UNLV bidding practices studied

Friday, Feb. 4, 2005 | 9:58 a.m.

University regents scrutinized bidding practices at both UNLV and UNR on Thursday in response to a Legislative audit last month that showed both universities had conducted numerous energy retrofit projects without properly putting the projects out to bid.

Legislative auditors found that UNR signed 14 contracts totalling more than $8.2 million between 1992 and 2002 and that UNLR signed three contracts in 2000 totalling $6.2 million that violated state law by not going through a competitive bidding process. Auditors did not find any evidence of intentional fraud.

Also, at least six of the retrofit projects failed to result in enough energy savings to recover the cost of the improvements, auditors found.

Regent Doug Hill drilled UNR Vice President for Finance Ron Zurek and UNLV Vice President for Finance Gerry Bomotti to make sure that the violations would not happen again.

Zurek verified that there have not been any violations at UNR since 2001 and that administrators now have separate oversight over all maintenance contracts to make sure there are no future violations.

Bomotti said UNLV's energy retrofit contracts with e.three Custom Energy Solutions in 2001 were done through a competitive qualification process conducted by the state Public Works Board, and that UNLV did not bid the projects because officials thought Public Works had already approved the company.

Bomotti also noted that while some projects may not have paid for themselves soley with energy savings, they did pay for themselves with rebates UNLV received for the improvements and decreased maintenance costs that auditors did not factor in.

Some of the other alleged violations stemmed from a discrepancy between university officials and the auditors about what constituted a public work, both Zurek and Bomotti said.

University officials believed that state law required a maintenance project to go out to bid only if more than 25 percent of the project was being paid for with state money. Legislative auditors believed a project had to go out to bid if the building itself was paid for with state money.

The university system's lawyers are working with the Legislative Counsel Bureau to clarify the law in this Legislative session, internal auditor Sandi Cardinal said.

Regent Mark Alden said that all projects, no matter how they were being financed, should go through a bidding process. But Alden also said that contractors should be prequalified to make sure they can handle the project.

"Lower cost doesn't always mean the best quality," Alden said.

Regents also reviewed another Legislative audit that found improper host account purchases. In one incident, UNLV gave away two $500 leather jackets to athletic consultants from the University of Texas.

The gifts were payment for their time, Bomotti said, but he agreed with HIll that the purchase should not have come out of a host account.

Hill joked that he'd like one in size 46 long.

"I hope that we don't do business like this in the future," Hill said.

Legislative auditors made a total of 32 recommendations to improve business practices in the University and Community College System of Nevada over the course of five audits, Cardinal said. System officials are working at implementing all of the recommendations and will update regents at the April meeting.