MPDP: Davison’s words don’t matter

Promises: kept or broken? — Part 3

Maritime Park Development Partners responded in a letter to the CMPA EBO Committee on Oct. 7 to the findings by CMPA attorney Ed Fleming regarding the EBO complaint by George Hawthorne. In his findings, Fleming found that had been a material breach by MPDP.

The EBO (Equal Business Opportunity) Committee includes Bentina Terry (chair), Dick Baker, LuTimothy May and Grace McCaffery.

In the letter, MPDP president, Jeff Galt criticizes Fleming for not clearly spelling out his findings and assertions or the relevant linkage to the agreement. Galt points out that the EBO agreement and its terms and provisions “constitute the full and complete agreement between the parties.”—-in other words, any promises made by Davison and his team on camera at the CMPA meeting to get the contract should be ignored. The Covenant with the Community, Land Capital response to the RFQ and any presentation documents should not be considered by the EBO Committee.

Galt writes, “Mr. Fleming’s repeated references to these documents serves only to confuse the issue.”

1. Contractor’s Academy: Galt claims that there was not separate Contractor’s Academy ever intended, according to the EBO Agreement. That any contractors and potential workers would simply be referred to George Stone, PJC, UWF, etc. “Whatever Mr. Fleming believes a Contractor’s Academy should be, it was not contemplated in the EBO Agreement. MPDP can not have violated a provision of the EBO Agreement that does not exist.”

2. Training: Galt writes that MPDP isn’t required to provide training to prospective contractors, according to the EBO Agreement. (Again the Land Capital commitments aren’t relevant, per Galt.) The Agreement wordings is “The Developer may…” which Galt believes relieves them of any training responsibility.

3. Financing/Bonding: Galt points out the only reference to financing is in Section 10: “The Developer may develop a resource directory…” He writes: “It was never the intention of the parties that MPDP would ‘assist minority contractors with financing’ as asserted in Mr. Fleming’s report.”

Galt states that MPDP through its affiliate Magi Construction (51%-owned by Hoar Construction) had made arrangements to provide bonding to all subcontractors. He asserts that MPDP, working with the General Contractor (its affiliate Magi) has “gone even further than contemplated by the contract in regard to bonding.

As to mentor-protege relationships, Galt that is a requirement placed on the contractor, not the Developer. (Above MPDP points out through its affiliate, Magi Construction, MPDP is the contractor, too, but fails to make the distinction here).

4. Rate of Spending: Fleming asserted that MPDP hasn’t spent enough money on the EBO program.

Galt: “The EBO Agreement did not establish a timeline for expenditures and therefore it is impossible for MPDP to have breached the EBO Agreement.” He writes that they spent considerable time and resources to develop the EBO Agreement (fails to say CMPA reimbursed MPDP for the $15K it paid Hawthorne and $30K it paid Target Group). MPDP is drafting a new budget for EBO program and “it is clearly unfair and unreasonable to hold MPDP to a spending plan that is only now being finalized.”

Galt gives these facts about minority participation

Construction Contracts: $6,283,443
Minority percentage: $1,497,785 (23.8%)

Design Contracts: $1,829,199
Minority percentage: $25000 (1.37%)

Consultants: $381,784
Minority percentage:: $33,850 (8.87%) (a)

Total: $8,494,436
Minority percentage:: $1,554,635 (18.3%)

There is no breakdown by minority groups as promised by Davison in his June 2008 presentation. There are no figures as to the actual number of minority workers on the project.

(a) $30,000 of the minority consultant total is with Target Group, who is no longer involved with the project. Take that out – minority percentage drops to 1% for consultants.

Galt also writes at the EBO Compliance Officer Lou Ray has ruled them in compliance as of Sept. 30.

Read MPDP letter

Fleming Email Response to this letter:

From: Edward P. Fleming []
Sent: Friday, October 08, 2010 11:15 AM
To: Edward Spears
Subject: CMPA Trustees

Chairman Todd & Members of the Board of Trustees – I have given a cursory reading of MPDP’s response to my report to the EBO Committee, and would make the following responses:

1. The MPDP’s attempt to claim “credit” for the Design-Builder (Magi, LLC) procedures for bonding subcontractors is disingenuous. Magi is not an “affiliate” of the MPDP. An affiliate, by legal definition, is an entity for which you have control. The controlling partner of Magi is Hoar Construction. “Sub-guard” is a program provided by many large contractors (such as Hoar), and is intended to eliminate duplicate exposures and reduce overall bonding costs. The cost of that program is borne by you, as the owner, and not by MPDP or Magi. It is neither designed for, nor directed to, minority participation.

2. The recent e-mails from George Hawthorne illustrate that MPDP has not provided technical support to minority contractors, and lacks the ability to provide such support.

3. MPDP’s inability to provide technical support to minority contractors is a direct result of its failure to employ Bruce Cutright. Cutright is designated as a “key person” in the MPDP-CMPA contract, and the failure to employ him (or a replacement approved by the CMPA) is, in and of itself, a material breach of MPDP’s contractual commitments.

4. MPDP’s attempts to disavow the promises it make to in its RFP and RFQ is likewise disingenuous. Although the MPDP had numerous “means and methods” in which to accomplish its various promises, the fact remains that the MPDP has not spent one single dime to carry out those promises during the critical pre-bid period. Nor has the MPDP produced documents supporting its claim to have provided $24,000 of “in-kind” contributions.

5. The $250,000 expenditure was to have been made during the construction phase of the public improvements. Additional funds (not even addressed in my report) were to have been spent during the private development.

6. Showing that there has been minority participation in this project does not demonstrate that MPDP kept its contractual commitments to the EBO requirements. There would have been (and obviously was) minority participation without MPDP spending any of the money it promised to spend to INCREASE minority participation. MPDP, despite a request to do so, produced no “link” between its “Contractor Academy” and other EBO commitments and the competitive bidding by existing minority contractors.

These are initial thoughts from a quick reading of the response. I can prepare a more detailed response if so requested.

Ed Fleming


The EBO Committee voted to not send the complaint to the full CMPA board for discussion.