Riff Raff: Local problems

The Fort Smith Public School Board on June 22 rejected a bid recommendation by a Texas-based company managing the district’s $120 million millage construction and instead gave the work to a Fort Smith-based company. That rejection may have come sooner if the public knew the extent of how Fort Smith firms were treated.

It’s uncertain what the elected Board knows or wants to know about a process that has made it difficult for local contractors and professional firms to compete for the millage work, or that several local owners with decades of impressive large projects around the country decided to not bid on the millage work.

By way of reminder, Fort Smith voters on May 22, 2019, approved a school millage increase, the first in 31 years. The new rate will raise around $120.8 million, with roughly $64 million for significant work at Northside and Southside High Schools. Fort Smith residents should be proud of school improvements completed and underway thanks to the voter-approved millage increase, but should be disgusted, angry and eager for answers as to how the school district treated local companies and lied about the results of the treatment.

You, Kind Reader, might remember Talk Business & Politics reported July 7 that 46.2% of around $88 million in millage money paid to contractors, architects and engineers went to Fort Smith-based firms. We based that percentage wholly on numbers provided by the office of Superintendent Dr. Doug Brubaker. The numbers took two weeks and many texts, phone calls and e-mails to obtain. (That it took Brubaker and Co. weeks to provide data on how they spent $88 million is alarming and disconcerting, but not the focus of this essay.)

On July 13, Brubaker & Co. would argue against the numbers they provided Talk Business & Politics and, with a straight face no less, tell the school board that including “Tier 1” subcontractor numbers and claiming that Conway-based Nabholz is a local company – which is responsible for $40 million of the millage work – pushed to 65% the amount of millage work directed to “River Valley” businesses. Nabholz is certainly a first-rate firm, but not local.

Talk Business & Politics gave up after several attempts to obtain a meaningful number from Brubaker & Co. on the value of “Tier 1” work awarded to Fort Smith-based subcontractors. Hell, we couldn’t even get a clear answer on what constituted a “River Valley” business. It was expected Brubaker & Co. would massage the numbers in their favor, but we never expected a gaggle of Ph.d’s to believe we’d vacate common sense and accept that a Conway-based company is local because they have a small office in Fort Smith. By the way, the district sends payment for Nabholz services to a Rogers, Ark., address.

Claiming Nabholz is local is overtly disingenuous. It is insulting and sad that Brubaker & Co. asked the board and public to believe such a specious claim. But the school board and public shouldn’t feel special because local contractors, architects and other firms were treated in ways that also are insulting and sad. Before we look at a few examples of mistreatment of local firms, let’s note that Birmingham, Ala.-based Hoar Project Management (HPM) was awarded $4.91 million, or around 4% of the total work, to manage millage projects for the school district. HPM never managed a large millage project in Arkansas. Firms brought HPM up to speed on Arkansas rules before HPM could decide on which firms should be hired to meet Arkansas rules. It would be like bringing in Australian rules football refs to judge a pecan pie baking contest. (As an aside, large millage projects at Bentonville and Fayetteville public schools did not spend millions with an out-of-state management company. The almost $5 million we taxpayers paid HPM would have made significant improvements at several of our elementary schools.)

The first example of local firm mistreatment is in inaccuracies with scoring used to award bids. One Fort Smith firm was credited with doing work at a particular building, when in fact the firm worked on a different project at a different building. The same firm discovered that none of its references were contacted prior to awarding a bid.

Another example is in how HPM awarded large projects at Northside and Southside High Schools. Because they were so large, two design teams were allowed to work on each school. But when it came time to award a bid for construction manager at risk (CMAR), HPM allowed only one bid per school, which made it impossible for most local firms to participate. One local contractor told Talk Business & Politics such subjective decisions were why the firm’s owners decided to avoid bidding on any millage work.

“We didn’t have the time to screw around with that (the process) and then not be fairly treated. And look, being local, we pay the taxes. We are the ones paying that higher millage on our property … and then the outside folks get invited in and get preference,” noted a representative of one firm with large school and other project experience all over the country.

Another person with a local firm noted: “When we found out the qualification criteria and knew we didn’t meet them, we damn sure were not going to partner with an out-of-state firm and they get 80% of the money and we get most of the responsibility.”

Yet another example, cited by a contractor as being “just dumb and unnecessary,” was HPM decided to require contractors to have a “Lean Construction” membership. Not having such a membership reduced a firm’s scoring by 20 points. Less than a handful of area firms were “Lean” members.

“That made it so obvious, to all of us, to all of us here (in Fort Smith), that they (HPM) didn’t care about us local guys … or didn’t care what kind of, you know, really complicated work we could show in those (work portfolios),” another local firm owner told Talk Business & Politics.

One final example – but not the limit of examples – is inconsistencies with HPM scoring in awarding contracts. An example, provided in documents by a local firm, showed an out-of-area firm having a 15-point swing in scoring on essentially the same “Request for Qualifications” with two projects. That’s a big swing considering the awarding of millions in work can come down to just a few points. “Add it to the list” of other puzzling HPM contract award decisions, one firm owner responded with a chuckle when asked by Talk Business & Politics about the scoring swing.

What was not chuckle-worthy was the pressure on local firms to keep their mouths shut. As one local firm representative said: “And if anyone made waves, or if anyone considered taking their concerns to a board member, then forget about any future work with the district. You could forget about it, because it became real clear real fast that working with us (local firms) was not important.”

Brubaker & Co. will most certainly have clever responses to these examples. The examples listed here are petty and had only minor, if any, impact on bid awards. The district and HPM, they might say, have an obligation to ensure the most efficient use of millage funds, and local firms are just bitter about not getting a bigger piece of the pie. They may again distract from the issue by saying the millage work, no matter how local firms were treated, is having a great economic impact. Indeed, the millage work is a positive for the economy, and the district should conduct a valid economic impact analysis and report that out. But a positive impact shouldn’t provide a pass on the treatment of local firms.

The bottom line is that this is not how you treat people. You don’t mislead your elected leadership about how you calculate local money. You don’t allow a third-party to make it hard for local folks to have a fair shot at local work. You don’t make it difficult for the media to report on how millions in taxpayer dollars are spent. You don’t promise local support when seeking a favor, and then renege on that promise when the favor is granted.

Maybe the reason Brubaker & Co. have trouble definitively assessing the value of work with Fort Smith firms is because it was never important; never a priority. When challenged, they struggle to provide a reliable number. Or it might be that convincing Fort Smith voters the millage was necessary proved the limit of the capacity of Brubaker & Co.