SPRINGFIELD — A state procurement board has voted for a second time to void a multimillion-dollar contract between the University of Illinois and BLDD Architects of Champaign, on hold because of concerns about a potential conflict of interest.
Several members of the Illinois Procurement Policy Board also urged the UI on Tuesday to consider other architectural firms that bid on the $70 million Natural History Building project back in 2010, rather than starting over with a new selection process.
Board members, including former state legislator Bill Black, said they acted to protect the "integrity of the state" but had no wish to delay the project any more than necessary.
The state's chief procurement officer for higher education, Ben Bagby, who can accept or reject the board's recommendation, said he would consult with attorneys and UI officials before making a final decision.
Michael Bass, UI senior associate vice president, said he hoped to talk with Bagby today and then brief UI trustees when they meet Thursday in Chicago. Chancellor Phyllis Wise had said Monday the university would rebid the contract with BLDD, which totaled $4.6 million.
"This is not an easy situation," Bagby said. "We're trying to find the best way to deal with it."
The procurement board voted 4-0 in April to void the contract with BLDD after raising questions about a potential conflict. A top UI planner, Jill Maxey, is married to a BLDD employee and formerly worked at the firm, though she recused herself from the project once BLDD bid for it.
A state law that took effect in July 2010 requires that when a potential conflict of interest is identified, the state chief procurement officer must send the contract to the Procurement Policy Board for review.
The board didn't learn about the potential conflict until March 2012, more than a year after BLDD beat out 33 other firms for a $368,000 contract for conceptual design work on the project. The UI also expanded the contract in December 2011, agreeing to pay BLDD $4.3 million for architectural and engineering services for the duration of the project.
The UI determined in 2010 that notification wasn't required under its interpretation of the new law. BLDD disclosed the conflict, and the UI identified it as a "serious concern," but UI lawyers concluded the statute didn't apply to Maxey because she did not meet the salary threshold in the state procurement code. The UI also argued that no potential conflict existed because it had an internal procedure to remove Maxey from the decision-making process. Bagby, who was still assembling a staff at the time, didn't learn about the matter until later.
Bagby held a hearing following the board's April vote but rejected the recommendation and said the contract should proceed. He disagreed with the UI's interpretation of the law but said he found no evidence of improper activity or influence. And he said it would be too expensive to void the contract, citing UI cost estimates approaching $1 million.
"I don't think the university acted in bad faith, and it would have been costly," Bagby told the board Tuesday.
The board voted Tuesday to void the contract again on procedural grounds, noting the UI's failure to initially report the potential conflict and Bagby's decision to move forward with the project before it was vetted.
Board member Edward Bedore criticized Bagby's decision, citing testimony showing there had been "breaches" of the UI's policy to prevent conflicts. He said the university had acted "above the law."
Also, he said, Bagby should have considered the option of inviting one of the other finalists for the conceptual work in 2010 to take over the project now. BLDD finished just ahead of two competing firms in the UI's scoring of the four finalists.
The procurement board contacted the second and third-place firms, asking if they would be willing to assume the project using BLDD's designs.
BauerLatoza Studio of Chicago, which finished less than a point behind BLDD, said it would take two weeks to become familiar with the project. Bill Latoza said that it is "current industry standard" for conceptual plans created by one firm to be given to other architects to complete a project, which the firm had done for major clients in Chicago.
The third-place firm, Holabird & Root, estimated it would cost $100,000 to $150,000 to review the work to date and propose any modifications. The UI would also have to pay BLDD for any work to date.
Bagby said he wasn't sure it would be wise to go back almost two years to proposals from 2010, saying the data might be "stale."
The procurement board's lawyer, Todd Turner, said it appeared nothing would prevent the university from negotiating with the other firms, but he and Bagby planned to study the law further before making a final determination.
The UI's Bass was dubious that state procurement laws would allow the UI to simply negotiate with one of the firms, though he said "different people may have different opinions on that."
If Bagby accepts the board's recommendation, the first $368,000 contract with BLDD would stand but the larger $4.3 million portion would be voided and likely rebid, he said.
"Until I get something that's more concrete, that we don't risk violating (state rules), the safest way is to go out and resolicit for submittals," Bass said. "What I want to make sure is that everyone has an opportunity to be in the bidding."
That process would likely take several months, officials said.
A statement from BLDD Architects of Champaign said, "We are obviously disappointed, and by no means intended for the University to have to go through this. We have the utmost respect for the University of Illinois and of course the state we all call home and we will abide by the process."
Bagby also gave the procurement board a draft of a new policy to specifically address cases where an employee works in a procurement office and has a potential conflict, as Maxey did.
"We can't allow the process to be used for individual gain," he said.
It stops short of establishing a "no tolerance" policy, because there are too many "varied circumstances," he said.
But he added, "We need to have a policy that everybody knows, and then can adhere to, and if they don't, there are sanctions that go along with it. Right now we don't have a very clear policy of how to deal with this."
Black, of Danville, said he wasn't sure whether the UI case represented an actual conflict, but added, with an obvious reference to imprisoned ex-Gov. Rod Blagojevich: "Coming through the six-and-a-half years that many of us went through with a certain governor who now resides in Colorado, it's the perception of a conflict of interest that created many a problem."
Added board member Larry Ivory: "I think it's critical that we protect the integrity of the state by making sure that everyone understands it's not 'pay to play.'"