Follow the Money: Tracking city contract payments impossible, Abell Report Finds
By by Edward Ericson Jr.
Nov 10, 2015 | 12:25 PM
Baltimore City government does not track its contractors well enough to know if the city is being hosed, an Abell Foundation report revealed recently. The report suggests that more information about the city's contracts should be made available to the public. Elected officials say nope.
The report is called "The Opacity Problem." Abell researcher Cristie F. Cole wanted to find out which city construction contracts were completed on time and on budget, and which ones were granted extensions for more money, more time, or both. She wanted to analyze which contractors, or which city agencies, managed their contracts best. And she wanted to find out how often the city demanded "liquidated damages," a penalty it can exact for slow or substandard work.
All this makes sense from a responsible consumer's perspective. Why would you work with a contractor again if they were repeatedly missing deadlines and/or over-budget?
But Cole found that this basic data, which should be at the Board of Estimates' fingertips for consultation before every contract it awards, was not available.
Cole began her research by looking at "Extra Work Orders," the contract cost overruns (which are not considered overruns) that routinely pepper Board of Estimates agendas and just as routinely are approved without debate or discussion.
These extra work orders—EWOs for short—can sometimes double the cost of a road, pipe, or other infrastructure project. Using Board of Estimates records, the Baltimore Brew's Mark Reutter has been questioning this practice for years, but Cole's project tried to look at all the contracts the city let in an entire year—FY 2012—to see if there were any patterns. She picked 2012 because it's both recent enough that the information about the contracts is still relevant, and long enough ago that the contracts ought all to be completed.
Cole's analysis began with the agenda published each week by the Board of Estimates, which must ratify all city spending. She wanted to know the original bid price, the original completion date, the number of days each project was slated to take, and any additions to these via EWOs for all contracts let by the Department of Public Works, the Department of Transportation, and the Department of General Services. There were 68 of them, with an original total bid price of $212 million, Cole reports.
The next question was, how many of these contractors were fined for blowing deadlines and raising costs?
"That was one of the hardest data points that I tried to find," Cole says. "I asked how many contracts we assessed liquidated damages. They said they would have to flip through the files and find the letter."
There is just one place where a record of liquidated damages is kept and it is a one-page letter buried in inches-thick paper files, Cole says she was told.
The letters could not be retrieved without a massive and expensive search.
And when Cole tried to get the actual contracts and the engineer's certificate which is filed after the project is complete and audited, she found another problem: Only 11 of the contracts had engineer's certificates, and of those 11, "seven had disparities between the two data sets in the amount of additional funds granted and two had disparities in the number of additional days granted," the report says.
Unable to reconcile these discrepancies, she suspended the analysis.
The question for city officials is simple: Why do city records not match up? It would appear that the number of days an infrastructure project takes to complete, and the number of dollars originally bid, and the number of dollars finally paid, would all be facts not subject to dispute. It would follow that such simple, key facts would, as a matter of routine, be made part of the various records the city keeps. That this is not so would appear to be alarming and worthy of explanation and/or efforts at reform.
But Cole's report has generated little interest outside the Brew—and little public comment from those in a position to discuss it. Mayor Stephanie Rawlings-Blake complained that she had not been contacted by Cole. The mayor told the Brew that the report "raises some important questions that we're looking into." No one has yet addressed the report's suggestions for reform.
City Council President Bernard C. "Jack" Young also complained that Cole had not contacted him during her research, and left the impression in her report that politicians who sit on the Board of Estimates might be swayed by campaign donations from these contractors. He did not reply to City Paper's request for additional comment.
"Adding more data to the Board of Estimates Agenda is not the solution," Comptroller Joan Pratt told the Brew. "The Board of Estimates Agenda provides sufficient information to the public."
Cole's report notes that just four contractors received nearly half of the contracts let in 2012 by the three city agencies she surveyed.
Cole says the four companies were P. Flanigan & Sons, the road contractor, M. Luis Construction, Machado Construction, and Allied Contractors, Inc. She did not analyze the total dollar amounts each company bid and, as the report explains, she was not able to determine the amounts they were actually paid for their work. She did note that the companies contributed to at least one of the three elected members of the Board of Estimates, which has five members and is effectively controlled by the mayor, as she appoints the two unelected members.
Cole's report suggests that city agencies post the scheduled completion date of every project on the sign that is posted outside the work site. They usually list only the year and season, which leaves several months' room for error. It also suggests that the Board of Estimates have a public "scorecard" for each contractor, derived from the ratings city project managers have assigned, along with other data points. She'd like campaign contributions to city politicians included in the scorecard. She also suggests that the reason for the EWOs, along with each new deadline, be included in the minutes of the Board of Estimates. That would make the Board of Estimates agendas and minutes a more useful source for tracking contracts.
Cole is a former CitiStat analyst who moved to the State's Attorney's Office but was terminated last spring after Marilyn Mosby took that office; Cole supported former State's Attorney Gregg Bernstein in the election. She says she spoke with city agencies during her research and had a cordial relationship with them. The report mentions new computer software that supposedly will make keeping track of future contracts easier.
The agencies did not have much to say about Cole's report or her recommendations.
Department of Public Works spokesmen Jeffrey Raymond and Kurt Kocher say the problems Cole found are in the past. "Let's not walk the same path that the Abell Foundation researcher did," Raymond says in a phone interview. "It was a mess on a variety of levels." They emailed a PowerPoint presentation outlining the department's new project management system, which has been going into place since Rudy Chow took over as director in early 2014. "We're reimagining the office so that the whole issue, the opacity issue, pretty much goes away," Raymond says.
Adrienne Barnes, the Department of Transportation spokeswoman, says DOT Director William Johnson responded to Cole and summarized his comments: "The study represents a great opportunity to determine if the City's 'low bidder' policy as delineated in the Charter is truly in the best interest of the City," she wrote City Paper in an email.
Department of General Services Director Steve Sharkey responded to City Paper's questions by email. He says he does not have specifics about which DGS projects were included in the study and which were not. He says neither he nor any of his staff communicated with Cole during the study, and he identified the new contract-tracking software that the city is implementing. It's an Oracle product called Primavera CM14, P6, BI Publisher.