$200 Million of Your Money Wasted
State procurement squanders cash and delays services
(page 3 of 4)
Photo:Kevin Blitz Seven years after the work was supposed to
Contract No. 3: System to Monitor Airport Taxis
State Agency: Department of Transportation
Summary: In 2000, DOT awarded Ted’s Wiring a $1.5 million contract to develop and install a system to track if taxis paid correct fees at Honolulu
International Airport. The project was scheduled for completion by May 2003 and $1.3 million of the contract has already been invoiced and paid. However, despite numerous extensions and the threat of fines, seven years later, the work still has not been finished. In addition, the airport seems to have paid Ted’s Wiring more than $20,000 in 2005 for unrelated work completed in 1986. In May 2009, following publicity about the problem, the state initiated default proceedings against Ted’s Wiring.
Findings: Confusing RFPs and a consistent lack of follow-up or supervision plague airport contracting. The result is the potential for waste and fraud. This is exacerbated by the excessively cozy relationships between airport authorities and contractors. For example, although Ted’s Wiring, a long-time airport contractor, was threatened with fines, in the end, airport authorities assessed no penalties. The appearance of special treatment is not an idle concern: In 2007, several airport officials and contractors were convicted in a bid-rigging scandal that cost the state $4 million. With hundreds of millions of dollars in airport contracts in the works, the efficiency and fairness of the agency’s procurement process is more important than ever.
Do you like what you read? Subscribe to Hawaii Business Magazine »