A disputed recycling contract worth upward of $3.5 million annually over the course of ten years was finally awarded during last night’s Long Beach City Council meeting, closing months of reviews to challenges brought against the city’s request for proposal (RFP) process and its transparency.
The contract was set to be re-awarded to Waste Management of Long Beach in March but was put on hold after two of the finalists in the RFP process raised questions about the process. The council opted to pause the process, extending Waste Management’s contract on a month-to-month basis, until a second independent audit of the process could be completed.
The city enlisted the services of the Philadelphia-based PFM Group to oversee the second audit of the process, and its findings were released in a 43-page report that concluded that the city had acted legally and honestly in its RFP process.
“Although several issues were identified with the implementation of the RFP process used by the City, the major concerns raised by Republic Services in the letter of protest and EDCO in the letter of comment do not justify the reissuance of the RFP,” the report said.
The two competitors that challenged the findings to award the contract to Waste Management were EDCO, which was tabbed as the lowest cost for the city during the RFP process, and Republic Services. Republic representatives alleged that the city was “price shopping” with requests for multiple quotes to be submitted and maintained that its overall package was of better value to the city because its technologies allow for more material to be recycled.
Because the contract was not a bid process the city was not obligated to go with the lowest price package in EDCO and was able to cite reasons including lack of transitional costs and no interruptions in services for why it ultimately decided to award the contract to Waste Management. The company has been the city’s provider for recycling services since the city started its program in 1993, and by renewing the contract the city is expected to save about $394,000 in year one, with future savings fluctuating dependent on the consumer price index.
PFM’s report noted that the city deviated from the established process outlined in the RFP process in an attempt to complete necessary evaluation steps in a compressed timeline. While the report found that there were instances where confusion was present, Russell Branson, the director of PFM, said that there was no foul play to warrant offering up a new RFP process.
“Were there ethical issues, were there process issues that left somebody out or was there something that happened in this process that significantly disadvantaged one of the partners that should have been included in that top two, I do not believe so,” Branson said. “I think the top two should be EDCO and Waste Management.”
Several members of the council had expressed their trepidations about moving forward with the award without having full confidence that the process was “criticism proof.” The PFM report seemed to alleviate much of that reservation as the council eventually voted unanimously to approve the contract for Waste Management.
“Based on this report, although there were problems, I don’t think that we crossed the threshold of the process being invalid,” Ninth District Councilman Rex Richardson said before adding that he would be supportive of a motion to award the contract to Waste Management.
Reissuing the RFP would have been costly for both the city and any vendor that submitted a proposal. The city had already spent around $100,000 for the initial oversight of the RFP and had to invest an additional $30,000 to pay for the services of the PFM Group. A restart of the process had also raised the concern of some on the council that a “Pandora’s box” of sorts would be opened with future vendors that lose RFPs having a precedent to challenge for a new process.
Fifth District Councilwoman Stacy Mungo who was a supporter of the additional auditing of the recycling contract said that although it took additional time—and taxpayer dollars—the process helped show that the council is dedicated to getting the process right.
“While we always want to trust that our staff are doing the right thing, occasionally in any large government organization bad things can happen,” Mungo said. “I think that this keeps everyone aware that we as a council are here to protect the public’s interest and ensure […]each and every group of individuals that if a mistake [was made] we’re here to review it and move forward and take the recommendations. But had something been terrible, we also would be the guardians of the public trust and look into that.”