ANNAPOLIS — State officials who may be hoping for an easier time getting approval for contracts while Gov. Larry Hogan is traveling in Asia didn’t get their wish.
Lt. Gov. Boyd Rutherford may have been filling in for the traveling governor but he continued the policy of seeking deferments or in some cases rejections of proposed state contracts. On Wednesday, Rutherford along with Comptroller Peter Franchot and Treasurer Nancy K. Kopp deferred decisions on more than $300 million in contracts and rejected three requests for contract extensions totaling about $3 million.
“There’s been a consistent pattern,” Rutherford said, speaking about state procurement overall. “There’s been some consistent problems and a couple of the items today, I’m going to raise issues in terms of what I think is poor planning, where we see contracts that are about to expire and we’re being asked to extend contracts. It puts us in a difficult situation, us the board, where we have to approve these or cause major disruption.”
The biggest chunk of the items deferred by the board involved 31 contracts totaling $297 million for residential services through the Department of Juvenile Services.
Chunks of money
At issue for the three-member board were concerns about the estimated $346,000 spent on each of about 860 children who pass through the department annually. The panel also expressed concerns that the 31 contracts, each with varying lengths, to existing contractors without a competitive bid were lumped together in one request that did not include any way of determining if each contractor was providing adequate service.
“All we get is the name of the companies and the amount of money we’re supposed to hand over,” Franchot said. “These are huge chunks of money and we’re simply, on your say-so, handing it over to you.”
Michael A. DiBattista, chief financial officer for the department, told the board that per-child cost won’t exceed $110,000 but that the agency builds in room for additional children or services — as much as two-thirds more than actual expenses. The state pays providers based on the number of days of service provided to children that the agency is responsible for, he said.
“We do not spend the money unless we are provided that day of service,” said DiBattista.
Franchot and other board members expressed concern about approving the money without additional information.
“I view this as an actual cutting of checks,” Franchot said of the request for approval. “That’s what we’re looking at here. This is real money we’re about to vote for.”
Hogan has made procurement reform an issue at nearly every Board of Public Works meeting since he was sworn in as governor. He has joined Franchot in taking exception to no-bid or single bidder contracts as well as to extensions. He has named Rutherford, who has an extensive background in state and federal procurement, to chair a work group to look at overhauling the state system.
“I think we’re all in agreement that there’s a need for improvement in our procurement process,” Rutherford said, including both how agencies handle contracts as well as regulations.
The board also deferred action for two weeks on four other contract extensions to obtain additional information. Among those extensions was one through the Department of Natural Resources to study bottom-dwelling organisms in the Chesapeake Bay as part of efforts to monitor Chesapeake Bay Restoration efforts.
Bruce D. Michael, director of the department’s Resource Assessment Service, said delaying the contract would interrupt efforts to complete a one-time survey required by the federal government.
“The world is not going to come to an end if a couple of oysters don’t get counted somewhere,” Franchot said.
Kopp, the state treasure, urged her colleagues to allow the environmental contract to proceed but was ultimately out-voted.
The board also voted to reject three contract modifications totaling about $3 million to three firms already doing on-call architectural and engineering services for the Department of Transportation.
Transportation officials said they had money remaining on an existing contract but were seeking the modification to cover potential future expenses as the agency seeks to issue new bids for the services.
Rutherford, who initially said he “inclined not to approve” the contracts, pushed the board to reject them and asked transportation officials to make sure it expanded its bidding process to include smaller firms, including minority-owned companies, had a chance to compete.
“I don’t want to interrupt but I am willing to take that chance,” Rutherford said. “I think we need to make sure other entities have a chance to compete.
“It’s not personal,” Rutherford told transportation officials as he announced the vote to reject the three contracts.