This article first appeared in the St. Louis Beacon, Dec. 10, 2009 - A Springfield, Mo., nonprofit agency that has snagged the most license office contracts in the state is scrambling to correct a staffing problem that prompted the Nixon administration to announce Thursday that it was rebidding all 10 of the agency's contracts, including two in the St. Louis area.
A spokesman for Alternative Opportunities Inc., which focuses on helping the disabled and youth in foster care, said Thursday the agency is confident that it has fixed its snafu, and can recapture all 10 contracts in the rebidding process.
"We're very willing to go through the process again," said Alternative Opportunities spokesman Reggie McElhannon.
Also at stake for the agency are eight other license office contracts that it is seeking from the state, including at least one other in the St. Louis area.
McElhannon said its officials took heart in the fact that the state Department of Revenue, which oversees the license contracts, is allowing Alternative Opportunities to continue to operate the 10 license offices currently in limbo during the re-bidding process, which could take a couple months.
The affected license offices in the St. Louis area are in Olivette and Creve Coeur. A Revenue Department spokesman said the public should see no change in the offices' operations during the re-bidding.
Alternative Opportunities initially won the contracts during bidding that took place between April and September. Officials said last summer that the agency wanted to use the offices for job-training for some of its clients and to raise Alternative Opportunities' public profile.
At issue was the agency's decision to list on its bids as its contract manager a man who is paid by WB Management, a subcontractor. The state's contracts forbid using subcontractors for the license office's main services.
McElhannon said the agency has now assigned an employee as the contract manager and is changing pending and future bids accordingly.
The misstep highlighted an aspect of the license contracts that the Nixon administration had not promoted -- that it has, in effect, banned the type of subcontracting practices that had touched off controversy during the tenure of former Gov. Matt Blunt.
The state Office of Administration, which crafted the ban, had yet to return phone calls Thursday.
Missouri's network of 183 privately run license offices, known as fee offices (because of the fee tacked on to cover operations and profit) are overseen by the state Revenue Department.
Contracts for the offices traditionally have gone to allies of the governor. But after controversy over his initial awards, Blunt, a Republican, began putting the office contracts up for bid. Nixon, a Democrat, continued the practice and, at his behest, the state Legislature approved a measure last session requiring that the fee office contracts go out for bid.
But Blunt ran into a buzz saw of controversy during the first year of his term, when he privatized 11 state license offices and allowed allies to set up a tier of private management firms that actually ran the fee offices, even though the contracts had been awarded to individuals. The management firms' principals, and operations, were not public.
Nor was it public how much they were being paid by the people actually awarded the contracts.
The problem unearthed with Alternative Opportunities' operations ran into the Nixon administration's ban on middle-management contracts. The agency's spokesman emphasized that the manager's name was not secret and was included on all of its bids.
McElhannon said that it wasn't aware of the subcontracting ban until the Revenue Department pointed it out, and that Alternative Opportunities already is fixing the paperwork on all current and future bids.
The Missouri Republican Party has been critical of Alternative Opportunities' success in winning the various contracts and noted last summer that some board members and top officials had been campaign donors to Nixon.
Said the state GOP on Thursday: "Recent revelations raise serious new questions about Alternative Opportunities’ management of and application for these license offices. In addition, questions remain about the nonprofit’s connections to Nixon’s campaign and transition team — and whether these links contributed to their remarkable ‘success’ in amassing offices that collected millions of dollars in fees."
The agency and Nixon's staff have denied any link, with the Revenue Department citing a number of other contracts that went to Blunt's allies or other Republicans. According to the Revenue Department:
"As of early Thursday, 154 of the 183 license offices had been awarded under the competitive bidding system. Eighty-nine have gone to incumbent agents or groups associated with the incumbents, and 65 have been awarded to new agents. There are still 29 offices where the bidding has closed, but the offices have not yet been awarded."
Besides the rebidding of the 10 offices that had been run by Alternative Opportunities, bids are still accepted on two others in the state: bids for the Greenfield license offices are still being accepted until Dec. 17, and bids for the Linn License Office are being accepted until Jan. 7.
