BEULAH -- Some Benzie officials are questioning the county administrator's handling of a $140,000 phone system contract, an effort that's drawn attention to the county's bid policy.
Administrator Chuck Clarke and his assistant shared details of at least one company's proposal with a competing firm before he recommended a bid award, and one contractor alleges Clarke was so biased that the entire selection process had a "pre-determined outcome."
County commissioners postponed the phone system plan in January, and several of them said Clarke's handling of the project troubled them. The plan would have upgraded technology and replaced phones in the government center and sheriff's department.
At least one county commissioner and others approached Benzie Sheriff Rory Heckman with concerns about bid irregularities. Heckman asked Michigan State Police to investigate, though a state police detective this week said he didn't find evidence of criminal wrongdoing.
County commissioners still want answers.
"Chuck still needs to come out and explain more about what happened," Commissioner Kris Hollenbeck said.
Clarke, Benzie's administrator since 1998, denies favoring one contractor over another. But he acknowledged he may have violated a policy that requires sealed bids for projects expected to cost more than $20,000, and he understands why some are scrutinizing his actions.
"Did we do it right? Probably not," Clarke said. "Did we learn from it? Yes."
Commissioners balk
Two companies -- Converged Solutions and Wyant Computer Services, both of Traverse City -- spoke with Clarke and his assistant Lisa Tucker in mid-2008 about a new phone system and other technology upgrades. Clarke never sent out a formal request for proposals or developed a bid process.
At a Dec. 9 meeting Clarke asked the county's Board of Commissioners to authorize Wyant to do the work for roughly $140,000. But commissioners balked after a Converged representative spoke up and asked why Clarke rejected his company's $105,000 bid.
"We said, 'Wait a minute, how come we're not being considered here?'" Converged owner Dale Zuelch said.
Zuelch believes Clarke purposely tried to keep Converged's offer under wraps. Converged officials showed up at the meeting only because a county employee alerted them that Clarke planned to seek approval for a more expensive deal with Wyant, Zuelch said.
"Had we not showed up at that board meeting unexpected, we don't think we would have had a fair crack at that business," he said. "They didn't want us to know when the meeting was. They didn't want to tip us off as to when this whole thing was going down."
Clarke denied withholding information from Converged and said the company could have learned of the meeting from the county's Web site.
Commissioner Anne Damm said Clarke told the board he spoke with multiple companies, but didn't give the board the price details of Converged's bid. The board then chose to have each company return and give presentations at a Dec. 16 meeting.
Just before that meeting, Wyant's $140,000 bid dropped to about $115,000, a decrease of about $25,000 in a week's time.
"It's unheard of. That's a lot of money," Zuelch said. "How does that happen?"
Some commissioners also questioned the price cut, and the board voted to send the matter back to a committee for more research.
"That made us quite suspicious," Damm said.
Wyant's price drop was a result of reduced prices from their suppliers, said Victor Geha, Wyant's general manager. He said his company's initial bid should have been closer to $115,000 because the $140,000 figure was an outdated offer from June.
Current board Chairman Don Tanner won election in November and took office in January, but kept abreast of board actions in December as a commissioner-elect. He's concerned about what might have happened if someone from Converged hadn't surfaced at the Dec. 9 meeting.
"What really worries me is, had the one company not showed up to protest, no one would have known and we might have approved (Wyant)," he said. "That leads to the question ... what would have happened with that money?"
In January, the board voted to postpone the phone system project, citing a lack of money.
Sealed bids required over $20,000
Benzie County policy specifies all projects expected to exceed $20,000 must be handled by a sealed bidding process. Under those terms, bids are kept secret until it's time to pick a contractor.
Clarke contends he didn't treat the phone system project as a formal bidding process because he never sent an official request for bids. Instead, he spoke with each company and asked them to determine what would best fit the county's needs.
But Clarke's request that the county pay a private company for a service should have triggered bid requirements, some commissioners believe. Clarke acknowledged some could interpret his actions as a policy violation.
"If you apply that policy to that process, I suppose so," Clarke said. "But we didn't apply that policy to that process."
Clarke said the project proved difficult because he didn't send out formal specifications for a new system. Because each company was allowed to tailor what it considered the best system, it was hard to adequately compare prices.
"We tried to make it apples-to-apples as much as possible, but it was never going to be apples-to-apples," Clarke said. "In retrospect, we probably would have done this a lot differently."
At one point in the process, Tucker, Clarke's assistant, faxed each company the other company's proposed technical configurations for the new system, though prices were omitted.
"Each company got the other's design without the prices ... we were trying to get apples-to-apples," Clarke said.
But Zuelch contends Converged never received any information about Wyant's plans. Worse, he believes Wyant got its hands on Converged's prices, as well as its technical configurations. Geha said he did not see prices or financial figures for any part of Converged's proposal.
Zuelch said Clarke favored Wyant from the beginning of the process.
"It was a pre-determined outcome," he said. "The bid process was tainted."
Clarke, Tucker and Geha all denied any personal connections to each other, and Clarke denied favoring Wyant.
"That just continues to amaze me in northern Michigan: 'Well, you're doing business with this guy because he's your bud.' I don't have any buds. (Tucker) doesn't have any buds," Clarke said. "We have no personal ties with anybody here. It always seems to come down to that."
Some want detailed review of policies
State police Detective Mark Henschell said he doesn't believe criminal activity took place, though he didn't attempt to determine if Clarke violated county policy.
"I tried to stay away from that. That really wasn't my job," he said.
Hollenbeck said she'd like to see a thorough examination of Clarke's actions.
"I'd like to see him given a few minutes to get his hat, gloves and coat (and leave) while we investigate his office," she said.
Tanner said the board likely will at the very least take a close look at the county's bid policy and whether guidelines are being followed.
"I think we should review that policy and adhere to that policy so we don't have this kind of goofiness going on in the future," he said.
Not all commissioners are upset with Clarke. Commissioner Mary Pitcher said the county desperately needs a new phone system and technology upgrade. The December debate is in the past, she said.
"I don't feel like this is an issue," she said. "As far as I know it's dead, done."
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