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Jersey Halts New Pacts for School Construction
Inspector general to review contracts. Friday, March 11, 2005 NJ.com (The Star Ledger)

Star-Ledger Staff

The Codey administration yesterday suspended the awarding of new contracts under New Jersey's school construction program until the state's inspector general can review pending deals.

Inspector General Mary Jane Cooper sought the timeout after a meeting with the head of the Schools Construction Corp., the agency in charge of the $8.6 billion program.

In a letter to acting Gov. Richard Codey, Cooper asked that the SCC "refrain from completing and/or entering into any contracts, change orders or any other commitments for purchases or services until we have had an opportunity to review those agreements."

Cooper said her office "will establish a protocol for reviewing all pending and contemplated contracts, as well as change orders, to determine cost-saving measures."

Kelley Heck, Codey's spokeswoman, said the corporation will abide by the inspector general's request. She added construction already under way probably would not be affected. "We expect that existing contracts will move forward," she said.

The length of the new-contract suspension was unclear, but Cooper told SCC officials yesterday she would set up the review process "expeditiously."

Schools Construction Corp. spokesman Dominick DeMarco said Cooper met with SCC chief executive Jack Spencer for about 3 1/2 hours yesterday.

DeMarco said: "The SCC has said it welcomes any productive input that will help it do its job more productively. We see (Cooper) meshing into the process and having it flow."

Cooper took office a month ago as New Jersey's first inspector general, in charge of rooting out government waste and mismanagement. Codey asked her to scrutinize the SCC after a Star-Ledger analysis showed that schools built under the corporation since 2002 cost, on average, 45 percent more than schools built by local school districts at the same time.

The Star-Ledger report found that the corporation, since starting work 30 months earlier, had approved contract changes costing more than $500 million, and paid $216 million to 13 project management firms -- more than triple the rate local school districts paid their construction managers.

In her letter to Codey yesterday, Cooper said her office "may be able to suggest certain measures that may result in significant savings of state funds, as well as help ensure that the remaining school construction funds are used in the most efficient manner possible."

According to the corporation's Web site, 133 design and construction contracts are awaiting SCC action, and 12 change orders worth a total of $930,000 await approval.

Cooper told Codey she will ensure that any school repairs that are deemed emergency work will receive "immediate attention" from her office.

Gov. James E. McGreevey set up the schools corporation in 2002 to jump-start an $8.6 billion school building program that lawmakers had established in 2000.

Since its formation, the SCC has spent just over $3 billion. It is scheduled to approve $1.2 billion worth of school construction work this year, and spend $2 billion. The corporation is on track to exhaust its entire $8.6 billion allotment by next January, five years earlier than expected, according to Spencer.

SCC officials acknowledge they will have completed less than half the school construction work assigned to it before the money runs out. Lawmakers have demanded an accounting of the corporation's spending before they consider authorizing additional funds to it.

A bill that would set up a committee to review the state's school construction needs and the corporation's practices has passed the Assembly and is awaiting full state Senate action.

The corporation has announced plans to cut down the role of project management firms in an effort to trim its oversight costs.

Dunstan McNichol covers state government issues. He can be reached at dmcnichol@starledger.com or (609) 989-0341.

Garden State Coalition of Schools
160 W. State Street, Trenton New Jersey 08608