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URI building contract at issue

01:00 AM EDT on Tuesday, April 8, 2008

By Cynthia Needham

Journal State House Bureau

PROVIDENCE — The Senate committee investigating the way the state hires builders for certain public projects took aim at University of Rhode Island officials yesterday, hinting that they negotiated a building contract that was both costlier and riskier than necessary.

The URI contingent, led by vice president for administration and former U.S. Rep. Robert A. Weygand, shot back, saying they were being unfairly accused with no lead time to prepare their response.

In its first official hearing on the matter, the Government Oversight Committee, focused on URI’s yet-unfinished $45-million biotechnology and life science center as an example of why the state’s alternative bidding practices may be expensive and unfair.

State purchasing regulations dictate that traditional sealed bids are the preferred method of awarding public construction contracts. But there are many exceptions –– times when the particulars of the project require a different arrangement.

With the state’s approval, URI officials relied on an alternative method for the biotechnology center, saying the complexity of the high-tech facility meant that exact costs and designs could not be determined at the outset.

That delivery method, known as a “construction manager at risk” contract, allows the manager –– in this case Gilbane Building Co. –– to continue negotiating on plans and budget with the customer and the architect as construction moves forward, provided that it doesn’t exceed a guaranteed maximum price.

Local representatives from the American Institute of Architects and the Association of General Contractors testified yesterday that this method offers greater flexibility on complicated projects and often gets the job done faster, since certain design changes can be made on the fly.

But the panel of senators, led by staff lawyer Linda George, questioned why, after choosing an alternative method, the university then deviated from industry standards for such contracts, increasing potential costs and the risk to the state.

Weygand denied those allegations but otherwise had few answers. The committee, he said, did not show him its lengthy PowerPoint presentation prior to the hearing, or give him any indication of what he would be asked, apart from saying it would be about the contract.

“We would have appreciated at least the opportunity and the courtesy to see those questions ahead of time so we could have professionally responded to them with documentation and legal recommendations on each one of those,” he said.

Committee Chairman J. Michael Lenihan, D-East Greenwich, said that’s untrue. URI was given a clear understanding of what was discussed yesterday and should have come prepared. “There were a number of changes in the standard [alternative] contract. Our purpose here today was to find out why those changes were made and to whose benefit they accrued,” Lenihan said after the hearing. The chairman nonetheless agreed to postpone the proceedings two weeks, to allow URI officials to prepare.

The alternative bidding inquiry follows a lengthy Oversight Committee investigation last year of the Carcieri administration’s use of private companies to staff state government. It comes less than a month after the state awarded a $65-million alternative bidding contract to Gilbane to construct a College of Pharmacy building at URI.

A year ago, the biotechnology building itself came under fire when construction company A.F. Lusi sued the state, alleging that it awarded the building contract to Gilbane without following state regulations. A judge agreed and the state’s ability to award such contracts remains yet unclear.

In preparation for yesterday’s hearing, members of the Senate Committee last week visited the partially constructed biotechnology center. Clad in hard hats, the group toured the facility’s shell, from its depths to its roof, despite the wind and rain that fell in the unfinished building. Throughout the afternoon, they peppered university officials with questions about materials, design and costs.

Lenihan hailed the visit as a success, saying it was important for members to see firsthand where the money is going and why URI felt it needed to pursue an alternative contract.

Weygand yesterday said URI will continue to answer questions and open its doors to the Senate as the inquiry moves forward.

“We just hope they will return the favor and treat us in a very professional manner,” he said. “We were very disappointed today having such specific questions being thrown up on a PowerPoint which was obviously was prepared some time ago and not even told the kind of detail they were requesting of us.”

cneedham@projo.com