Contractors cast aside
Posted on Thursday, December 7, 2006
Agrowing number of contractors and subcontractors across Arkansas are spitting nails because our state has exchanged its competitive bidding laws, designed to ensure integrity within the process, for statutes that basically allow officials to choose who gets public construction contracts valued above $ 5 million. In the case of municipalities, the nobid requirement is any project above $ 2 million. They have a legitimate beef that affects everyone in the state. Erasing the traditional bidding process for multimillion-dollar public projects can’t help but open the door to unsavory practices. The terms favoritism, kickback and corrupt practices leap to mind. Ever heard of inflationary gems in construction such as cost escalation clauses, customized change orders and built-in bonuses for labor ? It is flat wrongheaded to give a group of state and local officials the power to assign public dollars to their favorite construction company rather than forcing every qualified business to compete for such jobs, as was constitutionally mandated until 1997.
The 45 or so members of the non-profit Contractors for Public Protection Association, or CPPA, are upset by three specific changes in Arkansas law during the past nine years that have all but killed competition for major state and municipal construction projects.
The situation began to develop in 1997 when special interests prompted the Legislature to approve Act 961, specifically aimed at the Jones Eye Clinic at the University of Arkansas for Medical Sciences. But that new law also cracked the egg of Article 19, Section 16 in our state Constitution, which had provided that “all contracts for erecting or repairing public buildings... be given to the lowest responsible bidder, under such regulations as may be provided by law.” Act 961 said that when private sources provided at least 80 percent of the funding for a construction project estimated to cost more than $ 5 million at a public institution of higher learning, the contracts could be negotiated without an offering to the public, an opportunity to compete or any basis for exact comparison of bids.
In other words, this act bypassed the constitutional requirement that such contracts be bid.
After Act 961 became law, a second shoe dropped. In 2001, the Legislature, still pressed by special interests who must have sensed even greener no-bid pastures, approved Act 1626. That statute dropped any references to private funding and allowed projects for state agencies that exceeded $ 5 million to be negotiated rather than put out for bids.
The final footfall came with the passage of Act 1989 of 2005. This law said that any municipal project exceeding $ 2 million was exempt from seeking bids. Now the cities were involved in negotiating construction projects with their favorite brand of general contractor, thus leaving all others out of the contest.
The net result has been that a significant number of highly lucrative public construction jobs are now “negotiated” rather than bid. Who do you suppose invariably gains and loses most from that nifty arrangement ?
My feeling is that unless our high court or the Legislature reverses these actions and we return to the process where the integrity of competitive bidding can help ensure the best financial situation for the public and all contractors, we taxpayers likely will be shelling out much more than is necessary for multimillion-dollar projects in years to come.
The CPPA feels likewise, according to its president, David Gatzke of Sheridan.
“For whatever reason, the media hasn’t picked up on this situation,” Gatzke said. “We sent several press releases to media and no one responded. Of course, they get to decide what’s news, not us. We’ve been very disappointed at the lack of public attention on this issue. It’s a huge taxpayer matter for our state, including all the Arkansas contractors and subcontractors.” Gatzke said there are 10, 052 licensed contractors across Arkansas, “yet those now who’ve been afforded the opportunity to contract for the lucrative, noncompetitive public projects totals less than 100 contractors and subcontractors statewide. And none of the work being done today is even being audited. That’s just not fair to anyone involved, including the taxpayers.” “ We’ve issued FOIA requests to see where all the money is going, ” he continued. “We’re also pursing legal action and working with state representatives and senators to make them aware of the situation. Many of the legislators didn’t understand what was happening when they passed these new laws under obscurely worded titles. Our ultimate goal is to obtain the ruling that what’s been done is unconstitutional.” I’m no constitutional authority, but my sniffer’s always worked pretty well, and eliminating competitive bidding in Arkansas carries the aroma of a herd of polecats mating beneath the floorboards.
—–––––•–––––—Staff columnist Mike Masterson is the former editor of three Arkansas daily newspapers.
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