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Contractor protesting stimulus fund use

Posted: April 5, 2012 1:55 a.m.
Updated: April 5, 2012 1:55 a.m.

The CEO of a Sun Valley-based technology company is crying foul after the Santa Clarita City Council awarded a contract using federal stimulus funds to a New Zealand-based firm rather than his business.

But city officials say all federal requirements for awarding of stimulus money have been met — and the city saved more than $200,000 in taxpayer funds.

The contract is for installing 86 on-board visual display monitors for the entire Santa Clarita Transit fleet.

The city issued a request for proposal for the monitors and only received two responses — an $840,192.25 proposal from Tezo Systems Unlimited of Sun Valley and a $545,178 proposal from Connexionz, which is based in New Zealand.

Tezo CEO Maurice Vanegas said Wednesday he is outraged that the city awarded the contract to Connexionz, although he admitted his company’s submitted proposal was “not as high-quality as we should have been.”

Vanegas most objected to the use of federal funds from the American Recovery and Reinvestment Act for the contract.

“I’m a small business owner, and it’s just frustrating that this was stimulus money,” Vanegas said.

City spokeswoman Gail Ortiz said Wednesday the contract with Connexionz follows all the rules because the act’s “Buy America” clause requires at least 60 percent of the money be spent on American labor and American products for the project.

The Connexionz project will use contractors based out of California and display monitors made in Nebraska.

Ninety percent of the contract cost will go to American labor and product — more than exceeding the requirements.

“Like many other foreign-based companies incorporated and doing business in the U.S. — i.e., Toyota, KIA and Honda —

Connexionz employs locally based subcontractors and purchases goods and services in the U.S. that in turn preserve or create new U.S.-based jobs,” Ortiz said in an email.

Connexionz CEO Roger Carruthers confirmed Wednesday that all of the labor and a large component of the product would come from America.

City staff also recommended the Connexionz contract because Tezo’s proposal would have cost taxpayers an additional $295,014, Ortiz said.

“We feel that we need to be expeditious with the use of taxpayer dollars,” Ortiz said. “We treat the pennies like dollars.”

The final contract with Connexionz, which includes maintenance and sales tax, comes out to $817,438.


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