State attorney general investigates Oak Bluffs bid procedures

In a report that surprised the public, but not the Oak Bluffs selectmen, town counsel Ron Rappaport said Tuesday that the office of Massachusetts Attorney General Martha Coakley is investigating bidding procedures for municipal building projects the town has managed.

The investigation began in March, as a result of a bid protest filed by former selectman Kerry Scott, who asked the attorney general to look into the town’s bidding procedures.

“I’m unclear exactly where this is going,” Mr. Rappaport told selectmen at their regular Tuesday meeting. “I’m a little reluctant to speculate, but it’s clear there are deficiencies.”

A spokesman for the attorney general would not comment on the specifics of the probe. “We did have a hearing, now we’re going to issue a written decision,” spokesman Harry Pierre said Wednesday. “We expect it to be completed in a couple of days.”

Town administrator Michael Dutton and Ms. Scott testified at that hearing in Boston, on April 6. The town has also responded to several later requests from investigators for documentation.

To date, responding to the bid complaint has cost Oak Bluffs $5,346 in legal expenses, according to Mr. Dutton.

Four projects under review by the attorney general’s office include renovation work at town hall, a roofing job for the old library renovation project, electrical work on a sewer project, and electrical work at the Oak Bluffs harbor, town officials said.

Each project was supervised by town department heads, who thought the expenditures did not require a public bid, according to Mr. Dutton.

“To the extent that mistakes were made, I should have overseen the whole process more closely,” Mr. Dutton said, following Tuesday’s meeting. “But were funds misappropriated? Absolutely not.”

Mr. Dutton said he is already working more closely with town employees in the several departments to improve compliance.

“The laws on public bidding change,” Mr. Rappaport said. “It’s important that people keep up with them. The threshold has actually gone lower. I know some of our department heads are unaware of that. These are smaller jobs, but they’re above the threshold, and they’ve gone somewhat unsupervised. We need to clean it up.”

Mr. Rappaport advised selectmen to arrange an educational workshop with Mr. Dutton, department heads, and an advisor familiar with complex state procurement regulations. Selectmen voted unanimously to arrange that workshop, and make it open to the public.

Public notice

The town counsel’s revelation was the first order of business at Tuesday’s regular selectmen’s meeting, though it was not on the agenda posted for the public meeting. Mr. Dutton privately kept selectmen aware of the investigation over the past two months, but it was not discussed in open meetings.

In a March 10 letter to the office of the attorney general, Ms. Scott objected to the hiring of contractors for town hall renovations begun in 2010. At the time, Ms. Scott was in the last months of her second term as selectman and clashed with the town administrator and other selectmen on a range of issues, including the reorganization of town employees.

In her letter, she said the town hall renovations totaled $33,797.

“While I was still in office, I was asking these questions and not getting answers that were forthright and accurate,” Ms. Scott said in a phone conversation with The Times Wednesday.

Ms. Scott waited more than a year to file a formal bid protest. She said she didn’t feel comfortable doing so as a selectman, and she was concerned that there would be consequences for the contractors.

She said a big part of her objection is that voters did not authorize the project.

“All this work was done without an appropriations article,” Ms. Scott said. “Michael (Dutton) was putting together funds from various line items.”

Town response

In a phone conversation Wednesday, Mr. Dutton said Ms. Scott is wrong. He said the total cost of town hall renovations, including electrical work, carpentry, and materials, was under $9,000.

In documentation submitted to the attorney general’s bid unit, the town contends that the renovations were not a formal project, but routine alterations to accommodate moving most town employees to the first floor of town hall.

In a letter to the office of the attorney general, Mr. Rappaport wrote that from August 26, 2009 to date, Powers Electric Inc. was paid a total of $17,445 for work at town hall.

Mr. Rappaport’s letter says Charles Danielson, a carpenter, was paid a total of $9,679, and materials purchased amounted to $6,847.

The town counsel wrote that most of that work was related to normal maintenance of an old building, as well as upgrades of faulty wiring discovered during an energy audit and unrelated to the renovations to consolidate offices.

The reorganization was discussed at several selectmen’s meetings. Mr. Dutton said he and highway superintendent Richard Combra Jr. supervised the work, in part to save money.

“Due to the limited nature of the work, neither an architect, a construction supervisor, or a general contractor was involved,” Mr. Rappaport wrote to the attorney general’s office. “The work at town hall occurred over a 17-month period of time. All bills, including materials, total $35,971. There was no general contractor or architect, and no structural work was undertaken. As a ‘renovation’ to an old town building, there was no reasonable anticipation by Messrs. Dutton and Combra, or the selectmen, that total costs would exceed the threshold requirements of Chapter 149.” Chapter 149, the law that covers procurement for municipal projects requires that projects of this kind be advertised in a public bid process if they cost more than $10,000.

“Anything we did here pursuant to a building improvement project was clearly under $10,000,” Mr. Dutton said in a phone conversation Wednesday. “Even if you consider it a building project, it’s under the threshold. We could have gone to Staples and bought modular office components, but that would have cost more.”

Other jobs

Also at issue was replacement of the badly deteriorated roof of the old town library, which the town renovated with Community Preservation Act Funds and a state grant. Completed last summer, the building now houses three apartments and a drug store.

In early 2009, well before the bid process was complete, town officials determined the roof needed emergency repairs, because leaking rainwater was damaging the foundation and the structure.

The town paid Mark Alwardt, a local contractor, $16,006, and bought $13,202 worth of materials for the roofing job.

In emergency situations, the state Division of Capital Asset Management (DCAM) allows towns to bypass the normal procurement process. DCAM is the agency that oversees state-funded projects. Town officials concede that procedures for emergency repairs were not followed.

“This project was deemed to be an emergency project and should have been sent to DCAM for approval. Unfortunately, it was not,” Mr. Rappaport wrote in his letter to the attorney general’s office.

Also at issue is electrical work done by Powers Electric on a sewer project. The town is in the process of extending a sewer line to handle wastewater from the Martha’s Vineyard Regional High School, the new “Y,” and the Martha’s Vineyard Arena.

Mr. Dutton said wastewater plant manager Joe Alosso satisfied all the requirements of the public bidding process, except for the electrical work done on the project. The cost of the work was approximately $28,000, according to Mr. Dutton. The threshold requirement for public bids on that kind of project is $10,000.

“It was perfect except for the electrical component,” Mr. Dutton said. “It should have been part of a filed subcontractor bid, or a separate bid. That one should have been bid.”

Mr. Dutton said Mr. Alosso and other department heads mistakenly assumed that Powers Electric was the town’s designated electrical contractor. The town originally hired Powers Electric for various municipal jobs, based on an hourly rate that was lowest of the three estimates solicited from local contractors by Mr. Combra.

Mr. Dutton contends that, ironically, if the work had gone out to bid, it would have cost considerably more, because it would have gone to an off-Island contractor certified by DCAM to work on public projects. No Island contractors have the necessary certification.

In fact, Tisbury contractor Powers Electric is certified by the state Division of Capital Asset Management (DCAM) to work on public projects.

The fourth project under review was work done by Powers Electric to the harbor electrical infrastructure, supervised by harbormaster Todd Alexander. Mr. Dutton said Mr. Alexander also mistakenly assumed Powers Electric was the designated contractor. Mr. Dutton said he is confident that there was no violation of procurement regulations in the harbor work.

May 12, 2011

This article has been revised to reflect the following clarification:

Tisbury contractor Powers Electric is certified by the state Division of Capital Asset Management (DCAM) to work on public projects.