District’s Splitting of Bids Criticized

The Los Angeles schools’ new top auditor has issued a report criticizing district officials for splitting a large bond project into small pieces to avoid competitive bidding procedures.

The report also criticized maintenance officials for awarding most of the work to a small group of firms.

Three firms have received 80% of the $1.8 million so far awarded by the district for installing security grilles, and one of those firms had 108 separate contracts for $700,000 worth of work, it said.

By keeping jobs under $15,000, district maintenance officials are able to solicit bids and award contracts by telephone, bypassing a state law that requires sealed bids for large public projects.

Don Mullinax, a former Defense Department investigator who was appointed director of internal audits and special investigations for the Los Angeles Unified School District in January, said he will present the report Wednesday to the citizens’ committee that oversees Proposition BB work.

Officials of the district’s facilities division have defended the practice in a written rebuttal, but Steve Soboroff, chairman of the Proposition BB committee, said he believes someone must be punished.

“This is so over the line that I believe consequences are in order,” Soboroff said.

The district came under fire for using similar tactics to award painting contracts.

The Los Angeles County district attorney’s office investigated several firms that received numerous contracts under $15,000 to paint various buildings on a single campus. Earlier this year, bribery and other charges were filed against a district employee and a retiree as well as four painting contractors.

After reviewing the district’s contracting practices, the Proposition BB committee concluded that telephone bidding could be useful to speed up some types of jobs but that procedures were needed to prevent abuse.

The district’s independent analysis unit began monitoring those contracts by computer to ensure that large jobs were not being split into smaller pieces.

A series of contracts awarded late last year for grille installation at Reseda High School triggered the inquiry.

Mullinax found that one job totaling $125,195 was split into nine contracts with one firm ranging from $13,475 to $14,455.

His report also said that bidding duties were not properly separated. The same person accepted bids, signed purchase orders and approved vendor invoices for payments, he said.

The director of the maintenance and operations branch argued that the formal bidding process is “tremendously time-consuming, requiring an average of 10 to 12 weeks, where the bidding of informal contracts is generally completed within 10 to 12 business days.”

Restriction of informal contracts would slow down the five-year schedule for bond projects, she said.

Mullinax dismissed that justification.

“The practice of splitting work into smaller projects did not follow the intent of the California public contract code,” he wrote in the report.

Mullinax withheld specific recommendations, however, saying that he first planned to investigate whether the cost of the work was reasonable.