Plexus contract prompts questions about DOT practices

Investigation reveals nepotism, never-ending contracts, and unquestioned overhead costs

A Providence Journal review of the Plexus contracts underscores a number of the concerns Governor Carcieri raised last month when, following earlier stories about DOT contracting practices, he empaneled a task force to look into...[them]. Among the Journal’s findings:

In 1997, the Department of Transportation hired Plexus Corp on a $1 million, 30-month contract to help install a financial management and project tracking system. However, over the next decade, the addendums extended the contract into a $6.6 million source of business for Plexus without ever going out to bid again.

Under the contracts, Plexus would be paid nearly twice the "actual" costs plus a 10% guaranteed profit. Auditors of 2004 expenses disqualified $240,544 of $954,426 in costs that Plexus presented after finding that some of these costs included loan payments for personal cars, gifts, and alcohol for parties.

Then in 2005, Plexus won two new contracts, including a $9 million, 4-year contract to schedule and monitor all highway construction in Rhode Island. Plexus' Vice President and co-owner David Giardino was tied to this contract with two close relationships: a member of the board recommending Plexus, chief DOT engineer Edmund T. Parker is his uncle and the contract administrator for Cardi Construction, one of the companies Plexus was hired to keep on schedule, is his father.

At one point, the President of Plexus, a woman, applied for minority business status. However, the President, Leslie Giardino, is also David's wife and though she holds the title and was made a majority shareholder by a "gift" of shares from her husband, Department of Administration staff (who make minority business determinations) questioned how much control she has given that their 2004 tax returns list her as an "administrative assistant" while her husband is "manager". In addition, she has "no previous engineering, transportation, or construction-related experience" to go with her business administration degree from Katharine Gibbs College.

Though he has no college or engineering degree, [David] Giardino attributes his success at winning DOT work to his expertise in his niche of the construction industry: “I am really good at what we do.…"

And though Parker abstained from voting on a panel that recommended Plexus for the first 1997 contract, citing "family ties", he participated in the 2005 panel, claiming he had not previously understood the Ethics Commission's definition of family:

“I don’t consider him my nephew. A nephew is a son of your brother or your sister and he is neither.… He is a son of my brother-in-law.

“...[The Ethics Commission's definition of family] doesn’t say anything about a step-nephew...[so] I did not see it as a conflict...”

The FHWA [Federal Highway Administration] is unable to cite another state that has entrusted all of its contract schedule-monitoring to a single, private consultant.

“For the most part, we look to our project engineers to do this work for us. People on our own staff,”...Mark Rolfe, Connecticut’s construction division chief, said in recent interview.

Full Story: $9-million Plexus contract prompts questions about DOT practices Source: Providence Journal, June 10th, 2007

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