WitnessLA has acquired some interesting documents this week regarding the ongoing dispute around LAUSD’s choice not to select the lowest bidder when, this past December, it awarded the district’s five year contract for waste management—which is a fancy way of saying trash and recycling pick up.
The contract is worth tens of millions of dollars so—given all the cuts elsewhere in the district—although usually we don’t spend LOTS of time thinking about the waste management business, it is in all of our best interest that LAUSD gets the most bang for its buck, even when it comes to garbage collection.
A recently filed lawsuit contends that the district is not getting the most for its money at all due to an improper bidding process.
Here’s the back story leading up to the dispute:
HOW THE LOS ANGELES SCHOOL DISTRICT DECIDES WHO TAKES OUT THE TRASH
Every five years, the Los Angeles Unified School District awards some worthy company or other the contract pick up the district’s waste. In order to select the vender, an RFP (Request for Proposal) goes out, specifying the scope and requirements of the job and what kinds of companies may bid. Then bids and proposals come back in, and the district gives the contract to the firm with the lowest bid, as long as other general criteria laid out in the RFP are met.
On December 6, 2011, however, LAUSD handed its business for the district’s newest waste management contract, not to the low bid company, which was a firm called BMAKK Apex, whose bid came it at $30 million. Instead LAUSD gave its business to Consolidated Disposal Service, for $40 million—-or a price tag that was a not inconsiderable $10 million higher for what is reportedly the same scope of service.
(Originally Consolidated’s bid reportedly came in even higher, at $50 million, but we’ll get to all that in a minute.)
To make matters more confusing, BMAKK Apex is a combination of a couple of companies who had the LAUSD waste contract for the previous five years, according to their president, Anthony Uwakwe, with no complaint and plenty of praise. (Although we’ve not confirmed these evaluations.)
Only three companies qualified to be able to put in bids at all, BMAKK Apex, Consolidated, and a third big LA County company, WM or Waste Management.
According to the RFP, in addition to the bids, each of the three firms had to make a technical proposal based on the district’s published criteria explaining how they’d carry out their services, et al. The three proposals—with the company names redacted—- were given to a panel of experts who then rated the proposals on a point system.
BMAKK Apex got the most points of the three, plus it had the lowest price, at $30 million. Whereas WM came in second, with Consolidated reportedly coming in third out of three with a bid price—at that time—of $50 million, a full $20 million higher than BMAKK Apex.
At that point, BMAKK figured they’d won the contract process, but unexpectedly the district said, no, that there would be a round of interviews to clear up a few questions.
The interviews took place, BMAKK figured they’d done fine, but after the interviews were completed the companies were informed that the new metric for handing out the contracts would be as follows: 30 percent for the bid price, 70 percent for the interview, and 0 percent for the points gathered from the previously scored blind proposal process, which the district folks had now decided to toss out entirely.
And, with this new interview-centric process, the contract was awarded to Consolidated, which had the “most comprehensive program,” the other two companies were told, although “comprehensive” was reportedly not defined, nor—according to BMAKK Apex—-were the losing companies provided with any reports or documentation from the interviews that would explain the discrepancy in the process and outcomes, that differed so greatly from the process that the district had used in past years.
As mentioned above, originally, Consolidated bid $50 million, but then the number reportedly got dropped to $40 million after the other companies questioned the humungous dollar discrepancy.
When the contract was awarded, LAUSD sent out a memo saying that, under the new contract, Consolidated Disposal Service, would be doing more aggressive recycling efforts with the schools, thus cutting still further the amount of junk that ended up in the public landfill, all worthy goals to be sure. But BMAKK says that it offered similar outcomes for less money.
In any case, unhappy at what they saw as an inexplicable contract decision, BMAKK Apex filed suit on March 31, asking the court to overrule LAUSD’s circumventing of their own RFP process.
WitnessLA has acquired a copy of the court filing.
Predictably, LAUSD asked the court to dismiss the lawsuit. The court has declined, saying that BMAKK Apex may proceed.
IF YOU FIND YOU DON’T LIKE FOLLOWING THE RULES—CHANGE THE STINKING RULES
Today, Tuesday, LAUSD’s Chief Operating Officer will ask the school board to vote to amend the district’s procurement manual—after the fact—to retroactively make this non-low-bid contract awarding okay, now that it’s being challenged in court.
Certainly, there may be a perfectly reasonable explanation for the district’s new oddball bidding process that has resulted in a contract going to the highest bidder, not the lowest one.
However, according to section 20111 of the California Public Contract Code, which would sure appear to govern such transactions, the parameters are pretty clear. To wit:
The governing board of any school district, in
accordance with any requirement established by that governing board
pursuant to subdivision (a) of Section 2000, shall let any contracts
involving an expenditure of more than fifty thousand dollars
($50,000) for any of the following:
(1) The purchase of equipment, materials, or supplies to be
furnished, sold, or leased to the district.
(2) Services, except construction services.
(3) Repairs, including maintenance as defined in Section 20115,
that are not a public project as defined in subdivision (c) of
The contract shall be let to the lowest responsible bidder who
shall give security as the board requires, or else reject all bids.
And that, we are told, is how it’s been done in the past.
After several calls to LAUSD, and much bouncing around from department to department, we were not able to talk to anyone who could actually answer any of our questions.
But the fact that the solution to the resulting lawsuit, not to mention the $10 million higher charge, is to—belatedly—change the rules of the game so there IS no competitive bidding for waste management….well, it seems that a decision of this nature should be open to a bit more public comment, and not be shoved through the board today, as is evidently the intention.
In a climate when adult education is being gutted, and still more teachers are being fired, it is vexing on a good day to hear that the district is paying $10 million more than it may need to for freaking trash pick up.
The bidding process is set up to specifically to avoid waste and favoritism, neither of which LAUSD can possibly afford.
If that process is being circumvented or changed, we need to know why.
And “trust us” is not a good enough reason.