Firm Seeking L.A. Contract Haunted by Its Bidding Past

The award of a contract worth $750 million to build bus shelters and street kiosks has been delayed after allegations that the firm favored by the city failed to disclose past involvement in bidding irregularities in Europe.

Infinity Decaux was recommended by the Los Angeles Public Works Department, but the matter was placed on hold after a competitor complained that the bidder failed to disclose, as required, past violations.

Decaux officials said the criminal charges were minor, are on appeal in French courts, and do not meet the standard for disclosure.

“Without question, we have complied with all of the city bidding requirements,” said Peter Kelly, an attorney for JCDecaux, a French firm that joined New York-based Infinity Outdoor Inc. in forming a limited liability company to bid for the work.

Assistant City Atty. Christopher Westhoff traveled to France with five others to check out Decaux but did not discover the background. Westhoff has been asked to study the case and recommend action to the city’s Public Works Board.

At issue is a contract to provide self-cleaning public toilets, transit shelters and kiosks. The winning bidder will be allowed to sell advertising on the shelters and kiosks, which could bring in $750 million to $1 billion during the 20-year life of the contract, and the city would get at least $150 million during that period, officials said.

Amy Forbes, an attorney for competing bidder Adshel Inc., said, “We believe Infinity Decaux has submitted a false, inaccurate and misleading response on its [work history] questionnaire, and therefore cannot be awarded this contract.”

The founder of the French firm, Jean-Claude Decaux, was given a six-month suspended jail sentence last year in France and a one-year suspended sentence nine years ago in Belgium in cases involving government contracts, according to the company’s documents.

In a prospectus filed May 30 as part of a pending stock offering, the Decaux firm said its street furniture contracts have been the subject of investigations by local authorities in France 15 times in the last 10 years, resulting in six contracts being terminated.

The filing said Jean-Claude Decaux was sentenced by a court in Bordeaux in February 2000 for “conspiring to restrict free and equal access to a public bid process” involving a contract for school clocks, Kelly said.

Reports of No-Bid Contracts

Decaux was sentenced for working out a no-bid contract with a French politician for a job that the courts later ruled should have been competitively bid, according to the prospectus.

On bid forms in Los Angeles, Infinity Decaux said none of its officers had been convicted “of a crime involving bidding” in the last five years. Kelly said the answer was proper because Decaux’s case is being appealed, and under French law there is no conviction until the appeal is settled. He also said the case is the result of a peculiarity of French law that outlaws no-bid contracts.

“What he was convicted for in France would not result in a prosecution in this country,” Kelly said.

Westhoff said he may have to hire a private attorney with expertise in French law to rule on Decaux’s claims.

“The question for the Public Works Board and the City Council,” Westhoff said, “is does all of this information rise to the level of knocking these people out of the contract.”