HUD orders pre-approval of housing authority’s services contracts
Because the Fayette County Housing Authority incorrectly mixed its procurement methods when acquiring architect/engineering and real estate developer services, the U.S. Department of Housing and Urban Development is requiring pre-approval of its future professional services contracts. A review by HUD’s Pittsburgh program office also found problems with the authority’s adherence to guidelines involving handicapped-accessible units. One of those findings was that a contractor did not install grab bars in any bathtubs at South Hill Terrace, “even though the plans clearly show grab bars to be installed” during renovations.
That contract is closed out, noted HUD, which means “the contractor has been paid in full,” even though all work detailed in the contract was not performed.
HUD also ordered the authority to revise its procurement policy to eliminate language that allows board members to serve on evaluation panels for ranking competitive proposals. That edict is related to HUD’s finding that the authority improperly permitted board members to evaluate real estate development firms.
The authority earlier this year selected Falbo-Penrose Joint Venture of Pittsburgh as its private sector partner in an ambitious plan to transform the face of its public housing stock.
However, HUD found that process fraught with errors, including failure to maintain sufficient records, the facts that the interview process was not used as a ranking factor and that no cost estimate was on file, and the failure to conduct a cost/price analysis as required by federal regulations.
Also, HUD found that the authority had permitted its board members to participate in the Falbo-Penrose procurement process, a move that does not comply with the HUD procurement handbook, which gives Executive Director Thomas L. Harkless that responsibility in his role as the authority’s contracting officer.
HUD said the authority wasn’t even permitted to use the “qualifications-based selection method” (QBS) that led to the selection of Falbo-Penrose. “The QBS method can only be used during the procurement of architecture/engineering services and cannot be used to procure the services of a developer,” noted HUD.
But the same review found that the authority fouled up its selection of a firm to provide architecture/engineering services. Although the process was advertised as a QBS, the authority improperly required interested firms to submit a listing of their “lump sum fee,” which is contrary to the purpose of a QBS and to federal regulations, HUD noted.
“Under QBS, the authority requests technical qualifications statements from prospective contractors, and the housing authority then ranks them technically,” said HUD. “The housing authority then holds negotiations with the top-rated firm to reach an agreement on a fair and reasonable price.”
If an agreement cannot be reached, the authority then negotiates with the next-highest-rated firm, and so on until a fair and reasonable price is reached, said HUD.
However, no negotiations took place with the top-rated firm and the price submitted by that firm became the final contract price, noted HUD.
The authority also did not maintain sufficient records on the architecture/engineering services procurement, improperly used proof of state license and liability insurance as an evaluation factor, and improperly used responding firms’ definition of what would constitute a “change order” as a ranking factor, said HUD.
“HUD General Condition 29 clearly gives the contracting officer (Harkless), not the architect, the authority to make changes to a contract,” noted HUD. “The authority should only use evaluation factors that measure a firm’s qualifications and abilities.”
Regarding handicapped-accessible units, the HUD review found numerous problems during a review of a limited number of the authority’s common areas and dwelling units. HUD was checking for compliance with Uniform Federal Accessibility Standards.
Basically, HUD found that the authority was counting its number of handicapped-accessible units twice – once in the hearing/vision-impaired category and again in the mobility-impaired category – when they cover two separate things.
Also, HUD found that the two-story nature of much of the authority’s handicapped-accessible inventory did not meet federal requirements because having bedrooms and bathrooms on the second floor did not provide for an accessible route for tenants.
“To comply with this provision, the authority must provide accessible units that have all sleeping spaces and bathrooms on an accessible route,” noted HUD, which gave the authority 90 days to submit a revised transition plan that includes a timetable for correcting all deficiencies.
HUD also revealed that the South Hill Terrace renovations did not include an upgrade of kitchens to make them fully handicapped-accessible.
Board member Angela M. Zimmerlink said the overall findings reinforce her long-held belief that her fellow board members are too lenient in questioning and monitoring authority activities, particularly as they concern compliance with established policies.
“They’re too concerned about patting themselves on the back for getting awards (from public housing interest groups), and the board’s too concerned with getting American flags in all of the (housing project) community rooms,” said Zimmerlink. “They ought to be concerned with sitting down and reading the HUD regulations and our own regulations.”
Zimmerlink also said the HUD procurement-related findings substantiate her lack of faith in the authority’s solicitor, the local Davis & Davis law firm, as well as the specialized Cohen & Grigsby law firm from Pittsburgh, which was hired to assist with the selection of a real estate development partner.
“I look at it as here’s an instance where you had the board relying on (those law firms), as well as the housing authority staff, only to find out again that the HUD rules weren’t followed,” said Zimmerlink.
“Here we are, paying for these legal services. The sad thing about this, too, is that a lot of times before I vote on these contracts, I specifically ask, ‘Was the procurement policy followed?’ and I’m told yes.
“I think it’s pretty bad that these HUD findings now result in the fact that all future procurements have to have prior HUD approval,” Zimmerlink concluded.
The other authority board members could not be reached for comment or did not return calls. Harkless was unavailable for comment, as he is on vacation.