Tale of Two Contracts

July 11, 1993

While state transportation officials worked diligently through the spring to give taxpayers the best deal possible on a new vehicle emissions inspection network, city officials failed to do 00 the same for city taxpayers in renewing the management contract for the Baltimore Arena.

It is a classic tale of two contracts: one is competitively bid, scrutinized in detail by experts and awarded to a Tennessee firm that had not used political pressure to get the lucrative job; the other isn't put out for bid but instead handed to a politically well-connected company. Under the first contract, taxpayers should reap long-term economies; under the second contract, we'll never know if there are any additional savings for taxpayers because the city didn't seek bids.

As for the state contract, Gov. William Donald Schaefer did the right thing by sticking with the bidding process, despite political pressure from the current vendor. New federal air-quality rules require more rigorous auto-emissions tests. A blue-ribbon oversight panel named by the governor and a technical panel both felt that MARTA Technologies Inc. offered the best combination of low cost and superior system. The price of $97 million over five years is less than original state estimates.

Some losing vendors may contest this decision, which was affirmed by the state Board of Public Works. That is their right. But they will have to do so on legal grounds. Attempts at politicizing the process were rebuffed. The governor, who allowed a dubious keno contract to be awarded without competitive bidding, named the blue-ribbon group to ensure that this procurement was on the up-and-up.

In the city, meanwhile, Mayor Kurt L. Schmoke ignored suggestions to seek bids on the Baltimore Arena's management contract and instead gave a five-year extension to Centre Management, a firm with close ties to the mayor and his top political advisers. Yes, Centre Management's work has saved the city $3.4 million over the past four years. But why hand a lucrative five-year renewal to the company without soliciting other bids?

Critics charge that Centre Management, which also runs the USAir Arena in Landover, has a built-in conflict, especially in booking sports events that might clash with activities at Landover. Another company might prove more aggressive in booking events for Baltimore, which would mean even bigger savings for city government.

But it was not to be. Mr. Schmoke had the votes for approval of the no-bid contract renewal with Centre Management. That's the wrong way to spend taxpayer money. A marketplace system works best when public officials let companies vie for government contracts. Slamming the door on competition is bad public policy.

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