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Contractor airs claim against county

Efforts are underway to internally resolve an independent contractor’s claim against the County Attorney’s Office regarding a time-sensitive landfill project that went awry.

Cushnie Construction Company President Ralph Cushnie in an Oct. 11 letter asked the state Department of Commerce and Consumer Affairs for an administrative review of the County Attorney’s Office’s decision to rescind his contract.

If disallowed to do the work, the Kalaheo resident wants a settlement to cover the “significant financial sums” of out-of-pocket costs for work he has done since receiving the notice of award for the contract more than three months ago.

He claims the County Attorney’s Office overstepped its authority by rescinding the $772,200 contract to load, haul and unload sand from the Kekaha Landfill to various county facilities.

Cushnie’s lawyer, Gordon Stewart, says in an Oct. 10 letter to DCCA that the chief procurement officer for the county, Finance Director Wallace Rezentes, has the sole authority over this bid.

Kaua‘i County Council Chair Jay Furfaro tried to keep the discussion tightlipped yesterday at the Historic County Building, calling for two recesses and cautioning his fellow council members several times.

He said the seven-member legislative body should hear from the deputy county attorney most familiar with the case before suspending the rules to allow Cushnie to make public comments on the council floor.

Furfaro underscored the agenda item was posted as a request from the County Attorney’s Office for $25,000 to hire outside legal counsel, not to talk about the process of contracts which is done by the administration. He said the discussion should stick to the agenda item as required by law.

After Deputy County Attorney Harrison Kawate asked the council to defer the matter, the council unanimously voted to receive the item, effectively killing the request for special counsel funds. But the County Attorney’s Office can have the item reposted on the agenda.

The ultimate goal is to resolve the matter within the administration, county officials said, negating the need to hire special counsel to represent the county at a hearing before DCCA officer Sheryl Lee Nagata that was rescheduled for Dec. 16 in Honolulu.

If a settlement, which the council would have to approve, is not reached before the hearing then special counsel will again be requested, Kawate said.

Councilman Ron Kouchi recused himself from the discussion due to a possible conflict of interest.

The council started its morning session without any knowledge of a deferral request by the County Attorney’s Office. It also began with Deputy County Attorney Margaret Sueoka, who said she was unfamiliar with the issue, in attendance.

Nonetheless, Cushnie was allowed to start his testimony.

He said the job was first publicized May 14 and on May 30 an addendum was added. Cushnie Construction was the low bidder on June 12 and was given the award notice June 30.

The next week, Cushnie said he met with the county Engineering Department and an Aug. 4 start date was set.

Some permits were secured related to the job, but he said engineering issues delayed the project despite the time-sensitive nature of the work.

Cushnie said the original intent of the sand was a beautification project over the next several years. But then it came up that the sand might be used as a drainage layer at the Kekaha Landfill, which the county is working to expand before it runs out of room.

Everything was put on hold while the sand was tested to see if it could be used with the landfill. The test came back negative, Cushnie said.

Although everything was set up to go Aug. 4, he said the start date was pushed back a couple weeks. Then an issue arose with the Health Department regarding raising the level of the landfill, Cushnie said, but that matter dissolved.

A third start date was set, Cushnie said, and a request was made for a sample contract so he could be ready to sign the final contract when it was time to begin the work.

Then oral requests from the state Highways Division and Public Utilities Commission arrived, he said, requiring responses to a “standard questionnaire.” The PUC said the work could be done, he added.

Finally, instead of receiving the final contract documents as promised, Cushnie on Oct. 7 received a letter, rescinding the award, from Mona Clark of the County Attorney’s Office.

The letter says Cushnie “was not a responsible or responsive bidder on the (invitation for bid) and that it is in the best interests of the county to re-bid the IFB.”

The deputy county attorney also notes in the communication that the state Department of Transportation has determined that the sand hauling, which was the subject matter of the IFB, must occur during the night for safety reasons. This is in direct conflict with the terms contained in the IFB and state law requires that the award be based on the criteria set forth in the invitation for bid, the letter states.

Cushnie immediately wrote to Rezentes, noting his “complete surprise” to Clark’s letter. He also pointed to a Sept. 22 letter from Steven Kyono, Kaua‘i district engineer for the Highways Division, that says in part: “We have decided to revise the requirements of the permit to allow for the hauling of sand during daytime non-peak hours.”

From there, Cushnie decided to take the matter up with DCCA.

“I’m hoping to get a quick resolution on this,” Cushnie said. But if not, then he said compensation for his expenses to date must be made.

Furfaro again cautioned the council members, underscoring the need to hear from the county attorney first.

After Kawate, who was more familiar with the matter, arrived at the meeting, he said the deferral request was brought over to the council earlier that morning.

The deferral was requested to allow time for the matter to be resolved internally, he said.

“Any further statements … would be improper at this time,” Kawate added.

Councilwoman Shaylene Iseri-Carvalho began questioning Cushnie, but Furfaro cut it short.

He said Cushnie “already had his agenda time” and the matter should be deferred “so we can all review the factual portions.”

Iseri-Carvalho objected, asserting it would be appropriate to ask questions of the person who filed the complaint since he was present.

But Furfaro asked Cushnie to step down from the chair where the public sits to offer testimony before the council. He then called Kawate back to ensure an understanding of the County Attorney’s Office’s position.

“The matter should be deferred in order to not prejudice the county or county parties … and the request was made with those issues in mind,” Kawate said.

Furfaro then called for a 10-minute recess. Twenty-five minutes later, the session resumed but Cushnie was not called back up to comment.

“One thing I don’t want to give up here is our hope,” Furfaro said, referring to the matter being resolved internally.

Councilman Mel Rapozo said he supported the motion to receive the agenda item because it kills the request for outside counsel money. He said he would not support spending $25,000 of taxpayer money for an issue which the County Attorney’s Office should represent itself.

Councilwoman JoAnn Yukimura said her ultimate concern is that small contractors and others involved in solid waste work are “not treated in a way that is really wrong in terms of fair practice.”

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