When the Maryland Board of Public Works voted last Friday to instruct the state Department of Transportation to act as its own construction manager on the Baltimore subway, Comptroller Louis L. Goldstein crowded that he had been advocating such a policy for two years.
But a memorandum in the department files, dated May 15, 1975, and attributed to Goldstein, strongly supported the hiring of an outside consultant to oversee the $721 million subway project.
Goldstein denounced the four-page document yesterday as "another fraud" perpetrated by Harry R. Hughes, who resigned two weeks ago as secretary of tansportation in protest of the works board's failure to award the management contract to the firm recommended by the departments.
A department spokesman said yesterday that Hughes, his successor, Acting Secretary of Transportation James J. O'Donnell, and Mass Transit Administrator Walter J. Addison all recall that Goldstein personally handed copies of the four-page document to them at a meeting at department headquarters at Baltimore-Washington International Airport.
The document said, in part, "The MTA should not build a large and extensive in-house staff to administer the design and construction management of this project. The most cost-effective solution for the State of Maryland is to keep the MTA staff relatively small and to contract for these services through the general design consultant, andmost particularly, through the construction manager."
The disputed document bore no letterhead or signature, but a handwritten notation at the top of the first page said "from Lous Goldstein."
The comptroller, contacted at the Homestead, in Hot Springs, Va., where he was addressing the Maryland Bankers Association, said, "If I gave it to them, it would be on my stationery, and have my signature on it."
Goldstein, who like Hughes is a potential candidate for the Democratic nomination for governor next year, accused Hughes of using the memo as "a campaign gimmick. But he's not going to play any tricks on me," said Goldstein, "I've been in politics too long for that."
Hughes contends that Baltimore contractor Victor Frenkli, who was to have been a major subcontractor for one of the losing bidders, "tampered" with the selection process and apparently persuaded his long-time friends Goldstein and Gov. Marvin Mandel to reject the recommended firm, the Ralp M. Parsons Co.
The consulting contract would have been worth about $25 million to Parsons, one of the nation's largest construction firms. The consortium of which Frenkil's Baltimore Contractors was a part said it could do the work for about $18 million, but department officials said that price was not the primary consideration because of the nature of the project.
Acting Gov. Blair Lee III, who with Goldstein and Treasurer William S. James makes up the three-man works board in the absense of Mandel, said at a press conference at the State House in Annapolis yesterday that "nothing in any law requires an outside consultant to run the constuction program."
There was some confusion over how far the works board went last Friday in asking the transportation department to prepare to carry out the subway management on its own.
Lee and Goldstein view the board's action as a final decision, with only the details to be worked out, while department employees consider their new orders a call for a new study of the feasibility of performing the task in-house.
Department employees conducted a similar study two years ago and reached the conclusion that the transportation department should not handle the management functions.
When he resigned, Hughes said that if he remained in the Mandel cabinet, his only choices were to go against what he believed, or sit by and watch the works board subvert the professional judgment of his staff.
Asked how the department could justify a new finding with the same facts, one employee said yesterday that the works board has sent the idea back for re-examination "in light of the present circumstances," which he said meant that the impasses would continue until the department knuckled under.
Lee said yesterday that "if the state develops its own expertise . . . we'll have a greater degree of control over our own destinies. We can steer sub-contracts into Maryland instead of California and everywhere. We're save lots of money because the profit factor will be removed completely and the overhead factor will be greatly reduced."
The works board will meet with department officials again Friday, after which the new plan for the in-house management will be sent to the federal Urban Mass Transportation Administration for approval. The federal government is putting up 80 per cent of the money for the 8.3-mile subway, which is the most expensive public works project in Maryland's history.