The City and County of Honolulu in March gave a $1.4 million contract to a local industrial cleaning company to clean Oahu’s buses every night so the fleet could operate through the coronavirus pandemic.
But the company, H2O Process Systems, got the contract without having to go through the usual competitive bidding process because the law governing purchases for government agencies was suspended as part of Gov. David Ige’s emergency proclamation.
The suspension is meant to help those agencies quickly react to the COVID-19 pandemic. But the cleaning contract also raises questions. H2O Process System’s owner, Milton Choy, has been a prolific political donor to Hawaii’s mayors, governors and lawmakers.
He’s given more than $118,000 to about 40 campaigns since 2014, a review of campaign finance records show. Choy says his company follows the law and procurement practices.
The city Department of Transportation Service’s request for an emergency procurement says that cleaning supplies were limited, and that the nightly cleanings would hold the city over until long-term and more sustainable disinfection protocols could be implemented.
The city hired H2O Process Systems on March 20 to perform electrostatic spraying of buses and HandiVans. The city’s emergency procurement request, which was approved March 23, notes that the company was hired before a contract was even sent to them by the Department of Budget and Fiscal Services, which handles purchasing for the county.
A footnote on the city’s emergency procurement form says that agencies should still try to seek competitive quotes if at all possible.
“Your request may be denied if good faith efforts and actions were not taken,” the form says. “Please exercise prudent procurement judgement.”
To perform the cleanings, H2O Process Systems teamed up with Sanitization and Sterilization Professionals, a janitorial company, according to the company’s proposal to the city.
The work is expected to run through July 20, according to contracts, and Choy said he expects that work to start winding down as the city searches for long-term options.
Another H2O Process Systems crew traveled to Hana and parts of Molokai in late April to perform similar cleanings. The cleanings cost a total $26,202, according to an emailed statement from Brian Perry, a Maui County spokesman.
Typically, a contract worth that amount would require an agency to get a minimum of three quotes as a requirement under Hawaii’s procurement law.
“H2O (Process Systems) was selected based on availability. The request for disinfection came with a very short turnaround needed for Molokai, then Hana,” Perry said in the email.
The county previously said the cleanings would cost between $4,000 and $6,000, but Perry said the work was expanded to cover additional offices and buses.
In addition to the sprayings on Oahu and Maui County, the company also provides hand sanitizer dispensers at state airports, according to the H2O Process Systems website.
Major political donors getting government contracts is not unprecedented.
A business is not allowed to make donations directly to a candidate’s campaign. However, employees and owners of companies are still allowed to make contributions themselves.
In the past six years, Choy has made donations to the campaigns of more than 40 elected officials. They include Govs. David Ige and Neil Abercrombie, Honolulu Mayor Kirk Caldwell and Maui County Mayor Mike Victorino, and numerous members of county councils in Honolulu, Hawaii County and Maui County and to candidates for the Legislature.
Choy is also listed in campaign finance records as a president or manager for two other companies, Tyco Engineered Products and Services and Fluid Technologies.
All told, Choy and his employees at those three companies have donated just over $200,000 to various campaigns since 2014.
Some of the top recipients of those donations include Ige ($33,000), Abercrombie ($25,000), Senate Majority Leader J. Kalani English ($14,000), House Finance Chair Sylvia Luke ($12,800), former Lt. Gov. Shan Tsutsui ($11,500) and Senate President Ron Kouchi ($8,000).
Choy said in a phone interview Monday that he recently decided to steer away from making further campaign contributions.
“We’ve been careful about any type of impropriety, and any type of perceptions in that way,” Choy said. “Even though we’ve received invitations for fundraisers, especially with city folks, and things like that, we’ve shied away from participating.”
Campaign finance records show Choy’s last donation was for $500 in December 2019 to Jacob Aki, a legislative staffer making a run for Honolulu City Council.
Asked how he avoids the appearance of impropriety while taking on government work, Choy said his companies always abide by the state procurement law, even under these new emergency guidelines.
“We always abide by fair practices and provisions and with accountability,” he said. “I operate knowing there will be an audit, I just assume that.”
The ongoing cleanings haven’t been the only business H2O Process Systems has done with the counties.
In 2018, it got a $93,000 contract to deliver a diesel pump package to the Maui County Department of Environmental Management, Wastewater Reclamation Division. It also furnished a filtration system for the Wailuku-Kahului Wastewater Reclamation Facility in 2018 at a cost of $3.5 million.
The company also had a $750,000 contract in May to deliver a similar system to a wastewater plant in Wailua on Kauai.
Besides campaign donations, Choy has also made numerous charitable donations to organizations in Hawaii, including $15,000 to start an endowment that supports athletics at Mid-Pacific Institute and $3,000 to help get air conditioners and fans into Kauai classrooms.
Civil Beat is a small nonprofit newsroom that provides free content with no paywall. That means readership growth alone can’t sustain our journalism.
The truth is that less than 1% of our monthly readers are financial supporters. To remain a viable business model for local news, we need a higher percentage of readers-turned-donors.
Will you consider becoming a new donor today?