By Brian Marron
Capital News Service
For the second consecutive meeting, the Board of Public Works on Wednesday criticized the University System of Maryland for vague and confusing language in requests for additional construction funding totaling more than $29 million, but eventually voted to approve the projects.
Two weeks after delaying a vote on funding four university construction projects, Gov. Larry Hogan, a Republican, and the other members on the board Treasurer Nancy Kopp and Comptroller Peter Franchot, both Democrats, once again found themselves raising the same questions.
All three expressed frustration over the University System’s convoluted explanations for additional funding for new buildings — at Salisbury University, Bowie State University, Universities at Shady Grove and University of Maryland Eastern Shore.
The University System came to the Board on Feb. 18 asking for a total of more than $29 million above what was approved in the original contracts for the four projects. The Board decided to delay voting on these projects until Wednesday because, they said, they were unsatisfied with the explanations for the requests.
University System of Maryland Associate Vice Chancellor for Real Property and Procurement James Salt, who was not present at the Feb. 18 meeting, and Joseph Vivona, the vice chancellor for administration and finance for the University System of Maryland, explained Wednesday that the additional costs were part of the appropriation awarded in the contract by the state and that these sorts of provisions are not abnormal.
Salt also said that, in addition to market changes, contractor miscalculations, especially with a new sciences building Bowie State, were primary reasons behind the need for more money.
Different and confusing explanations
Hogan on Wednesday railed at University System officials for offering what he characterized as many different and confusing explanations — presented at both meetings — regarding these projects rather than just providing a clear request.
“We want to move forward with these important projects for the University System, but we don’t want to allow this kind of process to happen in the future,” Hogan said. “We’re not satisfied with the explanation. We’re not satisfied with the process.”
Franchot also criticized the University System for requesting millions in additional funds without being able to clearly explain why.
“A murky presentation two weeks ago has gotten even murkier,” Franchot said.
Recently re-elected, Kopp also commented that such aggravating discussions about construction contracts reflect poorly on the institutions.
“You blow the credibility of the university and its process if people can’t understand (the school’s plans),” Kopp said.
Hogan, along with the rest of the board, eventually approved the projects after gaining more of an understanding of the requests, while university administrators said the additional costs would not affect the state budget. However, Hogan warned the University System that they must change their ways for future contracts.
“We’re never going to allow this in the future,” Hogan said. “So, we’re going to have to come up with a new process.”
The four projects
The four approved projects are:
–A New Center for Natural Sciences, Mathematics and Nursing at Bowie State University. The new request, for an additional $16 million, means a 23 percent increase from an initial $70 million estimate. The facility will feature classrooms, lounges and research and computer labs in support of the natural sciences, mathematics and nursing departments. This project will mean the Wiseman Center and Crawford Science Center are demolished.
–A parking garage at the Shady Grove campus. Its cost rose from $15 million to $17 million. The garage would include approximately 700 spaces.
–A new Academic Commons library at Salisbury would contain space for quiet studying, research and special events, among other uses. The final cost came in at $100 million compared to the original projection of $90 million.
–Lastly, a new Engineering, Aviation, Computer and Mathematical Sciences Building at the Eastern Shore campus features classrooms, technology labs and television and radio studios among other uses. The estimated cost went from $69 million to $71 million.
IT department slammed
The board was not so generous to the Maryland Department of Information Technology. After the board on Feb. 18 delayed a $20 million contract to Motorola regarding radio equipment for Maryland first responders, the contract was ultimately denied Wednesday.
The contract, totaling $19 million on Wednesday, would have provided increased funding to the $485 million communication contract the state has with Motorola. The department failed to account for this funding in its initial operating costs in the original contract, which Hogan said was “not acceptable.”
“I’m not adding $20 million more today because we forgot,” Hogan said, telling the department to find sufficient money for this cost within its current contract.
Franchot supported Hogan in voting against this contract while Kopp voted in favor of it.
Lastly, the state sold $518 million in tax exempt bonds at the board’s biannual bond sale, earning a net premium of $74 million. In addition, the state sold $365 million in tax exempt refund bonds with a net premium of $55 million. Tax exempt bonds are typically issued by local and state governments and are not subject to federal interest payments. The sale saved the state $22 million in debt service costs.
Kopp said the results serve the citizens of Maryland well knowing the state is a place to invest their money.
“The State’s taxpayers benefit from saving millions of dollars because of our strong AAA bond ratings and resultant lower interest rates,” Kopp said. “Overall, Maryland’s citizens benefit from the investment in Maryland’s schools, colleges, hospitals, prisons and cultural projects that are supported with bond proceeds.”
Maryland retained its AAA bond rating in February and is one of only 10 states that hold such a rating, Kopp said.
BPWs’ principals haven’t brought a proper degree of skepticism to these meetings in a decade or longer. However, the skeptism on display during this meeting shows a substantial degree of procurement illiteracy on the part of those principals. USM is not entirely to blame for complaints about ambiguity, However, if Vice Chancellor Vivona cannot translate his own procurement experts’ jargon into plain english, then I submit he doesn’t understand what his own procurement people are doing and therefore he needs to be replaced.