Ohio: Unbid Contract Raises Questions

COLUMBUS, Ohio (AP) – A debt collection agency accused of harassing customers and once mishandling sensitive state records has hit a roadblock in its latest effort to land state business.

The Department of Job and Family Services wants the state to grant Houston-based G.C. Services — a firm that has done business for various state agencies for two decades — a one-year, $5 million contract extension without seeking competitive bids from other companies through the state’s formal bidding process.

Job and Family Services has now asked the state Controlling Board, which handles such requests, to postpone its decision because the agency wants more time make its case to board members, said department spokesman Dennis Evans.

Sen. John Carey, the board’s ranking Republican, said members were alarmed to learn that the firm has run into trouble with the Better Business Bureau of Houston and was fired by former Ohio Attorney General Jim Petro in 2004 for throwing state documents containing hundreds of names, addresses and Social Security numbers into a Columbus trash bin.

‘They have the option of talking to us and making their case,’ said Carey, a Wellston Republican. ‘It looks pretty tough at this point.’

In July, Job and Family Services asked the Controlling Board to approve a two-year, $10 million contract with G.C. Services for collection of back child support from delinquent parents. Amid questions about the selection process, the board approved only one year, worth $5 million, and asked that competitive bids be sought from other companies for the remainder of the contract, minutes show.

So when Job and Family Services came back and placed the same contract extension on the agenda for Monday, it raised some eyebrows.

Evans said the contract classified as competitively bid because the agency received proposals from two different companies. But the agency formulated its own criteria that were different from the state’s bidding process, which essentially disqualified the other competitor. When an agency follows the state’s formal bidding process, contracts do not need approval of the Controlling Board.

The firm has a 20-year history of landing unbid contracts with the state and hiring lobbyists that give generous political contributions to the officeholders who hold the pursestrings.

In the 1990s, the company made headlines for receiving $37 million worth of state work during an eight-year period when its lobbyists had given attorneys general Anthony Celebrezze and Lee Fisher, both Democrats, a combined $90,000. Fisher is now the lieutenant governor.

Jerold Katz, patriarch of the Texas family that owns G.C. Services, gave Petro $1,000 in 2002, records show.

State records show that the firm’s current lobbyist, Philip Craig, gave $5,000 to Democratic Gov. Ted Strickland’s campaign fund in June 2006, and another $10,000 that August.

Craig also represents other clients, including the Licensed Beverage Association, with an interest in state politics.

A message was left with G.C. Services seeking comment. When reached for comment, Craig said he was not authorized to speak on behalf of the company.

The longtime contractual relationship with the state persists despite questionable conduct on the part of the company.

On Dec. 1, 2006, the Better Business Bureau in Houston moved to revoke the company’s membership after a litany of complaints G.C. Services made no effort to address.

Bureau spokeswoman Deana Turner said it had 284 complaints on file with the company, with 142 of those coming in the last year. There have been 14 additional complaints in the last 30 days, Turner said.

She said the company received an average number and type of complaints for debt collection agencies its size. But its failure to address the complaints or change practices set it apart from other agencies, she said.
Instead of arguing its case, the company simply resigned its membership with the bureau. A company opting not even to argue its case is ‘not the norm,’ Turner said.

Turner said the company had been a member since 1965, and the number of complaints increased over time.

Ohio: Unbid contract raises questions