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No Rest for the Weary?

Board of Public Works Stumbles on Rest-stop Renovation Effort

This week, the Maryland Board of Public Works made what sure looks like the wrong decision on a multimillion-dollar contract to renovate and operate two of the nation's busiest rest areas, the Maryland House and Chesapeake House, both located along I-95 in Maryland. 

As reported in this week’s Gazette, the Board voted 2-1 to give the contract to a Miami-based firm, rejecting a competing proposal by its Bethesda-based rival, HMS Host, which has operated the plazas since 1987. Maryland Comptroller Peter Franchot voted against the move but was outvoted by the Board's other two members, Gov. Martin O’Malley and State Treasurer Nancy Kopp.

Setting up an innovative public-private partnership to upgrade and run the two travel plazas, which together produce up to $35 million in annual sales, according to the Gazette, is clearly the right approach in my mind. It's a great way to leverage private dollars to pay for the expensive renovations, and create a significant new ongoing revenue stream for Maryland taxpayers.  However, there are two major problems with the board's action that could spell trouble for this initiative. 

The first is that we are passing over a highly qualified, well-respected Maryland firm that provides thousands of good-paying jobs right here in our community, in favor of an out-of-state firm that offers us no such benefit. In this struggling economy, every effort should be made to keep those jobs here, and that is an important consideration — or should be — in making decisions like this. There certainly need to be other considerations, like the cost of each proposal to the taxpayers and the qualifications of the operators, but I am not sure the advantages of going with a hometown firm were considered at all in this case, or that HMS Host got a fair shake from the state.

This leads to my second major concern.  Even if the Miami firm was the low-bidder, and their proposal was so much more advantageous to the state that ignoring the local jobs impact made sense, there is still a major issue over the timing of this decision. In fact, their decision could end up delaying the work and costing us taxpayers far more in the end. 

HMS Host is challenging the contract award and this matter is still in litigation.  What happens if the other firm starts work under the contract and then HMS Host prevails in the lawsuit? We taxpayers will then get the distinct honor and privilege of paying for the same work twice. How does this make sense? Why run the risk, and why not wait until the court case has played out before issuing the award? This is the objection Franchot raised in casting his lone dissenting vote, and he's right. 

This is not the way to for the Maryland to look after its homegrown companies that work hard every day to provide good jobs right here in our state, and it is no way to protect the taxpayers from the risk of losing out in the end anyway.  The Board of Public Works made the wrong call on this one and ought to reconsider, or at least delay any work under this new contract until the courts have had their final say.

Morris Zwick March 11, 2012 at 11:54 AM
Does the author have the interests of HMS Host or the citizens of Maryland in mind here? The evaluation criteria for award would have clearly spelled out how each company's proposal would be evaluated, and apparently HMS Host's bid was deemed to score lower. What evaluation factor would you have used for "in state company"? Given that there was only one other bidder, if your desire to see a factor favoring an in-state factor was incorporated, would the state have received as good a deal in a competition of one? It is certainly not in the taxpayer interest to offer sole source contracts. Then there is the issue of jobs. A rest stop hardly seems to be something that can be outsourced to a remote location. The bulk of the jobs would be done by folks in Maryland. The only potential out of state jobs would be those in the management of the company (i.e., headquarters). Finally, as far as litigation, government contracts are protested all the time. If HMS Host had won and the Miami firm litigated, the situation would be exactly the same. Usually a government agency won't proceed with the work until litigation is complete anyway to ensure that the problem you state doesn't happen. It is too bad HMS Host lost the contract. Next time let's hope they can put together a more compelling, competitive bid for the citizens of Maryland.
JJ Righs March 11, 2012 at 04:29 PM
HMS probably thought the contract was "in their pocket" soley for the reason that the author thinks it should be.
Sharon March 11, 2012 at 08:02 PM
Sure wish Montgomery Village would 'attempt' to entice Starbucks, Phillips and Cinnabon into the Village Center!!! Yummy to all!

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