Horry County Board of Education ignored $40,000 advice from consultant

The Horry County school board gave a consultant $40,000 only to reject his advice on which of three companies, including a local one, should be awarded a more than $240 million contract to construct five new schools over the next two years.

At least one school board member said although the company chosen was the most expensive, it was the only that could guarantee meeting a deadline, which was important to her.

Horry County Schools paid Greenville-area consultant Louis P. Batson about $40,000 in October to evaluate offers from three companies chosen as finalists to build five new area schools, according to documents provided by the school system.

“We understand educational specifications and various components that go into schools,” Batson said. “ But we are far enough away from Horry County and anyone who is a contender in this work that we could operate objectively.”

First Floor Energy Positive, which is based out of Raleigh, N.C., was awarded contracts to build all five new schools in November for a total of $240.3 million – more than $70 million over the district’s initial budget. The schools are expected to be built by August 2017, officials said.

The top three companies – M.B. Kahn Construction, Thompson-Turner Construction and First Floor Energy Positive – were chosen by a selection committee made up of school board members Neil James, Ray Winters, David Cox, Holly Heniford and Sherrie Todd along with school principals James LaPier and Janice Christy and district personnel Mark Wolfe, Dennis McCrary and Daryl Brown.

The district usually hires a consultant on major building projects to provide a “third party, unbiased opinion” on proposals, said Teal Harding, district spokeswoman.

Batson – who has more than 15 years of experience consulting architecture projects and owns Batson Associates – was hired through the district’s law firm Childs & Halligan.

“Given his professional background, he would be able to look at the proposals and base things solely on the merit of the plans,” Harding said.

In a written critique, Batson told the board the only firm within ‘striking range’ of the original $167.4 million budget was M.B. Kahn Construction Co., Inc., M.B. Kahn is based out of Myrtle Beach.

M.B. Kahn’s proposals totaled $184.1 million.

“Based on my professional experience, only the proposals by M.B. Kahn appear to be within ‘striking range’ of the published budgets,” Batson wrote in the consulting document presented to the board.

Proposals submitted by Thompson-Turner Construction, based out of Sumter, were also over budget but could have been “capable of adjustments” that would have reduced the price but still created a high-performance school, Batson said. Thompson-Turner submitted a $198.8 million bid for the completion of all five schools.

Proposals from First Floor – which is based in Raleigh, N.C. – came in at $219.3 million. Batson advised the board against attempting to reduce the scope of work to decrease costs regarding First Floor’s proposal.

“... It is my professional opinion that the changes required to reduce the scope of high-performance building characteristics, square footage, themes for collaboration, visual transparency, inspiration, and security... are not achievable,” Batson wrote.

Batson said he’s not upset the board didn’t take his advice, and the deal was a “pretty cut-and-dry engagement.”

“I can only give them the information from my professional expertise,” he said. “It’s entirely up to them whether to take that advice or not.”

Sherrie Todd, board member who represents District 2, said although First Floor was the most expensive, they were the only firm that could guarantee meeting the deadline. The firm’s prior experience building high-performance schools was also why Todd voted to award all five contracts to First Floor, she said.

“We really had no choice but them,” she said.

Batson critiqued other details of proposals

Batson also ranked First Floor last in conceptual design conformity, meaning the firm deviated significantly from plans developed by district staff and board members last year. Earlier this year the board agreed to allow design-build firms to change two specific parts of the conceptual design – created by a steering committee last year – to meet educational specifications also created by the committee.

According to Batson’s critique, First Floor’s designs eliminated exterior courtyards, exceeds the planned square footage and changes certain security features.

“It is of particular concern that significant time, energy and financial resources were spent in the development of the conceptual plans and modification of this magnitude were made without the input of stakeholders,” Batson wrote.

Thompson-Turner and M.B. Kahn’s plans generally conformed with the conceptual designs, though there were some minor variations that could have been addressed, Batson wrote.

Todd said Batson was not present when the firms were presenting their designs to the board, so he could only glean information from the paperwork submitted by the finalists. She said Batson’s absence during the presentations – especially given the $40,000 fee he was paid – was “aggravating.”

“We had no further input from him,” Todd said. “He just sent a letter. And I’m thinking, ‘Really?”

Batson ranked First Floor first in both high-performance and energy positive categories, though he noted Thompson-Turner was the only firm that conformed with the request for proposals requirements. All proposals did have high-performance characteristics, Batson said, and he ranked all three firms closely.

One of the biggest flaws of each proposal, according to Batson, was the timeline.

“It is my professional opinion that the schedule will become an issue prior to completion of this construction program,” Batson wrote.

The consultant critiqued each firm’s time allocation for weather delays, regulatory inspections and approvals and contractor issues. Batson argued the likelihood for any firm to meet opening day deadlines would be significantly diminished if more than two projects were awarded to a single team.

“The scope of work for the entire program will tax the resources of the contractors and more importantly sub-contractors as well as the local work force, particularly in view of the current and projected construction activity in the region,” he wrote.

The point of spreading projects around, Batson said, is to lessen the risk to the district.

“As an outsider looking in, one of the things you want to do in any project is to mitigate risk so you have the highest opportunity for a successful project,” he said. “And often times that means more than one contractor for a project of this size.”

Todd said hiring First Floor was the best option to produce “blue-ribbon schools” for the future students of Horry County. Though the new schools will cost the district millions of dollars, First Floor’s experience and stated ability to produce all schools by August 2017 gave her confidence.

Todd said she understands why people question the board’s choice but the decision to build high-performance, energy positive schools was made before she was elected to the board. Without completely undoing what the board voted on about two years ago, Todd had to select the best firm that could build the best schools compatible with high-performance criteria, she said.

The presentation by First Floor convinced her that they were, overall, the best for Horry County Schools.

“I wish people could have seen and heard what the selection committee saw and heard, so they could understand why First Floor is building these schools,” she said.

This story was originally published December 5, 2015 at 12:22 AM with the headline "Horry County Board of Education ignored $40,000 advice from consultant."