L.A. Unified suspends top facilities contractors pending internal investigation

Four key consultants in the nation’s largest school-construction program have been suspended by the Los Angeles Unified School District pending an internal investigation, The Times has learned.

The contractors -- Edwin Van Ginkel, Rod Hamilton, Charlie Anderson and John Creer -- have held prominent roles in acquiring real estate, managing environmental reviews, planning projects and managing construction over the last decade for compensation that surpassed regular district employees, including the wages paid to Supt. Ramon C. Cortines.

Cortines declined to comment pending his personal review of an ongoing district investigation, but officials said the work agreement with the contractors has been cancelled; Cortines said he would report to the Board of Education within 10 days regarding the internal review.

Critics of the construction program have praised the increased scrutiny, but its defenders say the district is dangerously ejecting the expertise that has made a $20-billion effort successful.

The four executives recently formed their own consulting company, Consilia, which was to plan how the district would, in the near future, spend the $7 billion of  bond funds authorized in Measure Q, passed by voters in 2008. Their role involved construction planning at 580 campuses, for which they would receive $3.74 million, at a rate of $185,000 per month. The contract also includes a $40,000 setup fee for furniture and related office costs.

The district's Inspector General is conducting the investigation into the company, looking into, among other things, whether the company was hired by L.A. Unified without competitive bidding, according to district officials, who spoke on the condition of anonymity because they were not authorized to discuss the issue publicly.

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Comments

[uncle_vito]

LAUSD just got ripped off. How stupid can these people be. But do not fire them, give them a raise.

What a laugh.

[Steven Moshlak]

Okay, before the IG's report is released, the apparent focus is on wages, not something known in acquisition management as a "wrap rate."

A "wrap rate" is based upon overhead costs and an hourly-rate. Overhead is generally the set-up and furniture costs (the $40k is paid for), but does not cover the rent, IT equipment, other employee salaries, support staff (they can be a "direct charge" or placed in an overhead pool) or a different line item for sub-contracts / subcontractors (people like myself), such as IT people, project planners and schedulers, cost analysts, auditors, compliance personnel, contract analysts, printing, 401k, health, disability, and life insurance, bonding and worker's comp., etc.

I am sure that there are travel costs entailed, vehicles that need to be used and so forth.

Then it is the type of contract that was written. Is it cost-plus expenses, or a "Not-to-Exceed" / Firm-Fixed-Price condition? Is there an incentive bonus?

Also, the article neglects to mention that the contract runs for less than 2 years. When a government or quasi-government hires someone, it is a lifetime commitment and training / expertise that is needed and can't be found within LAUSD. Considering their wrap-rate, length of commitment for an employer / employee situation and the lack of seasoned experience, which will cause an overrun and / or slippage of schedule, people are foolish when they think that they can do a job and save money, when the reality of the situation doesn't exist.

By the wau, my disclaimer is that I am not involved with any of the principals mentioned in the article or have done contracting for the LAUSD, but I would sure like to, if I still lived in Los Angeles. My expertise? Program Management - Acquisition and Cost/Scheduling.

[Steven Moshlak]

One more thing I forgot to mention-

When an organization pays peanuts, you'll only get monkeys to do the work.

[Dick Diamond]

I'm only going to comment on the land acqusition of the internal study. From my experience in research and reporting in a school district 70 miles east of Los Angeles, I can say that there is so much corruption and "slight of hand" in school land acquisition as well as the use of C.O.P.S (certificates of participation) that it rivals the Bell city scandal. Good for the Superintendent and IG. School contracts on land acquisition and building are one area that need close scrutiny. Too many school districts, both administrators and board members are like the three monkeys--Hear NO Evil, See No Evil, Speak no Evil.
Just be deaf, dumb and blind.

[James Andrews]

Are these the same genius planners that spent $672 million to build one high school and over $500 million to build two more? NOW they think something might be crooked? Wow!

Meanwhile the entire city and state fall into economic disaster and the Billions for new schools continues.