Smoking Garbage

November 28th, 2007 by Editor B

Through nefarious means I have acquired two documents from last year which clearly show that some vendors decided not to bid on the garbage contract because of (and I quote) “the onerous collection requirements.” Also cited: “The potential overlap of collection of ‘unlimited bulky waste’ with the ongoing Hurricane cleanup efforts, which we expect will continue well into next year or longer.”

Here are the documents in PDF if you want to see for yourself: SWDI and WM.

I hasten to mention that our current collector (Richard’s) is doing a far better job than our old collector (Waste Management). But we are paying through the nose for this service, and we aren’t even getting all the service we’re paying for. In particular, we’re not getting the “unlimited bulky waste” pickup because “unlimited” has been construed to mean “less than 25 lbs.”

PS: By “nefarious means” I meant Council Member Stacy Head.

Update: For the record and completeness, here’s the contracts inked by Richard’s and Metro.

7 Responses to “Smoking Garbage”

  1. Stevio Says:

    There are two scenarios that I can think of that would explain the current debacle:

    First Scenario:

    • The City intentionally put in ambiguous language into the bid specification in order to solicit better service than was previously being provided by Waste Management.

    • Big Companies do not like risk, and usually have an army of lawyers that advise operations against going after contracts that contain high risk. In this case the ambiguous language equals risk.

    • This usually leaves mid-tier or local providers to bid on risky contracts (usually privately owned, since public companies have bigger issues reporting profits), and they add HUGE contingency to their bids in order to guarantee a reasonable profit. You need to factor in additional costs because small or mid-tier providers don’t have the same economies of scale or scope.

    • Combine these facts with this being released as a bid, not an RFP, which means the bid response is the contract – there is no further negotiation for clarification of terms or best and final offers – and you have high prices.

    • The vendors probably realized their contingency was not high enough to compensate for the amount of additional waste that needed to be picked up, and lobbied the City for changes. The City had two options, 1) re-negotiate the contract, or 2) further clarify the ambiguous language in the bid specification. If the City pursued option 1, there is the risk that the companies could walk which means the City is in a better bargaining position if they pursue option 2. If you think people are pissed about not having their bulky waste picked up, or the cost of the service, imagine people if their garbage is not being picked up at all

    This scenario is largely based on the City being inept (which it is). The City could have avoided this situation had they 1) released this as an RFP and not a bid, or 2) clarified the language in the bid prior to releasing it. The RFP process is fraught with additional problems, so the bid was the right way to go (this is not a professional service), but the bid specification was not fully fleshed out.

    Second Scenario:
    • The fix was in from the start

    • The City added the ambiguous language in order to drive off large outside competitors

    • Meanwhile the City promised the local guys that they will not be held that contract provision, or that disputes will be resolved in their favor

    • Further the ambiguous language provides a red herring for the local companies to bid extremely high

    • Either the Companies or the Companies and the City colluded to set the prices.

    While I tend to believe that the first scenario is much more likely than the second, there is one troubling aspect. As I understand it, the bid was divided up into areas, Uptown, Downtown and New Orleans East. Richards and Metro both bid on Uptown and New Orleans East, but yet somehow they each won a different section of the City. How could their prices be different based on the different sections of the City? I mean, does it cost them any more to pick up trash on one side of the canal versus the other?

  2. rcs Says:

    This point (from the Waste Management letter) has been proven to be spot-on:

    The challenges (impracticality) of providing automated or semi-automated service in New Orleans given its unique, and historical layout, particularly in most of the older areas of New Orleans.

    The current implementation (“Big Freakin’ Cans Everywhere”) got around the issue by ignoring it entirely.

  3. mominem Says:

    Stevio

    I vote for scenario two. With parts on one blended in.

    I also seem to recall these were not bids but Professional Service Contracts, which sidestep the requirement to award the contract to the lowest bidder.

    That ads another layer of uncertainty. The City probably would award a contract to a local African American enterprise of a Large National Company. The Large Nation Company thereby wasting limited resources on a wild goos chase.

  4. Anthony Says:

    It seems that with different rates of recovery and the ability to blow off the unlimited bulky waste clause that the amount of garbage collected from uptown and downtown would be significantly different. I can’t imagine in it’s current state all of the lower 9th wards regular household garbage would fill up a truck, while a comparable area uptown, say Irish Channel, Garden District, Central City would fill up a number of trucks.

  5. news flash! · Trash Talking Says:

    [...] Editor B.got the same email that I did today regarding the trash contract dilemma. He is ahead of me at posting these actual letters from companies who opted out of the bidding process for the colossal trash contract which illustrate their sensible review of the contract based on the word ‘unlimited’. [...]

  6. Civitch Says:

    I heard one of the defenders of these contracts refer to “unlimited” as a “term of art” – a word or phrase that may have a slightly different meaning to those in a particular profession or industry, and therefore not necessarily understood by laymen.

    Bullshit.

    First of all, terms of art are usually cataloged and defined in an appendix to any bid or contract. Second, and more tellingly, neither Waste Management nor SWDI interpreted “unlimited” in the self-serving way that Metro and Richard’s did.

    It’s clearly Scenario #2.

  7. ellenj Says:

    I have Richards and they did not come Thanksgiving day like they don’t on a holiday but they did not come Fri or Sat or Sun but did resume on the regular Monday pickup. Can they at least give a little refund of my 12 dollar fee for 2x week pickup?

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