D.C. Board of Education members said yesterday that they are concerned that city officials have awarded a two-year, $30.1 million school security contract to a company that is rated a high risk for bankruptcy and late payments.
They said their concerns about Hawk One Security Inc. are based on a 17-page report prepared by the business information firm Dun & Bradstreet as part of the city's vetting process for bidders on the contract.
On a scale of 1 to 5 that measures the risk that a company will experience "severe financial stress, such as a bankruptcy over the next 12 months," the Dun & Bradstreet report gave Hawk One a score of 5. Similarly, it got a 5 as its credit score, indicating a "high risk of severe payment delinquency over the next 12 months," the report said.
Several city officials, including D.C. Council member Kathy Patterson (D-Ward 3), who chairs the education committee, said that although they were initially alarmed by the report, they have received additional information from Hawk One that has persuaded them that the company would be able to fulfill the contract.
The report said the high-risk ratings were based on factors such as bills more than 60 days past due and evidence of liens involving unpaid state and federal taxes.
Several school board members said they are worried about awarding the security contract to a company that could go out of business, citing the threat to student safety if the schools are left without guards.
"I'm concerned the company could do reckless things to stay above the margin," said board Vice President Carolyn N. Graham, who said she and her colleagues learned of the report last week. "We don't want to put children's safety in the hands of a company at risk of going under."
Patterson has invited board members to a meeting today to discuss their concerns.
City officials said they have not encountered any problems with Hawk One's fulfillment of a contract to provide security in D.C. government buildings. The city paid the company $7.4 million last year, according to D.C. contracting records.
Hawk One President Tyrone Thompson did not return messages left at his office.
The contract with Hawk One stems from the council's decision last year, after a fatal shooting at Ballou Senior High School and complaints about the previous security contractor, to shift authority over school security from the school system to the D.C. police. School board members have been skeptical of that arrangement, saying it will be unwieldy and expensive to have police oversee security while the school system continues to pay for it.
A panel of city, police and school officials recommended Hawk One last month. Because no council member objected during a review period that ended last week, the contract is scheduled to take effect July 1. However, board members said they are looking into whether they can take action to block its implementation.
Hawk One, a District-based minority-owned company, was founded in 1992, the Dun & Bradstreet report said. The report listed eight tax liens filed against the company in Maryland and the District from 1996 to 2003.
William E. Sharp, chief contracting officer for the police department, said he was satisfied with Hawk One's financial health after the company supplied additional records. "The tax liens are older and in the process of being resolved," he said.
Patterson said she, too, was reassured when she learned about the additional information. She questioned why school board members did not raise their concerns earlier, noting that a member of the school system's legal team was on the panel that recommended Hawk One.
Alan F. Hauff, a small-business program specialist for the College of Business Administration at the University of Missouri at St. Louis, looked at the Dun & Bradstreet study at a reporter's request. Hauff said that small minority firms working for city governments often encounter credit problems. He said the fact that the company has managed to stay afloat for more than 10 years with 150 employees demonstrates that it is viable.
"Cities are notorious for paying 60 to 90 days late," Hauff said. "He's got a large payroll to foot. . . . If he had a problem meeting the payroll, the government would shut him down. They've not done that."
Database editor Dan Keating and researcher Bobbye Pratt contributed to this report.