Board tries to control cost of school construction

It fears contractor abuse of change order allocations

May 11, 1999|By Howard Libit | Howard Libit,SUN STAFF

Embarking on its most ambitious maintenance and repair program in history, the Baltimore County school board is tightening strings on contractors to make sure that construction costs don't escalate out of control.

Board members say they believe that contractors might be taking advantage of the school system by winning contracts with low bids -- then securing extra money through change orders.

"People are shooting us low, knowing there is a cushion for them to fall back on," said H. J. "Jack" Barnhart, chairman of the board's building committee.

Efforts to control costs are becoming critical with the school system poised to spend more than $500 million over the next six to 10 years fixing its 161 schools.

When the board approves construction contracts, it typically approves the amount of the winning bid plus an additional "10 percent change order allocation to cover unforeseen conditions and minor changes to the contract."

At a meeting last week, the board approved nine contracts totaling $2.2 million and set aside an extra $222,250 to cover change orders for those contracts.

By law, change orders for more than $15,000 must be approved by the board. The 10 percent automatic allocation allows school system construction officials to approve smaller changes without going back to the board when, for instance, a renovation contractor unexpectedly discovers asbestos and needs to hire a company to clean it up.

But school board members say they fear that contractors -- knowing that an extra 10 percent is built into the contracts -- are finding ways to create change orders.

"It's common knowledge that this is always being built in," said board President Dunbar Brooks.

Board member Phyllis Ettinger added: "We don't have control over it. We're providing a cushion for contracts that [contractors] would be foolish not to take advantage of."

For now, the board will continue setting aside the 10 percent for changes. But the building committee -- which meets publicly before every school board meeting -- must approve all change orders. The committee is likely to begin meeting more frequently to oversee all change orders, Barnhart said. The board and its attorney are working to develop new policies to better oversee change orders.

"I would see this as a shortterm control mechanism" until the new policies are ready, said the board's attorney, Robert Haines.

Board members will continue looking for other ways to curb construction costs -- including hiring fewer outside architects, engineers and inspectors. They have been forced to do so because the school system's facilities department does not have enough staff.

Last week, the board approved a $210,000 contract for inspection services for Catonsville High School's renovation, and $32,411 for construction administration services at the project.

"This inspection job is a job we could provide cheaper than $142,000," Barnhart complained.

But the school board's budget request for next year does not substantially increase the facilities staff, leaving it unclear whether the school board will be able to find a way to cut those type of costs.

Pub Date: 5/11/99

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