Schools under fire for use of contracts

Report says city system often uses emergency deals for routine work that costs more

Sun exclusive

October 01, 2006|By Sara Neufeld | Sara Neufeld,Sun reporter

The Baltimore school board is regularly resorting to the use of emergency contracts to conduct routine business, potentially costing taxpayers hundreds of thousands of dollars and raising new concerns about financial controls 2 1/2 years after a budget crisis, a Sun review has found.

Over the past six months, the board has bypassed competitive bidding to approve at least 21 contracts worth more than $19 million - a process rarely used by surrounding school systems. What's more, even with regular, non-emergency contracts, work is often under way before the board has signed off on it.

"Somebody has got to be accountable as to why and how this kind of thing happens," said Skip Strovel, a vice president of a Beltsville company that submitted the low bid for a technology contract this spring, only for the contract to be thrown out and awarded as an emergency to another company - for nearly three times the price.

Members of the school board, who are jointly appointed by Gov. Robert L. Ehrlich Jr. and Mayor Martin O'Malley, have sometimes questioned the purchases in public meetings, only for a majority to approve them a few minutes later, according to meeting transcripts reviewed by The Sun.

School boards in Maryland are only supposed to use emergency contracts when students' safety is at stake or their education would otherwise be disrupted - when a storm destroys a school roof, for example.

City school system officials say they are trying to reduce their reliance on emergency contracts, but they are sometimes forced to use them to comply with state and federal mandates that other systems in Maryland don't face.

They say that many of the recent emergency contracts were necessary to complete summer renovations to accommodate 4,300 students displaced when their schools closed. The state required the school closures.

A Sun review found that the summer building renovations accounted for 11 of 21 emergency contracts that the school board approved between March and September, but only $6.6 million of the $19 million spent.

Another 10 contracts, worth $12.5 million, covered a variety of purposes, often for predictable expenses. The largest one, worth $7.8 million, was for cafeteria food - a decision challenged in court by a lower bidder but upheld last week by the state school board.

Interim Chief Executive Officer Charlene Cooper Boston said she has been looking at the system's use of emergency contracts.

"I don't know if there's a concern," she said. "I know there are reasons you have them."

Just three months ago, there was much fanfare as school and city officials pronounced the system fiscally healthy and deficit-free for the first time in seven years. In early 2004, the system had to accept a city bailout after the discovery that it had a $58 million deficit.

The deficit was caused primarily by problems in payroll: The system had far more people on staff than it could afford to pay. But according to a 2003 report by the Greater Baltimore Committee, another major trouble spot was that budgeting processes were not being followed or enforced.

"We don't want to go back down a road we've been down in the past," school board member Diane Bell McKoy said at a July meeting when four emergency contracts were approved.

Her sentiment was echoed by board chairman Brian D. Morris, who said the system has worked hard in the past few years to rebuild its financial stability and credibility in the community. "Any slippage of that," he said, "is an unacceptable outcome."

In an interview last week, Morris said the system is trying to minimize its emergency contracting, but state and local regulations do allow for it and "when appropriate, we use it."

Maryland school systems are required to conduct a bidding process for contracts worth more than $25,000, except in the case of emergencies.

When using emergency contracts, systems can shorten the length of time before work on a project begins from several months to a few days. Usually, that means they pay more for the services.

Other systems in the region report using emergency contracts sparingly. After Baltimore, Anne Arundel County used the most: four in the past year.

In Baltimore County - a system with 20,000 more students than the city - the last emergency contract was in 2004, when a well at an elementary school had to be replaced.

Howard County school officials said they haven't had an emergency contract in at least five years. And the Carroll County school board has approved just two emergency contracts in that time, one when a portable classroom was infested with mold and another when a high school had an air quality problem.

"We really only use it for health and safety," said Stephen Guthrie, Carroll's assistant superintendent of administration.

Jeffrey Parker, Baltimore's director of procurement, said for the most part, the city does, too.

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