Hudson County clerical error allowed vendor to spend more than double their contract

The Hudson County Board of Commissioners tabled part of a resolution that would have corrected a clerical error for a contract with William J. Guarini Inc. that allowed them to spend $1,099,752 in their contract which was awarded by the board as just $424,000.

By Dan Israel/Hudson County View

At last week’s meeting, the board was set to approve a resolution that would have added $675,752 to the contract for plumbing services, to increase the total contract to $1,149,752, which also includes an additional $50,000 added on May 14th.

Hudson County Administrator Abe Antun noted that part of the resolution was removed, specifically to increase a contract retroactively with Guarini Inc., and the requested information was provided to the commissioners prior to the meeting.

“We did provide the information requested, but it was provided late in the afternoon. It is voluminous, which is why I stated what I said yesterday. So we will bring this item on the agenda for the next board meeting,” he said.

Commissioner Bill O’Dea (D-2) encouraged Commissioner Al Cifelli (D-9) to call a contract committee meeting of the board on this subject after reviewing the relevant material.

Cifelli noted he has to get through the nearly 200 pages before making a determination, but said he would get through them in a day or two.

Board Chair Anthony Romano (D-5) thanked Director of Finance and Administration Cheryl Fuller and Purchasing Agent Christine Moro for getting the information to the board quickly after intense discussions took place the day before.

The revelation occurred at the May 27th caucus, which sparked shock and anger in commissioners upon learning that the contract error yielded over $600,000 in accidentally authorized spending by Guarini Inc. that went unchecked until now.

Responding to questions from Romano and Commissioner Caridad Rodriguez (D-7), Moro told the board it was to correct the contract with Guarini Inc. for plumbing services due to a transcription error when the original contract was entered into the system.

According to Moro, the original contract was approved by the commissioners for $424,000. However, when it was put into the financial system, it was entered in as $1,099,752.

“That number didn’t come out of thin air,” Moro began.

“That was the original number on the routing form and on the award paperwork. But when it was routed for award, it was changed by finance from $424,000. The error was put into the system and we just recently discovered it.”

According to Moro, the contract was awarded last year in January and the funds were used specifically this past October for the Duncan Avenue parking garage.

“Now we have to balance it out so it reflects what has been spent,” Moro said.

O’Dea said “they spent money they didn’t have the authority to,” which Antun said was correct “because it was entered in the system incorrectly.”

According to O’Dea, someone should be disciplined for that, but Antun insisted it wasn’t a “disciplinary thing.”

“It was entered incorrectly by staff and they didn’t catch it until later on … They thought they had it and it was primarily one project,” Antun added.

Moro also said the funds primarily went to the underground plumbing at the Duncan Avenue parking garage.

Cifelli questioned if the project the funds went to was “glorified” and could have been done for less than what was erroneously appropriated and spent by Guarini Inc.

Departments of Road and Public Property Director Denise D’Alessandro explained that at Duncan Avenue, there is all underground coppers lines which were cracked when the public safety building was knocked down.

After the demolition contractor cracked the pipes at the parking garage, they had to replace about four which cost up to $30,000, she said.

D’Alessandro further stated that since the Jersey City Municipal Utilities Authority (MUA) replaces all of their water and gas lines, the county needed to redo all of the plumbing pipes under the Duncan Avenue parking garage to comply with their guidelines.

“Normally, if there was no money, we would come to the board and say ‘We’re doing a project, we need to add money to the Guarini contract,” D’Alessandro said.

“In this case, the money was sent because if you go into the system, it tells you what your balance is.”

According to D’Alessandro, the plumbing renovations at the garage cost $500,000. The rest of the funds were used for various other things during the year and half that the contract has been in place erroneously.

Additionally, D’Alessandro told O’Dea the amount of the previous contract with Guarini Inc. at its conclusion was $3,090,986, although he asked for that original contact amount and the number of additions made to it before it expired and this erroneous contract was put into place.

“I think we need to hold this,” O’Dea said.

“I think we need to look into this. And quite frankly Mr. Administrator, I think you just need to have someone go back and check all the dollars spent to this vendor to verify it the way you would verify it as a CEO, right?”

Fuller than approached the board and told them the contract is open-ended, meaning “it’s time and time immaterial.”

“Generally, what we do, is just put enough in the budget based on projections, but it’s not because we can add to an opening in the contract. It’s a two-year contract. So for that two-year period, as long as they stay within the parameters of the time and material that they did from time to time, we will add to that contract depending on what the needs are,” Fuller said.

“General, if there’s a large capital project like what Denise says, as opposed to day-to-day fixing a pipe or something, it doesn’t go over that amount. So it’s not like there was a contract for a stated amount, even though we just asked for the budget as needed.”

Fuller said when Guarini Inc. exceeded the contract, that’s the part that was missed, thus the need to go to the board to add to the contract.

“It’s not like we’re violating the contract because the contract is an open-ended contract for the cost of time and material,” Fuller said.

“I just want that to be clear. But we can bring to you, as Christine said, what we started with, and every time you can see in your purchasing agendas every week, we’ll add money to contracts because those are bid as open-ended contracts.”

While O’Dea asked about the amount the contract was bid out for, Moro said the county did not put out any amount on the bid specifications.

“We don’t put an amount in the bid of how much it’s going to be awarded. We ask them to provide their rates. They bill based on their rates,” Moro replied.

O’Dea then requested the bid and the bid response, arguing that other entities have given reasons why they “wouldn’t bother” with the bid.

“I need to look and see all of that stuff,” O’Dea said.

Responding to questions about personnel, Fuller said the county pays Guarini Inc. a rate per person.

“That’s how the bids come in,” Fuller said.

When O’Dea asked if another vendor bid a lower rate if they would have won the contract, or if anyone has even bid against them for the past years, Fuller said she would have to “go back and see.”

“You know the answer, really,” O’Dea said, to which Fuller assured she did not.

“The answer is no,” he continued.

O’Dea then said Antun should know the answer to that, however he said he didn’t either.

“No one’s bid on it for five years,” O’Dea concluded.

After the board voted unanimously to pull that portion of the resolution, Antun noted the county can no longer proceed with fixing any plumbing issues since Guarini Inc. was the contractor for that.

However, the board is not without options, he said.

“If something happens, we can declare an emergency,” Antun said, with an excited O’Dea interjecting to say the same thing, adding that they can go out and get bids in such a scenario.

“I just wanted to let the board be aware of that, if something comes up, but also we will have to declare an emergency.”