Dive Brief:

• The Long Beach City Council in California has pulled the reins in on a decision to re-award Waste Management a $3.5 million recycling contract, and is considering a city audit to determine if there were questionable aspects of the request for proposal — a consideration prompted by two competing vendors' allegations that the city misrepresented figures they submitted. An independent firm hired by the city pointed out that EDCO Waste and Recycling Services’ deal came in lower for the first year, but the city argued that since EDCO submitted an RFP rather than bid, they were not required to accept the company’s lower price.
• City Auditor Laura Doud said the audit to look further into the alleged questionable bid process could take four to six months. Waste Management’s contract expires in June, which could mean that if an audit is done, it could necessitate another RFP process and cost the city $100,000.
• If the 10-year contract were signed with Waste Management, who has been the city’s recycler since 1993, the city would make a base payment along with an extra rate determined by the consumer price index (CPI) — a deal that could reach $40 million at maturity. The council’s pending vote will postpone initial movements until at least March 22. The four bidders will be asked to hold their current proposals through the audit, though the Long Beach Post reported whether they will be willing to wait that long is unknown.

Dive Insight:

Contract disputes over bidding procedures are common. In the Long Beach scenario, there are city officials on either side of the fence on whether to pursue an audit.

Councilwoman Suzie Price said the procedure is undoubtedly called for and stated she would have excused herself from the vote on the contract if it had taken place Tuesday night.

"I have no doubt that city staff did excellent work, but in light of the recommendation … from the consultant, it appears to me that there were at least two vendors that were recommended by that consultant," Price said to the Long Beach Post. "Based on conversations I’ve had during this process, I want to make sure that both of these candidates are qualified, both of the numbers are accurate, and they involve all the different price points included in the RFP."

Councilman Roberto Uranga thought subjecting to an audit before an RFP was awarded could invite a situation where any contract could end up getting recommended for audit if a business lost a contract and charged unfair conduct.

"I’m just concerned if we open a Pandora’s box to a certain extent, if we’re going to review this huge contract, that’s what I’m hearing that it’s too big to have just one set of eyes; that we need two sets of eyes; why don’t we do this with all of our contracts of this nature?" Uranga said to the Long Beach Post.

"After tonight's robust discussion about this significant contract worth millions of taxpayers' dollars, I am pleased that my colleagues agreed to revisit this matter again in two weeks," Councilwoman Stacy Mungo said, as reported in the Post. "Making a decision that will have long-term implications for a vital municipal service warrants informed analysis and a fair, transparent process, especially at a time when we are working hard to become more business friendly as a city."