UPDATE | Kansas City Public Schools promised full video of an interview with a District leader on its website. However, after taking a closer look, 41 Action News discovered the most revealing part of the 40-minute interview was missing .
KANSAS CITY, Mo. - Serious ethical questions are surrounding a pricey project to make some Kansas City school buildings more energy efficient.
A 41 Action News investigation scrutinized the bidding process for an estimated $32 million project with Kansas City Public Schools and discovered that an Overland Park businessman who acted as a District adviser early in the process eventually founded his own company and won the contract.
After reviewing emails and hundreds of pages of company bid documents, 41 Action News is publicly asking the same question being privately whispered by critics: Was it all a lucrative inside deal?
Pouring millions into aging schools
In early 2011, Kansas City Public Schools decided to spend millions of dollars retrofitting a list of school buildings. Citing decades of neglect and deferred maintenance, the District said the refurbishment work would improve the learning environment for students.
Many of the area's largest and most-recognizable construction companies competed for the estimated $85 million project, spending thousands of dollars assembling bid packages that stacked hundreds of pages high.
District staff relied on outside help to wade through the complicated selection process. Chief Operating Officer Mike Rounds brought in two paid consultants to oversee the process.
Rounds also enlisted Dayton "Buddy" Hahs as an adviser. Hahs is a Johnson County businessman with a lengthy background in energy conservation. He founded an Overland Park-based company in 1992 called Custom Energy and ran it until it was sold in 2008. He also served a two-year term as chairman of the National Association of Energy Service Companies.
Note: Kansas City Public Schools issued a news release before the 41 Action News investigation aired. Go to http://bit.ly/xaTuqT to read it.
Emails obtained by 41 Action News through a Missouri Sunshine Request show Hahs reviewed bids, crafted questions and expected answers of bidders, and sat in the room during interviews.
In an extensive interview with NBC Action News, Rounds said he asked Hahs for help because of his expertise in the industry. He also noted that Hahs did all of the work for free.
Click on the videos to watch the entire interview with Rounds.
"He wanted to make sure that when we selected an energy performance contractor that it went well," Rounds said.
All bids rejected, no explanation provided
On August 30, bidders received an email, informing them all bids had been reviewed with "external assistance" and it would be in the best interest of the District to "reject all responses submitted."
Several companies tell 41 Action News no further explanation was provided.
"If you are being good government, there should be a detailed explanation after people spend all that time and money," said William Black, a law professor at the University of Missouri-Kansas City with a focus on governmental and business ethics. Black is also a former banking official who regulated large commercial construction projects.
Rounds said there was ample communication with companies up until the final decision was made. He added Hahs did not provide advice to reject all bids, but said that recommendation came from the paid consultants.
Following rejections, relationship with adviser continues
The same day bidders received the rejection emails, Rounds wrote to Hahs saying, "I would still really like to sit down with you to discuss the way forward on our infrastructure requirements."
A couple weeks later, Hahs brought a business partner to a meeting with District personnel.
Rounds said he also met or spoke with other companies about how the District planned to proceed with refurbishment work. However, several companies deny that claim, saying they only discovered a new bid proposal through word of mouth.
On October 7, the District issued a Request for Proposal (RFP) for what it called "Project 360." Instead of tackling all the work at once, the District decided schools would be ranked in different tiers, depending on the urgency of their renovation needs.
The RFP asked bidders to provide an estimate for the first tier of construction work along with a fee for acting as project manager.
Mysterious company wins bid
Many of the same companies competed to win the Project 360 bid . However, the District opted for a mysterious new company no one had previously heard of: HMM Construction Services.
State records show the paperwork establishing the company was filed on October 11 , just a couple weeks before the deadline to submit bids. The founder of the business? Buddy Hahs.
Although Hahs and other members of his HMM team have an extensive background working on similar school projects, critics point out that