A top Illinois university is about to put a price on failing to bring a potential conflict of interest between a school official and her architect husband to the attention of state officials for 15 months.
The exact start dates for renovation of the 120-year-old Natural History Building at the Urbana-Champaign campus remain unclear. At the moment, it looks like the lapse in reviewing an architectural design contract will add a year delay and more than a million dollars in total cost to a planned $70-million project. In addition, the university has reassigned a senior planning director while the school system reviews its policies. And state officials are investigating why, in the post-Blagojevich era, the original contract was not presented to the state procurement policy board for conflict-of-interest review.
The exercise may serve as a lesson to firms that have cozy relationships with public agencies as well as to those who have tread carefully to avoid apparent conflicts of interest. Scrutiny of potential conflicts is growing wherever public officials have been caught abusing their power. The episode is especially poignant in Illinois, the state known for its two former governors, including Rod Blagojevich, serving prison sentences for corruption. And when it comes to construction, delays caused by ethics reviews can add up fast due to inflation even before a single yard of concrete has been poured.
Despite a year of votes by the state’s procurement board recommending that the contract be cancelled, the state Chief Procurement Officer for Higher Education, Ben Bagby, allowed the contract to stand.
The matter was finally decided on July 17, when the Illinois Procurement Policy Board voted unanimously for the second time to recommend voiding a $4.6-million contract between BLDD Architects and the University of Illinois at Urbana-Champaign because of the potential conflict of interest.
Two days later, the University of Illinois Board of Trustees cancelled the contract. A University of Illinois report estimates that voiding the contract would result in a minimum of one additional year of work, costing $91,000 per month in escalation. Even without the expenses for rebidding the design contract, this adds more than a million dollars to the project's price tag.
Details on the procurement board’s review emerge from documents provided to ENR by the board itself, including an independent hearing officer’s report with testimony from involved parties.
The potential conflict of interest involved Bruce Maxey, BLDD’s principal, treasurer, and BIM overseer. He is the husband of Jill Maxey, who until last week was the Associate Director of Planning in the Urbana-Champaign school’s Capital Planning & Space Management office.
The state’s chief procurement officer for universities, Bagby, brings potential conflicts before the state procurement policy board for review. The board makes a recommendation on what’s ethical and how to handle conflicts, but Bagby can do otherwise if he holds a public hearing on the matter.
Bagby had brought the relationship before the state procurement board for the first time in June 2011, regarding the project’s second, planning phase.
The university system had policies in place barring relatives from the contract selection process and the policies would have applied to the Maxeys from the moment BLDD submitted its proposal. There is no evidence that the Maxeys violated university policies or did anything unethical.
Nevertheless, the state procurement board voted unanimously to recommend that the contract amendment extending BLDD’s services to the planning phase be voided.
Bagby held a public hearing on the contract amendment continuing BLDD’s services on the project and chose not to void it. He then submitted the contract as a whole for review by the state procurement board in May 2012. The process repeated in June: the Board voted unanimously to recommend voiding the contract, Bagby held a public hearing and then he decided to maintain it.
In his statement submitted to the procurement board, Bagby supports his decision in saying that he found “no evidence that the potential conflict of interest resulted in improper actions,” and that the costs of rebidding the contract outweighed the benefits.
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