OJ's, Razorclean Kick Up Dirt After Losing Bid Leads to Lawsuits

OJ's, Razorclean Kick Up Dirt After Losing Bid Leads to Lawsuits
(Photo of Arkansas Highway & Transportation Department by Wil Chandler) | (Photo of Madre Hill by AP/Laurie Driver) | (Photo of Cubby Hole from Google Street View)

(A correction has been made to this article. See end for details.)

Losing a bid in February to clean the headquarters of the Arkansas Highway & Transportation Department didn’t sit well with Charles Hinson.

Hinson, the owner of O.J.’s Service Two Inc. of North Little Rock, lost the contract to clean the 11-floor, approximately 110,000-SF building and other Highway Department properties when Razorclean Maids Inc. of North Little Rock, which is owned by former Arkansas Razorback Madre Hill, came in with a bid of $380,000.

O.J.’s had submitted the second-lowest bid at $439,847, said Randy Ort, a spokesman for the AHTD. The department received two other bids, which were more than $560,000, he said.

After losing the bid, though, Hinson, who has a history of being litigious, launched his own investigation into Razorclean.

Hinson not only hired a private investor but he grilled Razorclean’s clients that were listed in the bid in an attempt to uncover evidence that should have disqualified Razorclean from being eligible to participate in the bid process.

When Hill learned of the investigation, he filed a lawsuit in Pulaski County Circuit Court on Feb. 28 accusing Hinson and O.J.’s of interfering with Razorclean’s contract. Razorclean also wanted a restraining order to stop O.J.’s and Hinson from contacting Razorclean’s customers that were listed as references in the Highway Department bid. The parties settled the restraining order section of the lawsuit on June 23.

O.J.’s and Hinson agreed to a prohibition on harassing the Razorclean customers listed on the bid. The lawsuit over the allegations of interfering with a contract is moving forward, however.

Meanwhile, O.J.’s took his alleged evidence that Razorclean didn’t meet the requirements to win the bid to the Highway Department. When it didn’t reverse its decision about the contract, O.J.’s went to Pulaski County Circuit Court and petitioned a judge to void the contract with Razorclean and award it to O.J.’s.

Razorclean’s attorney, Tré Kitchens of Little Rock, told Arkansas Business in March that “My client didn’t do anything wrong. … Our position is we followed the law. … And O.J.’s has gone to great lengths to impugn us and we’ve got litigation pending about that.”

Razorclean isn’t a party in the case involving O.J.’s and the Highway Department.

The attorney for the Highway Department said in its court filings that the case should be tossed out because the Highway Department has sovereign immunity. In addition, “O.J.’s is not merely requesting this Court to order the Highway Department to take some simple, ministerial step,” Regina Haralson, assistant attorney general, said in her motion to dismiss. “O.J.’s asks the Court to Order AHTD to void one contract and execute another contract with O.J.’s. O.J.’s has cited no statute or other authority that would require the Department to so act.”

A hearing on a motion to dismiss the case is set for Aug. 18 in front of Pulaski County Circuit Judge Alice Gray.

One of O.J.’s attorneys, Tiffany Flock, of Katy, Texas, told Arkansas Business last week that after O.J.’s lost the bid, 35 employees who had been assigned to clean the Highway Department’s headquarters had to be laid off. Flock, who is Hinson’s daughter, said she didn’t know how many employees O.J.’s has now.

O.J.’s, which was incorporated in 1993, first won the bid to clean the Highway Department’s headquarters in February 2010, when the low bidder couldn’t do the work, said Ort, the AHTD spokesman. The Highway Department then renewed the contract with O.J.’s for the next three years.

In January, the Highway Department rebid the contract for “no particular reason,” Ort said. “Every now and then we feel like the prudent thing to do is go out and readvertise.”

O.J.’s still cleans the Highway Department’s buildings in Fort Smith and Russellville, Ort said.

Flock said O.J.’s still considers the Highway Department a customer. The fight to clean the Highway Department’s headquarters is “just business,” she said.

After Razorclean won the cleaning bid in February for the one-year contract that could be renewed for up to five years, Hinson began gathering evidence on the buildings Razorclean listed as references, Hinson said in a March 21 affidavit filed in the AHTD case.

To meet the bid requirements, the bidder had to have at least four contracts on public office buildings with each building being at least 130,000 SF.

“When talking to the building references, I always introduced myself as Charles Hinson from O.J.’s and explained the situation regarding the bid,” Hinson said in the affidavit. “I did not expect to find that Razorclean did not have contracts to clean some of the buildings referenced.”

The failure to have a cleaning contract meant Razorclean didn’t meet the bid specifications, Hinson said.

Hinson said he went to one of Razorclean’s references, a Cubby Hole Inc. location in Little Rock, and found it to be a storage building with no offices.

“I measured the building and it totals approximately” 45,000 SF, Hinson said.

Hinson said he quizzed the assistant manager, Travis Pilcher, who told him that he was contacted by Madre Hill, who offered a free trial cleaning if Hill could use the Cubby Hole as a reference. Cubby Hole didn’t sign a contract with Razorclean, Hinson said.

Based on Pilcher’s statements, Hinson had an affidavit prepared for Pilcher and gave it to Loretta Foster, an investigator with Action Process Service & Private Investigations, to get it signed.

When she showed up at the Cubby Hole on Feb. 27, Pilcher refused to sign the affidavit until his attorney looked it over. “He said he is tied [sic] of being bothered at work about this,” Foster wrote in her sworn statement filed in the Highway Department’s case. “I apologized and advised that ‘I was not trying to bother him but my job is to return this signed affidavit to my client in hopes of avoiding serving subpoenas.’”

Foster left the affidavit with Pilcher. As of April 15, Pilcher hadn’t signed the affidavit, according to a court filing.

The day after Foster showed up at the Cubby Hole, Razorclean filed its suit against O.J.’s. Razorclean accused Hinson and O.J.’s of repeatedly coming to Razorclean’s customers’ businesses “to bully and threaten them to sign affidavits,” which Razorclean said contained errors.

In court filings, Razorclean also disputed O.J.’s allegations involving Cubby Hole and said it did have a contract with the company. Razorclean denied that it offered Cubby Hole a free trial cleaning so it could use the company as a reference in the bid.

O.J.’s said in its answer in the case that it denied doing anything wrong, but was only gathering information to support its case to have the contract thrown out. O.J.’s asked for the case to be dismissed. A court date hasn’t been set.

Flock, the attorney for O.J.’s, first filed a protest letter with the Highway Department on Feb. 12, just two days after Razorclean won the bid. She listed in her letter several reasons why Razorclean didn’t meet the bid requirements and pointed out that Hill was a “highly celebrated” Razorback football player, which “creates an appearance” that Razorclean’s bid was not impartially considered. Hill was named to the Razorbacks’ All-Decade team for the 1990s. He also played in the NFL.

The Highway Department fired back a letter to Flock and said it considered her protest but denied it.

Flock didn’t stop, however. She kept uncovering evidence and sent off three more letters urging the Highway Department to reconsider.

But it didn’t.

In a Feb. 19 letter, Rita Looney, the chief legal counsel for AHTD, said due diligence was done when Razorclean submitted its bid. The Highway Department’s purchasing committee “determined that the bid was awarded to the low bidder, with adequate references,” Looney wrote in the letter, which was filed as an exhibit in O.J.’s petition. “The AHTD does not second guess or go behind the information provided by references and does not seek information acquired by a competing bidders’ investigation as part of the bid award process.”

Looney also said that Razorclean “has not failed to comply with the bid specifications.”

But there appeared to be some hope for O.J.’s when Razorclean’s contract ended, according to a March 19 letter from Scott Bennett, director of the Highway Department, to Flock.

“We accept the ‘newly discovered information’ you have submitted and it will be taken under advisement as we evaluate the current vendor,” Bennett wrote. “The on-going evaluation may reveal that it is necessary to re-bid this contract at the conclusion of the contract term.”

But that didn’t satisfy Hinson.

A History of Court Action

Hinson took the protest to Pulaski County Circuit Court March 25. O.J.’s said in the filing that Razorclean “acted fraudulently or in bad faith and did not meet all bid requirements.” O.J.’s wants a judge to award it the contract.

“I decided it was in the best interest of O.J.’s and our numerous employee [sic] that worked at AHTD, to formally protest the award pursuant to procurement laws,” Hinson said in his affidavit.

Going to court is not new for O.J.’s. It has been involved in several lawsuits, most of which were filed about 15 years ago.

O.J.’s once sued the Arkansas Department of Finance & Administration’s Office of State Purchasing when O.J.’s wasn’t the winning bidder to clean a school in Hot Springs. In that case, filed in 1998, O.J.’s said it should have won the bid. Instead, the contract went to a company that “did not meet the minimum requirements to be considered for the contract let alone be awarded the contract,” according to the lawsuit filed in Pulaski County Chancery Court.

That case was dismissed in August 1999 because of a lack of prosecution.

(Correction, July 8, 2014: O.J.'s and Hinson agreed to be enjoined from harrassing the Razorclean customers listed on the bid. The original version of this article incorrectly characterized the nature of the agreement.)

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