Accountable Strategies blog

A blog about accountability issues in the public, private, and nonprofit sectors

Performance, accountability, rules, and the Mount Hood-Big Dig dirt case

Posted by David Kassel on February 19, 2008

When I was with the Massachusetts Office of the Inspector General, we reviewed an interesting case in which hundreds of thousands of tons of fill from the ongoing “Big Dig” tunnel project underneath Boston were delivered to Melrose, a small city a few miles to the north.

It was done under an unusual arrangement in which a contractor actually offered to pay the city of Melrose to take the stuff.  The offer was made in April 2000.  City officials estimated they would garner more than $200,000 in revenues from the fill.  The then parks superintendent suggested to the then mayor that they could use the fill to make long-needed improvements to the 12th fairway of the city’s Mount Hood Memorial Park and Golf Course.

The problem was that those city officials failed to first do a project plan, design, or cost estimate.   As the truckloads kept coming, wetlands in the park became flooded and sediment from the fill got into resource areas.  Trees and other vegetation in a number of areas died or were stressed.  A partially installed drainpipe in the fairway failed, resulting in the need to install a new one, and the built-up fairway slopes had to be stabilized.  Rather than completing the project with $200,000 in revenues from the fill, as planned, the project was now projected to cost $1.8 million.  The parks superintendent was fired from his position and the mayor himself left office soon afterwards.

The IG’s office was called in to do an assessement.  We found, among other things, that in six instances, the city procured site preparation and other work without complying with the state’s public works bid law.  In 16 instances, the city failed to comply with a law requiring written contracts. 

I discuss this case and three other “design-build” contracting cases in which traditional bidding rules were bypassed, in an article in the March/April 2008 issue of Public Administration Review.  The purpose of the article is to offer a rebuttal to a view among some public administrators and academics since the 1980s that bidding, contracting and other rules are largely bureaucratic red tape and that they stifle innovation by public managers and hamper their performance.

On the contrary, these cases appear to me to show that there is a certain amount of wisdom inherent in public procurement laws and regulations, and that when managers evade those rules, their projects can implode.  Conversely, when they follow rules, they may well be rewarded with successful and accountable projects.

Public works bidding rules, in particular, require public managers to do a certain amount of up-front planning for their projects in developing their bid requirements.  Contracting laws help protect public entities by ensuring that legal agreements are drafted with private contractors.

In the Mount Hood case, the city of Melrose jumped at the offer to be paid for accepting the Big Dig fill.  Within weeks, the fill began arriving from Boston.  Between May of 2000 and July 2001, roughly 700,000 tons of Big Dig fill were dumped in the center of Mount Hood park.

In the case of the drainpipe installation in Mount Hood’s 12th fairway, the city had hired a contractor for the job without having sought bids as required by the state’s public works bid law.  The law would have required the city to prepare a full set of specifications for the drainpipe installation—in other words the city would have had to do some up-front planning for the job.  The city also failed to execute a contract for the drainpipe work—a violation of another state law requiring that contracts be used in municipal transactions with vendors with values over $5,000.

The drainpipe was partly installed by the contractor in an area of the fairway where peat was present.  According to the IG’s report on the project, portions of the pipe became dislodged when the peat moved, or “heaved,” underneath the drainpipe.  An excavating machine belonging to the contractor became buried in the fairway.  A decision was later made by the city to abandon the pipe and start all over again with a new one.  Not only did the drainage system have to be redesigned, but the city was forced to spend money to pump silt deposits out of nearby wetlands areas.  The silt deposits were found to have been caused by the drainpipe failure.

In the PAR paper, I conclude that in the drainpipe case alone, had the city complied with the bid law and hired an engineering firm to prepare plans and specifications, those plans would have been likely to have been based on existing conditions of the fairway and the presence of peat there, and presumably those conditions would have been disclosed to all of the bidders.  The expensive environmental problems could have been avoided.  Moreover, without a contract in the drainpipe case, the city had no legal means to protect its interests.

Interestingly, the city was not required to seek bids for the overall fill delivery contract because the city was not specifically paying for the fill.  Nevertheless, the city’s lack of plans and specifications for the overal project appears to have had a direct impact on the city’s ability to prevent the environmental problems that occurred.

The lesson here is that to the extent that rules encourage planning for major projects, it’s often a good thing to follow them.

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