THE CARROLL COX SHOW

NEWS AND COMMENTARY

The CARROLL COX SHOW

CARROLLCOX.COM

P.O. Box 89-4202

Mililani, HI  96789

808-782-6627

                                                                                                                                                        November  2, 2013

Dear Mr.  Lau;

I am writing you to express my concerns regarding what appears to be the ongoing improper, unethical, and illegal activities behind the awarding and performance of contracts at the Honolulu Board of Water Supply (HBWS).

Specifically, I am concerned about the manner in which former Board of Water Supply Chief Information Officer Brian Curtis McKee was allowed to compete and receive contracts with the HBWS that he appears to have authored and developed, then used to evaluate the qualifications of vendors seeking those same contracts (#C13003201 and C12001801).  At least one of the contracts was eventually awarded to his company, UTC-10 Consulting, LLC, a small company registered in 2012 by McKee and his wife, Julie Wright Mckee.  

I am also formally asking you to initiate a criminal investigation against all parties involved in the drafting, developing, approving and granting the above-mentioned contracts.

As you know, Mr. Brian McKee served as Chief Information Officer and Officer In Charge of  all IT systems  implemented  at HBWS between August, 2003, and May 20, 2011.  During that time he had a major role in planning, designing and developing the RFP, evaluating proposals, and negotiating the contracts for a number of systems.   Based on information we have on the subject, it appears that Mr. McKee terminated his formal employment as Chief Information Officer and Officer In Charge in May, 2011. 

I have been informed that Mr. McKee and his company, UTC-10 Consulting, LLC, were one of the competing vendors bidding for the contract to "provide planning, design, change management, process improvement and project management service for computerized maintenance management (CMMS), and other related IT systems.    It appears the company, UTC-10 Consulting, LLC,  was not registered in Hawaii at the time it was competing for the contract.  In fact, a check of records at the Hawaii Department of Commerce and Consumer Affairs shows that the company, UTC-10 Consulting, LLC, was formally registered via the internet on January 14, 2012, at 6:07 a.m.  Sources allege that Mr. Mckee had a role in authoring a "Summary of Qualifications" for the vendors or bidders and that UTC-10 Consulting ranked number one amongst the bidders.  If this is true,  it suggests that McKee prepared the qualifications while still employed with the HBWS or he participated in the qualifications while outside the employ of the HBWS, in violation of the Ethics rules.   An independent investigation will serve to set the record straight.

This is merely one of my points of concern,  and there are more.   I now ask you, based on this and the following information,  what measures were taken by HBWS to ensure Mr. McKee / UTC-10 Consulting,  LLC, did not receive special treatment or favor over the other competitors bidding for the contract? 

First, I understand Mr. McKee identified Mr. Russell Stepp and Mr. Dave Jochim of Stepp Consulting  as subcontractors on his consulting team, to  provide  key support to the contract.    Records show that a part of their  work experience or expertise was that one or both men  worked with the County of Kauai Department of Water Supply during your tenure at the Kauai Department of Water Supply.   While it may not be illegal that these relationships exist, again it raises the spector of unethical practices, and  I personally do not believe this can be a simple coincidence.  

Second, the evaluation of  qualifications for the contract shows that, because  one vendor had no experience  with board of water supply systems ,  their team would include subcontractors with expertise.  The evaluation results seem to  infer that this is the reason they were not chosen.     However, though not noted on the evaluation, this is exactly what McKee's company was allowed to do with their contract,  by sub-contracting with Stepp Consulting  and using Stepp's prior experience to fulfill the contract.    Regarding the use of sub-contractors,   Stepp Consulting  bills for meals and groceries, apartment rentals, auto and office expenses, airfare and other  transportation expenses.  Therefore, it appears the entire process lends  itself to spending money on supporting consultants rather than spending money on infrastructure.   Therein lies the problem.  

Third, while I understand the contract awarded to Mr. McKee / UTC-10 Consulting, LLC,  legally complied with the one year and one day ethics rule, I am concerned that someone within the HBWS purposely delayed the awarding of the contract to suit the ethics rules. The Honolulu Board of Water Supply website reflects that the bid process was posted May 22, 2012, and closed June 4, 2012.  It is my opinion that this is not a coincidence.  It is my understanding Mr. McKee left the HBWS May 20, 2011.  The website also reflects  UTC-10 Consulting contact (Procurement Office), EMA, Inc. contact  (Nancy Lerner), and Stepp Consulting contact (Russ Stepp).   McKee's name is conspicuously absent.   I am also concerned that the HBWS failed to recognize the importance of a need to immediately award a contract in order to prevent or end the improper use of electronically calculated billing in place at HBWS, for the rate payers,  at that time.   

Fourth,  the reason I am respectfully requesting an independent investigation into these matters  is because  I have noted  that a major portion of the delay in awarding contracts occurred under your watch and  that you knew or should have known of Mr. McKee's history with the HBWS  and Mckee's bid to compete and obtain a contract with the HBWS for services he had managed as the Chief Information Officer and Officer In Charge of all IT systems implemented between August 2003 and May, 2011.  Clearly those systems are responsible for some or all of the problems the HBWS and rate payers were and still are experiencing.  

Finally, I am  asking you to bring closure to contract # C08582001 with EMA, Inc.   As you know, the original awarded contract #C08582001 was for $796,000.00.  It has now ballooned to more than 3.5 million dollars and continues to increase via change orders tolerated by HBWS management. 

In addition to the above points,  I have several other instances of what appears to be unethical and illegal behavior that I will present as I obtain more supporting information.

Again, while I am respectfully submitting this letter calling for an investigation,  I am asking for your kind consideration for the financial hardship and frustration rate payers are experiencing due to the past and present practices of HBWS and their tolerance for what appears to be malfeasance and the unethical awarding of contracts.

Also,  it should be noted that employees of the HBWS  have expressed concerns that this questionable behavior has harmed the moral and financial well being of loyal, hardworking and longtime city employees forced to remain silent as these behaviors have taken place.    They  have also stated that a hostile work environment exists, as well as grounds for numerous employment practice violations.

In closing, my final summation is that Mr.  McKee was working for the agency at a basic 6-figure salary.  He then decided to leave the agency and one year later comes back to do the same work, only getting paid via a 1.5 million dollar contract.   Just this fact, in itself, is insulting.

Therefore, I  am urging you to cancel or suspend the above-mentioned contracts until an investigation is completed.  I respectfully ask that you provide me with a response by November 10, 2013, advising the steps you will be taking to address this matter.

Sincerely,

Carroll Cox