Metro officials announced yesterday that they have turned over evidence of contract bidding irregularities involving a small Kensington contractor to the Justice Department for investigation and possible prosecution.
The contractor, Richard O. Lee, president of CVM Contractors, admitted last month to The Washington Post that he and "two buddies" got together to submit bids on a series of small construction jobs awarded by Metro.
Altogether, Metro officials said the three firms won approximately $40,000 worth of work between June, 1976, and last April.
Metro general manager Theodore C. Lutz said at a Metro board meeting yesterday that information concerning the alleged contract rigging was turned over to the U.S. Attorney's Office here last month, about 10 days after The Post story appeared.
Lutz said that federal authorities are attempting to determine whether Lee and his two friends, Nelson Hopkins of N. Hopkins Construction Co., and Dave Bestpitch of D&D Decorators, defrauded Metro by getting together to submit what were supposed to have been competitive bids.
John Robertie, associate general counsel for Metro, said that Metro has also called the Justice Department's antitrust division to request an investigation into the possibility that Lee and the two other contractors may have violated federal antitrust statutes.
Officials in the U.S. Attorney's Office refused yesterday to comment on their findings thus far, although they did say that the case is still under investigation.
Robertie said that his office has not yet received word from the antitrust division about a possible investigation of the case, although sources within the division said yesterday that the three contractors appear to have committed a clear violation of section 1 of the Shermann Antitrust Act - which prohibits rigging bids.
Lee, Hopkins and Bestpitch first came to The Post's attention last April, shortly after Lee won a $1,990 contract to move a partition wall at Metro's Brentwood subway repair facility near Union Station. The work was awarded and performed on April 16 and 17, a day after Lee, Hopkins and Bestpitch submitted their bids.
The bids all appeared to have been typed on the same typewriter and two of them contained the same mispelled word. Confronted with this evidence, Lee admitted to The Post that he had prepared all three bids. Metro began an internal investigation after The Post's story appeared and then turned all of the evidence over to federal authorities, Lutz said yesterday.
John R. Kennedy, Metro's general counsel, said Metro's investigation revealed that the three firms bid on 80 different Metro contracts since last June. Kennedy said he did not know exactly how many of these contracts the firms actually won, but he said the firms had received $40,000 worth of work in that period.
Kennedy added that 10 to 12 per cent of the bids submitted by the firms appeared to be irregular.
Lutz told Metro's board of directors yesterday that "our internal investigation to date has not revealed any evidence of criminal misconduct on the part of (Metro) employees, but has identified certain cases in which existing (Metro) procedures were not completely followed or which demonstrated the need for strengthened procedural controls."
Ralph E. Smith, Metro's general supervisor of plant maintenance, and Darrol Hackney, Metro's superintendent of custodial services, decided which firms were contacted to bid on Metro maintenance jobs. Both men have acknowledged that they awarded Lee the April contract before sending the three bids to Metro's purchasing department for revie was Metro rules require.
"Several instructions have been issued to our contracting people reminding them to adhere to existing rules," Lutz said. "We have also put out several instructions to beef up existing rules on an interim basis until our comprehensive guidelines come out in a couple of weeks."
Lutz later said there are actually no written guidelines stating procedures for accepting bids on contract work under $2,500, although informal rules call for Metro's obtaining three competitive bids before awarding small contracts.
"There are no written procedures for that small stuff," Lutz said. He added that a provision exists that states that Metro officials can waive the informal guidelines in an emergency, and the Metro maintenance officials claimed that a necessity for getting the job done quickly had been one of the reasons they did not follow normal procedures.
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