Minority-Owned Firm Sues AHA over Contract Discrimination

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(APN) ATLANTA — Wilfred Gibson, 42, former owner of a small landscaping company, Gibson Landscape Management, has filed suit against the Atlanta Housing Authority (AHA) for allegedly discriminating against his company and putting him out of business, Atlanta Progressive News has learned.

AHA allowed millions in federal funds to be awarded to “friends” of three private management companies that manage Atlanta’s public housing communities, Gibson says, according to interviews as well as documents and court filings obtained by APN.

The lawsuit was filed in US District Court, Northern District of Georgia, Atlanta Division. Gibson, who is Black, seeks “relief against racial discrimination in contracting,” according to Gibson’s filing.

In addition to suing AHA and its Directors, including Renee Glover and others, Gibson is suing the three private management companies (PMCOs), including The Habitat Company, LLC; IMS Management Services, LLC; and Realty Management Corporation, doing business as the Lane Company.

AHA has hired at the rate of several hundred dollars an hour private law firm, Holland and Knight. Holland and Knight is also representing the three PMCOs.

AHA’s response to the lawsuit, filed June 20, 2006, did not respond to the substance of Gibson’s claims.

Holland and Knight told the Court that AHA had official immunity, sovereign immunity, governmental immunity, official act immunity, qualified immunity, did not violate any laws a reasonable person would have known, and acted in good faith and not in malice. AHA said Gibson did not suffer an injury, did not plead with sufficient particularity, has unclean hands [no explanation provided], did not satisfy prerequisites for relief, did not exhaust administrative remedies, and failed to do about a dozen other things.

AHA also said they were “without knowledge or information sufficient to form a belief as to the truth of the allegations set forth,” in most paragraphs of the complaint.

The crux of the matter is, AHA no longer manages its public housing communities; these are managed by the PMCOs, for several million dollars each year. In addition, AHA–a grantee of federal funds from HUD–has allowed the PMCOs themselves to manage the bidding process for all contracts related to the day-to-day maintenance of the communities.

Moreover, documents obtained by APN show that some time in the summer of 2003, AHA decided the PMCOs did not have to follow the federal regulations for open and competitive bidding as required by HUD for grantees and subgrantees under 24 CFR 85.36. CFR is the Code of Federal Regulations.

“She [Glover] superceded a federal law,” Gibson says.

In a May 05, 2003, letter, AHA requests one PMCO, IMS, show how their upcoming bidding process will comply with the competitive bidding requirements of the CFR.

However, an August 23, 2003, letter reveals that AHA Director Renee Glover personally had a phone conversation with HUD’s Althea Forrester, Assistant General Counsel, Assisted Housing Division, on July 24, 2003, in which Forrester told Glover that the PMCOs did not have to comply with the CFR, in the contracts they awarded.

“Please be advised the requirements relating to competition and methods of procurement identified in 24 CFR 85.36 apply to AHA as a grantee,” Forrester wrote to Glover. In a footnote, “Grantee means the government to which a grant is awarded and which is accountable for the use of the funds provided.” 

“Under the circumstances described by the AHA, the PMCO is neither a grantee nor a subgrantee for purposes of 24 CFR 85.36. Therefore, the competition and methods… do not apply to the second-tier procurements performed by a PMCO for goods and services to be provided at the AHA communities,” Forrester wrote.

Instead, “AHA may require each PMCO to develop and provide competitive procurement procedures consistent with sound business practices in the private sector industry,” Forrester wrote.

This is the decision that put Gibson out of business, he says, because the PMCOs no longer allowed him to submit bids for numerous federal contracts.

But Gibson did not believe AHA or HUD’s decisions had any basis in law.

“There is no such thing as a second-tier procurement to PMCO’s. They made it up. They put me out of business with this hogwash. This opened the door for all the PMCO’s to bring all their boys in,” Gibson told APN.

Gibson Landscape Management was dissolved as a company on July 09, 2005, according to Georgia’s corporations database.

“After she [Glover] got the letter from General Counsel, that was like the green light,” Gibson said.

Gibson has sent several letters to HUD seeking their justification for such a claim, and some were forwarded by the Office of US Rep. John Linder (R-GA), Gibson’s Representative in US Congress.

Gibson asked several questions in these letters, including one dated November 18, 2004, sent from US Rep. Linder to HUD. “If AHA is grantee, who is the subgrantee?” was his first question.

“A subgrantee is the government or other legal entity to which a sub grant is awarded and which is accountable to the grantee for the use of the funds provided,” Sharron Kelly, Acting Regional Director of HUD, wrote on December 07, 2004.

Kelly added that HUD’s lawyer said the PMCOs are not subgrantees. It is not clear why this would be the case, when the PMCOs receive funds from AHA which came originally from HUD, are legal entities, and are presumably accountable to AHA for the use of the funds provided.

“What’s the definition of second tier?” Gibson asked.

“There is no definitive definition. In this context… the contractor relationship at the level below the public housing authority/contractor relationship. Basically, a second tier provided is a sub-contractor to a prime contractor,” Kelly wrote.

HUD seems to be implying that the PMCOs are “contractors” but not subgrantees.

However, a copy of a vendor paycheck obtained by APN, dated January 30, 2004, from “LANE COMPANY AGENT FOR HACA” to Gibson’s company, states that Lane Company is an agent for the Housing Authority, City of Atlanta.

Also, Gibson asks HUD, “What federal guidelines were used to determine PMCOs as second tiers?”

“There are no federal guidelines for defining PMCOs as second tier contractors; it is a factual and contextual matter,” Kelly wrote.

The suit is currently in the discovery process, Gibson said. The next thing will be depositions by AHA’s Glover, HUD’s Boyce Norris, and the representatives of the PMCOs, he said. He estimates a trial date will be set for late November 2007.

About the author:

Matthew Cardinale is the News Editor for The Atlanta Progressive News and may be reached at matthew@atlantaprogressivenews.com

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