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State audit bashes Stadium Authority

THE BALTIMORE SUN

A $41.5 million contract for work at Baltimore's Hippodrome Theatre was awarded without following normal bidding procedures by the Maryland Stadium Authority to Whiting Turner/Doracon, a company that formerly employed the authority's head, a Sun examination of contract records shows.

The authority has been sharply criticized for its shortcuts in awarding that contract and an array of other management missteps in a report prepared by state auditors. Authority officials will be questioned on issues raised in the audit by a legislative committee in Annapolis today.

State Comptroller William Donald Schaefer said the authority's conduct as described in the audit was outrageous.

"They're out of control," Schaefer said in an interview this week.

Schaefer, a former Baltimore mayor and Maryland governor, has been widely credited with helping promote the authority's expansive powers to fast-track large projects outside normal state procurement policies.

The authority was created in 1986, when Schaefer was mayor, with the mission of obtaining a Baltimore NFL team, negotiating a long-term lease with the Orioles and building new homes for the two teams.

Following its widely acclaimed success with Oriole Park at Camden Yards, the authority has been given responsibility for an increasingly diverse array of major public projects, including a multi-use building at the University of Maryland, Baltimore County, a new field house at the College Park campus and an expansion of the Baltimore Convention Center.

Authority faulted

The audit, released last week by the Office of Legislative Audits, criticized the stadium authority for awarding $66 million in construction contracts without normal bidding, for sloppy bookkeeping and for lax board oversight.

The auditors said that the $41.5 million Hippodrome contract awarded by the authority in June 2001 was not advertised and that only two companies were invited to bid.

The winner of that contract, Whiting Turner, is the former employer of Stadium Authority Executive Director Richard W. Slosson. He said he was employed by Whiting Turner from 1979 to 1984 in connection with work at the National Aquarium.

Schaefer said he had warned the governor and legislators that it was a mistake to broaden the scope of the authority - created with a narrow mission of building the two stadiums - to include such things as dormitories.

"I was always opposed to extending the authority," he said. "I told everyone you're giving them jobs because they can do it outside of the procurement practices of everyone else in the state. They can do what they want."

Schaefer said if the Maryland Stadium Authority is going to serve as the construction arm of the state, it needs to come under the state's procurement regulations. He plans to raise his concerns at the Board of Public Works meeting today, before the legislative hearing on the topic.

"You can't give out contracts with just two bidding," Schaefer said. "I'm not saying it's wrong. But it looks wrong."

Carl A.J. Wright, the stadium authority chairman, rejected the auditors' criticism last week.

"The legislative auditors thought we should have more rules and regulations. I, personally, am not in agreement with that. If we had to live up to a long list of rules and regulations, we might get bogged down," Wright said.

"You can assure the citizens that the stadium authority is going to continue its tradition of excellence, and everything is in working order," Wright added.

Bypassing procedure

Slosson said in an interview yesterday that normal bid procedures were bypassed on the Hippodrome project when earlier cost estimates on the job soared.

"To me it was logical," Slosson said. "We had the money. We had to get going. We needed to move quickly. If I had to go through that [bidding] process again, I wouldn't have gotten the theater open for The Producers."

Even sole-source bids are something that the authority is allowed to do, Slosson said.

"We don't have the time in most of our projects to do the standard state procurement process," Slosson said. "There were millions of dollars in penalties if The Producers couldn't open that night [at the Hippodrome]. Time is more important than anything with our projects."

Such projects as the University of Maryland's Comcast Center, Ripken Stadium and the stadium at Towson all had tight deadlines, he said.

Slosson said he gets no sense that the legislature is looking to diminish the stadium authority's power.

"I really think they're looking to expand our powers rather than contract them," he said.

There is a bill in Annapolis that would put the stadium authority in charge of school construction and much talk of the role the authority could play if legislation authorizing the use of slot machines in publicly owned facilities is passed this session, Slosson said yesterday.

"The consistent message I've heard is the session ends on whatever day it is, the next day we want you working," he said. "The No. 1 question is how soon can you start? How soon can you open?"

But Bruce A. Myers, an auditor who helped oversee the stadium authority review, said he is troubled by the stadium authority's procurement policy.

'A real problem'

"They think their policy is fine," he said. "But we have a real problem with that."

While a few other agencies are exempt from state procurement regulations, most have adopted their own version, he said.

"When you're talking about construction, how do we know as Maryland citizens that we're getting the best deal for our money?" Myers asked. "Without competitive bids, how do you know there wasn't some kind of conflict of interest? If the board is not asking tough questions, then who is?"

State Sen. Paul G. Pinsky, a Prince George's County Democrat, agrees that the stadium authority needs better checks and balances.

Seeking balance

"It's one thing to build in some flexibility, but it's another thing to not check the books," he said.

"To not give the strict auditing and accountability of any agency if it's receiving state money is a mistake. Stepping back, it's abominable. You would think we'd be held to a higher standard when state money, public money, the people's money, is involved."

Pinsky said he understands the need for a balance between an open bid process that can drive prices down and cost savings that can occur with known contractors who can bring projects in on time and maybe even under bid. But there are dangers, he said.

"From a systems point of view, you do that too many times and for too long, you create a cozy situation," he said. "You sort of forget what the rest of the market has to offer. Systems are there regardless of the names and the players. They're to go on for a long time. It's to make sure you don't get into bad habits."

Covering the period between Dec. 20, 2000, and Dec. 31, 2002, the audit also alleged that the authority's full board had not approved pay raises and bonuses given to management.

The report also said that Slosson had accepted hospitality from a contractor doing business with the authority, in violation of state ethics laws, and it recommended the matter be referred to the State Ethics Commission.

"I understand that it's something I shouldn't have done," Slosson said yesterday. "I didn't know that then. But I know it now."

The stadium authority has awarded only a small fraction of its projects to Whiting Turner - about $44 million out of half a billion dollars, Slosson noted. Those projects were: the Hippodrome work, nearly $1 million for emergency repairs at Camden Station and $775,000 for the Veterans Memorial.

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