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Published: Tuesday, October 01, 2013
Page: 1A

The West Virginia Legislative Auditor is reviewing a state official's decision to award 20 "emergency" no-bid contracts to Premier Construction to repair microwave radio towers after the June 2012 derecho storm.

The inquiry follows a scathing audit released last week that alleged emergency communications director Joe Gonzalez circumvented purchasing rules and ignored a directive to halt construction of towers being built by Premier with federal stimulus funds.

Legislative Auditor Aaron Allred has directed the state Department of Health and Human Resources to turn over all emergency-purchasing contracts that Gonzalez has signed off on since 2007.

In a recent letter to DHHR, Allred commented that Gonzalez's reason for awarding the 20 no-bid contracts - valued at $27,410 - to Premier Construction after the storm "does not make sense."

In an August 2012 memo to his superiors, Gonzalez argued that Premier Construction, a Jane Lew contractor, was the only company that could repair the damaged towers "in a timely manner."

Allred told DHHR that Gonzalez's claim didn't make sense because Premier "merely served" as a general contractor on a related $38 million microwave radio network expansion project that included 17 new towers. Premier Construction used subcontractors - other companies with more tower-construction experience - to build 16 of the 17 towers as part of a statewide project funded by the stimulus.

"Given that Premier Construction had to use multiple subcontractors to erect 16 of the 17 towers, how could Premier be the only contractor with the ability to do this work?" Allred asked DHHR.

In his memo to DHHR higher-ups, Gonzalez said Premier had to do the work quickly to prevent a "complete breakdown of emergency medical services communications and the potential loss of life."

But Allred found that Premier waited four to 13 days to repair all but one of the microwave radio towers damaged during the derecho.

"If there [is] truly a potential for loss of life, would it not have made sense to use multiple tower companies to get this work completed in a more timely manner rather than waiting almost two weeks for Premier Construction to complete emergency work?" Allred asked.

Under emergency purchasing rules, state officials must solicit three verbal bids from companies for any contracts over $1,000. Fourteen of Premier's 20 jobs exceeded $1,000.

In a December 2012 memo, Gonzalez, who works as communications director for the Office of Emergency Services, wrote to his superiors that he didn't secure verbal bids. He said Premier was the only company he could reach by telephone "due to the interruption of phone networks" after the June 2012 storm.

Allred disputed Gonzalez's statement.

"While power outages were widespread, phone service disruption was not," Allred wrote to DHHR Purchasing Director Bryan Rosen on Sept. 10.

In the letter, Allred cited a Federal Communications Commission report that found few phone outages in West Virginia after the derecho.

"The statement that 'due to the interruption of phone networks, his ability to contact vendors was severely impaired' simply cannot be accurate," Allred concluded.

DHHR spokeswoman Allison Adler said Monday that Gonzalez followed the state's emergency contract rules because the state's "emergency communication system was compromised."

On Sept. 16, Gonzalez sent a letter to Allred in response to the auditor's questions about Premier's no-bid contracts.

Gonzalez told Allred that Premier's repairs - realigning satellite dishes on the towers - differed from building the 17 structures. Gonzalez said he believed that Premier installed the microwave dishes on the towers before the June 2012 storm, according to an excerpt from the letter released by DHHR on Monday.

"[Premier] was the only contractor familiar enough with and available to complete the troubleshooting and path alignment work in a timely manner," Gonzalez wrote in a letter to Allred.

Gov. Earl Ray Tomblin's office released documents about Premier's emergency contracts last week in response to a Freedom of Information Act request from The Charleston Gazette. Allred declined to comment on his letters to DHHR about Gonzalez.

West Virginia adopted emergency purchasing rules in 2002, after former state schools Deputy Superintendent G.A. McClung awarded Oak Hill businessman Phillip "Pork Chop" Booth a $2.4 million no-bid contract to repair Southern West Virginia schools damaged by flooding. McClung was sentenced to six years in federal prison. Booth also was convicted in the scheme, but had a heart attack and died just two months before he was to be sentenced in federal court.

Last week, Allred's office released a 41-page report, finding that Gonzalez and Homeland Security Director Jimmy Gianato improperly authorized Premier Construction to build the 17 radio towers without a state contract. Police, firefighters and paramedics use the tower network.

At Gonzalez's request, Premier later dismantled a Fayette County fire tower and reassembled it at Cass Scenic Railroad Park, according to the audit. The Mountain State Railroad and Logging Historical Association spearheaded the fire tower's move. Gonzalez serves on the association's board of directors.

The audit also found that Gonzalez had a "professional relationship" with Premier's owners since 2006. He has repeatedly declined to comment on the report.

Reach Eric Eyre at or 304-348-4869.

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