October 21, 2010

Board of Public Works approves $72 million for new helicopters, but questions lack of bids

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By Megan Poinski
Megan@MarylandReporter.com

After criticism from Comptroller Peter Franchot about the lack of bids, the Board of Public Works unanimously approved a $72 million contract to replace six of the Maryland State Police’s aging fleet of medevac helicopters with new ones from Agusta Aerospace Corp.

The purchase of the new helicopters has been hotly debated for two years, after a crash of one of the department’s current Dauphin helicopters killed state police personnel on board. There was general agreement that the aging helicopters need to be replaced, but there were arguments over how to do it, where the money would come from, and what was needed to improve safety.

The approved contract buys six new helicopters now, and has an option for six more between 2011 and 2013.

Only one company – Agusta Aerospace – had submitted a bid to sell the choppers.

Franchot said the state should be considering more than one bid for a contract that large and lucrative — especially considering the competitiveness of the medevac helicopter industry.

He said there had been a failure in the procurement process.

“We have a responsibility to get the best deal for the taxpayers,” Franchot said. “It may be innocent, but it looks odd, given all of the attention this contract has had.”

Jim Haley, procurement officer for the Maryland Department of Transportation, said that the single bid was a surprise after a drawn-out pre-bid process. Haley said that four potential bidders were identified, and the department had met and corresponded with all of them about what they were capable of providing. The state gave them specifications and revised them after consultations.

In the end, the state got just two responses: Agusta Aerospace’s bid, and a letter of protest from American Eurocopter, which provided the helicopters the state has now. The protest was denied, so things moved forward with the single bid.

Haley repeatedly said he did not know why the other companies did not bid on the contract. He and others had worked to ensure that the specifications met both what the State Police needed and what the companies could provide. However, he added, New Jersey made a similar purchase of helicopters last year, and the only bids they received were from Agusta Aerospace and Sikorsky, which had provided the older helicopters.

Because there were no additional bids, Haley said that he worked hard to ensure that the state saved money on the helicopters they were getting. He did intense pricing research and negotiations, and said Maryland can purchase the helicopters for $1.6 million less than New Jersey paid last year.

Dick Johnson, a Catonsville resident who is a persistent critic of the medevac program, told the Board of Public Works that the state didn’t need new helicopters.

Instead, he said, Maryland should do what President Obama and the armed forces have done in refurbishing helicopters from the 1960s.

“It’s more economical to update than buy in the economy we are in,” Johnson said. “The economy is going to stay the same for four or five years.”

Gov. Martin O’Malley said that he appreciated Johnson’s opinion, but during his four years in office, he has worked hard to both save money for Marylanders and reduce spending. The helicopter contract has been scrutinized more than most in the state’s history. O’Malley said that leadership is more than balancing the budget, and this contract could better equip the state to save lives.

“We will never allow the recession or anything else take away the dignity of every human being,” O’Malley said.

Treasurer Nancy Kopp said her concerns were addressed by Franchot’s questioning and voted to approve the contract.

Despite Franchot’s frustration with the single bid, he also voted for the contract.

“This contract will pay for itself when any life is saved,” he said.