November 15, 2012

More contract problems found in transportation department by auditors

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Maryland Department of Transportation logo

Maryland Department of Transportation logo

By Len Lazarick

Len@MarylandReporter.com

The Maryland Transportation Department violated procurement procedures by allowing some contractors to perform work outside the scope of their original contracts without rebidding the jobs and without the approval of the state Board of Public Works, auditors found.

In a report released Thursday, the legislative auditors discovered that a rail safety inspection contractor continued to do work after its original contract had expired by making the company a subcontractor under a State Highway Administration contract for bridge engineering and design services.

Responding to the audit, the department said the procurement rules were bent “for the continuation of critical projects and were time sensitive. Those responsible for continuation looked to SHA, with many more contractual resources than TSO [the Transportation Secretary’s Office], as a means to retain the vendor experienced with the projects.”

Once the problem was discovered, the department said it stopped the task orders, rebid the contract and had it approved by the Board of Public Works in March.

Major problems found last year with SHA contracts

Auditors last year found major problems at the highway agency, including violations of ethics rules, failure to fully review contract bids and shifts of government funds among contracts without authorization, as was found again in the new audit.

None of the problems in this year’s audit were as serious as last year’s findings, which were passed on to the attorney general for investigation.

Transportation department officials promised to fix all the problems auditors found, which included paying contractors without sufficient documentation of the work that was done.

AFSCME logo

The logo of AFSCME

Union says procurement practices mar agency, harm workers

Patrick Moran, director of AFSCME MD, the largest union representing state employees, said it had complained about SHA contracting practices in the past and was disappointed by the new audit.

“The procurement activities cited in the report clearly bring MDOT and the agency into public disrepute,” Moran said in an email. “While we are glad that MDOT agrees with the findings of this report and agrees to take corrective action, we cannot help but wonder what has taken so long to fix these kinds of problems.”

The union leader said the department’s independent procurement authority “should be reviewed.”

“Our members are harmed by these kinds of activities,” Moran said.  “They work hard to provide quality services; management should keep its obligation to conduct activities fairly and above board.  To avoid bringing contracts through a bidding process has the potential to create favoritism and a too-cozy relationship with vendors. And to divert funds to projects other than those that were bid makes a mockery of the procurement process.”

On Wednesday, the Board of Public Works hired a consultant to help the state revise its procurement practices.

Transportation Secretary Beverley Swaim-Staley announced her resignation in April and left the department June 30, leaving with high praise from Gov. Martin O’Malley. Her deputy, Darrell Mobley, has been acting secretary since then, and responded to the audit report.

  • Maryland should consolidate all of its contracting operations into the Department of General Services (DGS). This would improve the professionalism of the contract specialists, significantly reduce poor contracts, and ensure that Maryland receives value for the taxpayers. It would also eliminate agency executives and managers from presssuring their subordinate contracting specialists from executing bad contracts. Purchase cards could be assigned to other agency personnel for small purchases, with proper controls and oversight by DGS to prevent misuse. Maryland State government is not so large that it requires each agency to have its own, often disfunctional, contracting shop.

  • cwals99

    The citizens of Maryland recognize that the policy of privatizing public works adds not only copious layers of material management and regulatory oversight (although we know that doesn’t happen, but should), it creates an environment of corruption that businesses take for granted these days as oversight and prosecution is suspended. We are telling our elected officials we want our public works staffed and managed by public employees and that centralized agency monitored.