U. of I.'s C. of I.

When it comes down to conflicts of interests, in regimes with fairly effective enforcement regimes, the most critical element is the appearance of impropriety. To avoid the build up of distrust in the integrity of the system, not only must actual conflict be dealt with, but as important, the appearance of favoritism.

'Conflicted' contract may be rebid

Under pressure from state authorities, the University of Illinois plans to rebid a multimillion-dollar contract with BLDD Architects of Champaign because of concerns about a potential conflict of interest, Chancellor Phyllis Wise said Monday. "I don't think there was a conflict of interest," Wise told The News-Gazette on Monday.

But she added, "We will rebid it (the contract). And it will cause a significant delay in the renovation of the Natural History Building, but it probably is wise to rebid it."

At issue: Jill Maxey, UI associate director of planning in Facilities and Services, who supervises some aspects of campus construction projects, is married to Bruce Maxey, who works at BLDD and owns a 8.9 percent share of the firm. Jill Maxey is also a former BLDD employee.

The Natural History Building was initially scheduled to reopen by fall 2015, but that's already been pushed back to winter break of 2015, and any further delays mean the building wouldn't be available until the summer of 2016. The total cost of a 12-month delay would top $1.1 million, the university said.

BLDD disclosed the relationship, as required under state law. And the state's chief procurement officer for higher education, Ben Bagby, last month refused to void the contract, saying he found no evidence that the potential conflict resulted in any improper actions, documents show.

A state law that took effect in July 2010 requires that when a potential conflict of interest is identified or "reasonably suspected," the state chief procurement officer must send the contract to the Procurement Policy Board. The board then recommends whether to allow or void the contract or bid offer, "weighing the best interest of the state of Illinois."

UI officials made a determination in 2010 that notification wasn't required under its interpretation of the new law, according to testimony from a hearing in May prompted by the procurement board's vote.

Assistant Vice President Maxine Sandretto, the UI's state purchasing officer, saw the potential conflict as a "serious concern given the close relationship involved," emails show. But she consulted with the UI's legal department, which advised that the statute didn't apply to Maxey because she did not meet the salary threshold in the state procurement code.

The UI also argued that it had an internal procedure in place to prevent a conflict, as Facilities and Services had set up an informal "firewall" to remove Maxey from the decision-making process if BLDD bid on a project. Therefore, they argued, no potential conflict existed.

But the procurement board said documents and testimony from the hearing revealed several "breaches" in that firewall. Maxey recused herself once BLDD bid on the Natural History project but was later copied on several emails about the scope of the project, before a firm had been chosen.

Also, the employee that Maxey assigned the project to, Anthony Battaglia, testified that he had connections to the firm, playing in a band with some BLDD employees. His wife's brother-in-law works at the firm, documents show. Battaglia testified that he removed himself from the process after the four finalists were chosen.

Bagby conceded in his decision that the university's efforts at the firewall were "weak," adding, "The process was simply lacking." And he said the UI should have submitted the contract for review before it was signed.

Panel again votes to void U. of I. contract over conflict of interest

The two firms that had the second- and third-highest scores during the selection process both agreed to continue what BLDD started with little or no delays, records show.

An official with the firm that came in second place, Chicago-based BauerLatoza, said Tuesday she is glad the contract is getting another look. The firm fell a fraction of a percentage point below BLDD when 34 companies submitted bids in 2010. It told the procurement board that it would take two weeks and no additional costs to get caught up to speed with BLDD's design plans.

"I would like to think we could do something with those two firms that were so closely ranked that would avoid a complete and total rebid," said procurement board member Bill Black, a former Republican state representative from Danville. "I don't want to see this project delayed nine, 10 months, and I don't think we have to."