Internal audit cites sloppy bid practices in Broward school construction division

By William Gjebre, BrowardBulldog.org

A new Broward public schools internal audit of the district’s troubled Facilities and Construction Management Division has found “areas of concern” in the bidding of contracts and says changes should be made.

The latest audit comes after a February statewide grand jury sharply criticized the district and the facilities division for a lack of oversight and handling of bids. The grand jury made 21 recommendations to correct problems.

The report by the district’s Office of the Chief Auditor, to be discussed at today’s Broward School Board meeting (Tuesday, Aug. 2), stems from one grand jury recommendation that the district’s auditor review the bidding process “to certify bids met minimums.”

“In our opinion, the F&CM Division has areas of concern in the bidding and bid opening process which should be addressed immediately to ensure that appropriate internal controls are enforced …,” says the report dated June 23.

Among concerns cited were failures to: attract a minimum of three qualified bidders for projects; exclude from bidding contractors who have exceeded their bonding limits; use a secured lock box system for receiving bids; and to prepare and publish “invitation to bid” documents.

The internal audit made seven recommendations, some of which have been already adopted by staff:

• Strengthen bidding procedures to ensure compliance with construction procurement laws and regulations. The department should maintain lists of pre-qualified, certified contractors so there are no fewer than three bidders available in each category; document that qualified bidders received original bid information and any addendums; notify potential bidders which newspaper will carry printed bids. The audit reviewed four bid openings but, only one had a minimum of three pre-qualifiers. Three other bids were postponed or rejected. The audit also found that prospective bidders may fail to observe bids because of the district’s practice of alternating bids in the Sun Sentinel and The Miami Herald.
• Improve the  monitoring of the approved vendor list by constant review to ascertain pre-qualified vendors and discontinue bid opening when it is determined there are fewer than the required three pre-qualified bidders. The report found instances where only one pre-qualified bidder existed or there may have been a weakness of the district’s monitoring system to reach and seek bids from firms pre-qualified for projects.
• Utilize all available bid broadcast tools – in particular the district’s Internet bid management system, Demandstar, as an additional means to advertisement for bids to ensure that the largest number of prospective bidders to maximize market competition. The report found that the Demandstar system, used by contractors, was mainly being use to post addendum bid information.
• Strengthen contract language to ensure that addendums are fully tracked in the district. The report found there was no requirement for contractors to notify the bid- printing companies of receipt of bid addendum information.
• Establish a procedure for determining when proposers’ bids should not be opened if a contractor has exceeded state-established bonding limits. The report found several instances where the district had opened sealed bids from contractors who had exceeded their bond capacity.

• Use a lock box to secure all bids and require two staff members be present to access the box. The report found the facilities department was not using a a lock box system for submission of bids and did not regularly time stamp bids, raising concerns about the integrity of the process.
• Provide the “invitation to bidders” document as an internal step in all design/bid/build procedures. The report found that in three of four bids reviewed, the facilities division did not prepare, execute and publish “invitation of bid” documents, as required, and thus delaying the bid process.