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Legislative report: communication tower construction failed to follow purchasing rules

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Another legislative report on broadband communication expansion raises even more questions about how the state has gone about that expansion.

The latest installment came Sept. 24 when Legislative Auditor Aaron Allred explained to lawmakers how $38 million in Broadband Technology Opportunities Program grant also were used to construct 12 new and five replacement microwave communication towers without going through the proper bidding and construction process.

A February legislative audit pinpointed a $15 million misuse of the same federal funds in oversized routers for the state.

Allred said the latest report is complicated, and his staff members had to go back to 2009 funding to begin putting the pieces together, which span three different governors.

Grant Money

According to the report, West Virginia was given a one-time, $8.4 million Public Safety Interoperable Communications grant in 2007 from the National Telecommunications and Information Administration for interoperable radio network supplies, which could include mobile tower and microwave radios. The nature of PSIC grants require a minimum of 80 percent of the funds "pass through" local governmental bodies, the report explains.

The West Virginia Legislature appropriated $10 million of a surplus from the State Lottery Commission from the State Excess Lottery Revenue Fund to the Department of Military Affairs and Public Safety to be used to improve interoperable communications. Those funds did not require the local government "pass through," but sub-grants were awarded to Pleasants, Lewis, Fayette and Ohio counties.

The Department of Health and Human Resources owns and insures 114 radio communications towers that are a part of the statewide network, according to the report.

Joe Gonzalez, communications director for the state Office of Emergency Medical Services was hired in 2005 for his expertise in radio communication because of his experiences as the Chief of the City of Clarksburg Fire Department and part owner of a tower construction company called Tri-Star Communications, according to the report.

Gonzalez met with the Lewis County Commission to discuss the grant money, which all parties agreed would be used for a tower in Roanoke, which was constructed July 31, 2009.

The Lewis County Commission placed a legal advertisement in the Weston Democrat in July 2009 providing notice for a "mandatory pre-bid meeting for the complete installation of a steel, 340-feet, self-supporting Homeland Security Communication Tower including all site preparation."

'Menu Bid'

A problem the legislative audit pinpointed was during that pre-bid meeting and tower site visit, Gonzalez told potential bidders that in addition to the Roanoke tower bid, the bidders would be required to submit a "menu bid," outlining quotes for many specific tower erection configurations and civil work for an indefinite number of future state projects that would utilize the Lewis County contract.

Allred said the state purchasing director had never heard of the term "menu bid," and the Lewis County Commission advertised for the contract of one communication tower.

Gonzalez said the bid review process took between 10-15 minutes, the Lewis County Commission did not require the bid reviewers to keep score sheets and even though bidders were required to provide four copies of their bids, the legislative auditor could only obtain a copy of the winning bid from Premier Construction. Premier bid $192,318 and Bossie Electric bid $233,440, according to the report. The audit revealed Gonzalez was listed as a reference for Premier Construction's proof of experience.

In September 2009, the grant implementation team – which was headed by Dr. Bill Ramsey, former state EMS Medical Director who brought many of the state radio network towers and contracts under DHHR control and also hired Gonzalez – began to increase the sub-grant that was originally given to the Lewis County Commission. Various funds were transferred, according to the report, without the commission's awareness or approval.

The request for bid from the Lewis County Commission stated that only one contractor should be responsible for the total work of the project, but Premier Construction used subcontractors to erect 16 of the 17 BTOP towers, the report found. And two of those companies were not registered with the West Virginia Secretary of State, Allred said.

The report makes clear that the Competitive Bidding Act, which is in West Virginia Code, covers the state and its subdivisions must solicit competitive bids for every construction project that exceeds $25,000. All bids should include a bid bond or surety as well.

Report Recommendations

The report recommends the Legislature consider whether the state purchasing division should even have the power to oversee state grant funds and procurements made by grant recipients, which currently are considered exempt. A second recommendation is for the governor's office to consider setting up a statewide contract to award funds to entities to make procurements when there are federal grants and it is appropriate.

Allred said in March, the director of purchasing began to learn of the situation and recommended construction stop until he could approve of the project, but that did not happen.

The way the Department of Military Affairs and Public Safety "piggybacked" the contract for other towers was not illegal, but it did not align with the state purchasing division's guidelines, the report indicates. The Fayette County Commission was asked by the state, Allred said, to piggyback onto the Lewis County Commission's contract with Premier Construction Group to construct even more towers as well as the relocation of the historic Gauley Mountain fire tower.

"Although it was included in the DMAPS award to the Fayette County Commission, the dismantling, relocation, site preparation and re-erection of the fire tower at the Cass Scenic Railroad State Park does not appear to further the purposes of the legislative appropriation, which was awarded specifically for ‘interoperable communications,'" the report reads.

Allred said Gonzalez had indicated he had nothing to do with the tower relocation, but Division of Natural Resources District Administrator Bob Beanblossom said Gonzalez contacted him and indicated that he wanted to relocate the Gauley Mountain Fire Tower to Cass Scenic Railroad State Park to be re-erected at the Whitaker Site as an historic interpretive piece. Beanblossom indicated Gonzalez told him the relocation would not cost the DNR anything because he had a grant to cover the costs. Gonzalez was a board member of the Mountain State Railroad and Logging Historical Association Inc.

Allred made further recommendation that the Legislature give the purchasing rules currently in place the force of law and also consider establishing the Statewide Interoperability Radio Network under the Department of Military Affairs and Public Safety.

DMAPS Communications Director Larry Messina said after Allred presented the report that the suggestion to put the network under the DMAPS roof "says something about the department."

Gov. Earl Ray Tomblin's Deputy Chief of Staff, Jason Pizatella said the administration has been looking at the purchasing code and working with the Legislature to be sure "this never happens again."

Tomblin's Communications Director, Amy Shuler Goodwin, said the presentation of the report included four or five pieces of new information the administration was unaware of. She said there is no timeline, but the administration plans to work with DMAPS and DHHR to make any necessary changes.