A day after taking aim at inflated food costs at the Department of Education, Comptroller John Liu blocked the city from paying more for custodial services.
In an uncommon move, Liu rejected a $65 million contract with Temco Service Industries today, saying the DOE had not justified a 44 price hike when applying to renew a contract with the Bronx provider of cleaning and maintenance services.
Since at least 2007, the department had paid Temco $45 million annually for its services. Liu said the department had not explained an additional $20 million tacked on to the contract extension.
“With budget deficits still looming, contracts with huge inexplicable cost increases and other outstanding questions simply cannot be green-lighted,” he said in a statement. “An extra $20 million on top of $45 million is an enormous amount of money.”
DOE officials said Liu had not alerted them to his concerns before he issued a press release rejecting the contract today.
“Based on the comptroller’s press release, we see no legal grounds for him to deny registration of this contract,” said spokeswoman Deidrea Miller in a statement. “If he was genuinely concerned about the matters he cited, he could have asked us for clarification during the 30-day review period.”
The contract grew in size because the amount of space that Temco employees would maintain also grew, from 10 million to 12 million square feet, DOE officials said.
Liu also cited several improprieties when rejecting the contract. He said the department had not disclosed the fact that three Temco employees had been disciplined for letting outsiders into a Brooklyn high school and raised concerns about a Temco consultant who might have had improper ties to the DOE.
That consultant is James Lonergan, formerly the DOE’s CEO of facilities, but he did not start working for Temco until more than a year after he left the DOE, in keeping with city rules, officials said. They also said the city had investigated the security breech by Temco employees and were satisfied with Temco’s response, but they noted that city rules do not require background checks when existing contracts are extended.
Contract rejections are not common and the reasons cited do not always fully explain them. Liu rejected a $20 million DOE contract for teacher recruitment in March, saying that the department had not included information about conflicts of interest. But he also said he did not think the city should be spending money to recruit teachers when layoffs were threatened.
In August, State Comptroller Thomas DiNapoli rejected a state contract with Wireless Generation to build a new student data system because the state had not solicited competitive bids; he also said he worried about vendor’s relationship with News Corporation, which was embroiled in a phone-hacking scandal.
Just this week, the state started to move forward with soliciting bids to restart the data system contracting process. According to the Wall Street Journal, Wireless Generation has not yet decided whether to seek the state contract but is likely to be involved through a multi-state effort to share school information that the company is coordinating on behalf of the Gates Foundation.