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Maryland highway contractor questions SHA audit

An engineering executive said Wednesday his firm saw no problem with a State Highway Administration bidding process that yielded his firm a $16 million contract in 2008, and has since come under the scrutiny of state auditors.

“I think some of these things are unfair and create a pretty poor perception of some public officials who are doing a pretty good job for the public,” said Steve Zentz, a partner with Rummel, Klepper & Kahl.

RK&K and KCI Technologies won the contract Oct. 15, 2008. Johnson, Mirmiran & Thompson Inc. was awarded a similar five-year, $16 million contract for construction management and inspection services in Montgomery and Prince George’s counties about two months later.

The Department of Legislative Services report found SHA did not follow its normal procurement process in awarding the contracts.

They were awarded just months before the winning bidders made donations to a charity golf event promoted by a company part-owned by an SHA official. And other former SHA employees took jobs in the private sector that positioned them to work on contracts they helped craft during their time with the state.

Zentz, a former deputy secretary of the Maryland Department of Transportation, said he wasn’t sure what golf tournament the audit referred to.

“A lot of folks contribute to charity golf tournaments,” he said. “We do the same thing. We donate to quite a few of them.”

Zentz said his firm has many former state employees on its payroll.

“It’s not unusual for someone to leave state government and go to work for private contractors,” he said. “We are very careful, as our competitors are, to not have them working on Maryland state highway jobs inside the time frame laid out in the contract.”

SHA policy prohibits former employees from working directly on projects they dealt with during their time with the state, and prohibits firms from hiring former SHA employees to work on such projects within a year of their leaving state employment.

“We’re continuing to serve under our contracts with state highway and others,” Zentz said. “I’m not aware of any problem with the procurement of this contract.”

All three firms involved with the audited contracts do millions of dollars in business with the state every year.

JMT was paid nearly $37 million by nine state agencies from 2008 to 2010, including $33.4 million from SHA, according to the Department of Budget and Management. (Check out DBM’s contractor database here.)

RK&K earned $36 million from state contracts, including $28.7 million from SHA, during that period. KCI made $28.6 million, with all but about $2 million from SHA. Those two companies earned an additional $4.2 million from SHA through a joint venture.