Report calls out MDHA for 'serious flaws' in contracting practices

Thursday, November 26, 2009 at 1:02pm

Updated with MDHA's response:

The Metro Development and Housing Agency is taking heat for demonstrating contracting issues in work related to the proposed $585 million convention center, which Metro officials say has jeopardized the group’s future with the project.

A report released late Wednesday afternoon by Kraft CPAs reveals “serious flaws in contracting practices by MDHA,” Metro Director of Law Sue Cain and Metro Finance Director Rich Riebeling wrote in a letter addressed to MDHA Director Phil Ryan.

Read MDHA's response here

But Ryan defended his agency's work. "Through our predevelopment activities, we have provided the city with a world-class design, more than 1,800 pages of architects' work, and a top-notch construction team that is preparing a guaranteed maximum price project for Metro Council consideration in the near future," Ryan said in a written response.

"The plans for the Music City Center are for a building that is beautiful and respectful of air, water and energy. In producing this work, we have been on-time and on budget. ... The process has been transparent, and we have welcomed and given our full cooperation to this review. First and foremost, it's important to remember that the Music City Center project has remained in budget and has been successfully managed by MDHA, with the involvement of hundreds of persons involved in the design and construction."

Earlier this year, Ryan and MDHA were scrutinized when payments to the public relations firm hired to promote the convention center ballooned to $458,000, considerably more than the $75,000 the contract had allowed for.

Episodes that run contrary to MDHA’s procurement policy include:

  • A financial commitment of $104,720 was not presented to MDHA’s board for approval
  • Four instances in which time and materials contracts were executed without expenditure ceilings
  • Four cases in which cumulative change order or changes in the amount of a letter contract in excess of $50,000 were not approved by the board
  • Two instances in which letter contracts were used for a year or more with repeated modification
  • One case in which a vendor repeatedly invoiced and was paid on compensation terms different than the terms in the contact then in effect

The report also found no contract was executed for $350,000 spent by the Nashville Convention and Visitors’ Bureau during the “Blitz Campaign” for the Music City Center

The analysis found “no issues of note” with MDHA’s performance in contracting women- or minority-owned businesses, an issue that had been raised by the Metro Council’s Black Caucus.

Read Cain and Riebeling's first letter here

2 Comments on this post:

By: CityProgress on 11/27/09 at 8:49

"The review also found no contract for $350,000 spent by the Nashville Convention & Visitors Bureau for the "Blitz Campaign" for the proposed Music City Center. Nor was that expense approved by MDHA's board, though [*] it was authorized by Riebeling [*] "contingent upon the submission of adequate documentation of the expenses by NCVB to MDHA," Kraft wrote."
tennessean.com/comments/article/20091127/NEWS0202/911270336/Review-slams-MDHA-on-hall

How can Riebling sign off on these propaganda slush funds, then pass the blame?

This audit should just be the beginning. Those responsible for tax dollars being illegally spent on lobbying officials must be held accountable.

By: JeffF on 11/28/09 at 5:16

don't be too critical, the Blitz campaign was what supporters refer to as "years of debate on the issue". Any real open debate would cost extra and would never be allowed anyway.