Greg Smith recently sent an unusual letter to the engineering firm of Anderson Perry & Associates.
He had to halt a half-million-dollar contract in northeast Oregon because the business was improperly awarded.
“Anderson Perry & Associates, Inc., is to immediately cease any further performance,” the letter said.
Smith was acting in his role as executive director of the Columbia Development Authority, the Boardman-based agency converting the former Umatilla Army Chemical Depot into other public uses.
The contract foul-up isn’t the first time Smith has had to fix public dealings with the La Grande firm.
“It wasn’t by accident that it wasn’t on the agenda.”Jim Doherty, chair, Columbia Development Authority board
In Malheur County, Smith earlier this year had to modify a contract with Anderson Perry to manage construction of the Treasure Valley Reload Center. He acted after an investigation by the Enterprise determined he authorized payments that exceeded the contract limit by $500,000.
The troubles in Malheur County and in Boardman raise questions about Smith’s management of public contracts. State laws and rules are in place to ensure government spending on contracts gets taxpayers the best service for the best value. Bidding is an essential element of that system.
No bidding was done for the engineering contract in Boardman and neither, it turns out, was it done for legal services expected to cost more than $200,000, an investigation by the Enterprise has established.
Smith, a Republican state representative from Heppner, portrays himself in his work world as an expert on finances. One skill he lists on his resume “government contract procurement.”
But circumstances at the Columbia Development Authority challenge that description.
Serving many roles
Smith is a full-time employee of the development authority, paid $144,000. At the same time, he contracts to perform outside work, including acting as the project leader for the Nyssa reload center. Malheur County is funding his $108,000 annual fee.
He also manages a business center for Eastern Oregon University, operates the economic development arm of Harney County, and is paid $100,000 a year to manage a small government-funded lending entity in Morrow County.
Smith didn’t respond to written questions about the latest contract issue or to an email with excerpts of this story provided to verify accuracy. Earlier this year, he didn’t respond to questions about his oversight of the Anderson Perry contract in Malheur County.
But documents obtained through public records requests and recordings of recent meetings of the board of the Columbia Development Authority provide a view into events leading to the extraordinary cancellation recently of a public contract.
The Columbia Development Authority was formed by local governments in Morrow and Umatilla counties to move the former Army base outside Boardman into industrial use. A chunk has been carved off for a new Oregon Military Department training base.
Ahead of that transfer, the Oregon Legislature in 2017 budgeted $7 million for new road work for the depot grounds. Smith has taken credit for using his position as a state representative to get the money for the development authority that employs him.
In April, Smith approached the development authority board about contracting with Anderson Perry to design road improvements. The contract was for $480,000.
The contract wasn’t on the agenda for that April 14 meeting but Smith pressed for approval. A board member quizzed him about whether public bidding was needed.
“I think you’re good,” Smith responded.
Pressed about the process, he turned to Brad Baird, president of the company whose contract was in question.
“Brad, assist me on this,” he said. “My understanding is we have the ability to do a sole source selection for this project.”
Before Baird could answer, the attorney for the development authority spoke up. That was Elizabeth Howard of the Portland law firm of Schwabe Williamson & Wyatt.
“You don’t need to go out for a bid,” she told board.
Five months later as the contract remained in controversy, she told the board, “I am not a public contracting lawyer.”
But with assurances from Smith and Howard, the board approved the contract.
Bidding questions persist
Misgivings developed immediately.
Jim Doherty, a Morrow County commissioner and chair of the development authority board, said in a recent interview that he was troubled from the start about the contract. He said Smith sought board approval with no prior notice.
“It wasn’t by accident that it wasn’t on the agenda,” Doherty wrote in a text message that day to another board member.
Two weeks later, Doherty emailed the board with concerns that “we have mis-stepped by approving the Anderson Perry contract.” He said he had been advised the contract needed to follow state contracting laws and “if we did not follow the process according to Oregon law, we could be in violation.”
County attorneys concluded a contract the size of the one given to Anderson Perry should have been put out for bid, conflicting with Howard’s assessment.
When the board met in June, Doherty noted that three other members of the five-person board members now questioned how Anderson Perry got the contract.
Smith stood firm, according to a recording of the meeting.
“You folks approved for me to negotiate and sign a contract with Anderson Perry. I executed that contract,” he said. “We’re now in a situation where I’ve signed a contract that in my belief is valid.”
A board member asked Howard to explain how the contracting law was followed.
Attorney ducks question
“I’m going to have to defer on this,” said Howard. “Greg, we’ll need a further conversation. I wasn’t prepared to speak to this today.”
The circumstances of Howard’s service to the board raises other questions.
Howard wrote a “letter of engagement” in February, emailing Smith that the letter was “for your presentation to the board for review & signature.” It was addressed to the board “c/o Greg Smith.”
Howard outlined the work the firm would do in the coming year. The fee would be $221,000 – more than twice the limit on public business that can be awarded without public bidding.
Debbie Pedro, the development authority’s administrative assistant, messaged Howard after seeing the contract.
“My guess is that I will have to put this out for an RFP because it is over the limit?” she asked in an email.
Howard responded by email, “Would it be possible to have a discussion about this by phone?”
Pedro didn’t respond to questions sent to her last week about whether that call happened or what became of her concerns.
No bid record disclosed
The Enterprise in August requested from the development authority for “any record of any evaluation of state public contracting requirements” applied to the legal services contract.
No such documents were provided. Howard managed the authority’s public records response.
Howard did provide the letter of engagement, which included places for board members to sign. She provided no record that any of them got the letter or agreed to its terms.
READ IT: Attorney’s letter to board
Howard wrote in that engagement letter that Schwabe Williamson & Wyatt didn’t serve as the attorney for any board member or “other parties, be they public or private officials, stakeholders, people or entities who may have an interest in or are associated with the CDA.”
Schwabe Williamson, however, represents Smith and his consulting company, Gregory Smith & Company.
Smith provided no documents when asked for “any record in any form in which you notify, advise or otherwise disclose to CDA board members that Schwabe Williamson & Wyatt represents you and your company (Gregory Smith & Company LLC).”
Howard and the firm’s designated media contact did not respond to written questions about the firm’s dealings with Smith or other contracting matters. They also didn’t respond to an email with excerpts of this story provided to verify accuracy.
The letter provided a declaration that the terms and conditions in the engagement “are agreed to by the Columbia Development Authority Board of Directors.” There was space to sign for authorities from county and port district authorities in Morrow and Umatilla who serve on the board.
Doherty said he couldn’t recall seeing the letter and John Shafer, chair of the Umatilla County Commission, said “I don’t recall this letter at all.”
Letter didn’t reach directors
Kim Puzey, executive director of the Port of Umatilla and another board member, said Friday that he didn’t sign the letter. “I have not seen this letter until today,” he said on Friday after he was provided a copy by the Enterprise.
Lisa Mittelsdorf, executive director of the Port of Morrow, messaged the Enterprise that “we did not receive or execute” the Schwabe engagement letter.
Board records show the only contract questions emerging in recent months concerned the Anderson Perry service.
Smith reversed himself on the legality of the contract during the Sept. 27 board meeting.
He advised that the contract would have to be terminated – “correcting the error I made in previous meetings.” He said the contract would have to be put out for bid.
He also got board approval to stop an earlier contract with Anderson Perry. Records show that 2020 contract was renewed twice but there was no change to the limit of $40,000. By mid-September, costs under the contract had reached $76,000.
That over-limit spending by Smith was an echo of his management of an Anderson Perry contract in Malheur County.
The engineering firm was retained to supervise construction of the Treasure Valley Reload Center. The company’s initial contract was capped at $250,000 but invoices from Anderson Perry hit that limit and kept coming.
Ultimately, Smith approved $500,000 in payments over the contract limit, what the lead engineer termed a “paperwork” issue.
The contract also set the hourly fees for the engineers and other staffers at Anderson Perry. But twice the firm hiked its rates, charging more than the contract specified.
Following an investigative report by the Enterprise, the project managers fashioned an amendment, boosting the limit to $1.85 million.
For weeks, Anderson Perry officials and Smith had urged the local board to add road building tasks to a contractor already at work in Nyssa. The board’s attorney advised the work instead had to be put out to bid.
Meantime, in Boardman, Smith has yet to put out a call for bids on a new engineering contract to replace the one he scrubbed in September.
News tip? Contact Editor Les Zaitz: [email protected]
EXCELLENCE IN JOURNALISM – Available for $7.50 a month. Subscribe to the digital service of the Enterprise and get the very best in local journalism. We report with care, attention to accuracy, and an unwavering devotion to fairness. Get the kind of news you’ve been looking for – day in and day out from the Enterprise.