Wednesday, January 16, 2008

City Manager Needs to Strengthen RFP Contracting Practices

Even the Falling Star isn't applauding this one. These are some very interesting excerpts (italics) and my questions and comments (bold).

The integrity of the Document Output Management and Mail Services RFP process can be questioned because of the actions of some members of the selection committee, some city staff, and an elected official. Who are they? Especially the elected official?

The current draft contract does not adequately protect the city’s interest, providing little leverage to control costs or ensure performance. Doesn't this describe CIMO perfectly?

The city should reject the current proposals for the Document Output Management and Mail Services RFP and begin again, with a new RFP and a new selection committee. Are we sure that this Manager and this Council are capable of a clean process? After watching the Finance Committee this morning, I doubt it.

We shared a draft of this report with the city manager and his staff on December 5, 2007. Why did it take Cauthen six weeks to respond?

We were unable to interview two members of the selection committees. An outside consultant on the committee would not participate in an oral interview and we declined to submit written questions for her response with the assistance of her attorney. The former director of the Information Technology Department agreed to be interviewed after-hours, but did not provide a time for the interview despite our request. Why did individuals avoid talking to the Auditor? Why did people find the need to retain attorneys?

The city manager asked that Perfect Output’s CEO develop an RFP to address document output management. Let me repeat this.

The city manager asked that Perfect Output’s CEO develop an RFP to address document output management. This is unbelievable. Cauthen asked one of the contractors bidding on the contract to write the RFP? Are any of us surprised that this same contractor was awarded the contract?

Half of the committee failed to attend all vendor presentations. Certainly understandable, the decision was already made by Cauthen.


The city’s best interests are not protected by the language in the draft contract.

The draft contract would commit the city to a five-year contract while Perfect Output of Kansas City, LLC, was set to dissolve December 31, 2007.

The draft document management contract does not provide the city with leverage or any other means to control costs.

The cost of mail operations contained in the draft contract for staff and a delivery van are higher than the city’s corresponding costs for fiscal year 2007.

The contract was modified from the city’s standard contract language to permit Perfect Output to obtain financing for equipment. Cauthen employing his buddies wouldn't be so hard to swallow if the citizens of Kansas City weren't getting screwed too. Perfect Output was already scheduled to dissolve on December 31st, 2007! BTW Perfect Output Kansas City LLC did dissolve, as scheduled.
Who is Michael Marcotte?

The City would've have been obligated to pay Perfect Output millions of dollars over five years and Perfect Output was not obligated to provide anything in return!

Staff, at the time, had proof that costs were currently less than being offered by Perfect Output. AND we were ignoring our contracting guidelines to assist them to get their financing.

I was not able to see all of the Finance Committee meeting but am real disappointed in the whole committee, especially Herman. She seemed to be trying to shut down Johnson who was asking some great questions.

Stay tuned for
Who is Mary Redmond?
Why is Jan Marcason offended?


Anonymous said...

So who is the city council person?

Anonymous said...

How do I get a gig as a "Consultant" for the city, it sounds like a good deal....

Anonymous said...

NO NO NO - I don't think Hermann (note 2n's) was shutting him down, she was making sure he got her point. The point was council can make contract policy any way they want (take their lead from a board if they want - as he suggested), but in the end - they direct the City Manager to follow policy and make sure it happens. She wasn't disagreeing with him - he was saying Wayne shouldn't make the policy himself. They were actually on the same page - he just wasn't getting her point.

Anonymous said...

To anonymous 5:49
See comments posted in response to "Falling Star/Cauthen Conspiracy?".

Anonymous said...

I just listened to this on-line. Marcason is a crack-up! Why would ANYONE think that Councilpeople could use ethics training!!!! She thinks Gary White was being condescendng suggesting that council people be re-trained in ethics based on the red-flag commission. If anyone on earth needs ethics training it's KC Council...remember McFadden-Weaver, nearly the whole council during the Hernandez era..D. Jeanne Robinson, Weber, She's a funny gal that Marcason - me thinks she doth protest too much! Also - her comments about maybe there aren't very many vendors for this contract - does that make the corruption okay? Should the RFP read - "if there aren't many vendors then all rules are off?" Give it up Jan, go back to bed.

Anonymous said...

to 5:51: How do I get a gig as a "consultant"....easier than you think. You move to Denver, send a resume to WC, promising any little corrupt action that gets him what he wants. Make sure it will cost the taxpayers a lot of money and VOILA - you are the consultant of choice!!

Anonymous said...

Insiders confirm this, rumor was that MWH and came in and observed the Public Works Department, recommend some ways to improve it which included outsourcing the capital program, draft the RFP for outsourcing, and then win the $20million or so contract?

Isn't the same thing going on now in the Water Department with Burns and McDowell?

Anonymous said...

Go to and watch the streaming video of 1/17/07 and watch how far Riley goes to push Perfect is incredible. There is definitely a dirty story here. To get to the right place click on ordinance 061408 (this was posted on primebuzz and I checked it - it's a great lead). This is the discussion of Perfect Output contract.

Anonymous said...

When you watch 1/17/07 F&A Committee regarding Perfect Output, note that the staff that are presenting are Deb Hinsvark and Ray...didn't catch his last name. We all know the unfortunate story of Hinsvark...she's back in Denver now after a fight with LT (the user of inappropriate email content). I don't believe Ray is with us either - if anyone out there knows, please share. I think a lot of people went under after this project...I think many of them went under BECAUSE of this project.

Anonymous said...

Fool me once shame on you, fool me twice shame on me

In light of recent comments made about Perfect Output and ties to Blue Cross Blue Shield of Kansas City scandal in the mid nineties. I found my self intrigued, especially since I am in the document management biz and a KCMO taxpayer. Perfect output is owned by the infamous John Walker, who at one time was the #2 exec at BCBSKC. During Mr. Walkers stint at BCBSKC he was accused in a grand jury testimony of, well I will let former city councilmen Jeanne Robinson explain that one to you.

Robinson comments:
On Tuesday, Robinson provided extensive detail about how Anderson periodically handed her thousands of dollars in cash. Anderson, a public relations consultant, had been hired by Blue Cross to help the insurance company win the city's $60 million health insurance contract.
Wednesday, defense attorney J.R. Hobbs asked Robinson about her grand jury testimony earlier this year. Hobbs asked: ``Did you say Elbert Anderson indicated to you that Blue Cross and Blue Shield knew he was paying you? '' Robinson answered: ``He let me know that Mr. (John) Walker would see that I would get paid. '' Walker was an executive vice president at Blue Cross who hired Anderson as a marketing consultant. Earlier testimony indicated that Blue Cross paid Anderson more than $290,000 in consulting fees between 1992 and 1994.
``I was in a meeting in Mr. Walker's office,'' Robinson said.
``At that time, Mr. Anderson let him (Walker) know there were some funds that I needed. He (Walker) said, 'Have Ms. (Michelle) Lathan give the invoice to Blue Cross and Blue Shield,' and he would take care of it. The conversation occurred in his office. '' Michelle Lathan was Anderson's top assistant and has pleaded guilty to bribing Robinson.
Sited (The Kansas City Star, Page A1, Sept 18, 1997)

Not only was he lying to you then but he is lying to you now. Ricoh is the #1 copier manufacture in the World. They have been the industry leader in Japan for years and are now sweeping across the US. I would be interested to know what services Perfect Output would employ that would cost the city 9 million more dollars or over 300% MORE THAN THE LOWEST BID! Copiers are Copiers they all basically do the same thing, take a picture of an image and print it out.

My best guess is the extra services are going to be used to pad the pockets of councilmen, city officials, and Mr. Walker himself.

Posted by: Concerner Taxpayer | January 16, 2007 at 01:14 PM

Anonymous said...

I also want to reserve judgment about the F&A Committee generally and Hermann particularly.

Please note that WC was not at the meeting, and no other representative from the CM office was present either. It really was not fair for the criticism to be directed at the Auditor -- he was not the one who did anything wrong.

Anonymous said...

Perfect Output in Missouri was dissolved, but there is a website for a Perfect Output in Overland Park on College Boulevard that is a document imaging company - does anyone know if it is the same ownership?

Anonymous said...

To GloriaMustGo:
I would think that the information related to the selection of MWH would be available under the Sunshine Laws. If any one knows a lawyer (who is not an employee) who would request all the e-mails, correspondence and related documents that pertain to the establishment of CIMO and the selection of the management company, I believe that it would be disclosed that WC again engineered a special deal for his Denverite buddies. Let's go for it!

Anonymous said...

If you think that Perfect Output was the only deal that Riley was behind -- think again! Think Citadel Plaza! Many think that Riley was dirty in this deal also. Interestingly, he got WC and LT involved in defending this and at a meeting to dicuss the future of Citadel Plaza, he made his "presence" (along with the ususal group of minority "civic leaders" from the 6th District) and position on the issue very apparent to other council members who were considering the merits of this worthless project. WC and LT presented a 10 page plan to "fix" Citadel Plaza -- in return for Riley's (obvious) support of retaining WC as City Manager.

The deal was dirty from the beginning and I suspect (but have no proof) that Riley was in on it -- either monetarily or for his supporters.

Anonymous said...

Perfect Ouput in OP was the real vendor; the MO LLC was a front used in the contract negotiations.

Anonymous said...

Gloiramustgo and others, you people are truly amazing. Even an audit about duplicating somehow turns into a b*tch session about CIMO. There's a conspiracy around every corner. You give them way too much credit. On one hand, the current management has the biggest bunch of idiots the City has ever seen; on the other hand, they are behind some of the most elaborate and secretive conspiracies of the last two decades. Which is it?

Anonymous said...

9:12 - I don't think we're talking about conspiracies...we're talking about blatant cheating going on right under all of our noses! CIMO was such an open cheat - absolutely no accounting going on whatsoever -just wait - the audit has to show that. There were many business sessions with council (mostly hermann) asking for detailed accounting and they were always going to change things right away and start accounting. Well, guess what, they didn't, because they couldn't. It would show on paper that they were taking us for every penny we had. Now we're $20 million behind and the Denver CIMO crew have the money in their bank accounts.

Same thing with Perfect Output ...only this time there is documentation that is out in an audit and a certain council member what's his name...Riley...may just go down for this one. The CM should go down the drain with him, he is up to his eyeballs in this one. Can't wait for F&A next week, we'll see if he can stand the heat.

Anonymous said...

Quit complaining and get to work.

Anonymous said...

2:21 - Is that you LT...can't find another job yet? Don't worry, WC will be out of his job soon too and then you can both get a job at burger king.

Anonymous said...

The FBI should look into this matter. This is one of the worst audits that I've seen in a long time. Hopefully the city council doesn't turn a blind eye to this one!

Anonymous said...

980 AM had a 4:00 report today where they interviewed Riley. He said that the audit was a "smear campaign" against him and that he asked for the audit to begin with. That's KINDA true - the first audit requested had a scope that included NEGOTIATIONS & RFP process. He then asked for a second audit LIMITING the scope of the audit to the RFP ONLY...didn't want the auditor poking around in the negotiation phase. Tsk, tsk, tsk, Mr. Riley, the truth IS coming out, and you can't spin this one! Wake up council of 9, this is gonna be good stuff.

Anonymous said...

Regarding Marcason's comments during the audit presentation: There might have been many proposals to choose from had the city provided a more detailed scope of work and more time for potential vendors to prepare and submit proposals. Why did the City only give 14 days on a RFP for a contract that spans several years, outsources two city functions, and costs several million dollars? The City's minimum bid time of 10 days is just that -- a minimum! Complicated projects/RFP's require much more time for responsible vendors to prepare bids/proposals. Heck, why doesn't the City give just 10 days for large construction bids?

Anonymous said...

One of the more outrageous findings in this report is that two vendors participated in developing the RFP. One of them, Perfect Output, was brought in by the City Manager.

Perfect Output, a minority-owned firm, included in the draft RFP a requirement (yes, a requirement) that potential vendors be locally-based, minority-owned businesses.

The numerical objectives for a percentage of minority-owned businesses getting city contracts are not, and cannot, be requirements.

Many city staffers, and even some council members, do not understand this, and consider proposals that do not meet or exceed goals for minority-owned business participation to be "non-responsive".

Anonymous said...

If it is true the Perfect Output Missouri was just a shell MBE for the real company that exists in Overland Park, created just to qualify for the MBE - isn't this fraudulent? Shouldn't an MBE/WBE be a real business, not something made up so that a non minority company can qualify for RFPs? Is there an ordinance that prevents this?

Anonymous said...

RICO!!!! ...and I do NOT mean Ricoh.