Atlanta councilman calls for probe into how Y2K contract awarded.
Richard Whitt and Julie B. Hairston - Staff
Sunday, February 18, 2001

The city of Atlanta has paid an upstart computer company $10 million over three years without bids, formal contracts or oversight by the City Council.

The city sidestepped the normal bidding process by designating most of the jobs done by TDC Systems Integration Inc. as "Y2K emergency" work, although much of it was not.

The firm also was paid more than $450,000 under an exclusive agreement to create a sanitation billing system. That system sent out 11,000 erroneous bills to property owners last year. The city has failed to collect $30 million in outstanding garbage fees since the system was established two years ago.

Council member Lee Morris, who chairs the Finance/Executive Committee, said he didn't know that TDC had done so much city work. He said he will ask for investigative hearings on the matter.

"The idea that any entity could do $10 million in business with the city without competitive bidding is just astounding and ought to be of great concern to every member of the City Council and every honest citizen of the city of Atlanta," said Morris.

TDC is one of six minority firms on a list of favored contractors kept by city Administrative Services Commissioner Herb McCall. The existence of that list was revealed in a federal lawsuit by a TDC competitor, Information Systems and Networks Corp. of Bethesda, Md. ISN is suing an airport contractor claiming that it was illegally dropped from a contract because of pressure from city officials to give the work to TDC. ISN claims in its suit that McCall's list is made up of firms that have special relationships with McCall or Mayor Bill Campbell.

The mayor and McCall helped pave the way for the city to sidestep purchasing codes in hiring TDC. After Campbell set June 30, 1999, as the city's target date for ensuring that all computers were Y2K-compliant, McCall wrote a memo to purchasing director Felicia Strong-Whittaker declaring that all such work should be considered an emergency.

"To meet this compliance date, Year 2000 compliance issues are to be processed pursuant to emergency authorization," McCall's Oct. 29, 1998, memo reads. Two days earlier, on Oct. 27, McCall had signed and sent to purchasing a requisition for $300,000 for "technology upgrade, cabling and Y2K," with TDC the recommended vendor. Purchasing officials wrote a purchase order a month later without a formal contract.

McCall has refused to talk about the matter, as has TDC President Antonio Dozier.

Founded in 1995, TDC was just another struggling small business before hooking up at City Hall. The company lost $4,315 in its first year on gross sales of $25,118, tax records show. It did better in 1996, earning a profit of $15,557 on sales of $103,239 and paying $40,184 in salaries.

An affidavit filed in the fall of 1997 lists TDC's assets at $17,450 and says it had four full-time employees.

The next year, TDC landed it's first city job as a subcontractor to help the city set up a system to do its own billing for property taxes.

After gaining a toehold at City Hall, TDC moved quickly to get additional work. It has landed jobs teaching computer classes for the mayor's office and sold the city television sets, Gateway and Compaq computers, printers and an array of components and software. It has installed telephones, television and computer cables as well as shelving, and more. It also created a Web site for Hartsfield International Airport.

It's not clear how many clients TDC has other than the city of Atlanta. A Dun & Bradstreet report for 1999 lists the firm's sales at about $3,596,047. The city paid TDC at least $3,480,689 that year.

City purchasing codes require competitive bidding and council approval on all contracts over $100,000 under normal circumstances. And even emergency contracts are supposed to include telephone solicitations from at least three vendors.

There is no evidence in the city's records of any such solicitations from TDC's competitors.

Competitive bidding is the only way to ensure governments get the best possible prices, said state procurement Administrator Winston McColl.

Georgia law requires competitive bids on state purchases costing more than $2,500.

"It just makes good business sense," said McColl. "I've got a responsibility to get the best pricing I can for the state."

'Right place . . . right time'

TDC's success in landing city work seems a mystery, even to some at City Hall. Senior officials claim to know little about the company or its 35-year-old founder and president.

Mayoral spokeswoman Glenda Blum Minkin said she doesn't know Dozier and that TDC has no special relationship with city officials.

"The mayor doesn't know him. As far as I can tell, nobody around here knows him," said Minkin.

Minkin said that Dozier just "happened to be in the right place at the right time."

TDC contributed $1,000 to Campbell campaign in December 1999, more than two years after the mayor's re-election.

Dozier's personal resume, on file with the Atlanta Office of Contract Compliance, shows that he graduated from Shorter College in Marietta with a bachelor's degree in business administration. He also attended DeVry Institute, specializing in computer electronics. He worked briefly for Coca-Cola and IBM before landing at Program Resources Inc., where he worked for more than a year as a programmer/analyst. In October 1991, Dozier took a job as a network systems analyst at Shepherd Spinal Center, where he worked until 1995.

In May, 1995 Dozier quit to start his own computer company, employing himself and three other people.

One of Dozier's first acts was to apply to the city for status as a disadvantaged minority business. That status was granted in February 1996.

Small role in Y2K

Most of TDC's invoices are for work at Hartsfield during the past two years. In 1999 and 2000 TDC billed the airport $6.3 million mainly for computer upgrades and computer support personnel.

City administrators offered conflicting stories about how TDC, an infant firm with little experience and just four full-time employees, was able to land such large amounts of work.

Airport General Manager Ben DeCosta recalled that city purchasing director Felicia Strong-Whittaker recommended TDC. And, he said, Strong-Whittaker told him TDC was hired using a state contract with TDC. It wasn't.

"My knowledge of it is that if a person makes it through this competition to get on the state list, then the city of Atlanta as well as any other municipality can enter into agreements with them." said DeCosta.

Strong-Whittaker told The Atlanta Journal Constitution the same story at first, even providing reporters with a copy of a state contract that listed TDC as a subcontractor. Strong-Whittaker later said she had been mistaken and that no work was done under the state contract. Several other companies also got emergency Y2K work without bidding, she said.

All of TDC's airport work was designated "Y2K emergency," she said, meaning that it was supposed to ensure that all the city's computers would operate properly after midnight Dec. 31, 1999.

But much of TDC's efforts at the airport were unrelated to Y2K, DeCosta acknowledged.

For example, TDC billed the airport $1,266,675 for technical support staff in the first three months of 2000. All the work occurred in the new year and involved such things as supplying technicians to staff a help desk and desktop support. DeCosta said TDC has since negotiated a formal contract with the airport program manager and continues to work there.

TDC's airport billing invoices obtained through the Georgia Open Records Act also show a pattern of billing that avoided close scrutiny.

TDC frequently issued multiple invoices on the same dates for less than $1,000 apiece. For example, TDC issued --- and airport employees authorized --- the payment of 22 separate invoices on a single day. All were "change orders" for additional hours worked by two TDC employees. Such invoices do not require the city Purchasing Department's approval and go directly to the Finance Department for payment, according to Strong-Whittaker.

The airport employee who authorized payment should not have done so, Strong-Whittaker and DeCosta said. The employee was not disciplined but has since left his airport job and works for ISN, a TDC competitor.

'Sole source' bonanza

TDC's work in developing software for the city's dysfunctional sanitation billing system was awarded on a "sole source" contract without competitive bids, purchasing officials said.

The sanitation billing system was awarded to TDC under a "sole source" contract because the firm was already a subcontractor on a related project.

Former acting chief financial officer Judith Blackwell first hired TDC in 1998, according to successor David Corbin. At that time, the firm was a subcontractor working on setting up a system for the city to do its own billing for property taxes.

City officials later learned that Atlanta is required by law to collect its taxes through Fulton or DeKalb County. But even after returning property tax collections to the county, city leaders continued to press ahead with in-house plans to collect garbage fees. Fulton County Tax Commissioner Arthur Ferdinand had refused to collect any city levies other than property taxes.

So, in June 1999, Blackwell asked the city's Purchasing Department to approve a sole-source contract for TDC to develop the sanitation billing system. In her memo, she cited TDC's experience working with the property tax billing contractor. Because the property data used for garbage bills was the same as that used for property tax bills, Blackwell said, TDC was uniquely qualified to continue adapting the software.

Correspondence from Dozier to city officials indicates that the city may not have been entirely happy with TDC performance in installing the city's sanitation billing system.

Last October, Atlanta's deputy chief operating officer for information technology, Jules Maderos, called a meeting of city finance and TDC officials to discuss the work.

The meeting was recounted in an e-mail from Dozier to two other city employees.

Maderos asked for copies of contracts, purchase orders, proposals, technical specifications and project plans for the sanitation billing system. Five months later, Maderos responded that he could locate no such documents.

Maderos also declined to discuss the TDC meeting.

In November, CFO Corbin ended the Finance Department's relationship with TDC but the company continues to work at the airport. Corbin said TDC did good work for the department but that the city wants to make further refinements in the system such as online billing and payment.

Atlanta Journal Constitution

-- Anonymous, February 18, 2001

Answers

Pitts calls for probe of city contracts
Julie B. Hairston - Staff
Friday, February 23, 2001

Atlanta City Council President Robb Pitts today called the awarding of $10 million in city business to a Cobb County computer firm without competitive bidding "a disgrace" and called for a council investigation.

In a Feb. 22 letter to Finance/Executive Committee Chairman Lee Morris, Pitts said the matter "has outraged the taxpayers of this city." He asked Morris' committee to investigate TDC Systems Integration Inc.'s relationship with the city and issue a report within 30 days.

"And we wonder why people have no confidence in city government," Pitts said. "How can they and why should they when things like this can happen?"

Pitts was responding to a report in the Atlanta Journal-Constitution that TDC received more than $10 million in city work over the past two years without any scrutiny by the council.

All of TDC's payments were made through an emergency order or under exclusive contracting arrangements. None required competitive bids or council approval as the city normally does on jobs worth more than $100,000.

City administration officials could not be reached for comment today.

More than $6 million of the work was performed at Hartsfield Atlanta International Airport under a Y2K emergency order issued in October 1998 by city Administrative Services Commissioner Herb McCall.

Not all the work described in invoices submitted to the city's Finance Department by TDC was aimed at eliminating computer problems caused by the inability of older computers to read dates after Dec. 31, 1999, however.

Some of the work performed by TDC at Hartsfield occurred after Jan. 1, 2000, and it included such jobs as staffing the airport's computer help desk.

TDC also installed, under an exclusive agreement, the garbage billing system inaugurated by the city in 1999. The system issued 11,000 erroneous bills last year. The errors had to be fixed and the bills resent.

Over the past two years, the city's collection rate on garbage bills has fallen from more than 90 percent to as low as 60 percent in November 2000. More recently, the collection rate has climbed back up to about 75 percent, according to the city's chief financial officer, David Corbin.

Morris said that he will discuss the matter with the Finance Committee at its regular meeting on Wednesday, Feb. 28.

Atlanta Journal Constitution

-- Anonymous, February 24, 2001

Atlanta vendor jacked up costs
after winning unbid contract

TDC supplied technical staff to the airport at rates
that ranged from $105 to $175 an hour. The
company had proposed rates ranging from $57 to
$95 an hour, according to city documents.

The latest revelation comes as the City Council's
Finance/Executive Committee is to begin
investigating TDC's relationship with the city. The
committee, which meets today, is to issue a report
within 30 days.

Atlanta Journal Constitution

-- Anonymous, February 28, 2001

In October 1998, city Administrative Services
Commissioner Herb McCall declared as an
emergency all spending related to ridding city
computers of problems associated with their
potential inability to read dates after Dec. 31,
1999.

"One thing I do know is that there was a frenzy
everywhere on that Y2K situation and everybody
was scrambling," Councilman Jim Maddox said
Wednesday.

Atlanta Journal Constitution

-- Anonymous, March 01, 2001