In Columbia, Questions About Ethics, Favoritism

Quasi-government Uses Unorthodox Bidding Procedures

`Their Own Little World'

Ca Officials Say They Have Done Nothing Improper

April 27, 1997|By Dan Morse | Dan Morse,SUN STAFF

As a veteran roofer, Rocky Mills knows the only foolproof way to avoid rejection is to not bid on a job in the first place.

Or so he thought until recently, when he learned that bids he says he never made had been turned down by the Columbia Association (CA).

Records at the huge homeowners association -- a private corporation that functions as a quasi-government for the Howard County planned community -- list Mills as a bidder by phone for two jobs. "That's crazy," says Mills, who swears he didn't bid on the projects.

Mills' purported bids are among 16 losing ones in CA records from contractors who say they never made the bids. Those discrepancies highlight the unorthodox ways that the CA -- the second-largest homeowners association in the nation -- goes about spending Columbia residents' money.

As a private entity with public responsibilities, the CA operates without the checks and balances of government agencies while essentially serving as one for the unincorporated community of 85,000 residents.

The CA gets much of its money from annual homeowner payments similar to property taxes. It spends $49 million a year and has accrued about $90 million in debt for the wide range of recreational facilities and services that are Columbia's hallmark.

Like many businesses and governments, the nonprofit group takes bids for its larger purchases, with the goal of obtaining the best work at the lowest price. But a Sun investigation of CA spending in the fiscal year that ended in May 1996 -- the first independent look at CA's finances -- found dozens of cases in which the CA staff:

* Apparently falsified phone bids. A Sun reporter who called 44 losing bidders on a sampling of 22 CA projects -- for which three bids each were purportedly taken by phone -- found 16 who said they hadn't bid on the projects and four who said they were almost certain they hadn't bid. Mills, a Woodbine resident, is listed as a bidder for jobs at the Columbia Swim Center in 1995. "I don't even know where the swim center is," he says.

* Accepted late bids. CA officials acknowledge they allow bidders to submit proposals after deadlines met by other bidders. In one case last year, the CA awarded a contract by phone to a late bidder -- a business owned by a former CA manager -- four days before it received the bid by fax.

* Altered bids after they were received. Those contracts include $99,300 in tennis court renovations awarded to a Baltimore company after the CA staff lowered that company's bid and raised its competitor's, which had been lower -- while discussing the changes only with the winning bidder.

* Awarded no-bid contracts without contacting other readily available bidders. The Sun found seven such cases in which other potential vendors were readily available, including two contracts, totaling $58,591, for concrete repairs awarded to a neighbor of the CA's longtime president.

At the least, those practices violate accepted standards for government and business and, in many cases, violate the CA's own purchasing policies, which call for competitive bidding for larger purchases.

At worst, national experts say, they cost residents money, drive away good vendors, raise questions about favoritism and pose ethical problems.

"First of all, I think it's costing them a ton of money," says Mark Crowder of Chattanooga, Tenn., who supervises tens of millions of dollars in purchases for the Olan Mills chain of photography studios and serves on the ethics committee of the National Association of Purchasing Managers.

Harold Fearon, founder of the Center for Advanced Purchasing Studies at Arizona State University, says that following such practices "opens it up to all sorts of fishy occurrences."

In response to The Sun investigation, the CA's board voted Thursday night to include an analysis of the association's purchasing practices in its annual audit, which begins at the end of this month.

CA officials say they have tried to adhere to their own policies and have done nothing improper. They say their flexible purchasing practices are efficient and that stricter controls would probably drive up costs.

"Are the people of Columbia getting a good deal?" says Padraic M. Kennedy, who has been CA president for 25 years. "Are they getting their money's worth on the jobs and the quality and the prices and the timeliness and whatever it may be? I am absolutely confident they are."

Kennedy says he doubts that favoritism is a CA problem.

"I've never gotten a call saying this is going on and someone is complaining that they were given a bad deal," he says. "And I would think this is the kind of community where people would not hesitate to call and say that."

Kennedy says he is happy with what the CA gets for its money. "I think the quality of the work is good," he says. "I think the price is normally under budget."

`It's like shopping'

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