Portland Public Schools' contracting goof sparks dispute as district seeks $790 million construction bond
Portland Public Schools mistakenly awarded a $300,000 pre-construction contract, one that's potentially worth millions more, to an out-of-state bidder even though a local architecture team with a woman- and minority-owned partner scored higher in the public process. The school district admits the mistake but so far has declined to remedy it, arguing the Portland team missed the seven-day window to contest the decision under state law.
"They're shielding the process from integrity, rather than ensuring integrity in the process," says Joann Le, principal architect with Portland-based Dao Architecture, which got the highest score in PPS's public bidding process but lost the contract to BLRB, based in Tacoma, Wash.
The dispute is just the latest headache for the district as its advocates push for a $790 million construction bond on the May 16 ballot. A lawyer not affiliated with PPS who specializes in school construction law defended the district's response to the mistake, but it's unclear how voters will respond.
Jeremy Wright, a spokesman for the bond campaign, says voters should not let one error color their view of the school reconstruction that's happened since PPS passed the last bond in 2012. "Apparently a mistake was made, but that should not take away from the great work that's been done," Wright says. "Look at the totality."
PPS made the mistake in late October when it awarded BLRB the contract to do pre-design work at Madison High School as part of its decades-long effort to rebuild schools. The $300,000 contract is potentially worth millions more because the contract includes a very valuable clause. If district voters approve the bond next month, PPS intends to let BLRB finish the design work at Madison—a promise that could be worth up to $8 million, according to industry standards.
The mistake is the result of a pretty simple miscalculation. A PPS employee (or employees) created a faulty formula to tally three bidders' scores in an Excel spreadsheet. The screw up could have been caught if someone had double-checked the formula or reviewed the numbers by hand, a task that would have required simple arithmetic.
The oversight came to light publicly at a meeting of the Portland Public Schools board on Tuesday, April 25, only after Dao and its partner on the project, Opsis Architecture of Portland, tried unsuccessfully to resolve the problem with district administrators, the architects say. PPS's purchasing department, backed by PPS's outside law firm Miller Nash Graham and Dunn, has apologized to the Opsis-Dao team but told them they share responsibility for not catching the mistake sooner.
Under Oregon law, contractors have only a small window to protest the result of a public bidding process. Kevin Shuba, a Salem lawyer who specializes in school construction law, says PPS had no good choices. "I think they did the legally defensible thing," says Shuba, who's with the Garrett Hermann Robertson law firm. "That's kind of a 'damned if you do, damned if you don't' situation."
Le and Randall Heeb of Opsis say PPS is hiding behind an excuse. Contractors protest if a bidding process is flawed. "We are not protesting the process," says Heeb. "We are bringing attention to poor math."
Richard Higgins of BLRB said his firm has already completed the first phase of the project, the one worth $300,000. He distanced his company from the dispute. "We don't control the selection process," he said.
In response to the error, PPS has changed how it tallies scores. A spokesman for the district, Dave Northfield, also says PPS may revisit its decision in the second phase. "If the bond passes, we will reassess the current contract," he says.
The Opsis-Dao team says it's not seeking a do-over on the first part of the project, which has been completed. But it does want a shot at the second phase. It has a deep understanding of the Madison community's needs, the team says. That's because it successfully created the master plan for Madison last year after winning a 2015 contract for the initial planning, a separate contract also worth about $300,000. Last fall, the team pursued the second contract for pre-development work at Madison, knowing that they'd then be allowed to work on Madison's design and construction if the bond passed.
"We truly believe we would deliver a great design for the Madison community," says Le, a Vietnamese immigrant. "I see myself in a lot of the students at Madison."
The group learned in late October that it didn't win the contract. Heeb says they asked immediately for a meeting but were put off. PPS didn't schedule a meeting until Dec. 29, long after the district had inked its contract with BLRB on Nov. 9. An April 6 email from the district explains the delay: "As we notified Opsis in response to their initial request for a debrief, Purchasing & Contracting does not schedule debriefs until after a contract is awarded."
It was at the Dec. 29 meeting that the Opsis-Dao team got a copy of the scorecard.
An email from PPS documenting the chain of events says PPS discovered the error just after the Dec. 29 meeting. Then Opsis-Dao figured it out.
"We immediately made the district aware," says Heeb, "and they said, 'Yeah, we already knew that.'"
By that point, PPS risked making BLRB angry if it yanked the contract after work started.
"I imagine PPS is doing what they think is least likely to get them sued," says Maurice Rahming, president of O'Neill Electric who has worked with the city of Portland on public contracting programs and rules.
The error has added dimensions. BLRB donated $10,000 to the construction bond campaign on April 17.
There's no public record of Dao or Opsis having given money to the campaign.
Jeremy Wright, the spokesman for the ballot measure, says there's no connection between who contributes to the campaign and who gets district contracts.
To Le and Heeb, the whole episode reminds them of what happened at the 2017 Academy Awards when Warren Beatty and Faye Dunaway mistakenly announced that the movie La La Land had won Best Picture. The award was, of course, supposed to go to Moonlight.
Unlike PPS, the academy caught the error and corrected it.
"Someone handed over the wrong envelope," Heeb says of PPS. "They can choose to make this right, and they are choosing not to."