PROVIDENCE — The state has been paying the equivalent of $102,858 a year — including a 145.99-percent markup and a guaranteed 10-percent profit — to a private company to supply a “typist” to the Department of Transportation control center that provides traffic updates on radio and billboards.

At $18.35 an hour, clerk-typist Karenlee Bernardo makes the equivalent of $38,181 a year.

The other $64,690 goes to the company that employs her, Vanasse Hangen Brustlin Inc., for “overhead” and “profit.”

And she is just one of 36 employees that the Watertown, Mass.-based engineering consulting company is providing the DOT’s Transportation Management Center at an estimated $2.6-million cost this year.

The roster includes staff engineers, draftsmen, operators and at least one other typist. Hired under an $8.4-million, four-year contract first awarded in January 2004, these are the people staffing the technology center that oversees the 85 traffic-monitoring cameras along major roads and produces the traffic accident and construction reports on the radio.

The VHB staffing contract — financed 80 percent by the federal government — is the latest to emerge in the escalating controversy over the Carcieri administration’s use of private companies to staff state government.

A Senate government-oversight committee has been focusing its inquiries on the administration’s award of a no-bid staffing contract worth upward of $11 million annually to the Foxboro, Mass.-based Smart Staffing Services. The state pays Smart Staffing a 22.5-percent premium. But the Carcieri administration did not disclose the VHB contract when asked by The Providence Journal in early March for records pertaining to other private employees in state government.

An anonymous tip to the newspaper brought to light the four-year “strategic development and operational support” contract, worth an estimated $8.4 million, which the administration gave Vanasse Hangen Brustlin in 2004.

Top officials in the Carcieri administration have hailed the use of such contract employees as a way to fill short-term staffing needs, or engage workers for time-limited projects without making them full-time employees entitled to health, pension, sick-time and vacation benefits.

In this case, however, it appears the state is paying thousands more to hire a clerk-typist through Vanasse Hangen Brustlin that it would by hiring a full-time state employee.Pay for a clerk-typist typist starts at $26,746 a year (or $14.70 an hour). The state pays another $8,716 (32.59 percent) in Social Security taxes and fringe benefits, including unemployment, workers’ compensation and retirement contributions. Family health coverage would cost $15,820 more.

At $51,282 in wage and benefit costs, this worker would cost the state half what the state is paying VHB.

When first asked on Monday why the Department of Administration did not disclose the contract earlier, Carcieri spokesman Jeff Neal said: “The Access to Public Records Act requires the public body to provide responsive documents in a specific time frame. It does not, however, require a public body to seek out documents that it does not possess.”

On its Web site, Vanasse Hangen Brustlin takes credit for having “delivered the operational system for a fraction of the cost and time needed to build similar centers in other states.”

But the company did not respond to inquiries yesterday. And neither the governor’s office nor DOT could explain how the state calculated the “overhead” for running a traffic-monitoring center out of a state building across the street from the State House. Asked why the state agreed to pay the 145.99 percent — plus a 10 percent fixed fee — Neal and DOT spokeswoman Dana Nolfe suggested the rates were dictated by federal law.

“Governor Carcieri is surprised and very disappointed to learn that this federal law requires the state to pay such an artificially high markup on these federally funded engineering contracts,” Neal said. “From the governor’s point of view, there is no good reason that the federal government should require the state to waste this amount of federal money.”

Asked if an investigation by the Bureau of Audits was warranted, Neal said: “No. For better or worse, we already know exactly why we are paying such a high premium on these federally funded engineering contracts. Federal law requires it. No investigation is needed. What is needed is a change in the federal law.”

The answer is not that simple.

In the mid-1980s, Congress passed a law that recognized that the lowest bidder was not necessarily the most-qualified bidder to build a heavily traveled roadway or bridge, according to Federal Highway Administration spokesman Doug Hecox.

Hecox said the law enabled states to pay “what the market will bear” for construction and engineering talent. He said more and more states are taking the opportunity to “separate their construction and engineering services contract” so they don’t fall under these procurement rules.

For states such as Rhode Island that have not yet taken this step, he said, federal law spells out a methodology for determining payment rates for a contract such as this for “specialty service jobs, that require special training for which the market can be competitive because there are so few.” He said the amounts can vary from state to state and he could not vouch for the 145.99 percent paid VHB.As for the $102,858-a-year typist, he said, “that’s why many states are beginning to look at” separating their contracts so they “are not spending so much on services that shouldn’t cost that much.”

But “I don’t know that the state has done anything wrong,” he said. “So far as I can tell, based on what little I’ve seen, all of the federal regulations appear to have been followed.”Yesterday, in answer to questions about how the 145.99-percent markup was arrived at, the DOT made public an April 4, 2004, memorandum from its auditor, Elizabeth J. Swartz, to chief of audit and review, James R. Choquette, that said: “A limited review was performed on the above subject consulting firm….No detailed audit is necessary. It is recommended that the rate of 145.99 percent, as accepted by the Massachusetts Highway Department and adjusted for the state of Rhode Island, be accepted…”

While the federal government is paying 80 percent of the total cost of the contract, the state is paying 20 percent: approximately $532,379 this year.

“You can believe we will be asking questions about it,” Sen. J. Michael Lenihan, the chairman of the Senate committee investigating the Carcieri administration’s contracting practices, said yesterday.

Neal said: “The governor was not previously aware of the existence of this federal law or its impact on how the Department of Transportation is spending federal dollars,” but now that he is, he supports new DOT Director Jerome Williams’ “efforts to determine whether it is possible under federal law to carve out the small amount of non-engineering services involved in the contract, so that we can reduce the amount of federal dollars we pay for that function.”

But state Democratic Party Chairman William Lynch said: I find it outrageous and frankly inexcusable that Governor Carcieri would allow this company to charge such ridiculous markup fees…. You don’t have to be an accountant or fiscal genius to realize that this deal stinks.”

The House Finance Committee, meanwhile, considered a bill introduced by Rep. Elizabeth Dennigan, D-East Providence, to require monthly reporting on the use of non-state employees to staff state government; efforts made to fill the jobs from within and the rationale for not using state employees or services.

Objecting strenuously, Daniel W. Majcher, supervisor of fiscal services for the Department of Administration, said the bill would impose “onerous reporting requirements.”

“We’re all for transparency,” he said. “But we want to do it in a reasonable way.”

With reports from Steve Peoples of the State House Bureau.

kgregg@projo.com