High bid favored in heated battle to win major city contract.

High bid favored in heated battle to win major city contract

The battle for a hotly contested parking-ticket contract took another turn late last month when the Lost Angeles Department of Transportation endorsed the most expensive of three bidders, a subsidiary of defense giant Lockheed Corp.

Department of Transportation General Manager Ed Rowe, in a report to Mayor Bradley, said Lockheed Information Management Services Corp. should be given the contract, despite the fact that its bid is 16.6 percent higher than the low bidder's. Municipal law generally requires officials to select the lowest "responsible" bidder.

The other bidders are the Lost Angeles office of Anderson Consulting, which bid $43.1 million, and Detroit-based Tixon Corp., which bid $42 million.

Said Samuel Gardner, corporate counsel for Tixon, "We felt the analysis and conclusions of the Department of Transportation staff were totally inaccurate and showed a decided favortism to (IMS)."

The lucrative contract has become one of the most controversial issues city officials have grappled with this year, prompting intense lobbying campaigns by some of Los Angeles' most prominent private-sector players, many of them with longstanding ties to City Hall. The contract comes up for vote by the full City Council this fall.

"It's not what you know, it's who you know," groused Councilman Zev Yaroslovsky, who is head of the council's Budget and Finance Committee.

IMS, the Lockheed unit which has held the contract for the past five years, hired lobbyists with deep political connections to further its cause.

Mickey Kantor -- a partner at the influential Westside law firm of Manatt, Phelps & Phillips and a longtime friend of Mayor Tom Bradley lobbied in behalf of Lockheed. In early 1989, Kantor played a role in defending charges that Bradley failed to publicly disclose stock and bond holdings and influenced the decision to deposit $2 million in city funds at Far East National Bank, where the mayor was a paid advisor.

Manatt partner George Keiffer said the law firm and Kantor have done "almost no work" on the Bradley defense since the beginning of the year.

In the first quarter of 1990, Kantor lobbied Council President John Ferraro and two other councilmen, records show, billing IMS for $262, one hour's work.

Kantor, currently on vacation in Italy, was not available for comment. His second-quarter disclosure form indicated no lobbying for Lockheed.

"There is no conflict of interest and no requirement that Bradley would have to withdraw (from contract decisions)," Keiffer said. "This is just more nonsense raised by the representatives of Andersen to draw attention from the merits of the contract and get it down to politics."

Keiffer himself billed IMS nearly $1,400 in lobbying costs for the contract in the second quarter of 1990. Manatt partner Lisa Specht, who cosidered running for Yaroslavsky's council seat when he pondered a mayoral bid in 1988, is also an IMS lobbyist.

IMS's own management team has ties to the Bradley administration.

Julie Scarzi, Mayor Bradley's former transportation aide and now a member of the mayor's Cultural Affairs Commission, is a senior vice president at IMS. In addition, Edgar Hayes, the head of IMS's Los Angeles office, was formerly director of Los Angeles County's data processing.

IMS has about 100 employees currently working on the city's parking contract, with 400 more employees nationwide. The subsidiary is part of Lockheed's Technology Services Group, which reported revenues of $1.4 billion last year.

Andersen Consulting, the largest consulting firm in Los Angeles, has also hired powerful lobbyists.

Joseph Cerrell, a veteran Democratic political consultant and Bradley ally, has lobbied on behalf of Andersen. A Cerrell employee, Howard Sunkin, has also lobbied city officials for Andersen. The two billed Andersen Consulting $12,000 for lobbying city officials in the second quarter of 1990.

George Mihlsten, a partner in the prestigious Los Angeles law firm of Latham & Watkins and a member of the mayoral-appointed Downtown Strategic Plan Advisory Committee, also represents Andersen Consulting. So does former councilman Arthur K. Snyder, who has met personally with various council members, including Michael Woo. Snyder, however, did not list Andersen in his second-quarter lobbying statement. Mihlsten's statement was not available.

It was unclear how much the three companies have spent lobbying city officials, but city sources said the amount is probably in the "tens of thousands of dollars."

Political contributions and gifts have also become part of the battle to process city parking tickets and collect unpaid fines. IMS contributed more than $70,000 to city officials since 1985, much of it going to Bradley, Scarzi confirmed.

Records show that city Parking Administrator Bob Yates, who is in charge of the ticket contract, has been the subject of IMS generosity. Between 1988 and 1989, IMS paid for 18 meals for Yates and seven golf games, according to Yates statement of economic interest. Total value: $780.

Yates said the gifts were all above-board and that his department had not been lobbied by any of the three companies since the contract renewal process began several months back. "We have not been approached on the current lobbying effort," Yates said. "Our position has been from the very beginning to do a technical review of the proposals."

Andersen officials said they have made very few political contributions and given no gifts to city officials. It was not known if Rowe, who did not return phone calls, received any gifts or contributions from Lockheed.

Barry Patmore, Andersen Consulting's managing partner for Southern California, said he was "mystified" that the Department of Transportation recommended IMS. "We think the department's analysis was incomplete," Patmore said. "We are still confident we can provide the best collection results and are willing to guarantee it."

Andersen Consulting's chances of landing the parking contract faded somewhat July 30, when the Business Journal reported that the company was deemed to have economic ties to South Africa by the City Administrative Office. Andersen Consulting officials refute the city's claims.

Lobbyist Keiffer said the Department of Transportation's endorsement was "a solid recommendation of what (IMS) can do."

In his report, Rowe said his department had little confidence that Andersen Consulting or Tixon could compete with IMS. Andersen proposed leading a seven-company team, one that included a citation processing company called Computil and Cordoba Corp., a customer services firm.

Said Rowe in his report, "This proposed organization provides inadequate focus for a city contact and will quickly deteriorate into a 'management by committee' situation." He also raised questions about Anderson Consulting's proposed staffing levels, computer tecnology and lack of previous parking-citation experience. Similar questions were raised about Tixon.

"Neither Anderson Consulting nor Tixon can reasonable be expected to improve the city's citation collection rate," the report said. "In our opinion, we doubt that either vendor would be able to maintain...the existing 73 percent collection rate produced by" IMS.

While some city officials have raised questions about IMS's performance the past five years, Bradley said they have been "tremendous" in a previous letter to Rowe.

Studies conducted by the Department of Transportation show that in New York only 45 percent of parking tickets are collected and Chicago only gets money from a quarter of its citations.

Los Angeles has increased its parking ticket revenue by 400 percent, from $18 million in 1985 to $90 million last year.