By most measures, the Charleston, S.C., school construction program is a resounding success. Two years ago the district adopted "big project" protocols for its growing $365-million building program and hired a 27-year ex-Navy construction chief to run it. William H. Lewis brought with him the military's "toolbox" of alternative contracting methods that includes prequalification of bidders on difficult or time-sensitive projects and use of large program and construction managers. The district's jobs are coming in on time and within budget. "It's been such a positive thing for this community," he says.
School building chief Lewis says firms must learn new ways. (Photo by Wade Spees for ENR)
But not all Carolina contractors feel like welcome members of that community. To some small firms that have traditionally bid on local school and other municipal jobs, "RFP" now might just as well stand for "regrettable flawed practices" as it does request for proposals.
Contractors are worried, and in some cases outraged, that public works agencies and their proposal evaluation committees can push them around--and possibly out of a big portion of the booming school building market. Charleston County also recently recruited a Navy alumnus to head its program who, before he left a few months ago, introduced use of simultaneous technical and price submissions.
Some firms claim the new protocols amount to a wasteful system that has awarded contracts to other than low bidders and may allow favoritism or blackballing. "It's possible that people in control have more power than they need and can break any contractor," says one contractor who insists on anonymity.
|CONTEST District and contractors dispute project track records. (Photos by Wade Spees for ENR)|
The bad feeling is growing in Charleston even though its school district and agencies are using low-bid alternatives on less than 20% of all work. But as recent huge school bond votes channel billions of new dollars into the marketplace and construction work explodes, the same innovations that have swept federal contracting are surfacing locally. Schools are excellent candidates because under traditional bid competitions "there's no good way of guaranteeing schedule," says Donald G. Gardner, vice president of planning and development for DWB Architects and Engineers Inc., Marietta, Ga.
In California, Lou Smith, a retired Navy rear admiral and former commander of the Naval Facilities Engineering Command in Washington, D.C., now serves as chief operating officer for the San Diego Unified School District. He says that while state law limits some contracting alternatives, he wants to use as much of the Navy "toolbox" as possible. Smith says that approach helped accelerate San Diego's slow-moving school construction program by chasing away many poor-performing "marginal" firms. "We disqualified tons of two-person contractors with a pick-up truck," he says.
INEVITABLE? Until the past year, contractors in closely knit Charleston and South Carolina's coastal "low country" had accepted the new contracting methods as inevitable. There was still plenty of work awarded in traditional bid competitions and complaints were mostly private. But in recent months as economic slowdowns have affected workload, the grumbling has gotten louder and more public.
Charleston contractor groups, with the endorsement of the Carolinas Associated General Contractors group and regional surety association, formed a group called the Open Competitive Bidding Alliance. It sent letters to county school officials and to a state senator, questioning the fairness and effectiveness of the school district's policies and procedures.
|MAKING THE GRADE A big contractor building this Charleston, S.C., high school is rated highly by the school district. (Photo by Wade Spees for ENR)|
The Alliance's Oct. 4 letter to school officials, obtained by ENR, is full of phrases such as "behind closed doors" and "unfairly limit competition" that suggest moves to favor some companies and exclude others. And while school officials claim that awarding work to other than low bidders is a necessary component of "best-value" procurement, the letter also raises the specter of waste to rattle taxpayers and politically sensitive school board members. The Alliance points out that on one recent small project, some contractors failed to qualify even though they "have done work and received accolades from the district." Says its letter: "How can a contractor be qualified on one job but be deemed unqualified on a smaller project?"
The exact number of protesting contractors is not clear because few allow public exposure for fear they will be ostracized by school district and county officials--or the architects and engineers on proposal review committees. But the Alliance's Oct. 4 letter includes signed endorsements from some Charleston mechanical and electrical contractors and women-owned construction firms.
Privately, contractors complain that the procurement rules force small firms to spend more money and shoulder more risk to win work. "An architect takes two years to design a school and then they want it built in 14 months," says Alfred T. Johnson, vice president of surety agent BB&T/Boyle-Vaughan Insurance, Charleston. In addition to the time and expense of preparing more complicated proposals, a process some bidding firms don't handle well, contractors say they must tie up surety bond capacity while submissions are evaluated.
playing field. The new methods have redrawn the competitive playing field in and around Charleston. Growing school and municipal construction programs have attracted bigger out-of-town firms, such as Atlanta-based Heery International, to the area. Among those that have successfully competed under the prequalification system are Beers-Skanska, a part of the Stockholm-based giant Skanska AB, and M.B. Kahn, a Columbia, S.C.-based contractor that performs hundreds of millions worth of work a year, much of it schools. Now one small local firm says it must reluctantly hit the road to keep its volume up. "We've stayed local as much as we could in the past, but we have to work, and this has forced us to move into other areas as larger contractors moved into our area," says an owner of a firm that performs about $20 million worth of work a year.
Although contractors dance delicately around the subject in their letters, firms speak in interviews of a perception that the school district has greater power over them. After careful evaluation by staff, committees and the superintendent, the district reserves the right to refuse a bid on a "critical" project from a contractor whose work on a current or past job is considered lacking.
While district officials and the protesting contractors say they want to keep the conflict from becoming personal, sources say that has already occurred. Joey Infinger, a project manager with respected North Charleston contractor Emory J. Infinger & Associates Construction Co., is president of the Charleston Contractors Association and a signer of the Oct. 4 alliance letter. Infinger did not prequalify to bid on the $4.5-million C.E. Williams Magnet Middle School, because the district deems its work on a larger job unsatisfactory so far, according to school officials. Infinger is reluctant to discuss that project and complains that "everyone thinks [the protest letter] is sour grapes, but it isn't."
Infinger says the real issue is the school district's use of what he claims is a closed and complicated process that concentrates power in the hands of designers who sit on its proposal and qualifications review committees. "Our industry is a pretty small and minute community, and if you ever have had a falling out with an architect or engineer, pretty much everybody knows," he says. "There's no way that this can't come into play when making decisions. That's the problem we have."
POWER. Construction chief Lewis, formerly commander of NAVFAC's Charleston-based southern division, has himself become a focus of the arguments. "I told him that he has too much power, and that one person should not be in control with public money," says Infinger.
But Lewis is also the man that contractors face on difficult projects. This past summer, Emory Infinger, Infinger's father and firm president, met with Lewis several times to discuss the high school project's progress, but Joey Infinger is worried about the new and unfamiliar advantage of a government official over a small contractor who bids and performs less than $25 million of work a year. "If he decides no jobs to Infinger, it can put us out of business," says the younger Infinger.
Lewis and other public works officials counter that such denials represent a government owner's proper exercise of responsible business judgment and discretion, not unlike what private companies enjoy–the right to evaluate a contractor based on past performance. He says that a rejection of prequalified status is not a permanent condition for a firm.
But personal differences often surface. Alliance officials have been particularly up in arms that contractors on the Williams school procurement were subject to prequalification. Without naming any individual firms, school district Superintendent Ronald A. McWhirt explained in a Nov. 1 written response that an evaluation committee rated six companies acceptable or better. Two Charleston general contractors received marginal ratings and failed to prequalify because they had "current projects with the district that were not on schedule and had subcontractor coordination and quality programs that required major elements of work to be torn out and rebuilt," he noted.
However, according to publicly available information, Infinger is the contractor on the multimillion-dollar James Island High School, which district officials consider behind schedule. They also requested that the firm and its subcontractors redo roofs and concrete work. Joey Infinger says that any problems on that project have been corrected. He adds that while the job is a little late, its current problems revolve around a concrete subcontractor that is no longer on the project.
During a recent meeting, the school's assistant principal described the project as one of the smoothest contracting jobs he has seen, according to Infinger. "I looked at Bill Lewis and wanted to bite my tongue," he says. The assistant principal could not be reached for comment, but Lewis says general contractors are responsible for poor work by their subs.
In his letter, McWhirt also notes that one local general contractor that failed to prequalify "had a recent fatality" related to a sub's delivery of steel to the site. According to records of the South Carolina Dept. of Labor, Licensing and Regulation, self-employed delivery driver Benjamin Carson brought a load of steel products weighing 7.5 tons to the R.D. Schroder Middle School last Jan. 7.
While unloading the steel, a long bundle swung and hit Carson in the head, causing his death five days later. The project general contractor, Brantley Construction Co., is the other firm that failed to prequalify for the Williams project. Brantley staff were not present when the accident occurred after normal business hours, and it is not clear whether Brantley could have controlled or prevented the accident. "They did not cause the accident, but they did not prepare the area for the delivery, and they are responsible for the site," says Lewis. Brantley is an active member of the alliance, but company officials decline to comment on the Schroder job. Joey Infinger agrees that the accident was a tragedy, but he wonders how fair it is to hold this type of event against the prime contractor.
VALUE. Lewis emphasizes that contractor prequalification will remain a key selection tool for the school district--a factor in up to 25% of 20 construction projects that it plans to award in the next 18 months. "We feel strongly that by using the prequalification process on our larger and high-risk projects, we are delivering great value to our constituents and building quality schools for our students," he says.
Rather than characterizing the school district's prequalification procedures on some jobs as a power shift, Lewis prefers to call it a "market shift." He proudly points to small local companies that are prequalifying to win jobs under the new system. "These firms have the wherewithal to make this happen," Lewis said in a recent e-mail. "NO EXCUSES!"
Charleston's alliance contractors maintain their opposition to what they claim is the district's concentration of power. But they will also likely have to live with the shift and a smaller universe of bid projects--unless they can roll back a procurement tide that may soon be sweeping the country.