October 7, 2010

I-95 rest stop contract rebid after Franchot protests

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By Megan Poinski
Megan@MarylandReporter.com

A $4.8 million contract to maintain two I-95 rest stops in Howard County will be rebid after Comptroller Peter Franchot vehemently protested the selected contractor’s bid application at Wednesday’s Board of Public Works meeting.

H.D. Myles Inc. had initially been selected to receive the contract. However, H.D. Myles was not a registered Maryland corporation when it completed its bid application – which includes a signed affidavit swearing that all of the information it is submitting is true.

Franchot said that based on the false information on a signed affidavit – which he said was tantamount to a lie – the contract should not be awarded.

“This goes to the heart of things that are very important to the procurement process: integrity and telling the truth,” Franchot said.

Board general counsel Greg Bedward said that he believed the contract could legally be approved. Based on precedent from the Board of Contract Appeals, he said, inaccuracies in an affidavit can be corrected after a bid is submitted.

Franchot countered that if the Board of Public Works elected to approve the contract, it would be setting a bad precedent. Lying on a signed affidavit is against the law, he said, and should not be allowed in a contract with the state.

Adding to Franchot’s condemnation of the proposed award was that the person who signed the bid as president of H.D. Myles Inc. — Michael Lesniowski of Church Hill – works as a medevac with the Maryland State Police. As a law enforcement officer, Franchot said, he should know full well the legal ramifications of signing a false affidavit.

Bedward said that he did not believe that the contractor intended to deceive the state, and the problem may stem from an incomplete form that is a part of the bid application. The existing form has no box to check if an entity has not yet filed as a corporation, but intends to. Bedward said he understands that changes will be made so future bidders will not have this problem.

Gov. Martin O’Malley said that the form seemed to be a large part of the problem, but called for the contract to be rebid based on Franchot’s frustration.

More money for prescription benefits

Franchot’s sharp eye was not limited to the rest stop contract. Before the Board of Public Works approved a $266 million supplement to an existing contract for the employee and retiree health insurance prescription benefits plan, he asked both Budget and Management Secretary T. Eloise Foster and program director Anne Timmons why the increase was so high.

Timmons explained that the contract supplement was based on increased enrollment, inflation, and the amount people use the program. Also, she said, prescription costs are not reimbursed for six to nine months, so there is a lag time. The contract’s original figures were based on flat estimates when the contract began in 2007. About $177 million of the new money is for the increases in enrollment and inflation, while about $81 million is to pay rebates.

Franchot said he knew the formula for the program was complicated, but there should be a more accurate way to determine the cost of contracts like this, especially since enrollment and utilization will inevitably expand if the benefits are good. Even overestimating the contract would be better, he said.

“It’s much easier for us to approve them giving us money than us giving them more money,” Franchot said.

Shannon Hoffman of Capital News Service contributed to this story