Federal officials dismissed allegations that the city administration improperly handled the awarding of a lucrative mass transit contract, according to Federal Transit Administration findings released yesterday by U.S. Rep. Neil Abercrombie.

City Councilman Charles Djou filed the complaint with the inspector general of the U.S. Department of Transportation last November over the city's $9.7 million contract with Parsons Brinckerhoff Quade & Douglas Inc. for a mass-transit alternative analysis study.

The findings clear the city administration of any suspicion of possible wrongdoing, Abercrombie said.

"We were sure that the contract was awarded above board," said Bill Brennan, a spokesman for the mayor. "We're not really surprised by the findings."

Djou said the findings are positive because now the transit project can move forward without suspicion of possible corruption.

"I filed this complaint because I thought a number of legitimate questions were raised," said Djou, who voted against increasing the general excise tax to pay for a transit system.

On Nov. 29, Djou asked the federal Department of Transportation to investigate the contract award, saying the city may have abused its authority by requiring the contractor to divert nearly $900,000 in work to a subcontractor that wasn't part of the original team. The work went to an engineering firm headed by a friend and political supporter of Mayor Mufi Hannemann.

The subcontract originally was to be awarded to Communications Pacific. Kitty Lagareta, Communications Pacific's CEO, could not be reached for comment yesterday.

Djou said he was concerned that the city did not put out the contract to competitive bid. His complaint followed another complaint by Communications Pacific.

The company alleged that the practice of substituting subcontractors is not allowed under state law, after the company got a much-reduced role under the Parsons contract. Communications Pacific was working with Parsons before the council voted to go forward with the increase in the general excise tax to pay for the transit system.

In an internal memo dated Aug. 2, Federal Transit Administration deputy administrator Sandra K. Bushue said Djou's complaint was "without merit."

Reach Loren Moreno at lmoreno@honoluluadvertiser.com.