By Connie Llanos, Staff Writer | LA Daily News| http://bit.ly/czNz8H
11/16/2010 04:44:50 PM PST/Updated: 11/16/2010 09:04:31 PM PST
Los Angeles Unified officials cancelled a $3.7 million contract with four long-time district consultants shortly after a confidential report revealed irregularities with the deal, district officials confirmed Tuesday.
Superintendent Ramon Cortines said he cancelled the contract with Consilia LLC on Friday, asking its four partners to hand in their badges and cease doing any work for the school district for now.
Earlier that week, the Daily News reported that a study from the Office of the Inspector General - a watchdog agency within LAUSD - found Consilia was hired as a subcontractor, violating a district ban on using subcontractors on that contract.
"You can't say to the board that you're getting rid of consultants... and then let consultants create a company and then hire them to do planning," Cortines said.
Consilia is run by Rod Hamilton, Edward Van Ginkel, John Creer, and Charles Anderson, building consultants who have worked in LAUSD's $20 billion construction program for about 10 years.
The Inspector General report, prompted by whistle-blowers in LAUSD's construction program, focused on a collection of contracts totaling $65 million. Those contracts included a "lump sum" task order for Consilia LLC to handle construction planning for the district as sub-contractors. District policy had been changed to prevent subcontractors from being hired on this contract.
The "lump sum" task order, which is a work order usually reserved for smaller jobs because they lack the detail and description of a complete work order, was to be paid out at a monthly rate of $185,000 and included a $40,000 signing bonus to be used for furniture.
Under the contract, Consilia was supposed to handle the district's planning for Measure Q, a $7 billion construction bond approved by voters in 2008. The money was to be used primarily to modernize aging schools.
After facilities officials were told of an inspector general probe, they attempted to move the Concilia task order onto another contract that allowed subcontractors, according to the district IG report.
Cortines said he intends to present the board with a full report on Consilia, including revealing what other job orders - if any - it has received from the district. He also said that he would not rule out awarding another contract to this company in the future.
Questions over how the district has spent its construction dollars have been raised for years, with particular attention paid to lax controls over the hiring of consultants.
Known for years as some of the highest paid consultants in the district's facilities department, Hamilton, Van Ginkel, Creer and Anderson - who could not be reached for comment - made between $185 to $215 per hour when they worked as contract professionals with LAUSD.
The Inspector General is now conducting a deeper investigation into Concilia, according to sources familiar with the IG's office.
But many close to the district's massive building program refer to the four consultants as experts in their field, and credit them with helping ensure LAUSD's success with new school construction.
"I am very happy with the work they did," said Scott Folsom, a member of LAUSD's bond oversight committee.
"They were highly paid but I think we got our money's worth. In going to community meetings no one was stronger at communicating than these guys."
Folsom, however, said he agreed that the best thing to do now was halt the contract. Still, he said was more concerned about how facilities executives were handling the contracts than with Consilia itself.
"I am very concerned about this contract. However, my concerns come from the identified mishandling," Folsom said. "My criticism is not of Consilia, but of the leadership of the facilities division."
LAUSD Chief Facilities Executive James Sohn acknowledged Tuesday there were errors with the awarding of the Concilia contract, but he disputed any allegations of wrongdoing. Sohn also said the four consultants would be missed.
"The loss of these individuals will have a significant impact," Sohn said in an interview Tuesday. "These are very talented individuals."
Last week, Sohn disputed the legitimacy of some of the concerns raised by the 54-page report, prepared by LAUSD's Interim Inspector General Jess Womack.
The "limited review" report, which is a less thorough investigation than an audit, alleged that the facilities department under Sohn's leadership was authorizing work that exceeded pre-approved amounts by nearly 50 percent.
The report found the district's Facilities Department increased the $65 million in construction management contracts by $31 million without getting school board approval; failed to slash total costs of new contracts by 20 percent as promised to save money; and hired subcontractors to do work after being specifically told not to do so.
"The idea that we have to lay people off, while at the same time the rich may be getting richer through contracts that may or may not be valid or legal is something I am very concerned about and raises questions I must have answered," school board member Steve Zimmer said.
School board member Yolie Flores said she also agreed with Cortines' decision.
"I think this was the appropriate thing to do until we complete further review," Flores said.