Alamance-Burlington school board members stalled this week on awarding a contract for custodial services currently provided by The Budd Group of Winston-Salem, whose work has drawn repeated complaints from three, and sometimes four, of the seven board members.
A motion by school board member Tony Rose to award a new contract to The Budd Group failed 3-4. Voting with Rose to accept Budd’s bid were school board members Wayne Beam and Allison Gant. Voting against were: school board chairman Sandy Ellington-Graves; vice chairman Patsy Simpson; and board members Ryan Bowden and Donna Westbrooks.
At the end of a nearly hour-long discussion Monday night, school board members ultimately voted unanimously to postpone a decision on awarding the contract until the next work session in two weeks, in order to give ABSS chief business officer Jeremy Teetor time to gather additional information about the financial impact.
The cost for the custodial contract would require an additional $122,783, which Teetor said Monday night he hadn’t figured into the county budget request for ABSS for the 2022-23 fiscal year. “I’m really not kosher at this point – I’m really blindsided here,” Teetor told school board members, asking for clarification on the price for the custodial contract.
The $1.2 million increase in the contract for custodial services represents 26 percent of the total of $4.8 million in additional current expense (daily operations) funding that ABSS is requesting from Alamance County’s commissioners for the 2022-23 fiscal year, Teetor confirmed in a subsequent interview with The Alamance News.
The school system’s custodial contract is county-funded and currently totals $3.9 million this year, the chief business officer told the newspaper this week. That figure does not include a separate contract that ABSS awarded to The Budd Group last year for 36 sanitation specialists.
ABSS assistant superintendent Dr. Todd Thorpe told school members this week that the $7.1 million bid from The Budd Group includes the cost for “taking over all of our employees.”
There are currently 20 to 22 custodians who are still employed by ABSS but would eventually become employees of Budd Group or the next custodial contractor, Teetor said in a subsequent interview Tuesday.
Administration recommends new company
Instead, the school system’s administration has recommended awarding the custodial contract to MFM Industries in Texas, for an annual cost of about $6.2 million, or $900,000 less than what the current provider bid for the upcoming fiscal year.
Though MFM is a relative newcomer to the K-12 custodial world, the company provides custodial services for the Seymour Johnson Air Force base in Goldsboro, where it has its North Carolina office, Thorpe said this week. If awarded the contract, MFM would be provided with office space at an ABSS facility, as is the current custodial provider, he told school board members.
Thorpe said that MFM currently has one school system under contract to clean 22 out of 62 schools. “Some districts award multiple contracts,” he added.
Meanwhile, the board voted reluctantly last year – amid multiple concerns they raised and complaints they said they’d received from ABSS employees – to extend the existing contract with Budd by 12 months in order to give Thorpe time to put the custodial contract out to bid.
ABSS received nine proposals from custodial companies before the January 24, 2022 deadline, based on materials that Thorpe presented this week. The original bids ranged from a low of $6.1 million (submitted by HES Facilities Management of Tennessee) to a high of $14.3 million (submitted by City Wide of Greensboro). MFM submitted a bid of $6.2 million; The Budd Group submitted a bid of $7.1 million.
Two companies lowered bids
Budd Group and MFM subsequently lowered their original bid amounts, Thorpe said Monday night, without elaborating about why those two companies had done so.
Teetor said during the earlier discussion that the total cost for custodial services would be closer to $9 million per year if ABSS were to bring the custodial services back in-house (rather than use an outside company). That figure includes not only the hourly wages for custodians, but also state health and retirement benefits, as well as supplies and equipment, he said.
School board members Allison Gant and Tony Rose expressed concerns during the earlier discussion about the discrepancy in the bid amounts.
“Are they using their people, or are they contracting out?” Gant asked Thorpe during the earlier discussion. “Are benefits and vacation equal to some of these other companies?”
For his part, Rose said the board had specified how many custodians and how many hours it wanted them to work at each school.
Thorpe told school board members two weeks ago he was unsure about the reason for the difference in bid amounts but would ask each company for a breakdown.
School board chairman Sandy Ellington-Graves Monday night summarized the difference between the bids submitted by Budd and MFM, saying “$6.2 million is for Budd, with us retaining our employees at our expense; $6.1 million is for MFM taking our employees [the remaining 20 to 22 custodians who are currently employed by ABSS].”
Gant said Monday night that MFM would be “offering 32,000 less annual hours” of cleaning, which she said is “a drastic difference in what we currently receive.” Gant also said Monday night that it appears MFM would provide fewer hours of cleaning during the summer. “I’m just trying to justify how they come in so much lower and can they do the work.”
Rose amplified Gant’s concern about the apparent reduction in summer cleaning, which he said is important.
No competitive bidding requirement
State law does not require these types of services to be put out for bid, as the school board’s attorney, Adam Mitchell of the Tharrington Smith law firm in Raleigh, pointed out this week.
Nor does that portion of state law require public entities such as ABSS to award these types of contract to the lowest responsible, responsive bidder.
Frayda S. Bluestein, an expert in local government with the School of Government at the University of North Carolina at Chapel, confirmed for the newspaper this week that that state law doesn’t require a competitive bidding process for this type of service contract. “The statutory bidding laws don’t apply to this type [of contract] only purchasing supplies and equipment and construction or repair,” Bluestein explained. “It’s a good practice, but it doesn’t fall in the statute.”
That portion of state law Bluestein cited for the newspaper stipulates that only those contracts which are subject to the competitive bidding process are required to be awarded to the lowest responsive bidder.
Other objections to MFM
For his part, Beam said Monday night that MFM had not fared well during an internal review. Two committees, comprised of ABSS staff, evaluated and ranked each of the proposals last month.
RNA of Michigan, the second-highest bidder at $7.8 million, got the top ranking among the two staff committees. MFM, the company that the administration has recommended to receive the contract, ranked sixth; the current contract, Budd Group, ranked seventh, based on materials that Thorpe provided for the school board’s discussion.
School board members also objected this week to awarding the contract to a company that isn’t based in or near Alamance County.
“I’m concerned with the location of the company,” Rose said Monday night, referring to the MFM, the company that the administration has recommended awarding the contract to.
Rose also noted that The Budd Group had helped last year with the renovation of the McCray School, a one-room school north of Burlington originally built around the turn of the 20th Century to educate the county’s black children. “That’s important relationships these folks have with the schools,” Rose said, adding, “We have a lot of local people paying more for these types of jobs.
The Alamance News has been told that The Budd Group donated about $50,000, as well as an in-kind contribution of labor, to support the McCray School renovation.
State law doesn’t prohibit an outside vendor making such a donation to a school system with which it also contracts, Bluestein told the newspaper this week. “It may play into the decision by the board, but it’s not illegal because it doesn’t benefit anyone individually,” she explained. “Of course, this can’t come into play if the contract [is] subject to mandated bidding.”
“We are basically shifting leadership,” Rose said Monday night, and in the meantime, ABSS stands to lose good custodians during that shift. “I think the challenges we’ve had with The Budd Group – over-promising when they came – they admitted that.” Many of the complaints about Budd Group have been investigated and found to be “without merit,” Rose said.
Hole to pour money into?
Meanwhile, Simpson recalled this week that she wasn’t happy with the fact that The Budd Group has repeatedly asked ABSS to pay more for services currently provided under two separate contracts, which Thorpe previously said would be merged into one contract for the upcoming fiscal year.
In June 2021, The Budd Group sought an increase in the contract in order to raise the hourly pay for custodians, but school board members took no action.
School board members voted 4-3 last year to let a separate, $1.3 million contract for 36 sanitation specialists, also provided by The Budd Group, expire as scheduled on September 30, 2021. That decision was later reversed at a special-called meeting in mid-September, when the board voted 4-2 to extend the contract for the 36 sanitation specialists by nine months, until the end of the current school year. Voting to extend were: Gant and Rose, then-chairman and vice-chairman, respectively; and school board members Beam and Westbrooks. Ellington-Graves and Bowden voted against; Simpson was absent.
During the statewide school shutdown that began in March 2020, Thorpe unsuccessfully proposed in May 2020 using approximately $1 million in federal Covid-19 relief money to have The Budd Group spray a special disinfectant in schools and on buses, as well as to increase cleaning frequency.
At the same time, the board’s vice chairman acknowledged this week, “when buzz got around we were looking, they [Budd] got a lot better.” She also praised The Budd Group’s support for the McCray School renovation and initially said Monday night that she might be willing to consider giving The Budd Group a shorter contract but changed her mind by the end of the protracted discussion.
“I guess I’m a little bit uncomfortable with the math right now,” Simpson said Monday night. “I need some better math.”
School board members have agreed to resume their discussion at their work session in two weeks.