The contractor building a new library at Morgan State University declined to do several million dollars in work on another project that the university asked for, saying it went so far beyond the contract that the work would have violated state procurement laws.
Hess Construction Co. told a university construction official that it would not submit a quote to install telecommunications cabling connecting the library and other buildings. In a Feb. 22, 2006, letter obtained by The Sun, Hess wrote, "Our legal counsel also advises that because the work ... is clearly outside the general scope of our contract with the University, directing Hess to perform the work likely would be a violation of the State's competitive bid statutes."
Morgan State's management of other construction projects was recently faulted in a legislative audit. Responding to a question, House of Delegates Speaker Michael E. Busch said Friday that Attorney General Douglas F. Gansler told him the office has begun a criminal investigation into matters raised in the audit.
The university had shifted funds approved for one project to pay for changes on unrelated jobs, the routine audit revealed. It found that Morgan State made $2.4 million in "questionable payments" to Baltimore-based Whiting-Turner Contracting Co. Auditors also said the university improperly divided projects so that amounts were low enough to avoid scrutiny by the Board of Public Works.
Under state law and regulations, funding for one construction project can't be used for another and funds may not be transferred without authorization. Contracts and change orders over $500,000 at public colleges require approval from the board, which consists of the governor, comptroller and treasurer.
The additional work that Morgan State requested from Gaithersburg-based Hess had been roughly estimated by a subcontractor at $3 million.
A Morgan State spokesman, Clinton R. Coleman, said: "We are trying ourselves to understand exactly what went on, what took place." He declined to comment on details.
The audit, released Feb. 14, and subsequent legislative hearings have diminished confidence in Morgan State among some lawmakers who oversee its budget. The university's hard-won freedom to manage building projects on its Northeast Baltimore campus is in jeopardy, said several key lawmakers.
And now, the exchange between Hess and Morgan State has brought attention to the way campus officials handled another contract.
"They said they made a mistake, that's what they continue to say," said Del. Talmadge Branch, a Baltimore Democrat and majority whip of the House. "But here we come with one more thing. ... These are not small issues and these are not small mistakes."
Under tense questioning at recent budget hearings in Annapolis, Morgan State administrators have characterized the audit findings as an anomaly - caused mainly by an errant manager who is no longer an employee - and limited to a $7.9 million telecommunications contract.
But the nature of Morgan State's request to Hess raises the question of whether problems found by the auditors in their limited review may be more widespread. Lawmakers and auditors said that it may prompt a broader look at $120 million in construction deals struck in recent years to modernize the campus.
"We weren't aware of this," Bruce A. Myers, head of the Office of Legislative Audits, said of Hess' letter. "But it looks like you have some of the same concerns in this letter that we raised in the audit."
The extra work was assigned to Whiting-Turner, according to Michael E. Thomas, a former Morgan State construction administrator. Only a week or two after declining it, Hess was informed that Whiting-Turner would handle the cabling, which would go inside a utility tunnel.
"I was on site. I watched them do the work," Thomas said about Whiting-Turner, which in 2005 had been awarded contracts to build the utility tunnel and to relocate a telecommunications hub.
An official of Whiting-Turner declined comment.
Morgan State said it can't explain what happened after Hess declined to provide a quote. Earlier this year, the university made public a contract change that referred to the installation of "200 pairs of copper cables from the Communications Center to four campus buildings," but it is unclear how that may relate to the work offered to Hess and apparently performed by Whiting-Turner.
The official who oversaw the contracts awarded to Whiting-Turner and Hess resigned Jan. 21 in connection with the audit. Peeter Kiik, who had been director of design and construction management, did not respond to repeated requests for comment.
Kiik was the official who asked Hess to do the extra work, Thomas said. The letter signed by Hess' project manager, Jim Gladhill, was sent to Kiik and to the architect on the library project. Gladhill and other Hess officials declined comment, as did the architect, Design Collective of Baltimore.
Morgan State and Hess have had a series of disputes over two major construction projects on campus. Last year Morgan State withheld payments from Hess for the library. The university cited the project falling behind schedule by about 45 calendar days as among the reasons.
William M. Huddles, the attorney representing Hess, said project documents show the university was at fault for delays that pushed back the schedule by years. The library officially opened last month.
Hess is also in a dispute over the student center-parking garage. Both matters are pending before the state Board of Contract Appeals, which hears claims over bids and contract disputes.
The request that Hess declined in February 2006 was to install cabling for voice, data, and video connections among four buildings: the communications building, the Hurt Gym, the student center and the new library.
Gladhill wrote in the letter that Enterprise Electric, the electrical subcontractor on the library project, said it would do the cabling work only under a new subcontract.
Fred Churchman, president of Enterprise, said last week that the firm had estimated that work at $3 million.
Gladhill also pointed out that PrimeNet, a telecommunications firm, had bid the work under a project to build a utility tunnel, with drawings dated Oct. 24, 2004. But PrimeNet was told the project was over budget, he wrote.
Morgan State sought competitive bids for the overall construction of the utility tunnel in 2004 and recommended that Whiting-Turner receive a $2.9 million contract, according to Board of Public Works records. But Morgan State withdrew that. "The low bid was rejected; the second bid exceeded the budget," according to the document.
Morgan State rebid the utility tunnel project in 2005, and the state approved a $2.8 million Whiting-Turner contract. In public notices published in 2004 and 2005 seeking bids, Morgan State identified the project as construction of a utility tunnel connecting three buildings to the new library.
In the letter, Gladhill said Hess didn't know how installation of telecommunications cabling "got deleted from the utility tunnel project or how it wound up as a proposed modification to our job.
"Perhaps the utility tunnel job indeed was over budget at the time and the University now has the funds necessary to do work. That does not mean that the University has the right to simply add work to our project. ... ," he wrote.
Morgan, a historically black college, has many supporters in the legislature and some have suggested the university is facing undue scrutiny. One is Sen. Joan Carter Conway, a Baltimore Democrat who introduced a bill Friday that would require extra audits of procurement at other public universities.
Del. John L. Bohanan Jr., a St. Mary's County Democrat who heads an education subcommittee, said concerns about Morgan State's oversight could lead to placing another entity in charge of building a planned $83 million business school. Such a move would be a blow to Morgan State's construction autonomy, granted by the legislature in 2006.