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Firm with ties to BMHA supervisor gets $391,000 from BMHA, mostly without bidding

Just months after it was founded, GFY General Services & Cleaning got nearly $400,000 in largely no-bid work from the Buffalo Municipal Housing Authority in 2017, according to BMHA records.

Owner Brandi A. Clark says the company was hired to clean and repair public housing apartments because it does a good job for a good price.

But a Buffalo News investigation found GFY has a BMHA connection.

Clark employs and has a close personal relationship with Jeffrey DiPalma. DiPalma's brother is a BMHA assistant maintenance superintendent with authority to help select contractors for some jobs that don't exceed $2,000 – and therefore are exempt from public bidding laws.

GFY was paid almost twice as much as any other firm in 2017 to clean and fix Buffalo public housing apartments.

Most of GFY's almost $400,000 in payments were for $2,000 or less. The company received almost 300 work orders in 2017.

BMHA doled out these no-bid contracts in a way that, in some cases, appears to violate federal rules that prohibit government agencies from splitting work into small contracts to avoid public bidding thresholds, The News found.

In one case, GFY received a $1,950 order to clean and paint a Langfield Homes apartment on the same day that it received a $650 order to remove trash from the same apartment. That's a total of $2,600 – which would require BMHA to seek competitive bids for the work.

Using the Freedom of Information Law, The News obtained records of $2.5 million BMHA paid in 2017 to companies that cleaned and repaired housing authority apartments and grounds.

The News' analysis of the records determined 90 percent of the money was spent in increments of $2,000 or less.

More than $1 million was paid to just five companies – mostly $2,000 or less at a time.

Gillian Brown, BMHA interim executive director (Provided photo)

BMHA Interim Executive Director Gillian Brown, who has been in the post since March, expressed concern about the way micropurchasing – the technical term for the no-bid purchases of $2,000 or less – is being used at the agency after reviewing The News's analysis.

"The data indicates that jobs should have been grouped together and bid out, but instead are split into under $2,000. That is also disturbing and violates the spirit of the micopurchasing program," he said.

He promised to change the agency's procurement procedures within weeks.

"It gives at least the appearance that proper procedures are not being adhered to," said Brown, who took over the top BMHA post after the March 15 resignation of long-time executive director Dawn Sanders-Garrett.

The U.S. Department of Housing and Urban Development, which oversees the agency, said it is reviewing micropurchases at BMHA to determine whether they were made in accordance with federal procurement rules.

"If not," said HUD spokesman Charles McNally, the agency "will take appropriate action.”

Federal rules on no-bid micropurchases encourage housing agencies to spread the work among qualified firms.

Brown called the disproportionate amount of BMHA work awarded to GFY in 2017 "disturbing."

"I don't think it's fair to have one make $400,000 and the next $200,000 and some other not make anything because no one chooses to call on them," he said.

While the GFY case raises questions of fairness, Brown said he has no information leading him to believe GFY was hired for any reason other than it does good work, and its services are needed.

"There are no allegations that GFY did a bad job, no allegations that they didn't do the job. There is no proof anything was done out of venal impulse or allegations of fraud," he said.

Brandi Clark says her company did jobs no one else wanted.

"I'm told what is needed to be done, and I do a good job. They don't have to hound me. I don't screw around," Clark said, defending the amount of money her company earned from BMHA. "I'll be the one to take the crappy jobs no one else wants to do."

She never mentioned Jeffrey DiPalma or his brother when The News asked how her new company got nearly $400,000 in BMHA work. She declined subsequent requests for interviews.

BMHA used to seek bids

For years, the BMHA had a central purchasing office that sought bids from several companies before awarding a contract for most apartment repairs and grounds improvements.

But the process was time-consuming, and the BMHA was criticized by HUD for taking too long to get apartments ready for new tenants, BMHA officials said.

As a result, the BMHA in 2014 changed its procedures, turning its eight assistant maintenance superintendents into micropurchasing agents.

"The idea is to reduce the administrative burden," said Modesto Candelario, the BMHA's assistant executive director.

Under the new system, the assistant maintenance superintendents estimate what work should cost. Anything over $2,000 is sent to BMHA's central administrative office to be bid out. When work is estimated to be $2,000 or less, the assistant maintenance superintendent calls one of the companies on BMHA's approved list for a quote.

If the price seems reasonable, and doesn't exceed $2,000, the assistant superintendent can authorize the work to be done subject to approval from the housing manager, who checks such things as whether funds are available, Candelario said.

The BMHA policy is based on rules by HUD, which offered the micropurchasing option in 2007.

The change has sped up the process and reduced the cost of preparing an apartment, BMHA officials said. The average cost had been $1,500 but it is now $1,200, according to Brown.

Langfield Homes, one of the Buffalo Municipal Housing Authority complexes where GFY General Services & Cleaning was hired to clean and repair vacant apartments. (Derek Gee/Buffalo News)

DiPalma gets promoted

Darryl DiPalma, 57, had been working as a BMHA building engineer prior to May 2016, when he was promoted to an assistant superintendent of maintenance, a position with a base pay of $55,400.

He was assigned to be one of two assistant maintenance superintendents at the Kenfield-Langfield Homes, the largest complex in the BMHA.  For much of his time there,  DiPalma was involved with contractor assignments at Langfield and Kenfield, according to two current and former BMHA employees.

At the time, BMHA was contracting with more than half a dozen companies citywide to get vacant apartments ready for new tenants, as well as others doing more specialized work – like plumbing, heating, extermination and roof repairs, according to BMHA records.

Within months after DiPalma was promoted, GFY was founded, in September 2016.

Clark, the owner, obtained a license from the City of Buffalo that same month, then subsequently incorporated the business with the state of New York in July 2017.

GFY, according to city and state records, is based out of Clark's home in the Town of Batavia.

In an interview with The News in June, Clark, 43,  explained that she heard about three years ago that the housing agency needed companies to do clean up and repair work.

“I heard from someone they were looking, that a few (companies doing work in the past) had retired, and some were not completing the jobs,” she said.

Clark said she can’t recall who told her, or the circumstances of the conversation.

“In the last couple of years I heard from someone they were looking for help, and what they were looking for,” Clark said. “It piqued my interest. It was word of mouth from employees. I don’t recall who. I don’t recall where it came up."

In its first few months of operation, GFY earned $62,450 in 2016 from the BMHA. At least 75 percent of the jobs were at the Kenfield-Langfield complex, where Darryl DiPalma worked, according to housing authority records.

In 2017, at least 35 percent of its BMHA jobs were in the Kenfield-Langfield complex, but GFY was also working at Msgr. Geary, Marine Towers, and other public housing developments around the city. BMHA paid GFY $391,000 in 2017 for its work.

Darryl DiPalma did not respond to repeated calls for comment about GFY.

Brown, the BMHA acting executive director, said he's known Darryl DiPalma to be an excellent employee. "I've had no negative experiences with him."

Jeffrey DiPalma

Clark declined to say how many people work for GFY. A report she filed with HUD in 2017 said the company had three employees.

Among those who work for GFY is Darryl DiPalma's brother, Jeffrey, 51.

In addition to their working relationship, Jeffrey DiPalma and Clark have a personal relationship. Facebook photos show DiPalma on family outings with Clark and her children. DiPalma's relatives comment on everything from recipes and political views that Clark posts to photos of Clark and Jeffrey DiPalma together at a camping park with the kids.

On two legal documents, DiPalma listed his address in 2010 and 2014 as a Genesee County home where Clark was registered to vote from 2011 through 2014.

Jeffrey DiPalma also works at another business Clark owns, GFY Motor Cars, a used car and car repair shop on Kenmore Avenue in the Town of Tonawanda.

The business is located at the same address where Jeffrey DiPalma once operated a business called Sparkling Auto Detail, according to records filed with the Erie County Clerk's office.

When contacted by phone July 6, Jeffrey DiPalma identified himself as an employee of GFY, and said he's not familiar with the company's finances.

"I work for the company, I would not know," said DiPalma.

He acknowledged his brother works for the BMHA, but implied that's a non-issue.

"Maybe you should talk to my brother or the BMHA," he said. "I'm not going to answer any questions. You twist everyone's words around. I have nothing to say.

"My brother doesn't own the BMHA, and work doesn't come from where you think it comes from," he added, before abruptly hanging up the phone.

In a subsequent telephone conversation, when The News attempted to ask DiPalma about his personal relationship with Clark, he accused The News of harassment and threatened to get a restraining order if the reporter continued contacting him.

GFY still getting BMHA work

Darryl DiPalma was transferred out of Kenfield-Langfield at the beginning of 2018, when retirements led to job moves within the agency. He now works at Commodore Perry Homes.

GFY has earned about $119,000 in the first half of 2018 on BMHA properties throughout the city, BMHA records show.

While not on pace to match the 2017 earnings, GFY earnings are still 30 percent more than those of any other company doing similar work for the BMHA, records show.

"I've kind of slowed down," Clark said. "Very busy, but not as busy as last year. It's a lot to keep up with employees, and sometimes I don't get paid immediately."

When contacted in July for a follow-up interview, Clark declined further comment.

"I feel you and I have already discussed all we need to," she wrote in a text response to The News. "Any further questions you have, you can contact 300 Perry for your answers." The BMHA administrative offices are at 300 Perry St.

Bid splitting

GFY provides an example of the way the BMHA is using micropurchasing.

The company received 294 purchase orders in 2017. All but a dozen were micropurchases for $2,000 or less, according to BMHA reports. All but $30,000 of the $391,000 in payments it received are listed as micropurchases on BMHA documents.

What's more, 42 of these under $2,000 payments – almost 15 percent – were for between $1,900 and $2,000, with three of them for $1,995.

There were several instances when BMHA gave GFY two or three separate purchase orders on the same day for work needed to be done on two or three different apartments in the same housing development.

In January 2017, for example, there were five separate purchase orders for GFY to do work at the Msgr. Geary apartment complex. The total payment was $7,350 but the work was billed as five separate micropurchases ranging from $650 to $1,850.

There are also a few instances when separate purchase orders were put in for work being done on the same apartment.

These practices aren't just occurring with GFY, The News found, but are more apparent with GFY because the company earned more than any other firm for similar work in 2017.

Competitors upset

The $2.5 million in spending the Buffalo News reviewed was split among about 40 companies, some getting less than $10,000 to $20,000 to hang doors or do landscaping, and others getting from $25,000 to almost $400,000 to clean and repair apartments.

Following the $390,926 earned by GFY, the next largest amount was $200,401 paid to A 24-Hour Door; $184,730 to AA Janitorial; $183,995 to JF Commercial Improvement Services; and $176,099 to Precision Painting.

The next highest is Bugs & More, an extermination company that earned $168,854 in 2017, records show.

As with GFY, most of the work done by these companies was through micropurchases.

Representatives of several companies hired by BMHA spoke to The News but most did not want their names published because they said they feared their firms might lose work.

One said he often calls assistant maintenance superintendents at BMHA developments asking if any work is available. Some, he said, always say no, yet when he drives by the development days later, he sees another company at work.

Several GFY competitors said they were surprised to learn how much money GFY made off the housing agency last year.

"The only thing we are asking for is a fair process," said Juan Flores Jr., with JF Commercial Improvement Services of Buffalo. "One company getting $400,000? What is that? You can't tell me that is right."

"They say they will do any work asked of them," Flores continued. "We do any work that is asked of us."

Contact Sue Schulman at sschulman@buffnews.com 

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