DWP TO NIX $1.75 MILLION JANITORIAL SUPPLY DEAL MISHANDLED CONTRACT CITED.

Byline: James Nash Staff Writer

The Los Angeles DWP will cancel a $1.75 million janitorial supplies contract that has sparked allegations of price-gouging and retaliation against employees who complain, officials said Monday.

Ron Deaton, who has headed the Department of Water and Power since December, said the utility will cancel its contract with Empire Cleaning Supply Co., which has been providing mops, vacuum cleaners, cleaning fluids and other supplies.

Some DWP janitors and competing vendors have complained that Los Angeles-based Empire has used its position as a near-monopoly supplier to squeeze out smaller companies and to inflate prices on products it buys from other vendors and sellers to the DWP.

Deaton announced that the DWP would rebid the contract - not because of allegations of price-gouging or inferior products, but because the original bid for janitorial supplies in 2000 was improperly handled.

``It's not the vendor at all,'' Deaton said. ``The situation was the way we contracted and we need to redo that.''

More than a dozen janitors and competing vendors addressed the City Council's Commerce, Energy and Natural Resources Committee, alleging that the DWP was being overcharged and that employees were being punished for saying so.

``This has affected DWP employees across the board,'' said Sandra Miranda, a janitorial supervisor who has complained about the Empire contract. ``We're wondering about our leadership, our management, the policies that have been put into place.''

Empire Cleaning Supply Co. President Robert Cronyn said his company won its bid in 2000 by providing the lowest overall price on janitorial supplies. If the contract goes out to bid again, Cronyn said he's confident he'll again offer the best deal.

``We won it fair and square,'' Cronyn said. ``Our prices are extremely low. Our quality is great. We've done absolutely nothing wrong.''

Empire won its contract as part of a citywide effort - pushed by then- Mayor Richard Riordan - to cut costs by consolidating various small contracts at different city departments into larger, citywide contracts.

Councilwoman Cindy Miscikowski said the arrangement allowed the city to save money by buying in bulk and by eliminating redundant purchasing agents in different city departments.

But smaller companies complained that the Empire contract excluded them. The problem got worse last year when a DWP purchasing manager warned purchasing agents against buying from companies other than Empire, according to the smaller companies.

``We co-existed until about 10 months ago,'' said Joe Cina, a competing janitorial supplies vendor. ``Things changed. We were not allowed to sell to (the DWP) except in extremely specialty cases. Without small business, there is no country.''

Empire will be able to compete with other companies when the contract is up later this year, officials said. But there's no guarantee that the DWP will redirect business from a single large contractor to several smaller ones, said Councilman Tony Cardenas, who chairs the committee.

Cardenas applauded Deaton for ordering a closer look into how the DWP awards its nearly $1 billion in contracts every year, including the janitorial contract. Cardenas said he's also concerned about reports that DWP managers are punishing whistle-blowers.

James Nash, [phone]

james.nash(at)dailynews.com