December 2005

HISTORY OF DCCA PROCUREMENT LAW VIOLATIONS ALLEGED

COMMUNITY TELEVISION
PRODUCERS ASSOCIATION
1658 Liholiho St #506 - Honolulu HI, 96822

MEDIA RELEASE

CONTACT: ED COLL @ 808-246-2111 (Kauai)
coll@kauai.net

HISTORY OF DCCA PROCUREMENT LAW VIOLATIONS ALLEGED
Over $50 Million In Sole-source Contracts Involved

HONOLULU: MONDAY, DECEMBER 19, 2005 - The actions of the Community Television Producers Association (CTPA) have stopped the Department of Commerce and Consumer Affairs (DCCA) from obtaining an exemption from Hawaii State procurement law. At least eleven years of illegal contracts between the DCCA and the Public, Education, and Government (PEGs) access entities have been uncovered. Aaron S. Fujioka, Chief Procurement Officer for the State of Hawaii disapproved the DCCA exemption request saying these contracts were subject to the procurement code. The State Procurement Office (SPO) serves as the central coordinator of procurement statutes and rules for all governmental bodies of the State and its counties. Each County in the state has a PEG entity created by the DCCA over a decade ago, which include `Olelo on Oahu, Ho`ike on Kauai, Naleo on Hawaii, and Akaku on Maui. CTPA is an organization that was instrumental in establishing PEG access in the state.

Almost four weeks ago, CTPA members began pointing out several discrepancies found on a DCCA request for exemption from Chapter 103D, seeking to allow a sole-source designation for each PEG entity. Incorrect dates appeared on one application, where the closing date occurred chronologically prior to the opening date.

The exempted dollar amount DCCA was asking for was not half-a-million dollars as previously posted, but almost ten times that amount ($5,941,000).

The SPO will consider the period of violation to be from 1997-1999 contracts to June 30, 2006. During this time period, over $50 million worth of sole-source contracts have been issued in violation of procurement law by the DCCA and the Attorney General's office to these private entities, while no other non-profit or for-profit organizations were allowed to compete.

For years CTPA has questioned sole-source contracts with the DCCA-created 501c3 non-profits that are funded through state mandated cable subscriber fees. A CTPA member discovered several discrepancies in the DCCA request for exemption notice published on the State Procurement Office (SPO) website and reported the discrepancies to that office. Upon being made aware of these discrepancies, SPO rescinded the fast-track approval, reposted the request for exemption notice, and required a 7-day public comment period to begin from that date. This public comment period was extended an additional week after CTPA pointed out discrepancies in dollar amounts and dates. CTPA members immediately submitted comments. This time, SPO disapproved the exemption and directed that DCCA complete a procurement violation form explaining why the state agency violated state procurement law from 1997 until June 2006.

Apparently DCCA and the PEGs signed a new supplemental agreement prior to SPO disapproving the exemption extending the violations through the June 2006 date. The DCCA contract violations continue unabated. CTPA president, Ed Coll said, "This disapproval of exemption by the SPO may require DCCA to finally comply with state procurement law and use the Invitation for Bid (IFB) process, known as open bidding. If so, there are certainly competitors in Hawaii who will jump at the chance to bid on these contracts."

Currently, these PEG organizations have been funded to manage cable TV access channels, play back programs from users, and train the public to produce video programs. These funds are state mandated cable subscriber fees collected by the cable companies derived from 3% of their gross revenue. The entire cost is passed onto the cable TV subscribers as a franchise fee.

CTPA notes that `Olelo (Oahu's PEG) which receives millions in state mandated public dollars by the DCCA, disagrees with both the State Office of Information Practices (OIP) and Attorney General opinions that `Olelo must comply with the Hawaii Uniform Information Practices Act (UIPA) open records laws. Using their multi-million dollar budget obtained through DCCA's procurement law violations, `Olelo filed a lawsuit against OIP seeking exemption from UIPA open records provisions. "Although ironic, CTPA is not amused that `Olelo is using the public largess gained from DCCA contract violations to challenge the jurisdiction of OIP and exempt themselves from UIPA", Coll said.

• Read the original DCCA Request for Exemption and 12/12/05 SPO comment: http://hpam.hi.net/RFP4PEG/form07256.pdf
• For a complete chronology and archived original documents on this topic see: http://hpam.hi.net/RFP4PEG/
• Visit CTPA blog Persistence of Vision http://www.kauai.net/ctpa/

-###-