By Cassi Feldman

WHEN TOP AIDES to Gov. Gray Davis got busted in April for signing a wasteful $95 million no-bid software contract with Oracle Corp., a lot of people started asking questions. Just how many state contracts were being authorized without the benefit of competitive bidding? The answer, it turns out, is quite a lot; some news reports set the dollar amount in the billions.

While all eyes were on the Oracle deal, however, a similar scandal was unfolding here in San Francisco. According to a San Francisco Civil Grand Jury report released June 27, the city has handed out plenty of its own lucrative no-bid contracts – nearly $90 million worth.

By law, all city contracts must be put out to bid unless a department can prove that only one supplier offers the necessary goods or services. In a tight budget year, competitive bidding is even more important, since it generally guarantees the best deal for taxpayers. But without strict oversight, city departments tend to do what's easiest, and that often means sticking with the firms they know.

A Bay Guardian study found millions in sole-source contracts initiated in fiscal year 2000-01 for everything from animal vaccines to fax toner. And those are just the ones we know about. Though the Sunshine Initiative requires full disclosure of these deals, more than a dozen city departments have refused to comply (see "Shady Dealings," 3/13/02).

Muni is a prime example. The department controls millions in city contracts but has never turned in its list. "I hear some rumors that a whole lot of sole-source contracts are being let out [for the Third Street Light Rail], and they're not hiring any black people," said Willie Ratcliff, editor of the San Francisco Bay View newspaper and a general contractor.

Muni's requests for sole-source contracts actually have been rejected by the Human Rights Commission more than any other department's. Out of 30 waivers it requested last year, only 5 were approved. Muni communications manager Alan Siegel declined to comment on the matter.

Another loophole in the contracting process comes in the form of professional services, including architecture, research, and accounting. Judith Blackwell, who heads up the Office of Contract Administration, told us that while her office monitors the city's purchasing, professional service contracts are left up to the departments themselves. "For the most part the departments are very aware of what the requirements are," she said.

But that doesn't mean they follow them. According to the Civil Grand Jury, there is "widespread failure to adhere to requirements for competitive solicitation" for contracts under $50,000. The report also slammed city departments for using sole source "as a matter of convenience rather than as intended in the Administrative Code."

We asked the HRC for a list of all sole-source exemptions requested for 2000-01. Interestingly, the commission had a record of approximately 150 waiver requests, compared with the 325 approved sole-source contracts (each worth $5,000 or more) we counted.

Why the discrepancy? James Fields, senior contract compliance officer for the HRC, admits that his office is understaffed and can't always keep tabs on every department. He fears that without intense scrutiny the departments are more likely to rely on sole-source contracts and less likely to consider local, minority, and women-owned firms. "Particularly in these desperate economic times," he said, "more money should be circulated back into the city." E-mail Cassi Feldman at cassi@sfbg.com.