Federal contract disputed


Howard J. Goldstein was disappointed when his company missed by a hair winning a Coast Guard contract for cleaning the fuel tanks and bilges of ships that come to the Curtis Bay shipyard for repairs.

But that disappointment turned to anger when he learned that the Coast Guard intended to give the contract to a company with a key employee who was convicted four years ago of stealing fuel from Navy and Coast Guard ships at a Navy base in Key West, Fla.

"Here's a guy who stole half a million gallons of fuel," Mr. Goldstein, owner of A&A; Environmental Services, said this week. "They're giving him the opportunity to do the same thing again."

"It's like if you had a maid and she stole from you, then served time and paid the money back. Would you let her back in the house again?" he asked.

Thomas W. McCarty Jr., is president of Clean and Safe Environments Inc., the Cockeysville company that stands to win the Coast Guard contract. He said his company should not be penalized for employing salesman Stuart Paul, who, along with two others, was convicted in 1987 of stealing the fuel. At the time of the theft, Mr. Paul did not work for Clean and Safe, which was founded about two years ago.

Millions of people have been convicted of crimes, Mr. McCarty observed. "Should we put all of them out of work? . . . If they commit a felony, should they be unemployed? I don't think so."

What is at stake is a contract worth about $500,000 over three years, but for those caught up in the dispute it has become as much a question of principle as of money. But what principle should prevail? Does the old adage of once burned twice shy apply? Or has Mr. Paul paid his debt to society?

A&A; appealed to Representative Helen Delich Bentley, R-Md.-2nd, for help when the company lost the contract. She has come to doubt the wisdom of letting Clean and Safe have the contract. "When someone steals 550,000 gallons of fuel, that isn't an accidental incident. It had to be well-planned and executed," she said.

According to Florida newspaper accounts, Mr. Paul was given access to fuel storage areas by the Navy base's fuel officer, who was also sentenced to a prison term and ordered to pay restitution.

The role of Solomon in deciding who gets the disputed contract is falling to the procurement office at the U.S. Coast Guard

Supply Center at Curtis Bay. Even though almost 10 months have passed since the Coast Guard first sought proposals for the work, the contract has still not been awarded. That's not because the Coast Guard hasn't tried.

In September, the Coast Guard announced it intended to give the contract to A&A;, a Linthicum Heights-based company that has been doing contract work at the Curtis Bay yard for many years. The contract, however, was reserved for small businesses that gross less than $3.5 million a year. One of A&A;'s competitor's, Jet Blast Inc., protested that the company was too tTC big to qualify.

In a Nov. 4 letter, the Small Business Administration's regional office in Philadelphia ruled that A&A; was in fact too big. Its average gross income for the three-year qualifying period was about $74,000 a year above the limit. But just to complicate things further, the SBA also determined that Jet Blast's protest had been filed too late. Protests are supposed to be filed within five business days, but Jet Blast had waited almost a month. The SBA concluded that the Coast Guard could award the contract to A&A; but that A&A; should not be eligible for future small business contracts.

At this point, even though two months had passed since the Coast Guard announced its intention to give the contract to A&A;, the contract still had not officially been granted. That left the Coast Guard in a quandary. Should it give it to A&A;, even though, technically, the company was not eligible?

"How can you knowingly award a contract to a large firm" that you know does not qualify, asked Sue White, chief of procurement at the Coast Guard supply center. While the outside protest of the award may have been late, the Coast Guard's contracting officer could protest at any time if he or she had reason to doubt a company's eligibility. And that's what happened.

Based on the contracting officer's protest, A&A; was disqualified. The Coast Guard then announced its intention to award the contract to Clean and Safe. Again the award was protested.

In a letter to the Coast Guard dated Dec. 13, Philip C. Cohen, A&A;'s director of operations, wrote, ". . . a convicted felon is not eligible to participate in this bid process." The letter went on to say, "The two principals or owners of Clean and Safe Environments Inc. owned a similar company in Florida. One of the owners, Stuart Paul, was convicted of stealing 550,000 gallons of fuel from a U.S. Coast Guard Base in Key West, Florida."

Mr. McCarty, president of Clean and Safe, said neither he nor Clean and Safe were involved in the Florida fuel thefts. Moreover, Mr. Paul has been punished for his crime and has fulfilled his debt to society, a fact the Coast Guard cited in dismissing A&A;'s protest of the contract award to Clean and Safe.

Mr. McCarty added that Mr. Paul was not even a principal in the Clean and Safe business. "He's a salesman. He's not an owner," he said.

Mr. Paul declined yesterday to discuss details of the theft or his punishment. He did confirm, however, that although he is not a principal of Clean and Safe, his wife is one of the owners.

"I'm in a funny position here," Mr. Paul said, expressing his desire to put the crime behind him and get on with his life. "I work for Clean and Safe Environments. I'm out to do a job, out to be a salesman."

Mr. McCarty said bringing up Mr. Paul's past now was "propaganda" spread by competitors "to the detriment of our business." If there was any wrongdoing in connection with the bidding for the contract, it was A&A;'s claim to be a small business, Mr. McCarty said.

Mr. Goldstein said his company's portrayal of itself as a small business was an honest mistake. The company had qualified in the past. "We assumed we were a small business. We really didn't know," he said.

Mr. Goldstein also maintained that Clean and Safe was being less than candid in describing Mr. Paul as simply an employee. In Mr. Goldstein's view, Mr. Paul was in effect a partner through his wife's ownership interest in the company.

Mr. Goldstein said he accepts the judgment that his company is not eligible for the contract. "I'm not advocating that A&A; get it. I've resigned myself we're not a small business, but don't give it to a convicted felon," he said.

Ms. White, the head of procurement, explained that the Coast Guard may not have much latitude in the matter. While government contracts require bidders to reveal information about any convictions in the last three years, companies are not usually barred for crimes committed long ago.

"You can't continue to punish for something that happened many years ago," she said.

That leaves the Coast Guard to try to determine whether there is anything about the present condition of the company or its recent behavior to indicate that Clean and Safe might lack the ability, resources or integrity to fulfill the contract.

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