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County official calls car leasing contract procedure 'embarrassing'

Auditors find that a $1.75-million deal with Enterprise Rent-a-Car failed to create a 'truly competitive' process but found no evidence of improper influence.

January 22, 2013|By Abby Sewell, Los Angeles Times
  • Enterprise was given a sole-source, five-year deal in March to provide 60 leased vehicles to the county's Community Development Commission and to maintain the agency's existing fleet.
Enterprise was given a sole-source, five-year deal in March to provide… (Associated Press )

Auditors reviewing a $1.75-million car leasing contract given to a company with a politically connected lobbying firm found that Los Angeles County officials had failed to create a "truly competitive" process, but that there was no evidence of improper influence.

Investigators with the county auditor-controller's office reviewed the Enterprise Rent-a-Car contract at the request of Supervisor Michael D. Antonovich. A report by KCET-TV had raised questions about the way the business was awarded.

Enterprise was given a sole-source, five-year deal in March to provide 60 leased  vehicles to the county's Community Development Commission and to maintain the agency's existing fleet. Commission staff projected that outsourcing the fleet services would save about $300,000 a year.

The Nov. 28 report on KCET's "SoCal Connected" focused on the lobbying firm Englander Knabe & Allen and questioned whether its clients — including Enterprise — got an unfair advantage because partner Matt Knabe is the son of county Supervisor Don Knabe, who voted along with all the other supervisors to award the contract.

Both Knabes have said that their relationship has never posed a conflict, and a spokesman for the Englander firm has said Matt Knabe never lobbies his father directly.

The auditor-controller found no evidence of attempts to influence the rental car award. Matt Knabe told investigators that no one from his firm had lobbied on the contract, and the commission's executive director said he was "100% confident" the supervisor's son did not influence the process.

"The report shows that Matt acted professionally and used no undue influence in his dealings with the county," said Englander partner Eric Rose.

But the review did find that county staff did an "inadequate" job of trying to find other potential bidders.

Asked by KCET what vendors had been contacted and given a chance to compete for the business, a county analyst created a list to make it appear the department had reached out to 50 companies. In fact, only 16 firms had been contacted, auditors found. Enterprise was the only company that responded to the email request, and staff made no follow-up attempt to contact the other firms.

According to the auditor's report, the count of 50 vendors was originally used as a "place holder" in a template document and never corrected. By the time the contract was awarded, the contract analyst "felt he could not correct the number without embarrassment."

Investigators also found that the agency violated its own policy by not advertising the contract on the commission's or the county's websites, and that the contract should have gone through a full bidding process.

In addition, several vendors that contract officials emailed to invite interest had no "realistic potential" to provide a leased fleet to the county in the first place, the review concluded.

Investigators wrote that they couldn't determine whether the commission could have gotten a better deal but said "the potential for greater savings from a more competitive process appears to be plausible."

County auditor-controller Wendy Watanabe called the situation "embarrassing" but chalked up the issues to incompetence rather than intentional steering.

"I think they got lazy, they took a shortcut, and they didn't think it was that big of a deal," she said.

Watanabe said the investigation had focused on the Enterprise contract, so she could not say whether there was a broader issue with the agency's contracting process.

Commission representatives could not be reached Monday. The commission was slated to respond to the report's findings within 30 days.

abby.sewell@latimes.com

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