Delegate Tony McConkey's Official Blog

State Of Maryland Procurement Confusion Costs Taxpayers $300k

maryland-procurement-confusion-costs-taxpayersOne wonders how the State of Maryland could be facing a another $400 million deficit this year after raising almost every tax and fee, more than 40 plus tax and fee increases, over the last eight years. This story helps explain why with state government no amount of money ever seems enough.

When the state needed some work done at the Dundalk Marine terminal, it turned to the contractor that charged $1,300,000 verses the contractor that wanted to charge $995,332. The explaination was a descrepancy over whether a subcontractor could be counted as a full minority contractor, as the subcontractor had been on previous state contracts, or whether the subcontractor only qualified in part.

That the state could not find a way to correct any confusion before the bids were made, and thus save the taxpayers $300,000+ shows a lack of respect for public monies and management malfeasance that is criminal.

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Contractor Unhappy With State Procurement Rules
By Bryan P. Sears, The Daily Record

A contractor who lost a bid to demolish a platform at the Dundalk Marine Terminal last month has sent a letter to state officials complaining that separate agencies within the Maryland Department of Transportation are inconsistently applying minority contracting rules.

The letter and nearly 100 pages of supporting documentation was sent to Lt. Gov. Anthony G. Brown and Comptroller Peter V.R. Franchot and to The Daily Record.
In the letter, Ralph L. Arnsdorf, an attorney for Glen Burnie-based McLean Contracting Company, wrote that his client was disqualified from a bid to demolish a roll-on,roll-off platform at the Dundalk Marine Terminal despite being the lowest bidder.

“The inconsistent manner in which the MBE participation rules are applied to bid submissions, and reviewed in the case of a bid rejection protest, is to the detriment of Maryland taxpayers,” said Arnsdorf, an attorney at Franklin Prokopik.

McLean, which bid $995,332 for the project, was rejected in favor of Annapolis Junction-based Corman Marine Construction, Inc., which bid more than $1.3 million.
Brown, Franchot and a spokesman for the Maryland Port Administration were not immediately available for comment.

Procurement officials for the Maryland Department of Transportation said McLean’s bid and the company’s subsequent appeal were rejected because the firm submitted a bid that included 7.21 percent minority business participation, which was short of the 8 percent goal asked for by the state. Corman met that requirement in its bid.

At issue was McLean’s use of a fuel company that state officials said only qualified for partial credit toward those goals Frederick W. Rich, executive vice president for McLean Construction Company, said the intent of the letter was to highlight those inconsistencies — specifically how two agencies under the Maryland Department of Transportation could interpret and apply minority contracting rules and requirements differently.

In his letter, Arnsdorf wrote that his clients believed the company qualified for full credit toward the goal because the same fuel subcontractor had been used in a similar capacity on state contracts involving the Thomas J. Hatem Memorial Bridge and the Masonville Marine Terminal.

The Maryland Transportation Authority awarded McLean the bridge contract, giving them full credit for minority contracting including the use of the same fuel company that the construction company planned to use in the Dundalk Marine Terminal Project.

The Maryland Port Administration, which oversees the Dundalk Marine Terminal, did not give McLean the same credit toward the 8 percent minority contracting goal.
“The reason the bid was rejected is they failed to effectively meet that goal,” Gary Lockett, procurement officer for the Maryland Port Administration, said during the Sept. 17 meeting.

Rich said if one agency had given full credit for the contractor “then there shouldn’t have been a problem whatsoever.” “If (the port administration) had given us full credit we would have exceeded the minority contracting goals,” Rich said. Rich said he and other company officials did not believe the bidding process was designed to benefit a specific company. Officials for McLean Construction also took exception to comments by state officials that there was discretion to allow the company to bring the bid up to standard under the so-called 72-hour rule, which allows a bidder on a project to improve the minority contractor portion of their bid within three days of submitting it.

“There is some indication that the 72-hour rule would have given the agency some discretion and allowed the contractor to cure,” said State Minority Affairs Special Secretary Zenita Wickham Hurley, during the Sept. 17 meeting. “We reminded the agency of this discretion. We advised them moving forward under similar circumstances that they should use the 72-hour rule.”

Rich said that provision was unknown to company officials until they read Wickam Hurley’s comments. He said state officials never discussed it with the company Arnsdorf, in his letter, said the 72-hour rule would not apply because it only makes provisions for companies to fix a defective bid once it becomes aware that a subcontractor no longer qualifies.

“It does not, however, allow cure upon notice from the agency of a defect,” Arnsdorf wrote. “Thus McLean was offered no such opportunity to cure any purported defect, as its bid was inconsistent with those previously awarded.”

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