The City of Fort Smith reached a two-year agreement last Monday with Third Rock Recycling and Pen Sales, a Missouri-based company, to provide a stop-gap to ongoing recycling problems, but the way the contract was awarded has some interested parties scratching their heads.
Fort Smith has been embroiled in controversy concerning recycling and the operation of the sanitation department since it was revealed earlier this year that recycling was basically non-existent despite the fact the city deceived the public by continuing to run recycling routes while dumping all the collected materials into the same hole at the landfill.
To quell the criticism, the city board of directors enacted a two-year deal with Third Rock Recycling and Pen Sales at the June 20 regularly scheduled board meeting.
In a 4-1 vote, the board agreed to the two-year contract with the recycling concern that will cost the city approximately $316,000 over a two-year period once realized revenues for recyclable material sales are factored into the total program.
The lofty price tag will allow for citizens to once again separate recyclables from their other trash for pick-up by recycling trucks, whereas all the refuse collected in the past 30 months or so had just been dumped into the landfill.
Based upon numbers obtained by Inside Fort Smith, the “bid” submitted by Third Rock could cost taxpayers hundreds of thousands of dollars more over the course of the two-year agreement as opposed to the bid submitted by Marck Recycling.
At the June 20 meeting, Third Rock was awarded the contract for a single stream recycling program with the $316,000 price tag over a two-year period after expected revenues for the sale of collected recyclables are deducted.
The proposal submitted by Marck recycling originally during the legal bidding process would have cost the city $47,400 over the cost of the same year period, a difference of $268,600.
Obviously, something occurred between the original bid deadline on the January 6 request for proposal and the June 16 agenda posting naming Third Rock recycling as the preferred provider.
None of the original bids were rejected or withdrawn, and Third Rock went from being a non-factor to being the winning bidder in the convoluted process.
Cost aside, questions about the legality of the way that agreement was reached may have the city leaders revisiting the issue in the weeks to come.
Several aspects of the city and state ordinances governing competitive bids and the bidding process appear to have been violated, at least in spirit.
In a nine-month period, both a request for bids and a request for proposals were issued by the City of Fort Smith and two companies — Marck Recycling and Smurfit Kappa participated in the process.
Third Rock, the company that eventually won the city’s business, wasn’t involved in the request for bid (RFB) or the request for proposal RFP) in the process leading up to the awarding of the contract until almost four months after the bid deadline on January 24.
Section 1.05, Item D of the handbook issued by the City’s purchasing department governing purchasing standards for the city sets forth the procedures for the competitive bidding process for the city for contracts more than $75,000.
In addition to clauses requiring advertising the bid by legal advertisement and stating bids will be received, opened, and read in public at a time, place and date which provides potential vendors adequate time to submit their bids, the city procedures appear to be clear on the bidding process.
“Bids received pursuant to such advertisement shall be opened not less than fifteen (15) days including the date of invitation to bid. Such bids shall be made on the bid documents and specifications prepared by the City Purchasing Manager and shall be received in sealed container and not opened until the time established by the formal notice that bids will be received. In the event of an emergency, an exception shall be made to invite competitive bidding to be opened not less than five (5) days following the date of invitation to bid.”
Under the subheading of “Bidding methods” the procedures read in part: “Bids received pursuant to such advertisement shall be opened not less than fifteen (15) days including the date of invitation to bid. Such bids shall be made on the bid documents and specifications prepared by the City Purchasing Manager and shall be received in sealed container and not opened until the time established by the formal notice that bids will be received. In the event of an emergency, an exception shall be made to invite competitive bidding to be opened not less than five (5) days following the date of invitation to bid.”
“The Purchasing Manager may use judgmental consideration to determine if the bidder’s offer complies with the specifications and conditions if such considerations can be demonstrated to be reasonable, appropriate, and fairly applied. This method does not permit comparison of the relative specifications of competing bidders but only comparison to the specifications contained in the bid documents. ”
On October 17, 2016, after the deceitful practices that had been going on in the sanitation department were revealed, a request for bids (6301-16-BA) was issued with a seven-day window for a response. On October 2, bids were received from Marck Recycling and Smurfit Kappa
Those bids were both rejected by the city at the time because the variables in the bids rendered officials unable or unwilling to render a decision, and a RFP was ordered do that the bids could address the variables specifically.
RF -6301-17-Ba was issued on January 16 of this year with a bid deadline set for January 24. Those official bids were delivered to then - Director of Sanitation Mark Schlievart.
Ninety-three (93) days after those bids were delivered, deputy city administrator Jeff Dingman met with representatives of Third Rock, and two days later the Missouri-based firm submitted a bid on the project to Dingman.
On May 19, a posted agenda on the city website for a city board meeting stated that officials were recommending Marck Recycling from the three proposals submitted.
On May 23, Third Rock could submit a revised bid even though none of the original bids had been officially rejected. Third Rock’s bid was now the lowest of the three submitted.
On June 7, officials with Marck Recycling updated the financials on their January proposal to reflect 2017 prices instead of the outdated 2016 prices, which still left the local company as the lowest cost provider in the process.
The request for proposal regulations do address permitting “negotiations and discussion with competing vendors to determine the best solution to meet the City’s needs. Proposals may be revised or modified at the request of the City.”
The regulations also address a solicitation for re-bids if, the City Purchasing manager determines “bids received because of a solicitation for bids or proposals are not acceptable for any reason. Such re-solicitation shall not be for directing the award to a particular bidder.”
On June 16, the city posted agenda for the June 20 regular board of director meeting stated that officials were now recommending Third Rock’s bid and proposal.
On June 18, officials with Marck Recycling sent a rebuttal email to the council outlining that company’s proposal and offering two options for short term solutions.
The purchasing department handbook reads:
“Under provisions governing withdrawal or revisions of bids, bids or proposals may be revised, modified, or withdrawn by the bidder at any time prior to opening. Any such revision, modification, or withdrawal shall be in writing, and after the bids are opened, they shall be irrevocable for the period specified in the bid documents. Bids or proposals “may not be withdrawn or revised after opening except as permitted under regulation 4.05 (B) and bids or proposals shall not be received after the time set in the bid documents for receipt of proposals or opening of bids.”
The timeline involving the process shows inconsistencies in the way the matter was handled, although city attorney Jerry Canfield says under the duties as specified for the City Administrator in the manual
Canfield replied to an email on behalf of the city administrators requesting information about the way the proposal, bid and awarding of the contract was handled.
Canfield stated that the provisions quoted in this story were taken from an October 2012 revision to a purchasing manual published by the purchasing division of the City’s finance department “generally describing administrative purchasing procedures”.
“The manual is not updated to include discussion of current ordinances,” states Canfield. “The manual does reference distinctions pertinent here. “”In section 1.04B, at page 2, the manual notes that some contracts are directed by the Fort Smith Code to be dealt with directly by the City Administrator”.
Canfield went on to cite paragraph 1.05.E of the manual, saying “contracts for city services often involve situation in which detailed specifications for eliciting competitive bids may not be available in advance; as a result, requests for proposals and subsequent negotiations are the method of competitively identifying a contract.”
Canfield went on to cite Fort Smith Code Section 2-182(c), which was revised in December of 2012, allows the City Administrator to “enter into any such contract for services where the expenditure is seventy-five thousand dollars ($75,000) or more but less than three-hundred thousand ($300,000) after soliciting and reviewing written proposals from interested and qualified providers of such services” although the two-year agreement with Third Rock exceeds that maximum amount.
Mike Wilson, a spokesman for Marck Recycling, spoke to the council at the last board of directors meeting in attempt to clarify the conflicting information and question the legality of the bidding process that had taken place.
While Wilson was allowed to address the situation, two citizens that attempted to speak on the proposed contract were shut down by mayor Sandy Sanders and the vote was then taken.
Wilson was contacted about the discrepancies in the bidding process as well as the possibility of any legal action stemming from the situation and refused comment other than the following statement:
“We are communicating with the city and making every effort to work with them to find the most cost-effective solution that will serve the needs of the citizens of Fort Smith.”
