Leader Emerges for Air-Conditioning Work

After months of turbulent bidding for a lucrative air-conditioning contract, a clear front-runner emerged Monday as a Los Angeles school official recommended one of four outside firms competing against the district’s own management team.

In a surprise move, the district’s new business czar, Hugh Jones, recommended New West/Rogers Corporate Alliance, an Orange County joint venture that had been passed over in earlier evaluations of bids for the about $200-million job financed by the Proposition BB bond approved by voters in April.

Jones told the Board of Education on Monday that the firm’s price of $180 million for installing air-conditioning in about 300 schools was $50 million less than the next lowest bidder.

The district’s management team, hired in June to oversee more than $1 billion in bond-financed improvements, had the third-lowest bid, estimating that it could do the work for $234 million.

Only slightly lower was the $230-million bid of Energy Alliance, a joint venture including the Los Angeles Department of Water and Power and The Gas Co.

The Energy Alliance precipitated the unusual bidding procedure in May with a “fast-track” proposal to air condition about 300 schools for millions less than the district had budgeted for the work and in only a third of the time.

Since then, 10 other firms bid against the district’s management team. Some were eliminated after reviews this summer. Others dropped out, expressing frustration with the process.

Last month, a district review committee evaluating five finalists recommended that the district’s team keep the work because its proposal was the least expensive. As second choice, it recommended another joint venture, P G & E Energy Services/CH2Hill, because of its experience.

However, Jones, who was appointed during the summer as chief administrative officer in charge of business operations, intervened, saying he wanted to compare all the proposals to see whether they were covering the same work.

Jones said Monday that New West/Rogers was erroneously dismissed because the evaluators thought it did not represent a fixed bid. Further questioning showed that the $180-million bid was a fixed price.

He recommended that the board authorize him to enter into negotiations with New West/Rogers to work out an agreement on scope and specifications that would virtually eliminate the possibilities of change orders.

It was unclear, though, how many schools would be included because the district’s management team, hired in June to oversee more than $1 billion in bond-financed school repairs and improvements, would continue to plan and install air-conditioning in 155 of the highest-priority schools.

Jones said an undetermined number of those would be added to the New West/Rogers contract.

The board took no action, however, to allow time for review by the citizens committee set up by voters to oversee Proposition BB bond spending.

Jones said he plans to return to the board early in January and, if authorized to negotiate, expects to have a contract in place by the end of the month.

The bond oversight committee has scheduled a special meeting Wednesday.

Committee Chairman Steven Soboroff, who has vigorously championed the fast-track bidders, said he will ask the panel to give its blessing to Jones’ recommendation, which he said represents a victory for the BB oversight process.

Soboroff said the voters wanted the oversight committee to “come up with proposals and concepts and it wanted the system, which is a big lumbering system, to work with them.”

“The system worked,” he said. “It was a little bumpy, but it worked.”

Soboroff took issue with one aspect of Jones’ recommendation, that the district management team resume control of the air-conditioning work if negotiations with New West/Rogers do not produce an agreement.

“Who is negotiating the contract?” Soboroff asked. “I don’t like that.”

He said he will ask the bond oversight committee to recommend another review of the remaining three outside bidders if the negotiations should fall through.

A spokesman for the Energy Alliance took issue with Jones’ conclusion.

“We’re disappointed,” said Mike Mizrahi. “We don’t believe the work can be done satisfactorily at $180 million. A technical committee already came to that conclusion.”

Also on Monday:

* The board received without voting a report from Supt. Ruben Zacarias that effectively releases a 3% pay raise, retroactive to July 1, for about 30 top district administrators.

* Accepted an interim financial report projecting that the district will finish the current fiscal year with a surplus $137 million. District chief financial officer Henry Jones said nearly all the excess would be earmarked to help fund the second year of the 6% pay raises given to district employees this year and the 2% raise provided in their contracts for next year.

* Voted unanimously to oppose the proposed anti-bilingual education initiative on the June statewide ballot. Board members said the initiative process is not an effective way to guide education and that the measure sponsored by wealthy businessman Ron Unz would harm children, parents and teachers in Los Angeles schools.