Software firm given more than $26M in contracts being investigated in Wayne County probe [Detroit Free Press]

Dec. 23--Strategic Business Partners was a start-up company when it found its niche: Wayne County government.

Little by little, the information technology company's relationship with Wayne County has grown: from a $225,000 contract in 2005 providing technical support for the software used by county lawyers to millions of dollars in IT contracts ranging from medical records, to the county land bank, to a new jail construction project.

In all, Wayne County has awarded more than $26 million in contracts to the Detroit software company founded in 2004 by Philip Shisha. Much of the work was awarded without competitive bids, which the county has justified by saying it was the only metro Detroit company that could perform the work.

SBP's contracts have caught the attention of a federal grand jury investigating Wayne County. The grand jury subpoenaed the county for SBP records on Dec. 5.

Wayne County Executive Robert Ficano, meanwhile, has had second thoughts about a no-bid, $9-million multi-year deal that the county awarded SBP earlier this year. Ficano rescinded that deal in November, after the county came under public scrutiny for its spending practices. "In the climate that we're in right now, all contracts are basically under scrutiny," Ficano spokeswoman Brooke Blackwell said of the turmoil that followed revelations in late September of a $200,000 severance payment to former Ficano aide Turkia Awada Mullin.

Blackwell said the county does not suspect any wrongdoing in the SBP deal, but officials wanted to give other companies a chance to bid on the work.

Neither Shisha nor company executives responded to numerous requests for comment from the Free Press.

What SBP does

Strategic Business Partners' website does not list customers. According to Dun & Bradstreet, the business information firm, SBP has 45 employees and annual sales of $4.5 million.

Industry insiders say they are not aware of any substantial business that the software firm conducts with customers beyond Wayne County. They say the no-bid contracts Shisha's company received from the county is work other IT companies could do, and find it puzzling that SBP was the sole bidder on other county deals.

Noting the questions circulating about SBP, and that Shisha has contributed $26,000 to Ficano's political action committee since 2008, Wayne County auditor Willie Mayo told the Free Press that his office will now begin reviewing all large county technology contracts.

Mayo said he does not expect to find chicanery with most of the IT contracts. But he said he was surprised to learn, from the Free Press, that Ficano's office rescinded the $9-million SBP deal in November.

That move, Mayo said, "would tell me there's probably something that's problematic."

The decision to rebid the contract came five months after Ficano's then-second-in-command, Azzam Elder, and a county IT executive urged county commissioners to approve the deal because, they said, SBP was the only firm qualified to run the county's operating system.

Elder has since resigned over his role in the Mullin severance scandal.

In interviews with the Free Press, county purchasing officials defended their decision not to seek bids before recommending that the county commission approve SBP for the $9-million, six-year deal.

Wayne County Purchasing Director Charles Hicks told the Free Press several weeks ago that the county has put the contract out for bid again, but only 35 of the 290 firms notified even reviewed the county's invitation.

Ultimately, he said, only one submitted a bid: Strategic Business Partners.

Hicks, who has since left the county, said he did not know what the county will do next with the IT contract.

Expanding operations

Shisha has performed IT work for Wayne County since at least 2001, when Ed McNamara was county executive.

Shisha formed SBP in late 2004 and a year later received a no-bid county contract to continue providing technical support for ProLaw, a software system used by the county's legal department. The one-year deal was worth $225,000.

For the next five years, SBP received no-bid deals to provide technical support on ProLaw, with most contracts for $192,000.

The firm's county work mushroomed in 2009, when it was the sole bidder on a $6.3-million contract to create and maintain the county's operating system, dubbed eGovernment. The firm received another $850,000 to expand eGovernment.

The Free Press also has reported that SBP got a $314,880 no-bid contract in June 2009 from Mullin, then the county's economic development boss whose receipt this year of a $200,000 severance from the county, since returned, has spawned upheaval in Ficano's administration.

Earlier this year, SBP won bids on two health care IT contracts worth a combined $7.9 million, county records show.

SBP also began working on the county's new $220-million jail project; it's unclear whether competitive bids were sought. That work came from controversial contractor Anthony Parlovecchio, a former county official who worked for Mullin and managed the renovation of the Guardian Building, a project spearheaded by both Mullin and Elder. Parlovecchio has since been fired by county officials overseeing the jail project.

In 2008, Shisha made the first of several contributions of $500 or more to Ficano's political action committee. His contributions to Ficano's political fortunes intensified this year. He was on the host committee for a Ficano PAC fund-raiser in June. A few months later, he gave the PAC $20,000, according to a campaign finance report Ficano's PAC filed with the state.

Blackwell, Ficano's spokeswoman, said Shisha's ties to Ficano's PAC have not influenced any contracts the firm received. She noted that Shisha's $20,000 PAC donation was made after SBP began work on the $9-million contract earlier this year.

FBI on the trail

The FBI revealed its interest in the software firm Dec. 5, when it sent the county a subpoena seeking "records of all payments and contracts" with SBP related to electronic medical records and communications with Michael Grundy, a former top Ficano aide who ran the county's HealthChoice insurance program. The FBI is investigating whether Grundy pressured a HealthChoice vendor to make payments to companies founded by Grundy's childhood friend.

The county fired Grundy in November for failing to cooperate with its internal probe.

County Commissioner Ray Basham said recent concerns about the way the county does business have prompted commissioners to start "flyspecking more and more of these contracts, and I think we should."

He said the administration should "look for the best, cheapest and most reliable way to find cost savings to the taxpayers while running the business of Wayne County."

He said commissioners were told SBP was "the best thing for the buck by the administration, so you have to rely on some of that unless you know something different."

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