The state auditor’s office says Coupeville School District did not comply with competitive bidding laws on a major public works project.

The project that concerned auditors was the auxiliary gym and how the school district hired the contractor that is building it.

The school board approved a $4 million change order last year allowing the contractor building the new high school, Kassel Construction, to build the second gym adjacent to the high school’s main gym.

The state auditor’s office contends the school district should have put the auxiliary gym out to bid. By not following bid laws, the auditor’s office said there were no assurances that all interested parties had an opportunity to bid on the project and, because of that, there isn’t any way of knowing if the auxiliary gym would be completed at the best price, according to the audit report released Aug. 10.

Coupeville school officials disagree with the auditor’s finding. Superintendent Patty Page, who just came to Coupeville this summer, said the school district and the auditor’s office are interpreting state law differently.

School officials said they acted in good faith in trying to complete the auxiliary gym under tight financial and time restraints.

“This is really much ado about nothing. We clearly had the best interests of the community in mind,” Gary Goltz, the district’s construction supervisor, said.

He said the school district saved time and money by allowing Kassel Construction to build the auxiliary gym. He said he also received legal advice from the district’s law firm, Seattle-based Perkins Coie, saying the $4 million change order was legal. Goltz sought legal advice because he had never seen such a large change order for a school construction project.

If the school district had followed the normal bidding process, the auxiliary gym project would have been delayed and the district likely wouldn’t have had the money to complete it, Goltz said.

Goltz said it was more efficient to have the contractor already working on the high school build the auxiliary gym. Besides, having two general contractors working so close to each other would have caused a great deal of confusion and might have cost the school district more money.

“It didn’t make sense to go out and bid another general contractor,” said Superintendent Page, who replaced former Superintendent Bill Myhr in June.

Goltz estimates the district saved approximately $800,000 by having Kassel Construction build the auxiliary gym, rather than going through the long bidding process.

The school district delayed starting work on the auxiliary gym because officials were concerned there wouldn’t be enough money.

The district made cuts in the high school project after high inflation caused the price to climb. Those increases also caused the district to delay other projects, such as the auxiliary gym, until more money was available.

The school district learned last summer it would receive enough matching money from the state to pay for the auxiliary gym. Construction of the building began last fall.

Two gyms are needed for the students at the middle school and high school. The new high school and the auxiliary gym are both scheduled to be complete in time for the beginning of the school year in September.

If the auxiliary gym didn’t get built on time then the old high school couldn’t have been demolished, because staff would need the gym located in that building for classes, Goltz said.

When the school district put the high school project out to bid, officials told potential bidders the auxiliary gym would be built if state money became available, according to the audit report.

Goltz said there are no laws concerning change orders in terms of dollar amounts and how they should be administered. He also supervises major construction projects in the Oak Harbor School District.

Auditors focused on a state law outlining how public projects are sent out to bid. The report cited a law requiring that public works projects that exceed $40,000 be put out to bid.

Because the auxiliary gym wasn’t written into the original contract auditors reviewed, it fell outside the scope of the high school project, according to the report.

In the end, the school district won’t receive any monetary penalty for the finding, just a black mark on its audit report. In the future, the school district will seek legal counsel and consult with the state auditor’s office, Page said.