City supervisors are calling out the San Francisco Municipal Transportation Agency’s contracting process after a city report found numerous flaws in training, insurance and contract compliance from a security firm guarding transportation property.
That firm, Cypress Security, netted a more than $40 million contract in 2015, which expires March 31, 2018, to guard Muni rail yards, among other transportation facilities.
A City Controller’s Office report released Friday found 24 out of 28 guards examined — some of whom are armed — did not comply with annual training requirements, and that Cypress and its security subcontractors “could not demonstrate” that it complied with health benefits requirements. The subcontractors were also apparently not in compliance with insurance requirements, according to the report.
“That number is incredible,” Supervisor Jane Kim said of the number of guards lacking in training. “The fact that they’re not going through the appropriate training makes me question their effectiveness in serving our city’s needs.”
The SFMTA said it is implementing the city controller’s recommendations and is now “monitoring” Cypress.
“We take these matters very seriously and most of the areas of concern have already been addressed,” said SFMTA spokesperson Paul Rose, and that the agency would undergo a “normal” process in securing a new firm to provide security for the SFMTA, or potentially renewing a contract with Cypress.
Kim also said the City Attorney’s Office investigation of the contract and SFMTA staff in 2015, before the contract was awarded, was the Board of Supervisors’ first brush with the security company’s alleged problems.
That inquiry focused on Chris Grabarkiewctz, the SFMTA’s director of security, investigations and enforcement, which was spurred by a San Francisco Examiner investigation in 2015 that revealed Grabarkiewctz was a former employee of Cypress Security — the firm named in the City Controller’s Office report.
While working for Cypress, Grabarkiewctz’s efforts garnered him a leadership award from the company in 2011 for earning “higher than expected gross profit” by negotiating a contract with the SFMTA.
His new position at the SFMTA, however, saw Grabarkiewctz playing a major role in the reverse and awarding a contract to his former employers.
Though former Ethics Commission Executive Director John St. Croix told the Examiner at the time that no law was violated, former employees of Grabarkiewctz sounded the alarm over concerns he was granting favors to his former bosses.
“No one person has the sole responsibility to award contracts,” Rose said Monday in defense of the SFMTA’s contract process, which he said is “an agency-wide process with several checks and balances built into the system.”
But Kim said she wasn’t satisfied with the SFMTA’s relationship with Cypress.
“At minimum, if he’s working for SFMTA, he shouldn’t be negotiating that contract,” she said of Grabarkiewctz.
The City Controller’s Office found in its recent report that just four out of 17 Cypress employees reviewed had fulfilled the requirement for 24 hours of training annually, which it said may encompass trespassing law, detecting unusual behavior, skills required to report on precursors to terrorist events, ethics and knowledge of site vulnerabilities.
The contract between the SFMTA and Cypress lacks clarity on training requirements, however, the Controller’s Office found.
“Because neither the contract nor training plan states specific required topics for ongoing training, SFMTA does not have criteria against which to hold the contractor accountable in this area,” the Controller’s Office wrote.
Though the contract with The City requires training plans be renewed each year, those plans have not been renewed since Cypress’ first contract with The City in 2008, the report found.
“Without adequate and necessary training of guards, The City lacks assurance that the guards provide services that meet The City’s desired level of quality,” the Controller’s Office wrote.
Cypress guards also showed up later to shifts than they were reporting. In one instance, a security guard reported working from 9 p.m. to 5 a.m., but when verified by the controller’s office, actually arrived at 10:45 p.m. During the investigation, the controller found 34 hours billed within two months that were inaccurate.
Supervisor Aaron Peskin was similarly critical of the SFMTA’s contract.
“It sounds like someone is not minding the store,” Peskin said. “They clearly need better oversight.”