Contractor chose firms linked to Fenty, D.C. Council told

By Nikita Stewart
Washington Post Staff Writer
Saturday, October 31, 2009; B01

A firm owned by a friend of Mayor Adrian M. Fenty's that was selected in a controversial arrangement with the D.C. Housing Authority to oversee a dozen recreation construction projects gave work to other companies with ties to the mayor, according to testimony and documents revealed at a D.C. Council hearing Friday.

Council members, still angry at their discovery last week that at least $82 million in contracts were funneled through the Housing Authority to build the facilities -- a process that circumvented the council's authority to approve contracts worth more than $1 million -- were combative at times with members of the Fenty administration who testified at the day-long hearing.

Banneker Ventures, owned by Omar Karim, a fraternity brother of the mayor's, was chosen to oversee all the projects in partnership with Regan Associates of Herndon, whose principals are major donors to Fenty's reelection campaign.

Records show that subcontracts went to RBK Landscaping and Construction, owned by Fenty's longtime friend Keith Lomax, and to Liberty Engineering and Design, owned by fraternity brother and friend Sinclair Skinner.

Several council members, including David A. Catania (I-At Large), who has often supported the mayor's initiatives, called the contracts illegal and insisted that they go before the council for review.

"The worst thing you can do is dig in your heels," Catania told city administrator Neil O. Albert. "Your office will be well-counseled to bring them back to us as expeditiously as possible. . . . This is not a water-under-the-dam moment."

Attorney General Peter Nickles has said that the contracts are "legal and binding." Some members have said the council could turn to the courts to resolve the dispute.

Albert said he would consult the city's legal team to see what is possible. He said there are 12 to 19 projects worth between $82 million and $86 million, all overseen by Banneker, which he said won a competitive bid to be the program manager of the projects. He said no contracts, other than one with Banneker, have been signed.

Albert and others from the Office of the Chief Financial Officer who testified before the council explained how the projects were built by transferring money from the Department of Parks and Recreation to the Office of the Deputy Mayor for Planning and Economic Development to the Housing Authority to the D.C. Housing Enterprise, a subsidiary of the Housing Authority.

Albert said the process was used to get projects done faster, to save money and to utilize the Housing Authority's capacity to oversee the projects.

Rachna Butani, director of HRGM Corp., a D.C. construction firm, said the process was not transparent. She and her father testified that HRGM bid on the subcontracts that Banneker oversaw.

Butani said the firm's representatives gave her little information when she was offering her proposal to renovate Park View Community Park. She said they told her to use $250,000 to $500,000 as a guide to come up with her proposal. Her bid was rejected, and she later discovered that the project cost $1.2 million.

"There's no evidence to me that that project should be $1.2 million," she said.

Council members also were concerned to learn that Banneker collected a nine percent fee from contractors. It was unclear whether the fees were standard, but council members said they were troubled over the layers of fees that were being applied in the process. The city government also paid a management fee to the Housing Authority.

The contract between the Housing Enterprise and Banneker to manage the recreation projects gives Banneker a fixed fee of $4.2 million and bonuses ranging from $150,000 to $200,000, depending on timely completion. Banneker uses the money to pay its partner, Regan Associates, as a consultant. Banneker also has the right to charge the subcontractors that the firm selects to design and build the projects a nine percent fee.

Albert testified that Banneker also managed the $50 million construction of the Walker Jones Education Complex, which opened in August, and the $33 million project at the Deanwood Community Center, which is to be completed next year.

Albert said that those contracts were also awarded through the Housing Authority and that he believed they also did not receive council approval.

Albert praised Banneker for completing projects "on budget and on time."

The commendation irked council member Kwame R. Brown (D-At Large), who questioned why Banneker is also a subcontractor of Jones Lang Lasalle, a real estate management firm. As the subcontractor, Karim is a consultant to the Office of the Deputy Mayor for Planning and Economic Development on various projects.

He also questioned whether an employee in the deputy mayor's office who was working on the recreation projects is a former employee of Banneker.

During their back-and-forth, Albert giggled at one point. "It's funny. Isn't it funny?" Brown asked, clearly upset. "This is serious."

"If you don't have a small sense of humor, I apologize," Albert said.

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