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Tracking costs of city contracts is an exercise in futility, Abell report says

How many municipal contracts go over budget and by how much? Impossible to say, according to researcher who looked at $212 million in contracts awarded in 2012.

Above: The three elected members of the Board of Estimates (from left): Comptroller Joan Pratt, City Council President Jack Young and Mayor Stephanie Rawlings-Blake.

How bad is Baltimore government’s record-keeping of hundreds of millions of dollars of road, sewer and other big-ticket items?

So bad that a researcher hired by the Abell Foundation couldn’t make heads or tails of the final cost of $212 million of infrastructure contracts approved by the Board of Estimates three years ago.

Cristie F. Cole, author of The Opacity Problem released today by Abell, reports that determining whether 68 major city contracts experienced cost overruns and time extensions was “unanswerable” because of the difficulty in obtaining information about the status of city contracts.

“We don’t know how many contracts are going over [budget] and by how much,” Cole said in an interview.

The Abell report comes at a time when the Rawlings-Blake administration has failed to release a single audit required of 13 city agencies by the end of 2016. The first batch of three audits, promised last July, was recently postponed to late November and December.

Cole, a former CitiStat analyst at City Hall who now runs Firebrand Analytics, tried in vain to document cost overruns in contracts administered by the departments of Transportation, Public Works, Recreation and Parks, and General Services.

As Brew readers are well-aware, a key aspect of the “opacity problem” is the way in which “EWOs” (extra work orders) are added to previously-bid contracts at the weekly meetings of the Board of Estimates.

In some cases, 50 or more EWOs are tacked onto the same contract after it is bid, causing the original price to balloon.
An Example of EWOs

Last week, the Board of Estimates approved EWOs for two interrelated contracts held by Jacobs Engineering and T.Y. Lin International for the reconstruction of Annapolis Road/Waterview Avenue over Russell Street. While each of the EWOs was small (no more than $28,000), the approvals amounted to the eighth time that the project price was elevated. Result: the contracts are currently 51% over budget ($2.57 million vs. $1.7 million originally) with no information from city DOT as to whether additional overruns are expected. –MR

Tracing the extent and cost of EWOs for the 68 contracts proved impossible for Cole because the data either wasn’t available or was contradicted by other information.

For example, Cole requested 48 “Engineer’s Certificates of Completion” for projects awarded in 2012, but the city could provide only 11, despite a lapse of four years from the contract award.

Of those 11, seven differed significantly from the EWO amounts approved by the spending board.

“There were so many points of incongruence between the two data sources,” Cole writes, “that we suspended analysis because we had no way of knowing which was accurate.”

The author said the roadblocks to information raise several important policy questions:

• Are projects being intentionally underbid? Do contractors submit low-ball bids to win a contract fully knowing that the Board of Estimates will approve a multitude of EWOs once the project is underway?

Cole said that this suspicion could be dismissed “if we knew how often contractors asked for more money and if we knew which contractors were doing so habitually.”

• Are agencies producing bad RFPs (requests for proposals)? Without data, Cole said she could not answer this question or determine whether city agencies were failing to crack down on “negligent” contractors.

• Have campaign contributions influenced the actions of the three elected officials who vote to approve EWOs on the Board of Estimates?

Cole found that four contractors received half of the 68 contracts under review.

“All four of those companies were major donors to at least one” of the three elected officials on the board – Mayor Stephanie Rawlings-Blake, City Council President Bernard C. “Jack” Young and Comptroller Joan M. Pratt.

“If we knew that these companies were being awarded contracts because they did great work,” Cole writes, “their donations are irrelevant. However, if they are consistently turning out expensive work while blowing deadlines, their contributions might seem suspect.”

Howard Libit, spokesman for Mayor Rawlings-Blake, did not respond to questions about the Abell report.

There have been no responses yet from Council President Young and Comptroller Pratt over the possible role of campaign contributions in the contracting approval process.

Cole says that digitizing city records may help lower the barriers to understanding EWOs and other cost overruns.

She recommends that the reasons for EWOs and contract extensions be spelled out in the weekly Board of Estimates agenda and that “scorecards” be created of the past performance of private contractors, including the amount of campaign contributions they have given to Board of Estimates members.

[DISCLOSURE: Baltimore Brew receives grant funding from The Abell Foundation.]

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