Johns Hopkins Gazette: September 8, 1997

University Tightens
Bid Procedures

Procedures for administering university repair and maintenance contracts have been revamped to prevent recurrence of collusion that allegedly cost Hopkins hundreds of thousands of dollars.

The university's purchasing office will now join the Office of Facilities and Real Estate in opening and analyzing all bids on such contracts, said John J. Lordan, interim senior vice president for administration.

Affected university divisions will be invited to take part in the bid analysis. The senior vice president will award the contracts, based on a recommendation from all those who have reviewed the bids.

In the past, "too much responsibility was placed on one person," Lordan said. "That's easily changed without delaying or encumbering the contract administration process."

The changes were prompted by an outside auditor's report, prepared at Hopkins' request, on the university's relationship with heating and air conditioning contractor Thermal Services Inc. and other vendors. The auditor, KPMG Peat Marwick, found that Johns Hopkins had overpaid TSI "several hundred thousand dollars" since 1992 for work that either was never done or was billed at rates significantly above market, Lordan said.

Two university employees were dismissed during the spring for gross misconduct. The dismissals came shortly after detailed evidence of an improper relationship and possible kickbacks from TSI began to surface because of a lawsuit filed by a partner in TSI.

Lordan said the university is exploring options for recovering money overpaid to TSI and will cooperate with any law enforcement investigation.

In the meantime, Lordan said, the changes in repair and maintenance contracting will create safeguards similar to those that already exist for larger, more expensive construction deals.

"Decentralization is our strength," Lordan said, "but it needs to be balanced by effective control procedures. We've had a wake-up call on that. We won't soon again make the same mistake of relying too much on one person's judgment."

Lordan said the procedural changes--and others, including the upgrading of a construction auditor's position--will protect employees involved in the administration of the contracts, giving them confidence that their actions are double-checked and approved.

He said he hopes the changes will also persuade businesses that may have felt shut out of Hopkins work in the past to take another look.

"We hope that if any vendors have felt it was not an open place to do business, they will be disabused of that and want to do business with us," Lordan said. "We want all qualified vendors to have the opportunity to compete for university contracts in a fair and unbiased procedure."

Lordan said he believes the irregularities uncovered in the TSI case were an exception, atributable to just a handful of the many employees in the Office of Facilities and Real Estate. But he said he recently held a general meeting with the office staff to review for everyone the university's conflict of interest policy. The policy can be found on JHUniverse at

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