Suspended federal housing official Emanuel S. Savas received $33,000 in consulting fees from a New York firm that later was awarded a government contract by a panel that Savas appointed, although the company was not the lowest bidder.
The $495,000 contract was awarded in September to Ecodata Inc., whose president, Barbara Stevens, is a former colleague of Savas at Columbia University and has collaborated with him on several published articles.
Savas proposed the government contract and served as a nonvoting member of the panel that chose Ecodata to receive it, even though two other firms submitted bids at least $190,000 lower.
Savas suggested Ecodata as a possible bidder, and after the firm was selected he increased the $400,000 originally allotted for the study, according to HUD officials.
According to his federal financial disclosure statement, Savas received $19,000 in consulting fees from Ecodata in 1981, when he became assistant HUD secretary for policy development and research. His statement said the money was "for work done in 1980."
Savas' previous statement said Ecodata paid him an additional $14,000 in consulting fees in 1980.
HUD's general counsel, John J. Knapp, said in a legal opinion last summer that he saw no problem, because Savas played only a preliminary role in the award and had no future financial arrangements with Ecodata. "I am satisfied that your involvement in this procurement did not create any conflict of interest or an appearance thereof," Knapp wrote.
The contract is one of several areas being investigated by HUD Inspector General Charles R. Dempsey. Savas, who could not be reached for comment, was placed on administrative leave with pay this week pending the outcome of Dempsey's investigation.
Dempsey also is looking into Savas' official travel and allegations that members of Savas' staff proofread and partially typed his privately published book, "Privatizing the Public Sector," on government time.
Stevens said that she delayed paying Savas for past consulting work because "we didn't have the cash to pay him and he agreed to wait a few months for payment." She said the bidding was very competitive, adding, "I see no reason why a past professional relationship with Savas should be a barrier to government work."
Savas owns one third of the stock in another consulting firm set up by Stevens, which paid him $8,300 in 1980. Stevens said the firm now has no clients.
The Ecodata contract is to study whether it is cheaper for local governments to hire private companies to perform some city services. This is the theme of Savas' book.
Two members of the review board, George Winzer and Aliceann Nolte, insisted that they made their decision solely on the merits. They said it was not unusual for Savas to appoint the board, and that while he had access to the confidential bids, he attended no meetings.
The board rated three of the 12 applicants as technically acceptable. In a final round of bidding, the Urban Institute bid $266,000, the Rand Corp. $303,000 and Ecodata $495,000. Winzer and Nolte said the board considered Ecodata's bid technically superior and more cost-effective because the firm planned to survey more cities and services.
They said it is common for board members such as Savas to have worked with applicants in a specialized field, but added that they didn't know Savas had been paid by Ecodata. Nolte said she might have regarded that as a potential conflict.
Among other firms that Savas suggested as possible bidders was Government Advisory Associates Inc., where he had been treasurer for seven years. That firm has paid Savas $20,363 in consulting fees, more than half of it in 1981 for work done in 1980, according to Savas' statement.
One Government Advisory official, who also has collaborated with Savas on several articles, is working on the contract for Ecodata.