Muni contract sparks scrutiny, talk of ethics violations 

click to enlarge The lead negotiator of a critical $38 million security contract to guard Muni rail yards has questionable ties to the winning contractor. The contract is expected to go before the Board of Supervisors today for approval. - GABRIELLE LURIE/SPECIAL TO THE EXAMINER
  • Gabrielle Lurie/Special to The Examiner
  • The lead negotiator of a critical $38 million security contract to guard Muni rail yards has questionable ties to the winning contractor. The contract is expected to go before the Board of Supervisors today for approval.
A bidder in a recent city contract negotiation is raising questions over alleged ethics violations.

The lead negotiator of a $38 million security contract to guard Muni rail yards has questionable ties to the winning contractor. The contract is expected to go before the Board of Supervisors today for approval.

Chris Grabarkiewctz, head of fare enforcement at the San Francisco Municipal Transportation Agency, was the lead negotiator for the contract between two bidders: Andrews International and Cypress Private Security.

The contract was originally awarded to Andrews International during two bidding processes, one in late 2014 and another earlier this year. But a last-minute dispute between Grabarkiewctz and the lead negotiator for Andrews International, Peter Evins, led to Andrews being dropped. The contract’s value could have a big impact on either security firm’s local operations, as the $38 million translates to hiring or firing many employees.

Grabarkiewctz previously served as an accounts manager for Cypress, tasked with negotiating contracts with the SFMTA, which Cypress verified. He even received a leadership award from the company in 2011 for earning “higher than expected gross profit” from the SFMTA.

Now, Grabarkiewctz’s job is to handle the SFMTA’s negotiations with companies like Cypress.

Two weeks ago, the SFMTA board of directors voted to approve the security contract with Cypress. The Board of Supervisors is scheduled to give it final approval today.

“I was shocked,” said Evins, local district manager at Andrews International, questioning Grabarkiewctz’s motives and involvement in negotiations. “He shouldn’t have handled it. Why would they give him the contract when he had ties with Cypress?”

Andrews International is pondering legal action against Grabarkiewctz, management told The San Francisco Examiner.

Paul Rose, SFMTA spokesman, said his agency is looking into the issue. “The integrity of the public procurement process is of the utmost importance to us, which is why we take these matters seriously and are taking immediate action to investigate these allegations,” Rose said in a statement.

Representatives for Andrews International spoke out at an SFMTA board of directors meeting in early March against the way the contract bid was handled. Then at a recent Board of Supervisors budget committee hearing, Supervisor Mark Farrell asked Grabarkiewctz to explain the complaint.

Grabarkiewctz deferred to his colleague, Ashish Patel, who works in contracts and procurement.

“We issued a request for proposal. Andrews did score the highest,” Patel told Farrell about why Andrews International was awarded the bid. However, at the last moment there was a dispute over the amount of profit Andrews was allowed to accept, Patel said. “We were looking for a lower rate.”

“We negotiated in good faith,” Patel said, defending the process. Ultimately the SFMTA went back to Cypress, as it was the second-lowest bidder for the project.

Cypress CEO Kes Narbutas said it was just as likely that Grabarkiewctz would want to aid Andrews International, as opposed to Cypress, since he worked for Evins a decade ago at security firm Securitas.

“He should never have negotiated between either of us,” Evins said, adding that Patel could have led negotiations but did not.

Narbutas also pointed out that while contracting with the SFMTA, Cypress was responsible for a 99 percent reduction in graffiti and the company saved the agency more than a $1 million.

As far as any formal violations, it does not appear that Grabarkiewctz violated The City’s ethics code.

Specifically, codes 3.214 and 3.206 deal with employees and contract processes.

Code 3.206 says no city employee “shall make a contract” in which they have financial interests. Since Grabarkiewctz no longer works for Cypress, it would need to be proven that he would financially gain from Cypress being awarded the contract.

The code also says no city employees shall discuss city interests with those with which they might seek future employment. But, as in Grabarkiewtcz’s case, there is no rule outlining the reverse scenario. And Code 3.214 says city employees must disclose relationships “with any individual who is the subject of or has an ownership or financial interest in the subject of a governmental decision.”

The Examiner was unable to see whether Grabarkiewticz’s history with Cypress was listed in the decision to approve its contract, as the minutes from the SFMTA’s board of directors meeting approving the contract have yet to be made available. His ties to Cypress were not noted in the minutes of the finance committee hearing at the Board of Supervisors.

joe@sfexaminer.com

About The Author

Joe Fitzgerald Rodriguez

Joe Fitzgerald Rodriguez

Bio:
Born and raised in San Francisco, Fitzgerald Rodriguez was a staff writer at the San Francisco Bay Guardian, and now writes the S.F. Examiner's political column On Guard. He is also a transportation beat reporter covering pedestrians, Muni, BART, bikes, and anything with wheels.
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