Court Orders Depositions for Dallas County, GTSI Officials in No-Bid Contract Dispute

DALLAS, Feb. 19 /PRNewswire/ -- A Dallas County District Court has ordered the depositions of Dallas County Clerk John Warren and an as-yet unnamed representative of GTSI Corp. (Nasdaq: GTSI) in an effort to uncover details behind the county's award of a $17.2 million no-bid contract to the Herndon, Va.-based company.  The Court also ordered the county and GTSI to produce a range of documents and other communications relating to the contract award.

The order was made at the conclusion of a hearing late yesterday in Dallas County's 116th Civil District Court before Judge Bruce Priddy.  The Court set a 30-day deadline for the depositions and discovery to occur, in advance of an April 9 hearing to consider a request for a temporary injunction.  Granting the injunction would prohibit GTSI from performing any additional work and prohibit Dallas County from making any further payments under the contract.

The court noted that public officials and employees who intentionally violate the statute requiring bids may face a range of harsh penalties, including the possibility of criminal charges and removal from office or employment.

At issue is Dallas County's granting of a contract for preservation of the county's historical records without following the state-mandated competitive bid process. Dallas-based Business Resources Corp, which performs document preservation services, filed litigation against the county and GTSI challenging the no-bid contract in December of last year.

The lawsuit alleges that Dallas County and GTSI unlawfully bypassed the competitive bid process by "piggy-backing" the deal on an unrelated national purchasing agreement for technology services. The lawsuit claims GTSI is not providing the document preservation services, but instead is misusing its approved-vendor status to subcontract the work to DeRidder, La.-based Louisiana Binding Services, Inc.  In the lawsuit, Business Resources indicates it can provide the preservation services for at least $4 million less than the current $17.2 million price.

"From the start, the county and GTSI have done nothing to make this an open and transparent process, in fact they've done the opposite," says attorney Michael Hurst of Gruber Hurst Johansen & Hail LLP, who represents Business Resources Corporation and its affiliated companies.  "We're pleased with the court's ruling because we believe it means we're finally going to see some of what went on behind the scenes.  In the interest of open government and cost savings for the county, the county could resolve this matter by cancelling the contract and seeking a competitive bid, as should have happened in the beginning."

According to the lawsuit, County Clerk Warren urged Dallas County Commissioners to approve the seven-year contract with GTSI in April of 2009 for the preservation of the county records, such as books of property titles, deeds and plats. By law, county clerks are required to maintain paper records, which have a lifespan far longer than their electronic counterparts.

For more information, please contact Barry Pound at 800-559-4534 or [email protected].

SOURCE Business Resources Corporation