Come on everyone, get wonky: A case study in waiving competitive bidding

In Home, Politics by arkansasprogressive

Cities waive competitive bidding on projects a lot. Sometimes it makes sense. In some cases, a company will have only one provider of its software or computer product in the state, and swapping from that system would cause a municipal meltdown of epic proportions. And I shudder to think about the complexities inherent in electrical transformer equipment that often makes them single-source items. But sometimes waiving competitive bidding doesn’t make sense. For example, the City of Bentonville didn’t bid out its trash service for decades until about five years ago. When it finally did, the city ended up keeping the same provider but with a much better deal.

The Rogers City Council on Tuesday will consider waiving competitive bidding on some of the repairs to Lake Atalanta Park. Remember the nonstop deluge this April? It couldn’t have come at a worse time for the gorgeous park that had just reopened the previous November. The park’s new natural playground, trails, roads – they were all damaged in the rising waters. The good news is that FEMA has declared the flood a federal disaster, and the city can expect help shouldering the repair bill.

Council members will consider hiring Crossland Construction to do the repairs without bidding out the project. On the one hand, it kind of makes sense. Crossland did the original construction on the park and is familiar with the plan. They’ve done it once, and done it well; the second time around should go even smoother. The city also posits that Crossland can provide reduced cost for certain materials that would result in “significant savings” on the overall cost of repair and construction. Hmmm. While this sounds reasonable, how would the city actually know that without receiving other bids?

Arkansas State Law

One of the main considerations when waiving competitive bidding is the language of Arkansas state law governing the bid process. Legally, waiving competitive bidding is only allowed “in exceptional situations where this procedure (i.e., competitive bidding) is deemed not feasible or practical.” Feasible and practical are pretty subjective terms and can be twisted around like a ball of Play-doh to fit just about any situation a city sees fit. But, for fun, let’s apply it to this situation.

Is this an exceptional situation? Well, the flood certainly was – federal disasters would seem to always be exceptional situations. However, I’m not sure that’s what the law means. There doesn’t seem to be an exceptional situation that would block the city’s ability to bid the project. Secondly, is there something about this project that makes it not feasible or practical to put out to bid? To this I would ask – are there other providers capable of doing this job? Sure, there are plenty of construction companies around Northwest Arkansas. If the city is saying it’s impractical of infeasible to bid the project because Crossland will be cheaper, it seems like we’re putting the chicken before the egg. If the city says it’s impractical to bid because Crossland is already familiar with the project, that argument is also linked to price. The more experience the contractor has with the project, the less time it will take. The less time it takes, the less money it should cost. Again, it comes down to numbers – if Crossland can do it cheaper, let them show it in the bid.

I should take a moment to say I love Crossland’s work. I can see why cities want to have them on board. And I’m not a fan of the law that requires cities to accept the low bid – sometimes we should value quality and proficiency over price. But the thing with the low-bid law is that it has an out as well.¬†Cities have to award the bid to the “responsive and responsible bidder who has submitted the lowest bid that meets the requirements and criteria set forth in the invitation for bids.” The terms “responsive” and “responsible,” as well as the city’s criteria can help the city make an informed judgment that includes both price, timeliness and capability.

FEMA guidelines

Finally, since this is a FEMA project, FEMA has its own guidelines for competitive bidding that has less wiggle room than the state law. They specify contracts should be competitively bid unless:

  • The item is available only from a single source;
  • The awarding agency authorizes noncompetitive proposals;
  • After solicitation of a number of sources, competition is determined inadequate; or
  • The contract will eliminate or reduce an immediate threat to life, public health or safety.

Will waiving the competitive bid process jeopardize ¬†FEMA funding? I called the city’s senior staff attorney, Jennifer Waymack, to find out. She said the city has been in conversations with FEMA about the project and, specifically, about waiving the competitive bid process. In this case, Mrs. Waymack said Council approval of waiving the bid would be the first step in seeing if FEMA will approve it or not. If FEMA says no dice, it sounds like Rogers will go back to the drawing board and consider bidding it out.

Timeliness

An argument in favor of waiving competitive bidding on this project has to do with timeliness. Crossland, with its experience on the project, could likely knock it out faster than anyone else. You can look to Walter Turnbow Park in Springdale for an example of a construction project where timeliness was a real problem. The city went with the low bidder, and the project dragged on over a year longer than expected. They finally had to remove the contractor and bring in another firm to finish the park. And for every day that a project is under construction, you can bet there’s a business nearby that’s losing money or someone whose quality of life is impacted. Timeliness can certainly factor in to the allowable “practical and feasible” side of state law that allows for competitive bidding to be waived. But again, has the city made the case that it’s infeasible for Lake Atalanta to be closed a bit longer while bids are taken? And is there any proof that another firm would take significantly longer that Crossland to complete the project? The city may well make that case at the City Council meeting. And we hope it does, if for no other reason than to show, publicly, that it’s considering these issues.

Here’s the thing. This is not an egregious case of a city waiving competitive bidding in a way that leads to inefficient or wasteful government spending. There’s a lot of merit, and most likely cost and time savings, to contracting with Crossland Construction. But it’s also important for cities to be mindful of the law regarding the competitive bidding process, else we slide down a slippery slope where projects are willy nilly given to the county judge’s brother in law. Competitive bidding can instill confidence and transparency into city government. And that’s never a bad thing.