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May 4, 2022

CT lawmakers set to pass reforms to troubled school construction program

YEHYUN KIM / CTMIRROR.ORG Noel Petra, interim director of the Office of School Construction Grants and Review, speaks during a press conference. Petra took over the school construction office following the exit of former deputy budget director Kosta Diamantis.
By Andrew Brown, CT Mirror

State lawmakers are poised to enact a number of reforms to Connecticut’s school construction office as a federal investigation continues into the multibillion-dollar grant program.

Legislators in the House folded several changes to the program into the state’s annual budget bill, which they passed early Tuesday morning. The Senate is expected to take up the legislation Tuesday night.

The reforms tighten the bidding procedures for school construction contracts and set stricter deadlines for completing audits of school building projects.

The state Office of School Construction Grants and Review has been in the spotlight since February, when state officials revealed that a federal grand jury subpoenaed records related to the school grant program.

That subpoena — and similar summons that were sent to at least five municipalities — suggest that federal prosecutors are focused on investigating the work of former Office of Policy and Management deputy secretary Konstantinos Diamantis, who ran the school construction office for more than six years.

Diamantis, who previously served as a state Democratic lawmaker, was removed from both his state jobs last October.

Since then, Gov. Ned Lamont’s administration has been reviewing the school construction office in an attempt to foster confidence in the grant program and the financial assistance it provides to municipalities.

The legislation that lawmakers are poised to pass this week came out of that review. Leadership at the state Department of Administrative Services, where the school construction office is housed, asked lawmakers to take up several reform measures at the beginning of this year’s legislative session.

One of the biggest changes requested by the state agency involves so-called construction management companies, which often oversee the budgets, schedules and bidding processes for school construction projects in the state.
In 2019, Diamantis convinced state lawmakers to pass a bill that would enable those construction firms to manage a construction project and simultaneously build part of the schools they were overseeing. The bill referred to that as “self performance.”

That law has remained on the books despite several industry groups complaining that the setup threatened to upend the normal bidding procedures for school construction projects by giving construction management firms an unfair advantage.

Noel Petra, the interim director for the school construction office, told lawmakers earlier this year that the language that was introduced in 2019 could allow a construction manager to perform work on a project without seeking bids from other companies.

“They actually wouldn’t be required to bid it,” Petra said.

Those concerns should be alleviated by the legislation currently wending its way through the General Assembly.

The bill bans construction management firms from performing any of the physical construction work on future school projects. Instead, all of that work will need to be put out to bid to subcontractors.

“Prohibiting self-performance helps ensure consistency between state and municipal projects, promotes competitive bidding along with opportunity and competition in the trades industry and creates a more level playing field between construction managers and subcontractors,” said Lora Rae Anderson, a spokeswoman for DAS.

“We are grateful for the collaboration of our legislators, municipalities, and industry leaders in this process and are hopeful this provision, along with others will help further strengthen the integrity of the school construction grants program,” she added.

The other legislative fix that lawmakers are pursuing involves the financial audits that are performed once a school construction project is complete.

Recent reports have shown that the state is extremely slow in completing those audits, which determine whether municipalities properly used the grant funding they received.

The Connecticut Mirror obtained several recent audits showing the school construction office reviewed projects that were completed more than a decade ago.

To fix that problem, lawmakers plan to implement new deadlines for each construction project.

Under the new rules, municipalities will have three years to notify the state once students are in the building. And if they don’t, the state will open an audit on the project anyway.

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