Although he has risen to an esteemed role in public education, Reed Welsh would be a poor choice to teach students about a government’s responsibility to taxpayers.
Welsh, administrator of the School District of Abbotsford, is a perfect example of how most public school officials in Wisconsin do not know, or do not care, enough about construction to realize they are easy marks. Every time a school administrator negotiates a contract for a construction project rather than signing with the lowest bidder, the public’s money is in the hands of someone who has the freedom to make a bad decision.
School districts, with the exception of Milwaukee Public Schools, are exempt from the state’s competitive-bidding law, meaning they are not required to award public projects to the lowest responsible bidder. The exemption goes back at least 70 years but lacks justification for why public schools are not under the same restrictions as towns, villages, cities, counties, state government and, well, Milwaukee Public Schools.
The purpose of the law is simple: Awarding contracts to the lowest responsible bidder limits the opportunities for, or the perception of, backroom shenanigans. It also protects public money from those who would take as much of it as possible if given the chance.
Public schools need that protection, even if their leaders do not want it. The people who run those districts are among the least equipped to spot construction billing inconsistencies or contract manipulation.
How could they not be? Most school districts do not have engineering or construction departments. Only the most fortunate school boards include a construction professional. And the gap of many years between most major school projects means that when the next one is needed, any institutional knowledge of managing or hiring for such work is long gone.
The solution is as simple as adding “public school districts” to the state’s competitive-bidding law, but politicians rarely fix such old problems unless someone sounds an alarm. And it has to be loud.
Well, a lawmaker would have to be deaf not to hear the sirens blaring around the agreement federal investigators signed with Miron Construction Co. Inc. Those investigators said they were trying to preserve 1,200 jobs at Miron by letting the contractor avoid prosecution for allegedly overbilling five school districts, including Welsh’s in Abbotsford.
The contractor and those districts used cost-plus billing, which lets companies charge customers for costs directly related to a project. The “plus” refers to the fee, paid out as a percentage of the overall cost, that companies tack on to, among other things, make a profit.
If the cost goes up, so too does the “plus.” But the merits and flaws of such a deal do not matter nearly as much as the perception that school officials are playing too loose with taxpayer money.
In the Miron case, those five districts got lucky. The contractor is repaying a total of $4 million.
But some lawmaker somewhere has to be wondering about how many millions more slipped away undetected to construction companies while school districts senselessly ignored a bidding guideline that would protect their constituents.
Unfortunately, some administrators consider protecting constituents a second- or third-tier responsibility that can be rationalized away, as if flicking a speck of lint from a lapel. Welsh, whose district is to receive a $280,560 reimbursement from Miron, stands behind the deal with the contractor, at least partially because the district paid less for a school project than voters approved in a referendum.
Welsh does not know, or does not care, that those same voters also paid $280,560 more than they should have.
If state politicians need evidence that school districts should award projects to the lowest responsible bidder, they need look no further than Abbotsford, where arrogance exceeds an understanding of how to protect taxpayer money.
And yet, in his bumbling way, Welsh offers a perfect lesson to Wisconsin lawmakers as to why they should add all public schools to the competitive-bidding law.