A change in the way the state issues contracts for intellectual services, such as research and training, is causing officials at the University of Southern Maine to conclude that the state’s long-term partnership with its public university system has ended.
The partnership, which dates back to 1989 and the administration of Republican Gov. John McKernan, began to fray last December when Gov. Paul LePage issued an executive order mandating that all so-called cooperative agreements with state universities go out to bid unless a waiver is approved by the Governor’s Office.
In his order, LePage said that “full and fair bidding has the potential to both reduce costs and increase quality” and that he has the responsibility to ensure that such waivers are “utilized only to the extent necessary to protect the interests of Maine people.”
The change is causing Maine’s public universities to lose millions of dollars and lay off dozens of employees. USM — and particularly its Muskie School of Public Service — has been hit hardest because it does more work for the state than any other institution.
The bigger issue, though, is that the university system is losing its role as the research arm for state agencies, said Andrew Coburn, professor of public health at the Muskie School.
“The loss of the relationship is what’s important here, not the dollars shifting,” he said.
LePage believes the change is necessary because it will assure taxpayers that their money is being well-spent, said his spokeswoman, Adrienne Bennett.
“It’s about having a competitive bidding process that will demonstrate if the state is receiving the best value,” she said.
In late August, USM lost its largest contract, a $3.8 million agreement to provide nutritional education for people who receive food stamps. The University of New England, a private institution in Biddeford, won the bid.
In addition, the state Department of Health and Human Services has canceled a $1.9 million cooperative agreement with the Muskie School to train child-welfare workers. The work, which the Muskie School has conducted for a decade, will be done by the department in-house.
USM retained seven continuing agreements that were put out to bid, and the university has been given one-year waivers for three continuing agreements. The state put two other continuing agreements out to bid and has yet to make a decision on them.
1989 LAW SERVES A DUAL PURPOSE
In 1989, the Legislature passed a law that allowed state agencies to enter into “cooperative agreements” with the state’s universities for research, analysis and training work, without having to put the contracts out for bid. These agreements are reviewed and renegotiated annually.
By law, the projects must serve a dual purpose: assist the state agency and enhance the university system’s traditional mission of teaching, research and public service.
University officials say that the stability provided by the partnership with the state has helped the universities attract and retain Ph.D.s and graduate students, and qualify for federal grants that bring millions of dollars to the universities and the state.
The projects at the Muskie School include $26,000 to study how to improve the way Medicaid patients get treatment with anti-psychotic medication, $105,000 to examine the impact that diabetes has on mental health and $335,000 to evaluate the state’s home-visiting program for low-income mothers with newborns.
The arrangement in many cases has helped both state agencies and the Muskie School secure federal funds and foundation money to support programs that meet state goals, Coburn said. Because the university system is a state entity, its money can be counted as a state match on federal projects that require state contributions, he said.
A lot of the work is done by graduate students, so the universities can provide the services at a lower cost than the private sector, while providing a training ground for students, said Michel Lahti, director of an applied research program at the Muskie School.
EXODUS OF RESEARCHERS FEARED
The financial instability created by the new policy means that many of the state’s most talented researchers will leave Maine to work elsewhere, predicted Mark Lapping, former executive director of the Muskie School and now a tenured professor of public policy and management.
“The great shame of it is that the public intellectual infrastructure — which has served Maine so well over the years — is in serious jeopardy,” he said.
Lapping said the change illustrates LePage’s “clear preference for supporting the private sector at the expense of the public sector.”
But putting contracts out to bid assures that the state gets the “best thinking and the most for their dollars,” said Dora Anne Mills, vice president for clinical affairs at the University of New England.
“These are taxpayers’ dollars,” Mills said. “The state has a strong interest in assuring that the dollars are being spent in the most effective way as possible and with creative thinking.”
In winning a $3.5 million contract for providing nutritional education to food-stamp recipients, UNE offered an alternative to the more centralized system that USM had implemented since the 1990s. Most of the money will go directly to Healthy Maine Partnerships, a statewide network of community health coalitions, which will hire about 40 nutrition educators to conduct classes in healthy cooking and grocery shopping for low-income people.
Most of USM’s contracts are with the Department of Health and Human Services. The agency’s spokesman, John Martins, said DHHS staff believes it’s possible to lower costs without lowering the quality of services.
“We have learned over the years across DHHS programs and contracts that money spent does not always equal quality results,” he said.
POLICY LEADS TO LAYOFFS
The policy change has had an impact. Already, 28 employees at the Muskie School have been laid off this year, and 16 people lost their jobs at the University of Maine Cooperative Extension in Orono, which worked with the Muskie School on the food-stamps education program.
There is a potential for more layoffs, depending on the decisions the state makes regarding several agreements that are ending between now and December, Coburn said.
On Jan. 1 of this year, the state had 87 cooperative agreements totaling nearly $33 million. DHHS had more agreements than any other state agency. Thirty-three of its agreements — with a total value of about $19 million — were with the Muskie School, according to the agency.
Although the University of Southern Maine has lost several projects, the new changes have not been as “catastrophic” for the university as many had feared earlier this year, Coburn said. The university has emerged as the winning bidder for several contracts, including a project worth more than $1 million for providing epidemiological services for the Maine Center for Disease Control, he said.
One issue with putting the contracts out to bid is that the state by law can’t discriminate against out-of-state bidders, so the contracts — and the jobs that go with them — could flow to schools outside of Maine, said David Flanagan, who chairs the board of visitors for the Muskie School.
Nevertheless, he said he welcomes competition as long as there’s a level playing field and the competition will improve the quality and efficiency of the work the Muskie School provides.
“I don’t believe in putting a protective cocoon around any organizations in the state,” Flanagan said.
Staff Writer Tom Bell can be contacted at 791-6369 or at: