Letter to AG Brian Frosh: Sham procurement of downtown hotel developer by City of Frederick deserves investigation

Mr Frosh: I am part of a loosely organized group of Frederick people probing the City’s long efforts to get a Downtown Hotel and Conference Center (DH&CC) developed with ever growing public funding. We have written and spoken, and organized — treating the issue as a regular public policy dispute. However quite recently another of our group, Jane Weir, obtained amazing evidence, it seems to me, of serious wrongdoing in the invoice time-sheets of a City consultant, Jones Lang LaSalle (JLL.) Jane will write to you separately with the full evidence. As a retired journalist I offer a narrative here based on the invoices obtained by Jane.

2teamsslideThe City of Frederick purported in 2014 to conduct a best-value competitive procurement to select which developer would be entitled to some $31 million (the present figure) of state, county and city funds towards the cost of the DH&CC. The City issued an RFP February 20, 2014 with proposals due (after a short extension) on May 9th. It was announced that two proposals had been received, one from Plamondon Enterprises dba MCC Development LLC (Plamondon) and the second from Wormald/dpM (Wormald.) They would be scored by a Mayor-appointed selection committee which would recommend selection of one proposal. September 3rd 2014 it was announced that Plamondon was the unanimous choice of the committee, and there was a presentation to a public ‘workshop’ of the Mayor and Board of Aldermen.

Half a dozen consultants from the Chicago-based real estate consulting firm Jones Lang LaSalle (JLL) conducted the procurement under the supervision of the City’s director of economic development Richard Griffin — who is very much the public face of the hotel project. JLL was paid approximately $335,000 for their work on the procurement under a hours-billed/not-to-exceed contract which was extended and amended a couple of times. JLL consulted with Plamondon before the RFP, wrote the RFP, devised the scoring, had a representative on the selection committee, and were involved in followup work to reach a public-private partnership with Plamondon.

In response to Public Information Act filings on this project generally we have gotten very mixed results including absurdly trivial items and many complete denials. But in response to the request for JLL invoices and time-sheets Jane Weir hit a jackpot — striking evidence of serious wrongdoing. The facts of what JLL did as an agent of the City are totally at variance with the public narrative.

Major point is: the ‘competitive procurement’ of Plamondon to build the DH&CC with public support was a sham. The award to Plamondon of the $31 million prize was set up apparently long before, and certainly independently of the formal procurement.

Key dates in the formal public procurement were:

  1. February 20, 2014 when the RFP was officially posted
  2. May 9, 2014 the date when proposals in response to the RFP were due, or required to be held securely by the Purchasing Manager

Review of the time-sheets on the invoices show that Plamondon submitted a proposal, and had it reviewed by JLL on behalf of the City and its selection committee quite independently of the sham procurement process. I proceed to cite from the time-sheets attached to the JLL invoices that we have in pdf form.

JLL Invoice 008848 dated 31 Jan 2014   in the time-sheets JLL’s Pete Lambis and Tyler Krehbiel each include “Plamondon proposal/presentation correspondence” as Services Rendered on December 10, with 2 hours (City bill $620) five months before any proposal should have been available to anyone but the Purchasing Manager, and ten weeks before the RFP was issued. Lambis of JLL had met Plamondon two months earlier Oct 10 2013 for 5 hours (City bill $775.)

So sometime between Oct 10 and Dec 10 Plamondon must have submitted a hotel proposal. Whether this was an unsolicited proposal or a premature first draft response to the anticipated February 20 RFP this proposal from Plamondon has never been announced, let alone released. It was not mentioned in City presentations to the Mayor and Board.

Call it the Secret Plamondon Proposal.

Once it was known that a competitive RFP was in the works any true unsolicited proposal would be returned or discarded by agents of the City. Far from being discarded what was simply referred to as ‘Plamondon proposal’ was worked on continuously by City agents JLL in the weeks before the actual RFP was issued, and after the RFP was issued, and during the time when it was forbidden for proposers and the City staff or agents to communicate except in writing through the City purchasing Manager.

It was as if there were two procurements going on simultaneously — the official one with its public RFP and its dates and deadlines and rules, and the real procurement which saw City agents JLL working collaboratively on a deal with Plamondon in a freewheeling fashion regardless of the formal RFP, with its rules and dates. They had conferences, correspondence, did analysis, presentations, even consulted with Plamondon over the terms of the RFP, according to the time-sheets that accompanied their invoices.

January saw JLL consultants working long hours on this Secret Proposal, 35.5 hours and billing $5503: for Plamondon presentation of the proposal Jan 13, followed by Plamondon correspondence on the presentation of the proposal Jan 15 and Jan 17 and 14 hours review of Plamondon submission. And there were site visits. Plamondon seems to have submitted suggestions on the RFP because Lambis on Jan 15 reported 3 hours “Coordinate with Pl(amondon) regarding drafting hotel RFP…”, and Jan 26 he did 4 hours “Review/edit Pl(amondon) version of RFP, submit to Richard.” (Pl I guess is here an abbreviation for Plamondon.) And there was more Plamondon correspondence JLL dealt with.

Work continued in February according to another Invoice 011530 (dated April 30) on drafting the RFP in parallel with work on the Secret Plamondon Proposal. There was another meeting scheduled and 8 hours billed Feb 13 ($1240) “Plamondon pro forma review.”

On Feb 20 Lambis billed 3 hours, $465 for “Distribute RFP.” Under City rules he shouldn’t have done that. The very RFP they had drafted and were distributing contained this on p4: “I. NOTICE TO PROPOSERS, AUTHORITY TO DISTRIBUTE RFP PACKAGES: The City of Frederick Purchasing Office (and website, if applicable) is the sole entity authorized to provide this RFP package to interested companies or individuals.”

RFP distribution doesn’t in itself seem a big deal, though the intention of the rule is to ensure that all bidders receive the full RFP package and are on a list to receive any amendments or Questions & Answers. For JLL to bill time for an act in explicit violation of a rule JLL itself had written into the RFP does however suggest a casual attitude toward rules. And for lead City officer Richard Griffin to sign off “OK to pay” as on all the other time-sheets suggests an understanding among all concerned that the formal RFP need not be taken seriously.

To this point around 50 hours and about $7,800 of JLL time had been spent on Plamondon’s secret proposal. By contrast 1.5 hours ($233) was billed for a meeting back in October with the other proposer Ed Wormald. Apart from the 90 minute Meet & Greet no further contact with Wormald occurred until after the RFP was issued. That’s about 97 percent attention to Plamondon to 3 percent Wormald.

With the RFP officially posted Feb 20 the same pattern of close and intense dealings with Plamondon continued — apparently as if the City procurement rule did not exist that limits communication between a proposer and the City to written questions via the purchasing manager.

Apparently the Secret Plamondon Proposal going back to late fall of 2013 morphed seamlessly into the official Plamondon Proposal that is dressed up with the May 9 due date. Perhaps it was amended in discussions with JLL? What is clear is that after the RFP was officially posted JLL went on as before, having a meeting on the Plamondon Pro forma of 8 consultant hours ($1240 billed) on Feb 26 less than a week later. JLLer John Gibb billed 3.5 hours ($543) also on Feb 26 studying “Plamondon Financials.”   11 more consultant hours were spent on review of Plamondon’s “Pro Forma” March 2. Five more billings list “Plamondon Correspondence” March 15 and March 17. Two more are called “RFP Correspondence.”

April 24 there were “Calls with Prospective Developers” — again in complete disregard of City Purchasing rules. One of these would have been Ed Wormald who had been totally left out of the kind of meetings, the review, the correspondence and presentations and the financial analysis done with Plamondon.

The time-sheets show some 81 JLL consultant-hours costing the City over $12,000 were devoted to Plamondon through May 9 2014 when proposals were officially opened. Wormald by contrast got that initial 1.5 hours billed at $233, and no more. On that basis JLL as City agent gave Plamondon 98 percent of their attention before the beginning of the official assessment May 9 to Wormald’s 2%.

Wormald was, I suggest, a mere theatrical prop whose presence was important only to sustaining the false narrative of a competed procurement for the $31 million (as of 2016) of public financing assistance.

To reiterate:

Invoices submitted by JLL show flagrant favoritism and continuous disregard of the City’s procurement rules by the Chicago team acquiesced in if not directed by Richard Griffin:

— JLL worked on a Plamondon proposal for at least ten weeks (from Dec 10 2013) before the official Request for Proposals (RFP) was issued on Feb 20 2014. Under fair procurement rules JLL should not have known the Plamondon (or Wormald) proposal until the Due Date of the proposals, May 9. JLL got the Plamondon proposal five months before.

— JLL spent 1.5 hours billing $233 on Wormald and over 50 hours billing over $8,500 on Plamondon before the RFP was issued Feb 20 2014, a 30/1 bias (By the time bids were due the discrepancy had grown to about 81 hours Plamondon to 1.5 hours Wormald about a 98%/2% divide.)

— contrary to the City’s purchasing rules JLL dealt with Plamondon correspondence throughout the 3-month proposal preparation period (Feb 20 to May 9, 2014) in explicit violation of the requirement that all communications in that period be submitted in writing and directed through the City Purchasing Manager

— JLL’s billing itself is problematic, about half the $334,000 billed lacking details of work done, retrospective billing of 45% higher hourly rates negotiated from the end of 2014 to months before increased rates were approved, billing of “RFP edits” after the RFP was finalized and posted are examples we can see

— JLL consulted with Plamondon on the content of the RPF before the RFP was issued giving it an opportunity to shape the procurement and providing an unfair advantage in its proposal

— JLL distributed copies of the RFP despite clear rule in the RFP stating that the City’s Purchasing Office is “the sole entity” authorized to issue the RFPproblematicwork

This slice of ‘Chicago contracting’ — enabled by the City of Frederick’s hotel project officer Richard Griffin — cost city and state taxpayers around $335,000 for about 2,100 billed hours with supposed experts charging between $155 and $300 an hour and charging expenses for taxis to and from BWI and hotels in DC, and down to $2 for car parking. The quality of professional ‘advice’ bought was on display when the $300/hour star of the JLL crew Amelia Lim intervened at a critical moment in the Mayor & Board of Alderman hearing on the Plamondon deal Dec 3 2015 with the whopper that downtown hotels like Frederick’s just don’t get built without major public subsidy except perhaps in New York City. Loews Annapolis is just one of thousands of fully investor financed hotels in downtowns in cities large and small around the country that belie Ms Lim’s preposterous, but politically well-timed claim.plamondonworkprerfptbl

Another cost is selection of the poorer of two sites. Wormald’s is more prominently located, provides easier access of the interstates and East Street, is free of historic buildings and possible contamination from 19th century leather tanning, and has an underutilized city parking building immediately adjacent. Both sites are similar in walkability to the historic downtown and in overlooking the promenades and canal.   The sham procurement would saddle the City with a poorly sited, over-expensive hotel.

A further cost is to the City’s reputation for fair and equal treatment.

Background

At an on-site celebration after they scored a $1 million conditional grant and the prospect of two tranches of $7.5 million in state funds in the recent legislative session in Annapolis April 13th Plamondon principal Pete Plamondon Jr recalled: “I’ll never forget like it was yesterday picking up the Frederick News Post (in 2005), it was announcing the funding of the Interstate 70 interchange project where it was federal dollars and really building the East Street Extension as a means to get into our beautiful city. And I called Richard (Griffin) and I said: ‘This is now the time we can start talking about a downtown hotel.’ ”

Sources

I attach copies of key pages of invoices cited above. Jane Weir plans to send you the pdfs from which my copies are drawn. I’d be happy to elaborate on any of the points made here, or assist further in any way. If you wish to meet and speak I am at your disposal.

Peter Samuel, semi-retired journalist who lives in downtown Frederick,  tel 240.446.9736 petersamuel@mac.com 2016.06.27

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