Protest of Contract May Delay Smog Project
A get-tough smog control program for Los Angeles faces new delays after a competitor for the $100-million contract filed a protest accusing the winning contractor of a conflict of interest.
The protest alleges that Parsons Engineering Science, the winning bidder, should be disqualified because during the bidding process it hired a state official who had been privy to “a mother lode of inside information.”
State officials said the protest had forced them to postpone the award of the seven-year contract and could delay the new program several months beyond its scheduled July 1997 start-up.
The protest was submitted Monday by Envirotest of Sunnyvale, a losing bidder in the competition for a contract to operate a new vehicle emissions program designed to substantially reduce pollution in one of California’s smoggiest regions.
Envirotest complained that Parsons Engineering Science of Pasadena had an unfair advantage because it hired Larry Sherwood, who as the former head of the state’s Smog Check program for vehicles could provide “an insider’s insight into the priorities and concerns” of officials evaluating the bids.
Parsons officials denied that Sherwood had any involvement in the development of their bid, and said there were no violations of conflict of interest laws.
A lawyer for the state contended that the allegations had no merit. “At first blush the claims appear to be those of a desperate bidder who was simply unable to be financially competitive,” said Tom Welsh, a Sacramento lawyer hired to represent the state’s Bureau of Automotive Repairs, overseer of the Smog Check program.
Parsons Vice President Phillip Morris said that on the advice of its lawyers his company had “carefully structured Larry Sherwood’s employment duties to exclude him from any participation whatsoever in this procurement.”
The new program attempts to bring California into compliance with the federal Clean Air Act by cracking down on cars considered gross emitters--the 15% of vehicles that belch out so much pollution that they have become a major contributor to the state’s smog.
Under the program, vehicles suspected of gross emissions would have to be inspected at a series of centers operated by private companies under contract with the state. The program would be set up in the most polluted regions in the state--the Los Angeles Basin, Orange County, Sacramento and San Diego.
After a formal bid process, the state selected Parsons to run the Los Angeles program and Environmental Systems Products for the Orange County program. It did not make a selection for the contract covering both Sacramento and San Diego, saying the bids were too high.
Although it gave Envirotest the highest rating on the technical side, the Bureau of Automotive Repair said it was not selected for the first two contracts because of its high cost.
Each company was required to set a price that it would charge consumers for inspecting their vehicles. For Los Angeles, Envirotest bid $52.40 and Parsons bid $31. For Orange County, Envirotest bid $72.40, compared to the winning bid of $32.
Envirotest President Bob Miller contended that Parsons should never have been allowed to submit a bid because of its hiring of Sherwood, an official who “had access to voluminous confidential information about ourselves and all the other bidders.” It said the hiring of Sherwood violated state conflict of interest laws.
In their protest, Envirotest alleged that until he left his state job Nov. 29, 1995, to work for Parsons, Sherwood had played a pivotal role in the bidding process. To support that claim, the company submitted copies of dozens of state documents that showed Sherwood had participated in conferences with bidders, had been asked to settle several policy issues relating to the Smog Check program, and had been one of the officials who routinely received memorandums related to the bidding.
The state’s Department of General Services will rule on the protest.
