Wednesday, July 11, 2012

‘Change orders’ were a surprise to district


In response to questions raised by the Idaho Mountain Express: In 2008, the Blaine County School District board of trustees recognized that infrastructure improvements were needed at several schools within the district. Although the district would normally have been required to award any such contract to the "lowest responsible and responsive" bidder, it opted to follow the energy-savings legislation passed in Idaho for school districts in 2004. Under that legislation and procedure, the district was able to secure a fixed guaranteed maximum price for the project, guaranteed self-funded energy savings and a preference for local subcontractors.

After the thorough solicitation and interview process required by Idaho law, McKinstry was selected as the energy services company for the project, with the guaranteed maximum price set at $15,160,239, $5 million of which was paid for by a Department of Energy grant. Thereafter, the district approved in writing approximately $3 million of additional work that was represented by McKinstry to be outside the scope of the contract.

However, near the end of the project, McKinstry submitted additional claimed "change orders" of approximately $6 million—none of which had been discussed with or approved by the district. To the surprise of the district and despite weekly meetings with McKinstry during the project, one of the new "change orders" was a "premium" of more than $1,700,000 for the use of local subcontractors on the project. The district contends that the use of local subcontractors had always been understood by McKinstry as one primary reason the district selected McKinstry and conducted this project under the Idaho energy-savings legislation.

The district administration (Lonnie Barber, Mike Chatterton and Howie Royal) immediately rejected these unapproved new charges submitted by McKinstry. Settlement discussions and mediation ensued (without success), as required by the energy savings contract, and the current litigation followed. Details of the dispute revolve around the energy savings contract signed by the district and McKinstry.

The Blaine County School District would like to thank the more than 50 local subcontractors and their respective employees who have done excellent work on the new heating and ventilation systems that will serve our schools and students well for many years to come. If the public is interested in a tour of the new HVAC systems, please feel free to contact the director of maintenance and grounds, Howard Royal, at to schedule a tour.

Heather Crocker is director of communications for the Blaine County School District.

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