HARRISBURG -- The Pennsylvania Liquor Control Board exercised poor judgment but broke no law in awarding a $173,000 contract to a Pittsburgh company run by the husband of one of the state store system's regional managers, Auditor General Jack Wagner said today.

Solutions 21 began providing training this month to more than 2,000 employees on customer service and product knowledge.

Bob Hobart, president of Solutions 21 in the city's West End, is married to Susanne Hobart, who oversees state liquor stores in Western Pennsylvania. The Post-Gazette uncovered the familial relationship in a story last month.

The Liquor Control Board "should have anticipated the reasonable public questioning that would result over a potential conflict of interest, regardless of whether there was an actual conflict," Mr. Wagner said during a press conference today.

Auditors found no evidence that Mrs. Hobart influenced the contract, Mr. Wagner said. He said Mrs. Hobart told auditors she knew Solutions 21 was going to place a bid, but that she and her husband agreed not to discuss it.

A bigger concern, Mr. Wagner said, was with another bidder on the contract, Alaska-based Alutiiq Business Services. Alutiiq's bid indicated its on-site contact for the proposed training program would be someone who was on the Liquor Control Board staff as an alcohol counselor.

Mr. Wagner said the Liquor Control Board appropriately questioned that, and Alutiiq replaced the on-site contact with someone else. Meanwhile, he said, the Liquor Control Board disciplined the alcohol counselor, who remains on its staff.

Mr. Wagner said his investigators could not determine if the alcohol counselor, who was not identified, provided Alutiiq with confidential information that could have given it an unfair advantage in the bid process.

Alutiiq bid $453,500 for the job. A third bidder, Florida-based Achieve Global, would have charged $1.2 million.

Mr. Wagner said the disparity between prices and the low number of bids submitted shows that the proposal-seeking process may have been flawed.

"There wasn't a significant number of bidders and they didn't clearly understand the specifics of the [request for proposals]," Mr. Wagner said.

He said the Liquor Control Board said there were sufficient problems that the board should have rejected all bids and started over.

In a written response to the findings, board Chairman Patrick J. Stapleton said there was a legal obligation to award the contract "to the responsible proposer who submits the qualified proposal that is most advantageous to the commonwealth."

Mr. Wagner said he believes the contract could have been stopped, but now it's too late because the training already has begun.

He said training to improve employee courtesy, manners and product knowledge wasn't a worthwhile expense. At the least, it should have been done in-house, he said.

Joe Conti, executive director of the Liquor Control Board, though, said the training is essential.

He said the board plans to follow Mr. Wagner's recommendations to develop a procurement handbook, to allow more time for bidders to respond to requests for proposals, to document meetings and to be aware of how potential conflicts of itnerest could be perceived.