City auditor recommends independent review of jail contract process

With the Richmond City Council set to vote next week on a contract to design and build a new city jail, City Auditor Umesh V. Dalal is recommending an independent legal opinion on whether the city should have negotiated with more than one group.

Dalal reported to the council Monday on his roughly two-week review of how the city handled and reviewed four proposals for the jail project.

In a 10-page report, Dalal concludes that Mayor Dwight C. Jones' administration complied with "almost all" of the requirements but raises several concerns, including whether Director of Procurement Services Cheryl D. Wright exercised allowable discretion in negotiating only with the Tompkins/Ballard Joint Venture of Washington.

Jones is now asking the council to vote Monday on a $116.5 million contract with the group. Despite concerns from at least one council member, Council President Kathy C. Graziano said she expects the vote to go forward without the additional legal review suggested by Dalal.

"I think that there were a couple of questions that maybe went unanswered, but the concerns and issues that were raised were addressed," Graziano said Monday night after a lengthy work session on the jail project.

But Councilman E. Martin Jewell said he remains bothered by the city administration's call for a vote next week and believes the council should listen to Dalal.

"I think we need to follow his recommendations and get a second opinion," Jewell said. "This is the largest procurement Richmond has done on its own in probably forever."

Chief Administrative Officer Byron C. Marshall said a vote is needed next week to meet a Sept. 15 deadline to lock in a $116.5 million price that's being guaranteed by Tompkins/Ballard.

"We don't have the budget for the price to go up," Marshall said.

Tompkins/Ballard was selected by the mayor after a lengthy process that began when another group, City Central, submitted an unsolicited proposal for a jail on property off Commerce Road. The proposal was submitted under the Public-Private Educational Facilities and Infrastructure Act.

In his audit report, Dalal said the city's method for comparing scores for the four jail proposals exaggerates the differences between them, and he suggested an independent legal review to determine whether the issues were significant enough to call into question Wright's decision to negotiate only with Tompkins/Ballard.

In reviewing the recommendations of an 11-member technical review panel, Wright certified that Tompkins/Ballard was "clearly more qualified" than the other proposers. Dalal noted that the city code requires a determination that one group is "clearly more highly qualified" to sidestep negotiations with two groups. Wright said the word "highly" was left out inadvertently.

In his report, Dalal included a scoring comparison of the top- and second-ranked groups based on a number of factors, including technical design, construction expertise, price, schedule and minority-business participation. Using his own calculation method, Dalal found a 12.2 percent difference between the overall scores of the top two groups. The city administration had noted a 147 percent difference using its own calculation method that Dalal said "exaggerates the difference … and, therefore, is not desirable."

Based on Tompkins/Ballard's qualifications and the city's analysis, "it is not clear if the proposer who received the highest rating was 'clearly more highly qualified.' Therefore, it is not clear if the city should have negotiated with only one proposer," Dalal said in his report.

"There appears to be a need for an independent legal opinion from an attorney knowledgeable about PPEA regulations to confirm or refute the procurement director's action."

Administration officials defended the city's handling of the procurement and said they relied on City Attorney Allen L. Jackson for legal advice.

"We believe we adequately answered the questions that we followed the law," Marshall said.

Dalal's report also questioned a legal interpretation by the city that allowed officials to review unaudited financial statements for one group. The issue is now immaterial because the group in question was not Tompkins/Ballard, administration officials said.

Dalal also noted that his office did not find any evidence of a formal financial evaluation of any of groups.

"We're very confident a thorough job was done even if he didn't see the evidence of that," Marshall said.