulis Engineering, offered to do the follow-up study for $1.5 million, but lost the contract to P&D;, whose bid was almost twice as high.

Local officials were counting on a $1-million Pentagon grant to help pay for P&D;’s work.

Last month, Orange County officials announced that they would use $500,000 intended for roads, parks and flood control, along with $1 million from John Wayne Airport revenue, to pay for the P&D; study. In addition, the county expects to get $200,000 from the Federal Aviation Administration to help offset the costs of planning for civilian use of the base, which is scheduled to close by 1999.

Reyff said Monday that the county’s application for the Pentagon grant would be discussed today during a telephone conference between the county’s attorneys and Defense Department lawyers.

“Orange County’s attorneys are going to be given an opportunity to express their opinions. But at the moment, it looks like unless there is some strong argument from their side that they haven’t put forward yet, they’re going to have to rebid the contract,” Reyff said.

Deputy County Counsel Richard Oviedo, the county’s attorney for the airport, said he believed the conference was scheduled for Thursday. Oviedo declined to comment and referred calls to interim Airport Director O. B. Schooley. Schooley, whom Oviedo said is the county’s point man with the Pentagon on El Toro, did not return phone calls.

Schooley and Michael M. Ruane, director of the county’s Environmental Management Agency, had been assuring supervisors that the Defense Department funds had been approved, even after Pentagon officials questioned the awarding of the contract to P&D.;

In a Sept. 14 memo to the board, the two department heads said they had been informed that the county’s grant request was simply awaiting a Pentagon official’s signature “and that approximately $1 million will be transmitted back to the county.” Ruane could not be reached for comment Monday on the latest developments.

Reyff said that Defense Department officials have already approved the scope of the work that will be done in a Phase 2 study, which includes environmental impact reports. He said that analysts have determined that the Pentagon contribution for the new study should not exceed $1 million.

“This is the amount that we feel is necessary to help pay for this work. This is what we think it’s worth,” Reyff said.

The Pentagon’s action means that planning for the Marine base will be postponed again for an indefinite period. There has been no work done on a reuse plan since November, 1994, when county voters narrowly approved a ballot initiative requiring the county to build a commercial airport at El Toro when it closes.

Mittermeier, who is on vacation and could not be reached for comment Monday, previously said the new study will consider other development alternatives for the Marine base besides an airport. P&D; officials could not be reached for comment late Monday afternoon.