Lowest bid isn't always the best value — look at Mount Rose
Here's an easy question: Would you hire a contractor without references?
No, of course not. You ask your friends about anyone they know. You check ratings on Yelp and Google. You might even look at previous jobs the contractor has done.
But the state government isn't allowed to do that checking around.
When an agency like the Pennsylvania Department of Transportation has a project, it draws up the specs and puts it out for bids. And the company with the skills to pass a technical evaluation that puts in the lowest bid must get the contract.
The state isn't allowed to ask other states how the company's previous projects have gone, or if the company has been able to turn around contracts on time and on budget.
If it could, someone might have raised a red flag about Cherry Hill Construction, which put in the lowest bid for rebuilding the intersection of Interstate 83 and Mount Rose Avenue.
Cherry Hill claimed in 2015 that it could finish that project by 2018 for $58.3 million. Now it's 2022, the finishing touches are being put on the project, and the latest cost we've heard for the interchange is $63 million, although that's in dispute because PennDOT and Cherry Hill are fighting it out before the Board of Claims over late fees from the state, money the company says it's owed and alleged breaches of contract.
By the way, the next-lowest bidder was York County-based G.A. & F.C. Wagman Inc. at $59.46 million.
A quick search of Cherry Hill's parent company, Tutor Perini, shows a long history of change orders driving up costs.
In California, the construction of a bullet train has come with 383 past change orders that largely accounted for its contract growing from $1 billion to $2.4 billion, according to the Los Angeles Times. In 2014, the company and its partners were awarded $80 million for cost overruns on the $24 billion Big Dig in Boston, according to KUOW. In 2013, the Center for Investigative Reporting, a media partner of U-T San Diego, did a study that showed 11 major projects in the San Francisco Bay area done by Tutor Perini over the previous 12 years cost local governments 40% more than the original bids, according to the San Diego Union Tribune.
So, a few red flags there. With that knowledge and a local company with a bid that was only slightly higher, could PennDOT have saved York County the grief of the now nearly seven years of construction at Mount Rose Avenue?
We'll never know. But a bill making its way through the state House would at least make it so the state could check on bidders before awarding a contract.
Rep. Dawn Keefer, R-Carroll Township, last week saw her bill to require the state to consider a contractor's prior work in other states before accepting a low bid pass through the State Government Committee on its way to a vote by the full House.
“The saying ‘You get what you pay for’ especially holds true when it comes to the bidding process in Pennsylvania,” Keefer said. “Just because a bid is the lowest, doesn’t mean the overall end cost will be low.”
Keefer's bill, HB 2269, was one of a package of procurement reform bills that include requiring a list of campaign contributions from bidders on state contracts; authorizing officials to consider documented performance in other states or with other public entities before awarding a contract; and ensuring emergency procurement is only used in emergency situations.
More knowledge is always better, and bills like Keefer's are a good start to letting the state gather information before awarding contracts. It's time to start looking beyond the bottom line before pledging millions in taxpayer funds to companies that are proven to be bad road.