A construction company owned by Washington Suburban Sanitary Commission board member Prem Agarwal was listed as a subcontractor last month on a bid to do work for the water and sewer utility, despite past warnings from WSSC officials that his firm was ineligible to do business with the agency.
The deal was halted by General Manager John R. Griffin on July 13, after he noticed that Agarwal's company, G.E. Frisco of Upper Marlboro, was named as a prospective minority subcontractor on a $1.1 million bid by the New Jersey-based Spiniello Cos. to clean and line a water main replacement in Montgomery County. G.E. Frisco was to receive $22,000 to supply lumber.
Board members at the utility, which serves 1.6 million customers in Montgomery and Prince George's counties, are prohibited under state ethics laws from doing business with the agency.
Agarwal said he didn't know that his firm's name was on the proposed contract. "I have about 1,000 customers, and I don't know when they are using my name," he said. "I can assure you that before the final contract is awarded, my name will be taken out of there."
This is not the first time Agarwal's company has emerged as a subcontractor or prospective subcontractor for the WSSC. Last fall, G.E. Frisco was to receive more than $210,000 for two subcontracting jobs, according to utility spokeswoman Elizabeth Kalinowski. Griffin halted the deals until Agarwal's company was removed.
In March, The Washington Post reported that G.E. Frisco had been paid $1.46 million as an agency subcontractor during the nine months after Agarwal's appointment to the board by Prince George's County Executive Jack B. Johnson (D) in July 2003. (The six-member board is appointed by the Montgomery and Prince George's county executives.) Agarwal was active in Johnson's 2002 campaign, and he and his wife have donated $12,000 to several Johnson campaign accounts, according to finance reports.
Agency officials referred the matter to the Maryland State Ethics Commission. Robert Hahn, the commission's general counsel, would neither confirm nor deny the existence of an investigation, but Agarwal and the agency confirmed that the ethics commission had requested documents.
The abortive deal has renewed calls for a housecleaning at the agency, which has been plagued by charges of corruption, labor unrest and infighting between Griffin and the board. Several board members tried unsuccessfully to oust Griffin this year. He and the board are negotiating a buyout of his contract.
The Montgomery County Council met in closed session yesterday to discuss what one council member called "the crisis at WSSC." Council President Steven A. Silverman (D-At Large) said the council would not issue formal ultimatums to the commissioners, though he said the council expected the situation to be resolved before the board's next scheduled meeting Aug. 11. "I wouldn't consider that to be a deadline," he said. "We are just encouraging the commissioners to meet as soon as possible."
Agarwal said he can't be aware of every instance in which a contractor lists his firm on a bid for a contract. WSSC rules don't require a primary contractor to notify a subcontractor when it is listed on a bid.
"If I don't even know that they are putting down my name, how can it be my responsibility?" Agarwal said.
According to copies of e-mail correspondence supplied by Prince George's officials and the WSSC, Griffin discussed the subcontracting issue with Agarwal at least twice.
"You may remember last December that I suggested we would 'police' contractors on our side as to your involvement," Griffin wrote to Agarwal on April 19, "and recommended that you advise all companies that you supply that they cannot use any of your materials or delivered equipment or services on any WSSC work." In the same e-mail, Griffin asked Agarwal if the WSSC "should send a letter out to every construction contractor on our bidder list" advising that G.E. Frisco was ineligible.
The next day, Agarwal wrote to Griffin that he had contacted some of his customers: "If you think it is necessary to send a letter to every construction contractor, please do so, but I do not think it should be necessary because only a handful of contractors list my company as minority supplier, and it can be easily intercepted in the procurement process."
It is not known whether Griffin sent such a letter. Dave Koger, a project manager for Spiniello, said the company had not spoken to G.E. Frisco before listing the firm on the bid. He said the company learned Friday that Agarwal was a WSSC commissioner and has since removed G.E. Frisco from the proposed deal.
Prince George's officials defended Agarwal, saying WSSC staff should have been more thorough in putting out the word to contractors that G.E. Frisco was ineligible to work as a supplier.
Through a spokesman, Johnson declined to comment. But a senior county official defended Agarwal's conduct.
"Prem has done everything that he can to put everyone on notice that he will not do business with WSSC," said Alfonso N. Cornish, a deputy chief administrative officer for Prince George's.
Staff writer Ovetta Wiggins contributed to this report.