License fee office files lawsuit over lost contract

Mar 2, 2010 — St. Louis Post-Dispatch

Tony Messenger

Mar. 2, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- JEFFERSON CITY -- The operator of one of the state's busiest drivers license fee offices is suing the state after losing his contract to another bidder, prompting critics of Gov. Jay Nixon to allege that the political bias that has dogged the system for years persists.

On Friday, a Cole County Circuit Court judge issued a temporary restraining order allowing operator Mike Becker of St. Louis to continue running the Deer Creek fee office, which is in Maplewood. The bid had been awarded to Alternative Opportunities, a nonprofit organization from Springfield, Mo., that has won bids on several fee offices.

"The rules were changed at the 11th hour," Becker said Monday in an interview. "The state failed to execute a fair, equitable bidding process. They failed to even follow their own rules."

Becker's lawsuit alleges "multiple violations of law" in the competitive bidding process, which started in January 2009 and was completed last month.

When Nixon took office just over a year ago, he pledged to reform the long-standing Missouri tradition of rewarding fee offices to political allies as patronage plums. He began rebidding every office in the state. Last year, the Legislature passed a law requiring the bidding, and the law gave preference to nonprofit agencies.

But Becker's lawsuit contends that awarding extra points to nonprofit agencies goes against standard bidding practices in the state of Missouri. Also, the lawsuit contends that once the state entered into what is called the "best and final offer" negotiations with bidders, it substantially changed the rules and tilted the process in favor of Alternative Opportunities.

Some Republicans allege that the nonprofit has been favored by Nixon because some members of its board donated a total of more than $11,000 to Nixon's campaign during the 2008 election cycle.

Lloyd Smith, executive director of the Missouri Republican Party, said Monday that the lawsuit adds to the evidence that politics have played a role in the awarding of fee offices under Nixon, much as they did under previous governors.

"I think this lawsuit confirms some of the suspicions that we had about the changing of the bidding rules midstream," Smith said. "They seem to slant the bidding toward one direction."

During the negotiation process, the lawsuit contends, the state increased the amount of points that would be given to a nonprofit's bid, making it even more difficult for Becker's for-profit company to contend with Alternative Opportunities' bid.

Smith said he hoped the Legislature would review the process in light of the law that was passed last year requiring bidding, to make sure it was "doing what it was intended to do."

Nixon's office contends that fee office awards are given with no regard to politics. A Nixon spokesman referred questions about the lawsuit to the attorney general's office. Nanci Gonder, the spokeswoman for Attorney General Chris Koster, said the attorney general's office was preparing to argue the case on March 15 -- the date Judge Patricia Joyce set for a hearing on the restraining order -- and had no comment.

It isn't the first time Alternative Opportunities has been involved in a controversial fee office bid.

Late last year, the state ordered the rebidding of 10 fee office contracts that had been won by Alternative Opportunities because of discrepancies in the bidding documents. The nonprofit, which provides social services to the poor and disabled, had failed to disclose that it would contract with a for-profit company to provide management services of the fee offices it sought to run.

After the Springfield News-Leader reported on the company's relationship with the for-profit company that manages many of its contracts, the state ordered those fee offices rebid.

The Deer Creek office grossed nearly $475,000 in fees in 2008, according to the Department of Revenue, making it the ninth-busiest of the 163 license offices in the state. The Deer Creek office was not one of the 10 contracts ordered rebid by the state in December.

Several Alternative Opportunities top executives, including Chief Financial Officer Tom Goss, formed a for-profit company in 2005. That company, W.D. Management, is owned by an Arizona company called Providence Service Corp. (NASDAQ:PRSC) Alternative Opportunities pays millions every year to the for-profit company to manage much of the work that Alternative Opportunities does. Most of the nonprofit's contracts are to provide services for the state of Missouri.

Goss did not return a phone call seeking comment.

Becker's lawsuit contends that under state bidding practices, his company would have submitted the lowest and best bid, and that the allegedly skewed process gave Alternative Opportunities "a substantial and unlawful advantage over other bidders."

Becker has been a consistent GOP campaign donor over the years. He gave $1,000 to Gov. Matt Blunt in 2004 and continued to give to Blunt once he was elected and Blunt awarded him the fee contract.

Newstex ID: KRTB-0187-42485905