Tuesday, July 16, 2013


Hawaii whistleblower Sarah McCann reveals potential $284 million loss to state in mishandled bidding process

by Larry Geller

Hawaii has a whistleblower of its own, according to news of a lawsuit filed in Hawaii’s federal court that appeared on the web today.

Purna Nemani reports on the Courthouse News Service website that

Hawaii fired an auditor for pointing out that a Chevron Energy project bid would cost the state $284 million more than a competitor, and for objecting when her bosses told her to destroy the audit that showed it, the auditor claims in court.

Sarah McCann sued Hawaii Department of Education Superintendent Kathryn Matayoshi, in Federal Court.

[Courthouse News Service, Auditor Says The Fix Was In, 7/16/2013]

Hawaii taxpayers appear to have been taken on a $284 million ride by Department of Education mishandling of a bid. Yes, keep this amount—$284 million possibly wasted—as you read in the news that the state doesn’t have the money for this or that repair or for mental health services, for example. In my book, $284 million is a lot of money.

The lawsuit was filed by an individual allegedly improperly terminated, but McCann is doing us all a service by revealing this instance of massive waste in the operation of Hawaii’s state government. Government has access to our wallets and purses, of course, so unless we object, there is little check on government misspending.

Who is our new local whistleblower?

Hawaii hired McCann on Nov. 4, 2012, "as an emergency hire to be involved in the DOE's Energy Efficiency and Sustainability Master Program ('EESMP')," McCann says in the complaint.

Thanks to reporter Purna Nemani for the details of our apparent loss:

McCann says she audited the two proposals with a volunteer energy engineer "at the direct request of a superior at the DOE."

"The Audit concludes, inter alia, that Chevron's RFP response was legally nonresponsive and that the DOE's selection committee should disqualify the non-responsive proposal and award the RFP contract to the lowest priced responsible bidder, which is Prime," the complaint states.

"The Audit also concludes that the Chevron proposal will cost the State of Hawaii significantly more money than the Prime proposal, even though the Chevron proposal is non-responsive.

"In fact, the audit concludes that $284 million dollars 'is the conservative estimate of the potential lost additional savings for the State of Hawaii.'

Check out the complete article on the Courthouse News Service web site for further details of the case.

Update: The Star-Advertiser story on p. B2 of today’s paper adds what seems like an important bit of information I didn’t see in the Courthouse News Service story:

McCann’s lawyer also represents Prime Solutions.

Prime Solutions was the low bidder that lost out when Chevron was chosen.


And we wonder why there's a 'shortfall'?

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