Looks Matter

illustration by Jason Stout

When does perception become reality? For Malcolm Pirnie, Inc.- a consulting and engineering firm - it was the moment when approval of its $2.6 million contract to oversee the construction of water and wasterwater (W/WW) lines to the city's newly annexed areas fell under the city council's purview. Awash in allegations of insider information and criticism of the city's request for proposals (RFP) process, the council wrangled over the decision to award Pirnie the lucrative contract for more than a month. In the end, Pirnie ended up with the contract, but not before being run through a mill of council suspicions that nearly marked the company for sacrificial lamb status on the altar of public perception. And to think things started out so well for the Mahwah, New Jersey-based company. Pirnie emerged from the RFP process as the anointed one, with clear recommendations from both city staff and the water and wastewater commission (WWWC), recommendations which would normally hold a lot of weight with the city council. However, anonymous letters floating through city hall over the past two months alleged that Pirnie had insider information on the $2.6 million project, and Councilmember Gus Garcia harbored significant enough doubts based on these allegations to put the firm through quite a ringer, asserting that the mere perception of wrongdoing is enough of a reason to consider other firms for the contract. Meanwhile, some outside the process hinted that Garcia, the leader of the opposition, was himself acting unethically to land the contract for Parsons Brinckerhoff, a competing firm.

Garcia first began voicing concerns about Pirnie in regard to a separate contract which was to be awarded on Feb. 4. The contract was for $300,000 to complete the second phase of a management review that stemmed from the first phase done by Pirnie for $37,500. According to representatives of the firm, the management review consisted of analyzing data collected by the City of Austin through questionnaires on W/WW systems throughout the United States. The first phase contract, which was not awarded through a competitive process, originated out of a 1996 council resolution. After Garcia raised questions about awarding the second phase without a competitive process, the contract was pulled from the agenda by the city manager and has not yet reemerged.

A week later, at the Feb. 12 council meeting, the awarding of the $2.6 million contract for overseeing the W/WW construction to the annexed areas showed up on the agenda. Garcia immediately objected to awarding the contract to Pirnie because, he said, the firm scored too highly on the subjective interview portion of the scoring system the city uses to evaluate RFPs. When the city awards a contract through an RFP process, every applicant is judged primarily on past work histories and experiences. However, 20% of the score is reserved for an oral interview during which the applicant discusses specific plans for the particular project.

The interview portion allowed Pirnie to just barely bump out its nearest competitor - Parsons Brinckerhoff - which had a slightly higher score than Pirnie going into the interview. Pirnie was also able to overtake Montgomery Watson, which had a significantly higher score than either firm going into the interview. Public Works director Peter Reick defended the staff's choice. "The team that Pirnie brought to the interview impressed at least myself through a great amount of synergy," Rieck said. "They had a clear concept of how they would, as a team, approach this project. The project manager, and I'm sharing my personal opinion here, appeared a lot stronger in person than he appeared on paper."

But Garcia, who had already put a stop to what he saw as special treatment with regards to the earlier management data contract, spoke up again, citing his discomfort with awarding the firm the new W/WW department contract. Pirnie's superior interview performance did not impress Garcia much, because of what he perceived as an insider's edge. "I would expect them to be able to be that way because they were just here evaluating the whole utility, so they have a very good working knowledge," Garcia said. "And I'm sure that the people who made the presentation were briefed by the other guys. It's the same firm."

Phil Parkins, Pirnie's project director for the annexation areas project, suggests that Garcia simply did not have enough information to understand the situation. "I don't even know who those other people [who worked on the prior contract] are. There is no interface between the two teams," Parkins insists. "If the [management] study had included in-depth interviews with [City of Austin] managers and directors, then maybe, yeah. But it didn't include any of that. It's other kinds of information from other places that the city themselves collected."

So when Garcia moved to award the $2.6 million contract to Parsons, Pirnie Vice President Jack Renfro fought fire with fire. "We have reason to believe, mainly through rumor, but also by direct verbal comment to a city staff member, that the firm that you're getting ready to award this contract to has violated your policies. We have not done that," Renfro said. And although it was never spelled out during that meeting, Renfro was referring to an alleged violation of the council's anti-lobbying law on city contracts, and to Garcia's relationship to Parsons and its representative Bill Faust.

That allegation has its roots in the Feb. 17 issue of In Fact newsletter, which reported the following: "Mitt Tidwell, assistant engineering director for the Water and Wastewater Department, tells In Fact that Bill Faust had said to him at the Feb. 5 council meeting that he intended to lobby Garcia because `it would mean money for (Faust) if Parsons got the job.'" Faust, who served on the WWWC from 1983-1988, and does business as The Faust Group, confirmed that he made the statement to Tidwell, and that he did follow through. "What I did was go talk to Gus [Garcia], and Gus told me it would be improper to discuss it, so I didn't say another word," Faust says.

Several weeks later, Garcia addressed the In Fact report from the dais, saying, "If anybody's integrity was questioned, it was mine and my good friend Bill Faust's integrity. It came out in the paper that he had lobbied me, which in essence was not true. Bill asked me a little bit about the contract and... he did not know about the lobby rules. I told him this is not a contract that we can discuss with anybody. And he went away," Garcia said "The next thing I know I have a call from a reporter."

The February 12 meeting ended with Garcia suggesting a two-week postponement of the vote. When the issue came back on February 26, it looked initially as if Garcia might have changed his tune a bit when he started off by moving approval of Pirnie for the project. After that, the mayor allowed Pirnie and Parsons 10 minutes each to make their case before council.

The Parsons presentation lasted less than three minutes and consisted primarily of Eric Fisher, regional manager for Parsons, stressing that the firm is currently managing the construction of the Austin-Bergstrom International Airport, and that the firm has "supported all types of organizations" as a community leader. Fisher also criticized the city's RFP process for - in its attempt to spread its contracts to as many firms as possible - penalizing his firm for having previous City of Austin experience.

By contrast, Pirnie's team members used every second available to stress that they were the city staff and WWWC choice because they were the best prepared firm to complete the design for the construction of the water and wastewater lines in the 90 days allotted.

After hearing the presentations, Garcia withdrew his earlier motion to approve Pirnie and instead, once again, moved to approve Parsons. Goodman seconded Garcia's motion, citing her disappointment that Malcolm Pirnie did not seem to understand that the council's decision actually held more weight than staff or WWWC recommendations. Then, Councilmember Bill Spelman challenged Garcia to sell him on the idea of turning down staff's recommendation, and Garcia made this stunning revelation:

"Let me say that during this process we got some anonymous notes saying that some firms had advantages over the others," Garcia said. "I discounted that. For one, I don't appreciate anybody sending anonymous notes to a council. I think that's totally inappropriate, and we should not, you know, consider them. So I didn't. And so I tried to do it on the basis of what we had in front of us."

Garcia's motion to approve Parsons subsequently failed 3-4, with Goodman and Willie Lewis voting with Garcia. Spelman then moved to approve Pirnie, and the council did so, 7-0.

The matter should have been closed there, but Garcia reopened the debate by calling for a reconsideration of the contract on March 5. Garcia said that he received new information through an anonymous letter on Feb. 27, the day after the last vote, that a subcontractor for Pirnie, Soheir Michel, owner of Construction Project Management, Inc. (CPM) was married to Hani Michel, an engineer in the Water and Wastewater department, and that CPM would therefore be privy to insider information. Apparently, Garcia forgot that he had already mentioned the letter on Feb. 26, and so could not call this information "new," and also, apparently, he was ready to disregard his own caveat against anonymous notes. Garcia's aide Paul Saldaña says that on that Thursday, Garcia had only heard about the notes, but had not read them.

The two Michels were, in fact, married, which was known to Rieck since January 5 when the first anonymous letter appeared. Rieck then ran the issue past city legal which gave it the green light. Rieck says he then prepared a memo to debrief council on the issue - since every councilmember was cc'd on the anonymous tip-off - but that he never sent it.

By the time Pirnie came back before council on March 5, company reps were completely frustrated that the marital relationship between one of its subcontractors - CPM - to a city employee in the Water and Wastewater department was about to blow the whole deal. Pirnie rep Peter Nolan said, "The facts are [city employee] Hani Michel avoided any association with this contract. So he could not either exert any influence or even have any information to pass on... I think it's also relevant that [Pirnie] received the name of CPM from the city in November of 1997 as one of the [woman-owned] firms that we should contact to meet the [women and minorities subcontracting] requirement." He added that CPM had been awarded two other W/WW contracts in 1997 without a problem.

Next, an angry and demoralized Soheil Michel, whose firm stands to make $403,000 from the contract, stood before council to plead her case. "If I must tell every prime contractor with whom I work that they will not be able to get a contract with the water and wastewater department of the City of Austin because my husband works for the City of Austin, I will either have to change what I do, or he will have to change what he does," she said.

Garcia then argued that he was not impugning Michel's character in suggesting that she could have exchanged insider information, adding, "my concern was that nobody - not Pirnie, not staff, not anybody - told us the information that they knew" about CPM. After the meeting, Garcia added, "It is very difficult for a citizen of Austin to believe that the husband that works for the city didn't tell the wife about $2.6 million of information."

This time around, Slusher decided to switch his vote, which would have resulted in a 4-3 decision to turn Pirnie out once and for all - except that Goodman was absent for the day. Goodman confirms that, had she been present, she would have voted to turn down Pirnie. "Whenever something is questionable enough that somebody challenges it, it makes me really uncomfortable. It's perception, it's appearance," Goodman admits. "Even if something isn't wrong or illegal."

But with Goodman away, the vote on Garcia's reconsideration finished in a 3-3 tie, with Slusher, Garcia, and Lewis voting to oust Pirnie. The tie meant that the reconsideration failed, however, and Pirnie walked away with the contract, finally.

Afterwards, in the lobby, an addled collection of Pirnie's subcontractors were hugging and shaking hands. "I hope she makes a lot of money off this one, because she's never going to get another contract," Anne Young of A.K. Young Associates, a Pirnie subcontractor, was overheard telling a friend. Young also implored this reporter to make the point that no evidence came forward to prove the Michels or Pirnie had a hand in any wrongdoing.

For Spelman's part, he says he has thought as much all along. "This has all been a sleazy, scurrilous rumor mill," he said, adding, "Anonymous letters are chicken shit."

This Week In Council: Big week. The Brodie tract is back, as are Eeyore's Birthday party and the Central City Entertainment Center board. A big boost for the Downtown Austin Alliance is on the agenda. And Mayor Watson's backing of the Greater Austin Performing Arts Center's proposal for Palmer Auditorium is sure to be challenged by Gus Garcia, over concerns that city arts backing should go to projects like the Mexican American Cultural Center.