For Immediate Release - August 08, 2012

Salem Public Schools Settles Alleged Public Construction Bid Violations

AG's Investigation Reveals Systemic Issues with the Schools' Previous Construction Bidding Practices, Steps Taken by the City to Improve Practices

BOSTON – A settlement has been reached with Salem Public Schools (SPS) to resolve allegations of public construction bid violations, Attorney General Martha Coakley announced today.  

The complaint and consent judgment filed in Suffolk Superior Court detail the findings of an investigation by the Bid Unit of AG Coakley’s Fair Labor Division into the procurement practices and alleged public construction bid violations of the Building Services Department (BSD) of Salem Public Schools. The consent judgment details its requirements to improve and correct procurement practices of Salem Public Schools and safeguards to ensure future compliance.

According to the complaint, beginning no later than October 2006 and continuing through December 2010, the BSD of the Salem Public Schools engaged in practices that violated the public construction bidding laws for various construction and maintenance services. This matter came to the attention of the AG’s Office through a former employee of the Salem Public Schools in the spring of 2011.

Among the bidding issues identified in the AG’s investigation are:
• failure to properly estimate the cost of routine and emergency services and repairs to plumbing, heating, ventilation and air conditioning (HVAC) and elevators;
• failure to put these contracts out to a formal bid;
• dividing procurements into multiple smaller components to avoid a formal bid process;  
• failure to properly advertise contracting opportunities; and
• failure to require the payment of prevailing wage for work on public buildings.  

During the course of the investigation, the AG’s Office contacted the City of Salem (Salem) regarding its initial findings and the city initiated an extensive internal review of the procurement practices of BSD, subsequently implementing several actions to remediate many of the identified deficiencies.

The AG’s Office recognizes the significant cooperation received from the former employee who came forward with extensive information about the problematic bidding practices at the BSD, as well as from the city, which undertook immediate measures to correct the BSD’s bidding practices. The consent judgment resolves the claims alleged in the AG’s lawsuit and includes a plan for future monitoring of the BSD by the AGO which extends through March 2013.

The AG’s Bid Unit is responsible for investigating and enforcing the competitive bidding laws that govern contracts for public works and public building construction in Massachusetts. Its investigations primarily involve hearings held to investigate allegations of bid violations and result in the issuance of findings in what is called a “Bid Protest Decision.” In addition, the Bid Unit also conducts independent investigations as it did in this matter. The Bid Unit also assists the resolution of potential bid protests when possible by contacting awarding authorities during the bid solicitation process to call attention to possible bid law violations.  

For more information regarding the public construction and public bidding, please visit the Attorney General’s website.

This matter was handled by Assistant Attorney General Jocelyn B. Jones, Deputy Chief of AG Coakley’s Fair Labor Division and Assistant Attorney General Brian O’Donnell also of the Fair Labor Division.

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