Posted on 10/04/2012 1:09:05 PM PDT by Kaslin
Sometimes private contractors see schools and their multi-million dollar budgets as great sources of potential revenue.
And because schools rarely employ people with business sense or experience, they sometimes hire contractors to perform major projects without seeking competitive bids or doing thorough background checks on the companies.
Then the cost overrun bills start arriving and more tax dollars than necessary go out the door.
In Hillsborough, New Jersey, school board members were recently “shocked” and “insulted” that the district’s architectural contractor recently submitted invoices totaling about $19,000, according to the Hillsborough Beacon.
Apparently there was some confusion about what the contactor should charge the district on an hourly basis, and what should be part of the overall project cost. The news report did not say what type of project the architectural firm is doing for the district.
Board member Gregory Gillette claimed the district was being charged “$55 per hour for a secretary to open the envelope that contains the check we sent them.” He also accused the architectural firm of charging “for the amount of time (company officials) waited in the hall before they could see (the superintendent) Dr. Schiff.”
Board member Judith Haas also complained, “One of the most obnoxious things is they bill out an (subcontracting) engineering firm, and we get billed, plus 15 percent. It smacks of them not wanting our business. I find it very insulting.”
The taxpayers of the district should find it very insulting that the school board is discovering these problems so late in the game.
Is this firm new? Does it have a positive reputation in the community? Did the school board bother checking on these questions before hiring this company?
Somehow we doubt it.
We assume that the Hillsborough school board used competitive bidding to hire this company. But the bidding process involves more than identifying the low bid and awarding the contract accordingly.
Good stewards of public dollars employ due diligence to make sure they’re hiring a reputable contractor that does quality work and doesn’t consistently go over budget. That way they know who they are hiring and what they’re going to get for their money.
And taxpayers will have confidence that their school is making the most of the hard earned dollars they’re sending them. If public schools want the trust of the public, they should start by carefully handling the public’s dollars.
It reminds me of a lawyer I used for something several years ago. I told them DO NOT CALL MY CELL phone; I said I was only giving the number for use in case of something urgent and if I could not be reached at my designated phone number. The office gal would call my cell phone and leave messages, then charge $12 each time (a bargain based on $55/hr to open an envelope!). Then later in the day, she’d call the number I told her to use, and charge $12 again, and when I got the bill and called the office, told them NOT to call the cell phone, I was charged for calling the office, and they still kept calling the cell #. Fortunately the case was resolved fairly quickly, but could have turned into big money if it had been complicated or long-lasting (just for the clerical tasks).
As a licensed architect with years of experience I can tell you what is described in the article above (clerical work and hourly rates for meetings with local authorities) is standard practice. Don’t law firms charge in the same manner? There is a lot of time spent on billing, contractual negotiations etc.. and like any other profession, if the contract has this work as being billed hourly, that is how it is billed. Finally, as to the 15% fee put on sub-consultants, architects carry insurance on these people and that 15% fee covers that plus the coordination and management time of these guys. Without knowing more specifics about the contract, what I read sounds like standard practice.
It is hard to find a high school graduate who can do a high skilled job like that!
As an estimator / project manager for a construction company, all the above practices are not only billable, but seem very reasonable.
Did the school board bother to read the contract they signed?
Do they understand the contract they obviously did not read?
They blame the contractor for their own incompetence...
Typical government employee..
just one of the reasons I vote
No on all parcel taxes.
If under their contract the secretary is billable, then thats about right.
He also accused the architectural firm of charging “for the amount of time (company officials) waited in the hall before they could see (the superintendent) Dr. Schiff.”
If they are waiting to see you, they are on your job and on your dime. Better not leave them waiting long, you are getting billed for it.
Board member Judith Haas also complained, “One of the most obnoxious things is they bill out an (subcontracting) engineering firm, and we get billed, plus 15 percent.
Again, standard. You can contract the engineering firm yourself and save the 15%, but then you've got your own overhead to deal with. If you want them to do it, they'll pass it through with a 15% markup for their trouble. Think its no trouble? Then do it yourself directly.
Government is the least efficient of all methods of wealth distribution
No kidding.
This is standard practice in all professional services firms. These board members do not have a clue. A smart board would explicitly exclude the secretarial nits that you know are there.
Privatize it all.
I have no problem with this. As a contractor you pay me from the moment I arrive until I leave. Every minute I spend waiting on you is one minute I can not spend on my business. There is a charge for that.
“Finally, as to the 15% fee put on sub-consultants...”
In my line of work my subs get paid right away. The check from a gov’t entity can take 3 to 4 months to get paid.
Sounds like the contracting officer for the school system doesn’t understand technical stuff like reading proposals and negotiating before signing. And no clue that every employee’s time has a cost. Sad.
TC
If you signed a contract with a doctor or hospital where the fees and costs were spelled out ahead of time then that would be much better than we have now where services are rendered and you don’t know what you’re paying for until the bill shows up.
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