Loose Lips

CBE Mess: Were Warning Signs Ignored?

Brian Hanlon

A Rockville-based construction company won a $6.8 million school construction contract a month after city officials were alerted that the same company may have abused the city's preference program for local contractors, court and D.C. Council records show.

A panel made up of one city employee and two private consultants picked Forrester Construction on behalf of the Department of General Services to manage renovation work at Nalle Elementary School on Dec. 15, 2011.

The selection came a month after representatives of Forrester's partner in a joint venture at Anacostia Senior High School, EEC of D.C., copied city officials on letters alleging that Forrester was in breach of the city's Certified Business Enterprise program. (For more details on the issues at Anacostia specifically and problems with the CBE program in general, see LL's cover story.)

Scott Foley, an attorney representing EEC of D.C., sent a letter to Forrester on Nov. 11, 2011, alleging that Forrester had taken control of the joint venture on the Anacosita project, despite the fact that EEC of D.C. was required by law to be the majority partner by dint of its CBE status. "Interestingly, EEC is a 51 percent joint venture partner on the joint venture but Forrester is control of all the finances and books for the joint venture," Foley wrote.

EEC of D.C.'s owner, Andre Downey, sent a letter four days later with similar allegations. Both letters were addressed to Forrester, but indicate that they were copied to the Office of Public Education Facilities Modernization, which is a part of DGS, and the Department of Small and Local Business Development, which runs the CBE program.

On Nov. 22, Downey met with Harold Pettigrew, the department head of DSLBD, and discussed "several potential violations" of city laws related to not only the Anacostia joint venture, but two other previous partnerships as well, according to a complaint Downey filed on Feb. 7, 2012, that references the meeting.

But city officials insist they were unaware of any problems involving Forrester prior to awarding it the Nalle job.  "The conflict between EEC and Forrester was first brought to the District's attention as a financial dispute in December 2011," City Administrator Allen Lew told LL in a statement.

Brian Hanlon, the director of DGS, says the city first got wind that there were problems in mid-December, and it took two to three months "to investigate the matter and determine that there were, in fact, substantial issues."

"By then, we had already awarded the Nalle contract and [Forrester was] well into that job," Hanlon says.  (The contract wasn't sent over for council approval until July 9.)

As for the letters, Hanlon says no one on his staff saw them in November and notes that they weren't addressed to any specific individual. "It is quite possible that a letter addressed in such a manner got misplaced or did not get to the right people," Hanlon says.

He adds that he wasn't at the November meeting between Pettigrew and Downey and didn't "learn about that meeting until well after it happened." (LL has been waiting to hear back from Pettigrew—whose spokesman says he's coordinating with DGS and the city administrator's office on a response—and will update as needed.)

But even if DGS had been aware of EEC's complaints in November, Hanlon suggests that probably wouldn't have prevented Forrester from winning the Nalle job anyway. He writes:

The construction industry is by its nature litigious and we frequently are drawn into disputes between the various contracting parties. When this happens, we meet with both sides, investigate (if appropriate) and then decide what action (if any) to take. Both sides to a dispute are entitled to some level of due process and it would be foolish for us to act rashly and without all the facts.

It's wonderful that DGS respects due process and all, but it seems like it would behoove the city to act aggressively when it gets complaints of potential fraud. After all, Mayor Vince Gray's "One City Action Plan" calls for DGS to "strive to expand and maximize CBE participation even more" than it already is.

There's also the unanswered question of  how the city didn't notice problems at Anacostia earlier. In court records, Downey says Forrester has controlled all three joint-ventures he's had with Forrester dating back to 2008. (Lew says the District has discovered "potential improprieties" with all three.) And it's not like problems with joint ventures aren't common knowledge in the city's construction business.

Forrester's newest joint-venture partner is Parkinson Construction. They've teamed up on the construction of a new student center at the University of the District of Columbia. Nigel Parkinson, the company's owner, showed LL a letter he says he wrote to Forrester on Dec. 21, 2011, stressing that the partnership between Parkinson and Forrester will be an above-board enterprise.

"There are those who are tired of bogus joint ventures that attempt to pass 'as the real thing' but in no way approach even a 50-50 relationship," Parkinson wrote. " Ours is a true joint venture and must operate as such."

So why was he motivated to write such a letter before the companies even started working together? Parkinson told LL he wrote the letter to "set the record straight."

"We're not a bullshit company," he says.

Photo by Darrow Montgomery

The Nalle contract:

The letters:

  • Joe

    To paraphrase Flavor Flav: CBE is a JOKE in your TOWN!!

  • SaveWard7

    DC's contracting officer needs to be investigated and fired!!!!

  • ToTheContrary

    I believe the CBE program serves a valuable purpose when not abused. Now that the city knows there is a problem what will they do. Ignorance is no longer an excuse. The CBE program requires FTE's assigned to investigation and validate the authenticity of CBE's and, where it exist, refer fraudulent cases to the Attorney General for legal action and fines.

  • City Dude

    EEC of DC and Forrester are stealing 12% of the funds from DC Govt and unfortunate part is DC has no clue!!
    If CFO was to conduct routine audit for all 3 projects you bet they will get that 12% and more back..these Joint ventures are designed to avoid DC Taxes and as usual IG/CFO are clueless!!

  • Real talk

    JW LANUM GOT ALL YOU DC RESIDENT'S BEST INTERESTS IN HIS HEART BECAUSE AS HE'LL TELL YOU, HE'S A RESIDENT TOO!!!!

    HE, SCOTT BURRELL, ALAN LEW, BRIAN HANLON, AND ALL OPEFM EXECUTIVE MANAGEMENT THAT RAN DRES OUT OF TOWN ARE LAUGHING ALL THE WAY TO THE BANK!!!

  • Real talk

    SaveWard7,

    The Contracting Officer for DGS is Brian Hanlon, a puppet of Alan Lew and the rest of his buddies at OPEFM (now DGS).

    DGS, like many other District agencies, has their own procurement authority. The Contracting Officer used to be Wil Giles for DRES, but he was unceremoniously let go when worthless JW Lanum dragged his lazyass over from Office of the City Administrator.

  • Truth hurts

    Yes, LL, warning signs were ignored. Anyone shocked this could happen in DC?

  • Enough is Enough

    ALAN LEW, BRIAN HANLON, HAROLD PETTIGREW AND CO. ALL NEED TO BE FIRED!
    ALL THEY DO IS DRAW THEIR REGULAR PAYCHECKS AND GIVE LIP SERVICE TO COVER
    THEIR INCOMPETENCE. NUMEROUS SMALL BUSINESS HAVE EITHER BELLIED UP OR ARE CURRENTLY UNDERGOING ENORMOUS HARDSHIPS AS A RESULT OF THIS
    ON GOING MISCARRIAGE OF PUBLIC TRUST. KUDOS TO SUDERMAN, WHO HAS JUST BARELY TOUCHED THE TIP OF THE ICEBERG. THE MORE HE DIGS, THE FILTHIER
    IT GETS. THESE CONTRACTS ARE ALSO SUPPOSED TO PROVIDE JOBS HERE IN DC,
    HOWEVER, UNEMPLOYED DC TRADESMEN STAND AND WATCH CARS WITH OUT-OF- TOWN LICENSE PLATES BRING WORKERS TO THE JOB SITES. IT'S A LOW DOWN DIRTY
    SHAME THAT OUR TAX DOLLARS ARE BEING UTILIZED TO ALLOW THESE BIG CONSTRUCTION COMPANIIS TO PIMP THE DISTRICT''S COUNTERFIT CBE PROCESS!

  • The Guy from DC

    Does any of this really shock you, is anyone I mean anyone on the City council watching the store. Do they actually know there supposed to be watching out for the better interest of this town. Can you maybe go back to the way things used to be run, it goes something like this; let everyone bid a project on there own merit and if your the low bidder and qualified you get to do the project, that used to work years past and we didn't have all these greeeeeeeedy vulchers waiting to steal the pennies off your eyes. WAKE UP D.C.

  • W7BDC

    Is not Parkinson and HESS the same company? If so, wouldn't that be two "Primes" Joint Venturing (Parkinson/HESS) and Forester? What's the point?

  • Joe

    JW Lanum has been an ass kisser for a number of years. He should have been fired a long time ago.

  • Loren

    Everyone seems so quiok to blames DGS and OPEFM...nobody has really commented on Forrester's blatant abuse of (a) a small business clearly trying to do the right thing (b) a city government which has paid them tens of millions of dollars, only to have them turn around and screw them over. This seems like an awful firm with absolutely no integrity or morals. Why crucify DGS for getting abused instead of crucifying the obvious abuser?

  • Cry Wolf

    What really baffles me here is the CBE put himself on blast for going to the city, but what makes me sick to my stomach is he did 3 JV with Forrester, OK, I just want to know what kind of gun was being held to his head?? A lot of years has passed since JV one? I can tell you, he got greedy.
    My ole Mom always said: two wrongs don't make it right, and in this case three wrongs. He is no victim, he played himself and in the process he made a deal with the Devil and now he is paying for it, really!!!

    Deal with the compromiser first, (EEC) and just do away with this mess as it is a bad reflection on his character.

    I DO NOT FEEL SORRY FOR YOU, YOU SHOULD BE KICKED OUT OF D.C, IDIOT!!

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