Pima “County decided it would be hard to switch horses midstream. But it chose which horse to ride in August 2015…”
On December 17, the Goldwater Institute filed a brief with the Arizona Court of Appeals in it’s case against Pima County and the questionable procurement practices the County used on behalf of World View. The brief reads like an indictment as it lays out the secretive process employed by Chuck Huckelberry and his staff.
While part of Goldwater’s case involving the issue of gift clause violations remains in play, Goldwater hopes the Court will revive the procurement aspect and reverse a muddled finding by Pima County Superior Court Judge Katherine Woods. Woods found certain circumstances existed that created an exception to the State’s procurement laws.
The Goldwater case:
This case challenges the legality of actions taken by Pima County as part of “Project Curvature,” whereby the County provides facilities at taxpayer expense to a private company called World View—which is supposed to operate a luxury tourism business taking passengers on rides to the stratosphere in specially made high-altitude balloons, and also running high-altitude scientific experiments.
The County embraced the project on the theory that World View’s private business will help boost the local economy. As part of the project, the County financed construction of a 135,000 square foot facility on 12 acres of county-owned land, to be used by World View. The facility consists of a balloon launching pad, a building for manufacturing these balloons, and a headquarters building for World View’s corporate operations.
The County paid for the design and construction of these buildings, and retains title to them and the land. In this stage of the case, the focus is on the County’s selection of the architect (Swaim) who designed, and the contractor (Barker) who built those facilities for the County. Appellants are taxpayers who contend that the County violated state and county procurement laws in selecting Swaim and Barker for the project.
● Beginning in the summer of 2015, Pima County officials sought to entice World View to locate its business operations in the County, as part of an economic development plan.
– Among other things, the County built facilities for World View—including a construction facility for the manufacturing of high-altitude balloons, a launch pad for these balloons, and a headquarters building for World View.
– The County owned and still owns these buildings, but they are used exclusively by World View.
● As the Superior Court correctly concluded, County Administrator Chuck Huckelberry “selected” (indeed, “hand-picked”) Swaim and Barker to work on the project in August 2015.
– He did so without going through the procurement process required by state or County procurement laws, and without sufficient justification to invoke the exceptions to those rules provided by A.R.S. § 34-606 or Pima Procurement Code § 11.12.060(A)(1).
● The Superior Court rightly found that from the beginning, he “had no intention of pursuing a competitive bidding process, or encouraging the Pima County Board of Supervisors to do so.”
– Instead, he chose Barker and Swaim at the project’s inception in August 2015, and began “receiv[ing]” their services at that time—“when, because there was no looming deadline to complete the project on an accelerated schedule, it was not ‘impracticable’ to allow others the opportunity to bid for consideration on the project.”
– To be more specific, some time before August 12, 2015, Huckelberry selected Swaim to design the World View facilities.
– Shortly thereafter, he selected Barker to construct those facilities.
– Neither Barker nor Swaim had any experience designing or building a balloon launch pad or a balloon manufacturing facility, and had no particular expertise in this area.
● A week later, on August 20, 2015, County officials met with Barker, Swaim, and World View, and this became the first of a series of meetings and exchanges by email and telephone, during which Barker, Swaim, World View, and the County planned the facilities and created and revised construction cost estimates.
– There were between five and ten in-person meetings (in addition to countless phone calls and email exchanges) between August 2015 and January 19, 2016.
– During that time, Barker provided between five and ten estimates, and Swaim revised its plans several times.
– Swaim devoted the working hours of Mr. Swaim both himself and an employee to the project.
● The planning was quite extensive, and involved such specific details as the degree of flatness in the construction facility’s floor, the number of columns inside the warehouse, and the exact cost of the chip seal.
– In fact, the planning was so extensive that by January 19, 2016, the planning was already 30 percent complete.
● No other architect or contractor was ever invited to participate in any of these meetings, discussions, or plans, or given any opportunity to provide design or preconstruction services or to work on the project in any way.
– Sometime around October 2015, this team (the County, Barker, and Swaim) learned that World View wanted the project completed by November 2016.
● On October 23, 2015, Huckelberry submitted a formal project proposal to World View on the County’s behalf.
– In it, he recommended that Swaim be the project architect and Barker be the contractor. On December 23, 2015, World View accepted that proposal—including officially agreeing to Swaim as the architect and Barker as the contractor—and stated its desire that the facilities be completed by November 2016.
● On January 19, 2016, Huckelberry submitted to the Board of Supervisors a memorandum he had prepared in the preceding weeks in which he laid out the proposal for the World View project.
– (Prior to that time, he had not discussed the project or his meetings with members of the Board.) No written request for an emergency or limited-competition procurement was prepared prior to January 2016, nor was a limited procurement process for the World View project created prior to January 2016.
● In his January 19 memorandum, Huckelberry recommended that the County approve the project and award the contract to Swaim as architect and Barker as contractor. He gave two reasons:
– first, that “[t]hese two firms [had] provided months of substantial services without compensation to provide the necessary architectural programming and design and cost models” on the project
– and second, that “[g]iven the required facility delivery date of November 2016 and because of [Barker and Swaim’s] prior involvement and detailed understanding of World View[’s] requirements,” it would be “impracticable” to “compl[y] with the full provisions of the [procurement] statute” by allowing other firms to bid on the architecture or construction contracts.
-Barker and Swaim were not paid, and will not be paid, for their pre-January 2016 work on the project.
-Messrs. Barker and Swaim testified that they provided their services for free during that period because they hoped they would be awarded the contract in the end.
-Moffatt testified that it is “not unusual” for firms to do this as “part of their marketing.”
– Their hopes proved fruitful: the County did indeed award them the contract, in part as a reward for those free services.
● It was only because Swaim and Barker had already been providing services to the County for five months before the January 19, 2016 Board meeting that the Board concluded that Swaim and Barker could complete the project in time.
– Not only had Swaim and Barker already completed 30 percent of their planning for the project before January 19, 2016, but what the trial court called Swaim and Barker’s “five month ‘head-start,” was so extensive that these two firms were able to proceed with the project at a record-setting pace after it was officially approved. The plans they had prepared before that time required only minor modifications afterwards.
-They were able to obtain steel and other materials on what Mr. Swaim called “one of the fastest project schedules I’ve ever seen.”
● Simply put, Huckelberry and his staff circumvented Title 34 and County procurement ordinances by procuring these services in August 2015 and working with these firms in private to such an extent that by the time the Board was asked to consider the matter, the preconstruction services were already a third of the way complete and it appeared impracticable to hire anyone else. In January 19, 2016, the County decided it would be hard to switch horses midstream. But it chose which horse to ride in August 2015, when Huckelberry “select[ed]” them and the County began “receiv[ing] their services.”
● The Superior Court agreed with this interpretation of the facts. But it held as a matter of law that this did not qualify as unlawful “procurement” because Huckelberry is not an “agent” under state procurement laws, and since only agents are legally permitted to procure, his actions were not actually procurement, and were therefore lawful.
● This holding was illogical and incorrect as a matter of law and should be reversed.
Supervisor Ally Miller stated, “This is the kind of questionable procurement practice that takes place all the time in Pima County. These “as needed” type master agreements are ripe for abuse. Pima County went through this years ago when these practices were identified as questionable. Chuck Huckelberry has ignored those findings and proceeded as he has always done. The County administrator too often invites associates in to begin the design phase of a project, they then gain a foothold and are later awarded the full build out of the contract. It is an unfair practice and likely results in higher costs to the taxpayers. I sincerely hope authorities will read the Goldwater lawsuit closely and act accordingly to ensure that those acting in contravention of the law are held accountable.”
“I am extremely concerned about Pima County’s procurement practices. As a retired professional, who worked on federal government contracts, I believe that the County is often in conflict with the competitive bid statutes ” said Miller. No one would run their household or business in this manner. The solicitation of competitive bids is for the purpose of securing the best product for the best price. You certainly would not hire an individual based on a friendship if that friend did not have experience with a specific service.”
“Not only did the County violate the law by procuring Barker’s and Swaim’s services in August 2015 without complying with the statutes, but it also abused its discretion in January 2016, when it awarded them the contract,” reads the brief. “That decision was unlawful favoritism because it was both a reward for Swaim’s and Barker’s loyalty, cf. Brown v. City of Phoenix, 77 Ariz. 368, 376 (1954), and was based on the unequal access to information that Swaim and Barker had been given thanks to their five-month head start. The procurement of Swaim’s and Barker’s services was therefore unlawful and the judgment below should be reversed.”