The D.C. Housing Authority illegally contracted with a Virginia-based software company, spending about $1 million without competitive bidding and splitting the amount into smaller purchases to escape scrutiny from the agency’s board, according to a report by the Housing Authority’s internal auditor.
“In an effort to remedy the contract mismanagement and malfeasance from the previous administration, the current administration created additional mismanagement and malfeasance of their own,” according to the report, which was issued Nov. 1 and obtained Friday by The Washington Post.
The review was triggered indirectly by a broader federal audit of DCHA released last month that questioned the agency’s relationship with Verbosity, a vendor that provided website redesign and “automated workforce deployment” for the agency’s police department, among other services.
Housing Authority director Brenda Donald said Friday that she agreed the original purchases were done improperly, but she categorically denied the review’s allegations that her own administration had done anything wrong.
“I stand by what we did,” Donald said, “and it was exactly the right thing to do.”
Donald, who has directed the agency for about 17 months, has blamed problems there on Garrett, who the board dismissed in May 2021. She has said she can’t fix everything overnight at the authority, which serves about 30,000 households through housing vouchers and mixed-finance and traditional public housing properties.
Donald said her administration discontinued all purchases from Verbosity except the police tracking software, allowing that part to continue as two consecutive emergency sole-source contracts. She said that the software was needed to comply with a settlement agreement with the D.C. attorney general, and that the emergency contracts were necessary until a competitive bidding process could be finalized.
The internal review criticized the move, saying DCHA “had ample time to initiate a full and fair competitive procurement … instead of initiating yet another emergency contract for sole source procurement in October.”
The auditor also took aim at paperwork Donald’s staff gave the auditor to justify the emergency contracts, suggesting it was at best sloppy and at worst “falsified.”
Donald flatly denied that allegation. “We’re not trying to hide anything here,” she said. “This is a cleanup — a legal cleanup — process that is well documented.”
In a report delivered to DCHA’s board last month, The U.S. Department of Housing and Urban Development slammed the D.C. agency for inadequate management, poor oversight and faulty governance. The HUD report pointed to lack of oversight of procurement among broader governance issues driving the agency’s failure to provide “decent, safe, and sanitary” housing for its residents in violation of federal requirements.
The HUD report came a year after the abrupt departure of DCHA’s former chairman Neil Albert, who left after it was revealed he had authorized contracts for a design firm owned by his companion, Paola Moya. The U.S. attorney’s office subsequently issued the Housing Authority a subpoena seeking documents relating to Albert and his partner’s firm, Moya Design Partners.
HUD evaluators looked at about a dozen DCHA procurements and found systematic problems that included violations of HUD regulations and the Housing Authority’s own policy. DCHA staff “reported at times they felt constrained to take actions as directed by executive leadership and the Board, instead of in conformance with the regulations, policies and procedures that should have governed their actions,” the HUD report said. It demanded DCHA hire an outside firm to review all of its contracts for compliance with HUD requirements.
The HUD report pointed specifically to DCHA’s purchases from Verbosity as violating the Housing Authority’s own policy requiring “full and open competition.” The HUD report said “competition for this type of work should have been possible.”
HUD reviewers demanded that DCHA’s board investigate why the agency brought in Verbosity without competition, a question the auditor’s internal review does not answer. The review, however, recommends the board take further action that “may include an impartial external investigation” overseen by the auditor.
Donald said that after she became director, “we discovered that there were a number of noncompetitive purchase orders that had been initiated by the previous administration,” but that there have been “zero in my administration.”
In February, Donald promoted the Housing Authority’s longtime head of procurement and contracts, Lorry Bonds, to be the agency’s general counsel. The original purchases from Verbosity happened on Bonds’s watch, but Donald said Bonds is not to blame because Garrett “purchased this relationship with Verbosity without going through the procurement office.”
Bonds declined to comment. Garrett and Verbosity executives did not respond to emails requesting comment.
After the HUD report, DCHA board member Bill Slover requested the internal auditor’s review. Donald said she pushed for her own executive staff to provide a report instead, but Slover declined.
Slover said late Friday that “as we try to regain the trust of the residents” it’s critical that the board begin exercising its oversight. “This is the beginning, not the end,” he said. “This board needs to be looking at all questionable contracts.”
Slover said he’d been requesting information about the Verbosity procurement from Donald and her staff for months, after he had seen DCHA police presentations involving the company and wondered why a contract for the company’s services had never come before the board.
The agency’s internal auditor, Petuna Cooper, agreed to undertake the review.
The resulting report criticized Bonds, noting that as head of procurement in early 2021, she sent an email to Garrett raising an issue with the Verbosity procurement. “However, instead of ending the relationship with Verbosity, [Bonds] allowed the contractor to continue its engagement with DCHA, thus promoting the current noncompetitive procurement violation,” the review said.
The review also accuses Donald’s chief operating officer, Rachel Molly Joseph, of withholding relevant documents and information during the review. Joseph declined to comment. Donald said the allegation is false.
HUD rules require a “justification memo” for emergency sole source procurements, and Donald told The Post she requires them. But one of the memos Donald’s staff provided to auditors was dated Oct. 27, the same day the auditor asked for the memos, the review says.
According to the review, a former DCHA technology staffer told the auditor that in 2019, Garrett introduced the staffer to a Verbosity principal before the contracting engagement. A current staffer, who wanted to remain anonymous for fear of retaliation, told the auditor Verbosity’s principals had several discussions with DCHA staff before the engagement, according to the auditor’s report.
The review said there is “clear and convincing evidence” the procurement violated federal law by giving Verbosity an unfair advantage over other potential bidders.
Bonds and Joseph were put on administrative leave briefly after the internal review’s release, Donald said. She said the board ordered the move.
Donald rescinded the leave after the board got legal advice that it “did not have the authority to direct me to do it,” she said. “And by that time, I had provided the other side of the story.”
The board scheduled an emergency meeting on Monday to discuss the auditor’s report, canceled the meeting, then held a two-hour meeting on Wednesday behind closed doors.