The contracted firm, Systems Design Inc., based in Washington's Georgetown neighborhood, had no experience making glassware, and its owner had only recently emerged from bankruptcy proceedings, the source said.
As The Post first reported last month, SDI shut out upstate's Steuben Glass, which has made government glassware since the Truman administration.
"These two [Bennett and Jones] went down to the small-business office and insisted that we have an 8(a) company -- have this company SDI do our contract," the source said.
"They [SDI] don't know how to make glass. The glassware is being made in Sweden."
Sen. Charles Schumer (D-NY) met with State officials to grill them about the contract last month, shortly after The Post's report, and said afterward that the department would reopen the contract for bidding.
Records show Bennett gave $1,000 to Barack Obama's presidential campaign, $2,000 to the Obama Victory Fund and $2,300 to the Democratic National Committee for the inauguration.
According to the source, Bennett and Jones and their superiors steered the contract to SDI even after agency officials and at least one competitor complained it was a taxpayer rip-off.
"My belief is that this process is tainted and preferential treatment was given," said James Stieff, whose firm was shut out of the work. An e-mail with Stieff's complaint to a top State official was obtained by The Post.
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