The Denver City Council approved an airport pay-phone contract Monday estimated to bring in hundreds of thousands of dollars less to the city than two other bids.
The move, which comes as the city is struggling with budget deficits, sparked allegations of a corrupted contract process from FSH Communications LLC, a minority-owned contractor that lost the bid to RMES Communications Inc.
FSH, which has sent the city a letter saying it is considering suing over what it calls a “corrupt” and “legally flawed” process, has been the pay-phone contractor at Denver International Airport since 1999.
FSH contends it would it have given the city the highest commissions and alleges the head of the city’s small-business opportunity office, Tamela Lee, favored RMES because she knew the owner. The company also claims there was a conflict of interest because Lee and her brother-in-law, City Councilman Michael Hancock, both participated in the contractor evaluation.
“We just want them to start the process over and do it fairly,” said FSH attorney Larry O. Hudson Jr. of the firm Greenberg Traurig.
Hancock called the allegations “ludicrous.”
“I’m offended by them questioning my integrity,” he said.
City Attorney Cole Finegan said FSH had appealed the decision, but it was denied.
“Since it appears this may be heading towards litigation, I would decline to add any additional comments,” he said.
FSH proposed to give the city 30 percent of its projected gross sales, resulting in estimated payments of $476,875 the first year and $410,713 the next. Verizon Communications Inc. offered 15 percent of its sales. RMES Communications offered 16 percent.
RMES will generate $360,000 for the city over the next three years, according to the contract. The money goes to the airport fund.
The city said the commission was only one of 11 factors used to evaluate the proposals. It said it denied both FSH’s and Verizon’s proposals because they didn’t adequately address Disadvantaged Business Enterprise requirements.
“FHS is owned by three African-American men, and they are being thrown out because of disadvantaged business requirements? That doesn’t make sense,” Hudson said.
City Councilwoman Jeanne Faatz said she had concerns about the contract as well.
“(FSH’s) claims have some merit. I think we should do the process over again to ensure its fair,” she said.
