Posted on 11/28/2002 4:51:52 PM PST by GailA
Cooling 2 schools may cost double Agreed-upon price stuns outside expert
By Aimee Edmondson edmondson@gomemphis.com November 28, 2002
The kids at Whitney Elementary and Longview Middle need new air-conditioning - but taxpayers could get fleeced.
No contract has been signed yet, but Memphis City Schools has agreed to pay millions more than necessary to replace heating and cooling in the two schools, according to external estimates.
The overpayment has staggering implications for taxpayers: The two schools are first in a group of 26 waiting for new air-conditioning and heating.
And now some school board members and staff are fighting over who gets the blame.
The school board unanimously agreed without discussion this month to award a $14.9 million contract to its only bidder, air-conditioning giant Honeywell International.
However, a Louisville, Ky.-based consultant hired by The Commercial Appeal said that price is more than double what it should be. And he isn't the only expert questioning the price.
Mike King, an estimator with 13 years of experience, pored over the plans for both schools for about 30 hours. His firm, J & J Mechanical, a subsidiary of Comfort Systems USA, has worked on scores of schools and commercial buildings.
Instead of $14.9 million, he said the jobs are worth closer to $7 million.
King didn't know the price agreed to by the school board until after he turned in his price.
He was shocked at the difference.
"Oh my gosh, you're kidding. I'm amazed somebody can actually get away with that," King said.
"I will come from out of town and do both of those jobs for $10 million and that would buy us a new building and buy us all new trucks."
King used the same wage rates provided in the school system specifications, the exact heating and cooling systems and design plans as Honeywell.
A city schools administrator also had misgivings about the price.
Several days after getting Honeywell's Oct. 17 bid, director of facility planning John Williams called a friend for a favor.
Williams, who has since resigned for what school officials said are unrelated reasons, asked Page Inman of Inman Construction to price the job as a courtesy.
At the time, Williams said, he was concerned that the lone bid was too high.
Because the bulk of the work would be done by a heating and air-conditioning contractor, Inman then turned to W. A. 'Buddy' Soefker, of W. A. Soefker & Son Inc., a Memphis firm specializing in that type of work, to price the biggest part of the job.
Inman, a general contractor who has built many city schools, then estimated for Williams the price of the minor renovations for Longview Middle and Whitney Elementary, including ceiling, door and lighting replacements.
Inman's final estimate for the two schools was $9.1 million, a whopping $5.8 million less than Honeywell's price agreed to by the board several days later.
When asked about the difference in price, Williams said he didn't give Inman the final plans, that an extra $2 million in work per school was tacked on after Inman quoted the job, bringing it to $13.1 million.
This included extra construction work, engineering fees, demolition and management fees, Williams said.
However, Soefker said there was no change in the scope of the work, and the construction plans obtained by The Commercial Appeal show no revisions have been made since Inman gave his $9.1 million quote.
Soefker reviewed the plans released to The Commercial Appeal and said they are one and the same. He said Inman even padded his quote so as not to offend Williams and make the school system look bad.
"Inman's price included the entire job, electrical, mechanical and construction," Soefker said. "They're just trying to put up smoke and mirrors.
"The bottom line is Honeywell's price is twice what that job's worth."
Repeatedly over several weeks, The Commercial Appeal tried to talk to Inman.
Yet Williams said Honeywell's price is a good one.
"The price doesn't keep me up at night," he said.
Jim Lucy, Honeywell's representative in Memphis, referred all questions to his company's public relations repre sentative, who could not be reached for comment Wednesday.
After the school board agreed to go with Honeywell in late October, school board member Barbara Prescott said she became concerned about the price.
Three days ago, over board member Hubon 'Dutch' Sand ridge's protests, she persuaded the majority of the board to revisit the issue at its next meeting, set for Monday.
She asked that Inman's quote be distributed to the rest of the board.
When told of the price quoted by the consultant to The Commercial Appeal, Pres cott said:
"Companies are benefiting and kids are losing, and I'm not going to stand for it. This just makes me furious."
Sandridge and board member Wanda Halbert serve on the school board's construction committee, which recommended the board hire Honeywell.
They said they relied on Supt. Johnnie B. Watson's staff to advise them on how to handle construction work.
Associate Supt. Roland McElrath said Wednesday during a committee meeting that the staff never recommended the board take the lone bid for Whitney and Long view.
The city school board no longer takes the low bid for its construction work. Instead it contracts the work to a "construction manager." This is considered a professional service and therefore it's legal to pick a company on its qualifications and job proposal rather than on low bid.
McElrath on Wednesday told the committee the "management" approach to the job was "not a proper approach."
The board can pick the company it wants, looking at qualifications and even the percent of minority participation first, then negotiate a price.
In almost all cases, the winning contractor has promised on paper that he'll use minority-owned vendors.
For air-conditioning and heating, 90 percent of the work in city schools goes to Gipson Mechanical. The other frequently used contractors are minority-owned Allied Electrical and Tri-State Plumbing.
All three are the subcontractors in Honeywell's bid on Longview and Whitney.
And it's this work that prompted the latest lawsuit by white-owned companies charging discrimination.
These companies have long asked that the school system change its program to favor small businesses, which will automatically help fledgling companies of all races and both genders, they assert.
In late October, the Mechanical Contractors Association of Memphis (MCAM) and the West Tennessee Chapter of Associated Builders and Contractors Inc. (ABC) asked for a temporary restraining order against the city school board.
After seeing the requests for proposal (RFPs) on the Whitney and Longview job, the two groups charged that the school system is breaking the law by considering race and gender in awarding contracts. Language in the Whitney and Longview RFP stated that preference would be based on minority participation.
But school officials maintain they are following a federal judge's 1999 order to stop considering race and gender in awarding contracts. They insist they have a "race- and gender-neutral" program that merely monitors how much business minority- and female-owned companies are getting.
The history of Memphis school construction is mired in lawsuits over its affirmative action program that has steered millions in work to a handful of minority contractors over the last several years.
Memphis City Schools has a history of forcing taxpayers to pay high prices for schools, as previously reported in The Commercial Appeal.
In many cases city schools cost about double that of Shelby County schools.
The city opts for fancier features, such as vaulted entryways with lots of common space, more expensive materials and air-conditioning systems.
But local contractors have long said prices are inflated on top of that, largely because the board has been getting only one bidder on big school construction packages.
Those bidders have to have "the right subcontractors" to get the work, said David Sink, executive director of MCAM, referring to competitor Gipson Mechanical.
Board members Prescott and Lora Jobe, both of whom are white, also have questioned the board using the construction management process.
"Something is wrong with this process if we continue to get one or two bidders," Prescott said. The district is buried under half a billion dollars in needed school improvements that remain unfunded. This includes those at East High School, where parents' requests to shut down the school due to mold contamination continue.
- Aimee Edmondson: 529-2773
We have two seperate governments. One for the County and one for Memphis. Don't mention CONSOLIDATION, it won't work. Memphis has a bad reputation on schools the worst in the State and crime. Every area they annex goes to POT in just a year's time.
FYI, poorly designed, installed and maintained air conditioning systems are a major contributor to such problems, especially in a climate like that of Memphis.
Low and behold, I was right.
P.S. It did not work.
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