Charity contests loss of license office contract

Joe Daues: License office revenue has covered BCFO's administrative expenses.

On the morning of July 12, a sign was posted on the door of the former Glenstone License Office at 1002 S. Glenstone Ave. to advise the public that the office – operated for 13 years by Breast Cancer Foundation of the Ozarks – was closed.

It noted a new location would open five blocks away, at 525 S. Glenstone Ave., on July 17.

The Missouri Department of Revenue awarded a new contract for the Glenstone License Office to a private company, CGB Holdings LLC. Its registered agent is former BCFO Executive Director Crystal Webster, according to articles of organization filed with the Missouri secretary of state.

BCFO is challenging the bidding process and contract award through a petition for an administrative review. In the case, an attorney for BCFO alleges irregularities in the bidding process, collusion among vendors and undue influence on the DOR selection process. The case was filed on June 30 in the Circuit Court of Cole County, where Jefferson City and the DOR are located. A similar case is on file for BCFO’s Joplin office where, according to Missouri Case.net records, a bench trial began July 20.

Case.net records show BCFO made a motion for a temporary restraining order to allow it to continue operating the Glenstone office, but the court denied the motion, forcing the immediate closure.

BCFO continues to operate the Joplin License Office, where CGB Holdings also submitted a winning bid, as its request for a restraining order was granted, Case.net shows.

Joe Daues, the CEO of BCFO, said the license offices are an important funding source for BCFO, which pays for nonmedical living expenses for people with breast cancer in southwest Missouri and northwest Arkansas.

Under contract from the DOR, BCFO operated the Glenstone and Joplin license offices and three others through its wholly owned subsidiary, BCFO Titleworks Inc. BCFO’s Republic, Nixa and Ozark license offices retain their contracts with the state.

BCFO began operation in 2000, and since that time has distributed $7.9 million in aid. Daues said on average, BCFO gets 30 new clients every month.

“These five offices together raised enough money to pay for the entire administration of BCFO,” he said. “It’s a substantial amount.”

While Daues was willing to comment on the organization and answer questions concerning the closure of the Glenstone License Office, he declined to comment on ongoing litigation with the DOR. Webster and the DOR also declined to comment on the pending litigation.

The case
Lowell Pearson, office managing partner of law firm Husch Blackwell LLP in Jefferson City, represents BCFO and BCFO Titleworks in the lawsuit. He wrote to the DOR with a formal protest of the contract process for the Joplin office within 10 days of the award to CGB Holdings, and DOR posted his protest letter on its website. The document, which alleges irregularities in the bidding process, became the basis of circuit court complaints.

BCFO’s Joplin and Glenstone contracts expired in 2019, and over the next nearly four years, they were bid and rebid four times. In April 2022, BCFO was awarded the Joplin contract, with CGB Holdings coming in third place and another player, the Neosho Area Business Industrial Foundation Inc., finishing second, the protest letter states.

Pearson explains in the letter that protests were lodged by the law firm of Stinson LLP on behalf of CGB Holdings against the Glenstone award to BCFO, and of NABIFI, protesting the Joplin award. For nearly three pages, the protests on behalf of the different vendors contained the exact same language.

“The (request for proposal) requires no collusion between vendors,” states the court complaint filed for the Glenstone office.

The state upheld the protests, and DOR issued a new request for proposals and gathered bids, at which time NABIFI dropped out of the running. CGB Holdings then won the award for both the Glenstone and Joplin contracts.

Pearson alleges the DOR attempted to prevent BCFO from bidding by mandating a certain corporate structure to submit a bid, offering boxes to check to describe the corporate structure of the submitting company but eliminating a category for wholly owned subsidiaries, like BCFO Titleworks. He adds that BCFO sought guidance from the DOR on which corporate structure to choose on the bid form but received no response before the deadline.

“The fact that an RFP would even issue with this requirement shows that someone was putting a thumb on the scale,” Pearson writes.

Pearson states the license office bid process has been broken since 2019 and has been the subject of multiple protests and lawsuits.

The legal complaint alleges the DOR received significant input from the Springfield-based Missouri Association of License Offices for the RFP that resulted in bids reopened for the Glenstone and Joplin offices in December 2022. Webster serves as treasurer of MALO, according to IRS Form 990 filings.

In his initial complaint, Pearson writes that it was evident that someone within MALO with considerable background in license office contracts had influenced the RFP.

“BCFO reached out to attorneys in Jefferson City, Husch Blackwell, because it feared MALO and specifically their treasurer, Crystal Webster, owner of CGB Holdings, had inserted language into the RFP that favored CGB Holdings and worked against BCFO Titleworks Inc.,” Pearson writes.

Administrative review
According to past Springfield Business Journal reporting, in 2010, the Glenstone License Office opened at the corner of Grand Street and Glenstone Avenue. At the time BCFO submitted its initial bid for the office, Webster was its executive director, then the top official of BCFO. The office operated for 13 years at the site.

“Our board liked the idea that the organization can provide a service to the community and earn revenue to support families with breast cancer,” Webster said at the time.

SBJ reported in 2019 that Daues transitioned into the role of CEO, a title change for BCFO’s top post, as Webster returned to the private sector. She went on to serve as CEO of Morelock Builders & Associates Inc., a position she still holds. CGB Holdings is registered with the state at Morelock Builders’ address at 722 W. Olive St., according to the secretary of state’s office.

When SBJ reached out to Webster for comment, she replied via text, “Unfortunately, per the terms of CGB’s contract with the state of Missouri, I am not permitted to have this conversation.”

The DOR website indicates the department oversees 170 license offices that are operated by independent contractors. Contracts are awarded through a competitive bidding process, with bids evaluated on areas such as training for personnel, customer satisfaction initiatives and whether the entity is a not-for-profit, political subdivision or a service-disabled veteran business enterprise. Submitted bids are viewable online.

The Glenstone office had 13 employees receiving pay plus benefits, Daues said.

“I told our employees, if you want to stay in the BCFO family, we want you to stay,” he said. “It’s not an easy situation, but we are absorbing every one of those people into our other four offices until we know the outcome of this suit.”