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Saturday, July 09, 2016
Cool Schools: How Government Contracting Makes a $2,500 job cost $138,000
By Andrew Walden @ 12:51 AM :: 4101 Views :: Education K-12, Ethics

by Andrew Walden

Great news for sweltering students: “The…government…has installed additional air conditioning units and new generators in the city’s 34 public schools, just in time for this year’s school opening.”

Unfortunately, that news comes from Taguig City, Philippines.  Here in Hawaii, it looks like students will suffer again as hopes for immediate results on priority ‘Cool Schools’ projects—also numbering 34--devolve into political finger pointing after contractor bids came in high.

In a June 23 letter to the State Attorney General, Rep Matt Lopresti calls for an investigation of what he terms “price gouging.”  Writes Lopresti: “many contractors who submitted their bids over the past month significantly increased their bids over a short time period.  In some cases it was five times the original amount….”

UPDATE: Contractor Offered Cool Schools at $5990 per Classroom—Was Ignored by DoE

Lopresti is unfairly denying credit to his fellow legislators and to DoE Procurement bureaucrats who also had a hand in fattening up this cash cow.

Mission creep began with the original ‘Cool Schools’  bill, SB3126, signed May 6 by Gov. Ige, “allowed an emergency appropriation of $100 million to fund equipment and installation costs for air conditioning, heat abatement measures and related energy efficiency measures….” 

Those “related energy efficiency measures” ballooned into the bigger part of the project when Ige June 30 signed a second “Cool Schools” billHB2569—which obligates the Hawaii DoE to go net-zero--eliminate all of its net electricity consumption by January 1, 2035--and sets FY 2015-16, ending June 30, 2016, as the benchmark against which progress will be measured.

It gets worse: HB2569 can only be interpreted as a purposeful distraction of the public because Hawaii Board of Education Policy 6710 already “sets a goal of reducing the Department's reliance on fossil fuel-based energy by 90 percent by 2040.”  In 2013, the DoE approved a One Billion Dollar solar contract with Chevron Energy Solutions to which was justified by the need to carry out policy 6710. The Hawaii State Auditor in July, 2013 pointed out that the bidding process was rigged by the DoE PCB to favor Chevron whose Hawaii operations are overseen by Al Chee, a well-known athletic supporter.  A 2013 whistleblower lawsuit argues that Chevron's bid will cost the DoE as much as $612M more than the other bidder.

Ige, of course, is just doing his part for the HSTA—since they are the ones who put him on the 5th floor.  But Legislators have to answer to the contractors—which they do by imposing two opposite goals—install $100M worth of AC, which normally would consume electricity, and a redundant net-zero bill--showing progress from the very first year in which all those new AC units were to have come on line.

The result is explained by Clay Asato, president of the General Contractors Association of Hawaii:

These measures call for much more than adding air conditioning to schools. They also require modifications to school facilities to accommodate a range of energy efficiency features and the use of renewable energy to move public schools toward netzero energy use (i.e., a school’s energy needs must be completely satisfied by renewable power sources).

Because the majority of Hawaii’s schools are more than 50 years old and their construction and electrical systems reflect a different time, retrofitting them with modern features and systems, which they weren’t designed to support, often requires electrical and construction upgrades.

Older school buildings also were not designed to be airtight and relied on natural ventilation for cooling….

And when it comes to ensuring new air conditioning systems function effectively, the building envelope needs to be sealed, which requires replacing windows and doors, and installing insulation.​

Add to this the requirements that renewable energy systems must also be installed to reduce the electricity costs at our schools, and it’s clear the scope of work involved in addressing the requirements of the recently passed legislation goes far beyond the purchase and installation of air conditioning units….

Lopresti accounts for the role of the contractors.  Asato accounts for the role of legislators.  The HSTA’s hot schools dog and pony show at the opening of the last school year accounts for the Governor’s role.  But what about the DoE Procurement and Contracts Branch (PCB)--Don’t they get any credit for this money shower?

Akamai readers will remember that the Star-Advertiser Kokua Line column May 16 reported that DoE PCB limited Cool Schools bidding to a pre-qualified list of contractors which was closed off in April—before SB3126 was even signed into law.  On May 6, a letter-writer complained--also to the Star-Advertiser Kokua Line--that Cool Schools was going to cost as much as $100K per classroom.  When the envelopes were opened, the sole bid at Leihoku Elementary was $1.8M for 13 portables—$138K per unit.  Of course excluded contractors complained, allowing the DoE an excuse to reopen qualifications May 31.

This two-step process is obviously designed to produce the first round of high bids.  What may not be so obvious is that going forward those high bids will be used to make lower—but still exorbitant--second round bids look good by comparison.   Use of the procurement process to manipulate public perception is the special genius of State of Hawaii procurement officials.  Somebody has earned a free round of golf!

DoE has now revealed that the reopening boosted the number of competing contractors from 18 to 36.  Interestingly, only a few of Hawaii’s rooftop solar contractors qualified even as the solar industry contracts 39% due to the collapse of Net Energy Metering. 

Bid specs provided to Hawai’i Free Press shows how these shenanigans play out.  At Aliamanu Elementary School, bids for cooling of portables (DOE Job #T-75021-17) came in between $404,100 and $902,700—a cost likely far higher than the combined value of the five aging 896-square-foot units. 

The simplest and most inexpensive solution would be to install split air conditioning units in each portable.  This is not rocket science.  An 18,000 BTU split designed to cool a 1000 square foot building currently sells for $860.49 at Walmart.  A bid-estimation website reports the average cost for equipment and installation of a split AC for a 2000 sq foot home is $2,500.

DoE Spokesperson Brent Suyama tells Hawai’i Free Press,“…most specs on projects are hundreds of pages because of the details that are required by law for thing such as information about potential asbestos or other hazards….”

A look at the bid specifications shows extraordinary measures being taken to avoid even the slightest increase in electricity consumption.  The bid sheet specifies DC-driven solar AC model Lezeti #DC4812VRF.  GreenPath Technologies, which sells the Lezeti system in Hawaii shows on-line images of several installations on DoE Portable buildings.  Most feature six solar panels delivering DC power to two Lezeti split AC units set up to cool a single portable unit.  These seemingly simple and inexpensive installations were part of the Cool Schools bait-and-switch—but it was GreenPath which bid $1,837,966 for work on 13 portables at Leihoku Elementary.  Now you know the path to the green.

Page five of the plans shows that for Aliamanu Portable Number 6, the winning contractor is to hire a structural engineer to “determine if the roof framing is adequate to support the pv panel framing.”  That’s right, under the lowest rejected bid, $80K worth of work is proposed for a temporary building with a roof so decrepit it might not handle the weight of a few solar panels.  If the engineer finds the roof joists to be weak, the roof joists and the roof must be ‘strengthened’--which really means replaced.  Perhaps we could require Legislators to hold all of their campaign fundraisers on top of Portable Number 6 until something … uh … gives. 

And that’s not all.  A “typical roof plan” depicts 24 solar panels per portable—far more than the six needed by GreenPath to power two split AC units. Even though the bid specs require solar air conditioning—designed to run on DC power only when the sun lights up the solar panels--the installations are required to include a ‘Nema 4x’ stainless steel battery cabinet full of batteries and an inverter designed to deliver excess electricity to those batteries. The portable will then be run on the power from the battery systems, thus requiring a complete rewiring.

Every hippie in Puna has a battery cabinet—not stainless steel--in their off-grid house—and they didn’t pay $100K or $400K to get it.  But soon, the second round of bids will come in and voices in the media will express relief that the bids are so much lower than the $400-$900K originally submitted.  Nobody will notice how much higher they are than the $860.49 split AC unit from Wal-Mart.

The first installations will not occur until long after this summer’s hot season. 

Meanwhile in Taguig City, Mayor Lani Cayetano says: “We want to make sure that everything is ready before this year’s class opening.”

We can only hope that one day Hawaii will become more like the Philippines.

---30---

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DoE’s Other Solar Project:

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