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R.I. deal with staffing firm called ‘unique’

01:00 AM EDT on Tuesday, May 15, 2007

By Katherine Gregg

Journal State House Bureau

PROVIDENCE — A Senate investigating committee heard the words “very unusual” again and again yesterday.

That was the way executives from three temporary-staffing companies — Coworx, Westaff and Flagship Staffing services — described the Carcieri administration’s payment arrangements with the small, out-of-state company given a no-bid contract last Fall, worth upwards of $11 million annually, to cover the payroll for hundreds of privately employed state workers.

Key members of the Carcieri administration have said there was nothing out of the ordinary in the administration’s pledge to give the company, Smart Staffing Service, the money to meet each payroll a day in advance.

But several professionals in the field begged to differ, raising the volume of the controversy on the same day that state Democratic Party Chairman William Lynch called for an investigation by an independent auditor of the administration’s reliance on private staffing companies charging “premiums” and “markups” ranging from a low of 22.5 percent on the Smart Staffing contract to upwards of 150 percent.

Last week, the state advanced Smart Staffing $461,468 to cover 292 state workers.

Based on his 17 years in the business, Kevin Crowley a vice-president at Coworx Staffing Services, told the Senate Government Oversight Committee: “I would venture to say it’s unique … Nobody wants to use their own money. That’s why they use staffing firms. So I would go so far as to say it doesn’t exist anyplace but here.”

“Your opinion. So you have no basis in fact that that is indeed reality?” challenged the only Republican committee member, Sen. Leo Blais of Coventry.

“Seventeen years of doing it …” Crowley began, but Blais cut him off: “Yes or no? You have no basis in fact for when you stated that there is no other relationship like that anywhere …” “Not to mince words with you Senator, but I believe, I said, it’s unlikely,” Crowley began, before Blais interrupted again: “Just answer the question.”

They went several rounds like this before Sen. J. Michael Lenihan, the East Greenwich Democrat chairing the committee, assured Blais: “He is answering your question based upon his experience and his experience alone.”

Asked if their company would have had the financial capacity to jump in quickly and take over the payroll after Smart Staffing’s predecessor, DataLogic Consulting, went belly up, Crowley said: “The simple answer is: yes.”

Crowley’s colleague, Coworx account executive Harold Shapiro told the senators he was “personally taken aback” that his company wasn’t given a chance to bid on the contract.

After reading about DataLogic’s troubles in the newspaper, Shapiro said he called the state — and never got a call back.

Susan Fabrizio, owner of Flagship Staffing Services, said she too was shut out, despite repeated efforts to get in the door.

She said she got a heads-up from the head of the Department of Administration’s minority-business-enterprise office, Charles Newton, to expect a phone call from the state’s highest-ranked purchasing officer at the time, Brian P. Stern, because DataLogic had hit the skids, the state had to move quickly to make good on the defaulted payroll, and her company was one of four that qualified as an MBE.

She said Stern, who is now Carcieri’s chief of staff, left a message for her at 3:45 p.m. on Thursday, Sept. 21; she called him back within five minutes — and many more times. Each time, she said, she was told he was unavailable.

In between, she said, she called her bank to arrange a line of credit so that she would be ready to move quickly. Asked if she could have matched or bettered Smart Staffing’s arrangement had she too been promised the money up front, she said: “Absolutely.”

But she said she never got a return call.

Asked by one of the senators how she remembered the time and date of Stern’s call to her, she said: “Wouldn’t you? It was a great opportunity.”

Smart Staffing owner Craig Provost had been billed as one of the witnesses yesterday, but he sent a letter instead which said, in part: “While I understand your oversight responsibilities and am extremely respectful of them, I do not think my appearance before your committee would do anything to alleviate the situation I find myself in. The governor — and his top aides — defend the use of private staffing companies to fill “temporary positions” without hiring a full-time state employee, with benefits for life.

But Carcieri’s critics view these contracts as vehicles for evading job-posting and affirmative-action requirements, negotiated wage rates, hiring caps within the state budget and public-disclosure requirements in the hiring of hundreds of privately employed state-paid workers. The governor contends the Senate inquiry is solely driven by unions concerned about the loss of dues paying union jobs.

Against this backdrop, the Carcieri administration yesterday put out a “timeline” on their fast-moving efforts to replace DataLogic as the employer of record of hundreds of state workers, from secretaries to CFO’s to respiratory therapists, many of whom have worked for the state for years.

But Stern and Daniel W. Majcher, program director for the governor Fiscal Fitness program acknowledged they have been unable to locate any documents extending the limited-scope contract the former Almond administration gave DataLogic to any other state agency. Under Carcieri, that contract — capped at $10 million over five years — morphed into an $11 million-plus annual contract for DataLogic and, now, Smart Staffing.

Last week, Carcieri commissioned his own inquiry — headed by Lottery director and former Providence deputy police chief Gerald Aubin — after the Providence Journal brought to light DOT’s payment of $102,858 for a typist under a contract with another company, Vanasse Hangen Brustlin, to staff a traffic-monitoring center.

Yesterday, Democratic Party Chairman Lynch said: “By picking a member of his staff to lead the investigation, Governor Carcieri now wants to control and filter what information is released to the public. We just can’t trust the governor to investigate himself. Only an independent outside agency or special auditor can adequately determine if there was any impropriety or malfeasance associated with how these contracts and jobs were awarded.”

In response, Carcieri spokesman Jeff Neal said, “As chairman of the state Democratic Party, it’s Bill Lynch’s job to make outrageously false claims about the governor as often as possible.

But, “unlike Mr. Lynch, the governor believes that Mr. Aubin and the Senate committee will be able to unearth any legitimate concerns about these longstanding state contracts,” Neal said.

kgregg@projo.com