Henderson city officials have stopped a purchase the Henderson City Commission approved at its Dec. 16 meeting because the owner of the vendor is a Henderson Fire Department firefighter and the city did not go through the proper process to buy the equipment from a city employee, city officials said Monday.
The city commission approved a $49,275 purchase of extrication tools for the fire department from P&L Rescue Services which is owned by HFD firefighter Brandon Lingerfelt.
Most purchases of $40,000 or more require—by state statute—to be put up for a competitive bidding process. The city commission, however, approved a non-competitive quote from the company.
City Manager Dylan Ward said there was some confusion in the purchase because there are some exceptions to the Kentucky Revised Statutes that purchases above $40,000 need to go out for bidding.
In this case, P&L is the sole source distributor of Genesis equipment in 17 counties in western Kentucky, of which Henderson is one. Because P&L is the sole source distributor of Genesis equipment, which according to city officials is the equipment HFD needs, city officials had thought that the process they took was correct.
Most often, when the purchase from a sole source distributor passes the $40,000 threshold, the city commission must approve the purchase, which is what occurred.
But when the sole source distributor is also owned by a city employee, additional steps must be taken by the city, which did not occur, according to city officials in a Monday interview with the Hendersonian.
City Attorney Dawn Kelsey said there are added steps include first giving notice to the city commission that the city intends to buy from a sole source distributor owned by a city employee, followed by making it known to the commission who the employee is, she said. Once these basic steps are followed, the commission can approve the purchase if that body decides that it’s still in the best interests of the city.
In this case, Lingerfelt was not identified to the city commission as a city employee, said Kelsey.
After the commission approved the purchase, city employees found the error and held it until Kelsey could return from time off. Then the purchase was stopped, she said.
“This was all caught before anything happened,” she said.
When asked how the process got to the point of approval—especially in light that HFD Chief Josh Dixon knew Lingerfelt was the owner—Ward said mistakes were made in the lead-up to the purchase.
Ward said an employee of the city told Dixon the process was correct, and that the employee did not get permission from himself, Financial Director Chelsea Mills or the city commission to proceed. Ward did not give the name of employee.
According to a document in the Dec. 16 commission agenda packet, the process for this purchase appears to have started as far back as February.
A Feb. 1 letter from P&L signed by Lingerfelt included information that P&L is the sole source distributor for Genesis Rescue Systems, the equipment that HFD needs. The letter stated: “P&L Rescue is the only company that is certified by the manufacturer and permitted to sell, new or used products, as well as perform any warranty repairs. There are no agents or dealers authorized to represent this product within the listed regions other than P&L Rescue.”
Additionally, there was a P&L quote dated July 7 for the equipment included in the Dec. 16 agenda packet.
Finally, there was a Nov. 25 letter from HFD Chief Dixon to City Manager Ward requesting that the purchase be approved. The equipment includes the S49-SL3 Eforce, a spreader, for $17,870; the SC240 – SL3 NXT GEN, a cutter, for $15,960; a 41-inch SL3 RAM M28, a push pull tool, for $12,450; an EForce Ram Kit W/12 for $2,580; and shipping for $415.
Another wrinkle in this purchase is HFD’s need specifically for Genesis equipment, which in turn, seemed to have required them to go through P&L.
City officials said Monday that the Genesis equipment is necessary because its fit within HFD response equipment and because it is the same brand of equipment that is used by county fire departments and first responders, so if both city and county responders are on a scene, that equipment and the batteries used to run them can be switched out.
Ward said the city has not made any payment and has canceled the purchase order.
Now that this purchase will be canceled, Ward said the city is working through how to get the equipment it needs.
“We still need Genesis tools,” Ward said.
Kelsey said that in this case, it will mean beginning the process again. Both Ward and Kelsey said they don’t know exactly how that process will play out.
“We’ll have to do some type of bidding process,” Kelsey said.
Even though the city legally can purchase from a sole source provider who is also a city employee, that doesn’t mean the city should do it, said Mayor Brad Staton. Staton said the city will no longer allow purchases from sole source distributors who are also employed by the city.
“I don’t see it as the most ethical arrangement,” Staton said. He said ethical dilemmas could arise if that city policy is not changed.
Staton said the city has made past purchases from P&L, and all those have been compliant with regulations.
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Correction: In a previous version, it was reported that HFD Chief Josh Dixon did not get permission from the city Finance Director Chelsea Mills, City Manager Dylan Ward or the city commission to proceed with the purchase. That is incorrect. In fact, the employee who instructed Dixon that it was the correct process did not obtain the required permission, Ward said. The Hendersonian regrets the error.
