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August 16, 2008

The AG’s office calls out U. Mass Lowell on bidding process

by at 10:29 am.

Yesterday, the Lowell Sun reported that the Massachusetts Attorney General’s office has ruled that the University of Massachusetts Lowell ‘violated public bidding laws in awarding a $20 million student housing project to a local developer,” back in May.

These dorms were to be built with private funds, then leased back to the University. In his Sun article, Matt Murphy reports that “John Kendrick, president and CEO of Academic Village Foundation, filed a complaint after his bid was passed over, claiming the process was skewed to favor Brasi (the local developers) over other projects.”

The Brasi project calls for the U. Mass residential buildings to be constructed on Marginal Street; Kendrick’s plan has their dorms constructed on Pawtucket Street. I think they are referring to the old Burbeck Ice Cream site.

In today’s edition of the Sun, Murphy reports that Kendrick “is threatening to take the university to court if it doesn’t halt construction on the new dorm immediately.” Apparently, work continues on the dorm at Marginal Street while the University and the AG try to iron this out.

According to the Globe article on this subject, the University “argued that the project, which the developer would own and maintain, was private, giving them greater latitude in awarding the contract. But state officials office concluded that the public university created detailed specifications and design concepts for the building, and would in all likelihood assume ownership of the property eventually.” If that is the case, then the bidding process must follow state laws.

Increasing student housing is an essential part of Chancellor Marty Meehan’s plans for the University. Therefore, I am surprised that the University did not take every precaution to make sure that the process could not be challenged. It was not clear whether the AG’s office is asking to school to reopen the bidding process or award the bid to another entity. One thing is clear, either the new dorm will not be ready by August 2009, the University’s desired date, or it is going to be messy getting there.

The AG’s web page has not yet posted the ruling. When they do, I will link to it.

13 Responses to “The AG’s office calls out U. Mass Lowell on bidding process”

  1. Lynne Says:

    Does the buck stop at the Chancellor for this bid process, or does it go through a board of some sort? I’d like to know whose to blame for this, as it not only decreases the public’s trust in their pubic higher ed institutions, but also puts the kibosh for the time being on progress.

    So who, technically, is to blame? And is this evidence, as it appears to be, of cronyism?

  2. waittilnextyr Says:

    The reports on this contract are confusing. From the original SUN article:

    “Brasi proposed building the dorm on a privately owned property at 117 Marginal St. near South Campus and leasing the building to the university for $2.6 million annually for the first five years.

    Academic Village submitted a bid for the same size dorm on Pawtucket Street with a smaller $2.32 million annual lease and agreed to give the facility to UMass Lowell free of charge after 40 years.

    McCafferty said related costs in the Academic Village bid would have required students to pay $16,000 a year for housing compared to $6,500 for the Brasi facility.”

    It is pretty clear how the $2.6M annual lease cost of the selected approach translates to $6,500 per unit for the 400 unit dormitory, but it is certainly unclear how the $2.32 million alternate lease could translate to $16,000 per year for the same number of units. The proponent of the alternate lease disputes the $16,000 cited by the University, but doesn’t come out and say that the number should be $5,800 per lease.

    A complicating factor is the initial availability of the units, the selected approach is August of 2009, whereas the alternate is the Winter of 2009/2010. Exactly how much that time difference means in terms of comparative dollars is an open question. In any case, it is not clear from the data provided which of the two should be granted the project based on what is best for the students and the taxpayers of MA.

  3. Prince Charming Says:

    Ya think Scannell and Sullivan were donors to Meehan’s warchest or his foundation??

  4. C R Krieger Says:

    The question that popped into my mind was if the protestor was, in fact, the “lowest responsible bidder.” I am reading a 1990 book by a Harvard Prof (Steven Kelman) before sending it off to my youngest Brother–Procurement and Public Management: The Fear of Discretion and the Quality of Government Performance. That the procurement authorities made a choice of approach that the AG didn’t agree with does not mean the “fix was in.” The University authorities attempted to exercise discretion. The book author noted that Woodrow Wilson “argued that nonelected government officials should be kept from any discretion at all but should simply execute decisions made by others.” This strikes me as bad policy.

    The Academic Village bid offered housing a semester after the desired delivery date put forward by the University. If we accept there is a need for dorm space–and I think there is–we are back to the question of “lowest responsible bidder.”

    Regards — Cliff

  5. Ca2Camman87 Says:

    They can’t be talking about the old Burbecks lot. Can they?

    The neighborhood already said that condos couldn’t be built there. What makes this kind of project different? Also, how would they be able to fit parking in that little lot without taking out part of the national park as well?

  6. Mr. Lynne Says:

    Usually, if a firm has a beef with a (public) selection process, they file a protest right after selection. I don’t know what is specifically meant by the “greater latitude in awarding the contract” in terms of the protest process. I would assume that there was some means to file a protest. If so, it seems awfully late in the game to be talking about AG filings if construction is already under way. I’d be interested to know what the time-line of events actually was here because it looks suspect to me at this stage of the game. More to the point… even in a ‘beefier’ selection process, not being able to meet the proposed schedule is almost always a valid reason to reject a bidder, even a low one. Even if the bid selection was based on price (and disclosed as such), a bid that didn’t meet the parameters of schedule is often (usually) rejected as non-responsive. All of this above is, of course, separate from any cronyism angle (actual or perceived).

  7. Mr. Lynne Says:

    With regard to the question about if there is a difference between condos and dorms. The answer is parking. Dorms don’t need anywhere near as much parking (in theory) and as I remember, inadequate parking was a major reason the neighborhood didn’t want condos.

  8. Paul@01852 Says:

    The dorm location on Marginal St is *NOT* the same as the Burbeck’s condos location. Marginal St runs between Middlesex St and the large S Campus parking lot off of Broadway St

  9. waittilnextyr Says:

    Paul, check out the original article to see where the question about Burbeck’s probably came from.

    “Brasi proposed building the dorm on a privately owned property at 117 Marginal St. near South Campus and leasing the building to the university for $2.6 million annually for the first five years.

    Academic Village submitted a bid for the same size dorm on Pawtucket Street with a smaller $2.32 million annual lease and agreed to give the facility to UMass Lowell free of charge after 40 years.”

  10. Dan MacNeil Says:

    One big downside to the marginal street location is the freight trains that run past @ 3:00am.

    There is a reason they call it “marginal”

  11. Eleanor Rigby Says:

    Regarding the old Burbeck’s lot. The special permit for condos has expired so condos aren’t going in there. HOWEVER that parcel was rezoned as institutional with the express purpose of building dorms.

    Since putting a dorm on the site would not require a zoning change I doubt that any public hearing would be required at all.

    I think it was excluded in this round of “biddng” because they probably couldn’t deliver on the timelne set down by the university because Gary’s Ice Crean holds a lease.

    Look for the Burbeck’s property to be converted to dorms when Gary’s lease expires, neighborhood objections or not.

  12. waittilnextyr Says:

    I’m sure Gary could be bought out of his lease, as that location is not prime for high-priced ice cream.

  13. Eleanor Rigby Says:

    I’ve never had any ice cream at Gary’s Burbeck’s location but he does seem to attract a lot of cars when the weather cooperates. Neighbors might be out priced (although I don’t know his prices) but vehicle traffic seems to indicate he’s doing okay.

    So given what Gary had to invest in the building to open (Burbeck Falls LLC sold off all the equipment that was Burbecks at auction) and Gary’s potential income over the life of the lease based on his earnings so far (again, I don’t know what they are but based on vehicles in the parking lot he’s doing at least as well as he expected) and the mortgage that Burbeck Falls LLC still has on the property, I would guess they would rather just wait out Gary’s lease than try to buy it out.

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