Dive Brief:

• Republic Services is suing Middletown, NJ over the township's decision to award a new five-year contract worth more than $21.7 million to Central Jersey Waste and Recycling. Republic's suit alleges that the township violated the state's Open Public Meetings Act and Local Public Contracts Law by negotiating the contract in closed sessions, as reported by the Asbury Park Press.
• While Republic's bid was about $20,000 more per year, the company says Central's bid was inadequate because it lacked a valid insurance certificate or a warranty on the 55,500 new carts being purchased for the township. Republic has asked the Monmouth County Superior Court to deem this contract "illegal and unenforceable" and require Middletown to award it the contract instead.
• Close to 60% of Middletown households currently receive collection service from Republic within a specified waste district, while the remainder can contract directly with Republic or other companies. Over the summer, Middletown decided to eliminate the district system and award one contract for all households in the name of cost reduction. Solterra Recycling Solutions, a Central subsidiary, is currently set to begin collections in January.

Dive Insight:

This move away from an open market system has worried some residents, but Middletown maintains that it will lead to cost savings for the vast majority of them. According to a FAQ page on the township's website, "if no change had been made to the current garbage and recycling collection system everyone’s property taxes would have increased 5 to 10 percent over the next five years."

The township says this new system will lead to less truck traffic, bi-weekly recycling service, new bulk service and more efficient collections through RFID chips in the new carts.

This decision may come down to whether a county judge agrees that state meeting and procurement laws were violated, but the result in Middletown could also reinforce a different, non-binding precedent within the industry.

While many municipalities often look for the lowest bidder, Republic and others have proven that's not always what ends up happening. Last year, after a protracted multi-month debate, the company won a contract in Flint, MI despite appearing to be more expensive. Earlier this year, Jupiter, FL decided to select Waste Management despite a lower bid from Advanced Disposal. This has also played out in other states, often because the winning bidder says it can offer more complete services for a higher cost. 

Middletown will follow the growing trend of consolidated collection in the name of more efficient service, regardless of which company is operating come January. This New Jersey township of 66,000 people is much smaller than other municipalities that are pursuing their own consolidated systems, but marks another reduction of open market options nonetheless.