Dive Brief:
- Baltimore community development group the Abell Foundation tried to examine 2012 city infrastructure projects to determine why there were cost overruns, but an analyst said the data was incomplete due to lack of transparency in city records, The Baltimore Sun reported.
- Analyst Cristie Cole studied more than $212 million in contracts and said the City Board of Estimates (BOE) — which formulates and executes the fiscal policy of the city — awards contracts to low bidders, encouraging future cost overruns.
- Cole wanted to find out if projects were being underbid, if city agencies were producing bad requests for proposals, and if there was political gain to be had by not making the information public. Cole said the records she was able to access were only helpful with answering the question of low bids.
Dive Insight:
Cole said the city's bidding system, which awards construction contracts to the company that shows it is capable of successfully completing the work and offers the lowest bid, "incentivizes contractors to intentionally bid too low and ask for extra funding when the project is already underway." Her claim taps into an ongoing debate over the best kind of contract, as well as the constant search for cost overruns on major projects.
Despite the city's lack of sufficient record-keeping, Cole told the Baltimore Business Journal she doesn't think Baltimore officials are "trying to hide anything." She added, "I think that the system was not set up to keep careful track of these records. Essentially you need records of records."
As a result of the study, Cole advised the city to post the scheduled completion dates on construction project signs, rather than only the year or season the project is supposed to be finished. She also said the city should create contractor scorecards that are read at each bid opening. Finally she advised the city to include all information about extra work orders, additional funding, and new completion deadlines in BOE minutes.
"The burden shouldn’t be on the taxpayer to find out more about the construction project that is shutting down their street," Cole said. "The burden should be on the agency."