The Washington Suburban Sanitary Commission, one of the nation’s largest water utilities, gave a six-figure, no-bid contract to an audit firm with ties to one of the commission’s own directors, records show.
The WSSC awarded the contract to Thompson, Cobb, Bazilio & Associates earlier this year after officials decided to scrap a solicitation seeking a new auditor. The same firm had previously been listed as a client on the website of a defunct insurance company run by Christopher Lawson, who is now the commission’s chairman.
In addition, Mr. Lawson and his company, Insuraty Inc., have donated tens of thousands of dollars to Washington, D.C., and Maryland politicians over the years, with several of the donations coinciding with contributions from the audit firm’s founder, Jeffrey E. Thompson, or his associates.
According to records, several firms bid on the commission’s external audit contract, with Clifton Gunderson as the “lowest responsible bidder.” For reasons that are not clear in internal reports posted on the commission’s website, the solicitation was scrapped and Thompson Cobb was kept on the job.
WSSC spokesman Jim Neustadt said Thursday that the contract was pulled because of a problem in the solicitation process.
“It was an error we made,” he said.
He declined to discuss the mistake, citing a policy of not commenting on internal procedural matters.
However, Mr. Neustadt said the error was serious enough that officials decided to “pull back and start all over” with another solicitation rather than risk a contract protest. A new solicitation should be out in a few weeks, officials said.
“That’s all there is to it,” he said, adding that Mr. Lawson played no role in the award.
Meeting minutes show that board members were told during the November meeting, through a report from the internal audit office, that “a new external auditor was identified as Clifton Gunderson as the lowest responsible bidder, but no award has been presented.”
But in an update months later, the internal audit office issued a subsequent report that made clear that a new firm wouldn’t be hired anytime soon. Instead, according to the update, a change order had been prepared to continue the services of Thompson Cobb Bazilio & Associates for an additional year.
John White, another WSSC spokesman, said the arrangement to keep Thompson Cobb in place was made through a sole source contract amendment, not a change order, and that the contract did not require board approval because it did not meet a $1 million threshold.
Mr. Lawson’s company, Insuraty, listed both Mr. Thompson’s accounting firm and his health insurance plan, DC Chartered Health, as clients on its website, but the client testimonials were later removed.
In one testimonial, an official identified as the manager of human resources for Thompson, Cobb, Bazilio & Associates was quoted as saying, “Working with Insuraty has made the job of managing our benefits program much easier.”
In an interview, Mr. Lawson said the decision to remove references to Mr. Thompson’s companies on Insuraty’s website had nothing to do with the federal investigation into Mr. Thompson’s fundraising activities.
Instead, he said he was contacted by officials from both of the companies asking him to remove the information from his website. He said he had asked for testimonials, but was later contacted by officials from the company who told him he did not have permission.
The Times reported this week that despite the forfeiture of its corporate status in 2009, Insuraty has continued donating generously to politicians in Washington and Maryland, with several donations made on the same day, in the same amount and to the same politician as contributions from Mr. Thompson or his associates.
In an interview, Mr. Lawson said all of the contributions he and his company have given over the years were perfectly legal. He also characterized the forfeited corporate status of Insuraty as a mistake he planned to correct. He also said he would update information on the company website and elsewhere suggesting that Insuraty brokers insurance.
“Every fundraiser I’ve been a part of, I’ve made that choice myself to participate and contribute,” he said. “That was my personal decision to make contributions.”
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