Audit dings Tennessee's Jones Lang LaSalle deal

NASHVILLE - The Haslam administration's controversial outsourcing of its real estate management functions is drawing new criticism, this time in the form of a just-released state Comptroller's audit that chides officials over how they developed the contract with a private contractor.

Auditors detailed what the Comptroller's office calls "flaws" in how General Services handled the contract awarded to Jones Lang LaSalle.

Among other things, officials managed to created an "organizational conflict of interest" in which Jones Lang LaSalle profits from its own planning recommendations, the audit says.

Chicago-based Jones Lang LaSalle now oversees facility assessments, master planning and facility management services for Tennessee's real estate properties. There's been a months-long uproar over the contract. The Comptroller's office doesn't appear to add much that's new, but it fleshes out some issues and could hand critics with a big cudgel.

The audit says that while the department didn't violate state policies and procedures, General Services' Real Estate Management Division "entered Into a contract that was overly broad in scope and then pursued multiple contract amendments to refine the contract scope."

"Ultimately, some of these amendments created an organizational conflict of interest whereby Jones Lang LaSalle can profit from its own planning recommendations," the audit says.

The Times Free Press and other news organizations have previously detailed how Jones Lang LaSalle is making money of its recommendation to de-commission six state-owned buildings because the company is also earning fees in striking leases on private space.

Auditors also say the State of Tennessee Real Estate Asset Management (STREAM) Division and Procurement Office failed to "adequately document the decision to exclude a vendor from the negotiation of the facilities management services contract."