Jersey
halts new pacts for school construction
Inspector general to review contracts
Friday, March 11, 2005 • BY DUNSTAN McNICHOL •
Star-Ledger Staff
The Codey administration yesterday suspended the
awarding of new contracts under New Jersey's school
construction program until the state's inspector general can
review pending deals.
Inspector General Mary Jane Cooper sought the timeout
after a meeting with the head of the Schools Construction
Corp., the agency in charge of the $8.6 billion
program.
In a letter to acting Gov. Richard Codey, Cooper asked
that the SCC "refrain from completing and/or entering into
any contracts, change orders or any other commitments for
purchases or services until we have had an opportunity to
review those agreements."
Cooper said her office "will establish a protocol for
reviewing all pending and contemplated contracts, as well as
change orders, to determine cost-saving measures."
Kelley Heck, Codey's spokeswoman, said the corporation
will abide by the inspector general's request. She added
construction already under way probably would not be
affected. "We expect that existing contracts will move
forward," she said.
The length of the new-contract suspension was unclear,
but Cooper told SCC officials yesterday she would set up the
review process "expeditiously."
Schools Construction Corp. spokesman Dominick DeMarco
said Cooper met with SCC chief executive Jack Spencer for
about 3 1/2 hours yesterday.
DeMarco said: "The SCC has said it welcomes any
productive input that will help it do its job more
productively. We see (Cooper) meshing into the process and
having it flow."
Cooper took office a month ago as New Jersey's first
inspector general, in charge of rooting out government waste
and mismanagement. Codey asked her to scrutinize the SCC
after a Star-Ledger analysis showed that schools built under
the corporation since 2002 cost, on average, 45 percent more
than schools built by local school districts at the same
time.
The Star-Ledger report found that the corporation, since
starting work 30 months earlier, had approved contract
changes costing more than $500 million, and paid $216
million to 13 project management firms -- more than triple
the rate local school districts paid their construction
managers.
In her letter to Codey yesterday, Cooper said her office
"may be able to suggest certain measures that may result in
significant savings of state funds, as well as help ensure
that the remaining school construction funds are used in the
most efficient manner possible."
According to the corporation's Web site, 133 design and
construction contracts are awaiting SCC action, and 12
change orders worth a total of $930,000 await approval.
Cooper told Codey she will ensure that any school
repairs that are deemed emergency work will receive
"immediate attention" from her office.
Gov. James E. McGreevey set up the schools corporation
in 2002 to jump-start an $8.6 billion school building
program that lawmakers had established in 2000.
Since its formation, the SCC has spent just over $3
billion. It is scheduled to approve $1.2 billion worth of
school construction work this year, and spend $2 billion.
The corporation is on track to exhaust its entire $8.6
billion allotment by next January, five years earlier than
expected, according to Spencer.
SCC officials acknowledge they will have completed less
than half the school construction work assigned to it before
the money runs out. Lawmakers have demanded an accounting of
the corporation's spending before they consider authorizing
additional funds to it.
A bill that would set up a committee to review the
state's school construction needs and the corporation's
practices has passed the Assembly and is awaiting full state
Senate action.
The corporation has announced plans to cut down the role
of project management firms in an effort to trim its
oversight costs.
Dunstan McNichol covers state government issues. He can
be reached at dmcnichol@starledger.com or (609) 989-0341.
© 2005 The Star-Ledger. Used by NJ.com with
permission.
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