ustxtxb_obs_1978_08_25_50_00003-00000_000.pdf

ture properly celebrates. But others say that he has shown a little too much imagination in figuring out ways to secure contracts for his company, and evidence has turned up that collusive bidding may have occurred in at least 69 cases in which West Texas Coffee and Equipment Company won South Texas school cafeteria contracts. In 40 of those 69 instances, supposed bids from competing companies were actually forgeries. The upshot is that, even as federal and state investigators continue to trace the wayward course of manpower training funds from Washington through the Governor’s Office of Migrant Affairs to Valley agencies, another scandal is quietly coming to a boil in the school kitchens of South Texas. It features J. W. Hooker as a defendant , in two civil suits alleging that he achieved preeminence there by rigging bids. And it focuses some harsh light on the Texas Education Agency, which supposedly monitors the flow of federal funds to local school districts that qualify for help under the food service assistance program, but didn’t notice anything amiss until a Dallas television reporter turned up the evidence of forgery in the agency’s own files. The way things work One of the lawsuits was filed in state district court in Austin three months .ago by the state attorney general’s antitrust division, which claims that the Abilene businessman and unnamed “co-conspirators” agreed to restrict competition illegally by arranging the submission of “fraudulent or sham bids” to school districts and the TEA. Although the AG’s pleadings make no mention of the TEA’s embarrassing posture in the matter, they provide a tidy summary of the way the federally subsidized purchases are supposed to be handled in theory, and the way they allegedly were manipulated in practice by Hooker and company. TEA administers the federal nonfood assistance program and distributes the million or so dollars provided annually by the U.S. Department of Agriculture to pay for the installation or renovation of food service equipment. Federal and state law requires competitive bidding for contracts between school districts and equipment suppliers; TEA regulations add a requirement that three competitive bids be obtained for each purchase school districts make under the program. The schools don’t have to take the lowest bid in order to get the federal money, but 75 percent of the lowest bid is the maximum subsidy. The notion behind this scheme is obviously to’ get a fair deal on the merchandise by stimulating some good old-fashioned price competition. The only trouble, according to the AG’s suit, is that nothing of the kind happened in a lot of cases where West Texas Coffee got the contract. The antitrust division attorneys claim that Hooker and other equipment suppliers beat the system by engaging in practices euphemistically referred to in the trade as “complementary bidding”–that is, they exchanged bid forms and other letterhead stationery so that fake bids, ostensibly legitimate and higher than those submitted by West Texas Coffee, would appear to satisfy the three-bid rule and ensure TEA clearance of preordained purchases from Hooker’s firm. The same three corporate names crop up in many of the TEA bid files that will serve as evidence in the lawsuit: West Texas Coffee, Waco Hotel Supply Company, and Odessa Hotel Supply Company. Waco Hotel president W. C. Scheel has admitted that, although his company’s bid forms appear in at least 40 TEA files on purchases approved over the last five years in South Texas, he sought no business there during that time. In exchange for his testimony, the AG’s office has agreed not to sue Scheel for his role in alleged transactions with Hooker, and the Waco equipment supplier’s deposition in the case makes interesting reading. Scheel says that back in 1972 or 1973, he supplied Hooker with blank bid forms and letterhead station THE TEXAS OBSERVER 3