L.A. County Pact With Holmes & Narver Is Upheld Despite Federal Probe of Firm

Los Angeles County supervisors refused Tuesday to rescind an $80-million contract awarded to Holmes & Narver, an Orange-based firm targeted in a federal investigation of alleged fraud involving a contract at the Army’s national missile headquarters.

The board, despite protests from labor unions and other critics, stood by its decision to award the county’s vehicle fleet management pact to Holmes & Narver, an architecture, engineering and construction management subsidiary of Ashland Oil.

“The situation is that they have no irregularities and no pending (criminal) action against this firm,” said Supervisor Mike Antonovich in voting to uphold the contract.

The seven-year agreement--the largest single contract the county has granted in its program of using private companies for public services--had been awarded last week to Holmes & Narver on a 3-2 vote.

Supervisor Kenneth Hahn, one of the two board members to oppose the contract, sought Tuesday to revoke the deal.

“I think this is the biggest turkey the county has gotten into, and we’re going to be hurt by this,” said Hahn, who argued that the contract should be withdrawn until the allegations against the firm are completely dispelled.

Holmes & Narver has been accused of possible criminal activity in the management of a $250-million service contract at Redstone Arsenal, the Army’s missile headquarters in Huntsville, Ala.

262% Overcharge Alleged

The General Accounting Office, the investigative arm of Congress, has investigated allegations of inflated billing under the contract, including one of a 262% overcharge for lubrication and oil changes for the Army base’s vehicles.

Holmes & Narver is a joint contractor at Redstone with Morrison-Knudsen of Boise, Ida., and both firms are being investigated by the Army Criminal Investigations Division.

A spokesman for the GAO said Tuesday that the agency’s investigation has been completed and the findings turned over to Army investigators.

In a written statement to board members, the president of Holmes & Narver assured supervisors that the allegations involve subcontractors and “corrective action has been taken where warranted.” The statement added, “There has been no evidence of any wrongdoing” by Holmes & Narver.

In backing the company, county officials said they made their own inquiries and found no evidence that Holmes & Narver engaged in illegal activity. The officials said the county will closely monitor the contract.

Richard B. Dixon, the county’s chief administrative officer, also told supervisors that federal investigations so far have determined no wrongdoing.

The American Federation of State, County and Municipal Employees said that because portions of the federal investigation remain under way, the county contract should be rescinded.

The union, which represents many of the 192 county employees affected by the Holmes & Narver contract, have complained that county workers could become unemployed with the fleet maintenance responsibilities going to a private company.