One of the facets of school costs that can drive
up property tax bills is large-scale infrastructure projects. Many school
buildings across Pennsylvania are many decades old and require costly
maintenance or replacement.
The traditional way that such a project gets
completed is by putting out a notice to builders that they can bid on the
contract, and then the lowest bid that meets the contract’s stipulations wins
the job. But another method that has seen some popularity in Pennsylvania and
across the country largely circumvents the public bid process, drawing
accusations that it has left taxpayers on the hook for inappropriately inflated
expenses.
The Pennsylvania House State Government
Committee held an informational hearing Thursday to look at the topic in
relation to legislation proposed by Rep. Jesse Topper, R-Bedford. His bill would end the practice of using
cooperative purchasing agreements to arrange for school infrastructure
projects.
“We certainly live and operate in a time when
school districts are looking for any opportunity to save money,” Topper told
committee members. “We also know that a huge cost to school districts is any
kind of a construction project, whether it be a roofing project, an expansion,
renovation.
“And so we're just looking to make sure that
this system that we have currently in place that offers not only competitive
bidding but also this cooperative purchasing for construction is actually
working,” he continued. “I think there have been cases across the state where
it has not been working.”
Cooperative purchasing is a practice used in
both the public and private sector whereby different entities – businesses,
school districts, etc. – combine forces to overcome their relatively small
stature and negotiate for better terms in the purchase of supplies or
equipment.
“Cooperative purchasing is useful,” said Janiel
Mack, who was testifying on behalf of the Coalition for Procurement Reform, an
industry advocacy group. “It's a useful tool if used for the intended purpose
of commodities, such as papers and pencils and chairs. This practice however,
has morphed into non-commodity construction items, costing the taxpayers and
state of Pennsylvania millions of dollars unnecessarily.”
According to Mack, the co-op process has made it
easy for school administrators to more or less outsource the competitive bid
process and not have to wrangle with all the arcane details. The downside, she
said, is that the school district doesn’t get the best possible price.
“Through independent studies and FOIA requests,
it's estimated that the state of Pennsylvania has overspent for school
construction costs in excess of $100 million over a five-year period,” she
said.
Mack provided a number of specific examples
where districts had established pricing through the co-op process but then
turned to the traditional open bid process because of taxpayer pressure.
“Big Spring School District [had a] 180,000
square foot roof,” she said in one example. “Through the co-op, the price was
$2.4 million. The competitively bid price was $1.4 million for the same roof.
That's a million dollar savings on one roof.”
Rep. Pam DeLissio, D-Philadelphia, seemed to
suggest that if school districts were failing to get the best possible deal
with taxpayer funds, it would be up to voters to replace the school board
members rather than state government getting involved.
“School boards are elected bodies,” she said.
“They’re elected by their communities. School boards are held accountable when
they run for office every four years. So what this sounds like we're saying is
that school boards are not acting in an accountable manner, nor those personnel
who are running the school districts.”
But to Mark Sobeck, president of Mark J. Sobeck
Roof Consulting, individual citizens have had limited success fighting the
practice on a district-by-district basis.
“People go to the school board meetings and
throw fits about it, and they write letters to the editor and they're in the
papers,” he said. “We see them all the time. We get copies of them all the
time. But it doesn't faze the school board. When their mind is made up, they
are getting this system, and we don't know why. We'll call them, we’ll contact
them, we’ll explain that they're paying two to three times as much. And it
falls on deaf ears.”
John Brenchley, Chief Innovation Officer with
Central Susquehanna Intermediate Unit, an association of school districts that
oversees one of the most-used co-op programs in the state, argued that school
districts that rely on standard public bidding for infrastructure projects are
left in the lurch if the work is not up to snuff. He told the committee that in
a past job as a business manager for a school district, he’d had bad
experiences with public bid contracts leading to leaking roofs that had to be
re-bid for repairs, but with cooperative purchasing, the vendor has to provide
fixes at no extra cost.
“Individually, when we have the schools work
with contractors, we really have no power, because once the job's done, it's
done,” he said. “The comment [from the contractor] is, ‘well, go and sue me.’
When you go through cooperative purchasing, you have the power of the
cooperative purchasing behind you.”
Upon questioning by Rep. Matthew Bradford,
D-Norristown, Brenchley revealed that Central Susquehanna Intermediate Unit
makes about $2 million annually by administering cooperative purchasing
agreements. Since CSIU established the co-op program for school infrastructure
17 years ago, the only company to have won that contract is Weatherproofing
Technologies Inc., which in turn hires local contractors to do the actual work
– vendors that could be hired directly by the district through traditional open
bidding.
Rep. Frank Ryan, R-Palmyra, a frequent voice on
the committee on accounting best practices and fraud prevention due to his
career as a CPA, seemed to have a problem not so much with the co-op program
itself, but with the fact that in many cases it entirely supplants the open bid
process.
“I'm reluctant to constrain the school district,
but at the same time I'm reluctant to have the taxpayer foot a bill that
something that's unnecessary,” he said.
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Rep. Topper, and Ms. Mack are nicer, far more civilized, and professional than I will ever be. I'm not allowed in courtrooms because I carry a WWII flamethrower, and the scanner machine will 'beep" every time.
If you care to see my comments regarding the above, you may find them here:
https://www.delcotimes.com/news/state/lawmaker-state-overspent-for-school-construction-costs-in-excess-of/article_7bf6b39d-67d8-5eae-9e4b-da2450d88bea.html
We do not want qualified manufacturers excluded from a bid list, and that includes Tremco. They are welcome to compete with the rest of us.
All we're asking is the opportunity to compete for our own tax dollars.
Does that sound fair?
Does that sound reasonable?
Of course it does.
Reject negativity in all forms, and always remember to keep looking "UP"
Respect.
Robert R. "Ron" Solomon
Public Procurement Analyst
State Certification CCC 1325620
Licensed Consultant
Tampa, Florida
RobertRSolomon@aol.com