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Procurement transparency up for debate

Copyright © 2019 Albuquerque Journal

The final three sentences of the staff report on proposed changes to the city’s procurement code, on how contracts are awarded, lays it all out for city councilors.

“The City presumes that the public has a right to know how the public’s money is being spent,” it says. “However, the public’s money is not being spent before the Council accepts or rejects recommendations for an award. Thus, the policy question is whether the public benefit of accessing proposals sooner outweighs the potential detriments to the City of less competitive offers, increased cost to the City, and the administrative cost in defending potential protests.”

The proposed amendments to the procurement code address competitive sealed proposals from private companies that come in response to city government “requests for proposals,” or RFPs, for various services.

The report lists several potential downsides if the changes are adopted:

• The city would reduce its ability to conduct confidential negotiations with responsive vendors.

• The city could receive offers that are not as competitive as they would be if information in the bids is not publicly disclosed.

• Disclosure of proposal information before a bid is awarded could create unfair advantages among competitors.

• Reducing confidentiality prior to awarding a bid could increase the opportunity for protests by vendors that weren’t awarded a bid.

• Vendors that are not selected could try to influence the decision makers directly or by filing a protest.

• Vendors not selected could claim improper influence through the public process.

The same section of the “fiscal impact report” that addresses community impacts if the proposal is adopted lists just one upside:

“The primary benefit of making competitive sealed and qualifications-based proposals available earlier would be that the public has access to those proposals earlier than they otherwise would have access,” the report says.

City Councilor Signe Lindell

City Councilor Signe Lindell

For City Councilor Signe Lindell, that’s reason enough.

“I just think that there’s always the potential for a problem or unintended consequences, and I realize what we’re doing is separating ourselves from the state procurement code,” she said. “But I think the transparency is worth it.”

Without that transparency, she said, city councilors would discuss contents of proposals only behind closed doors in executive session.

“That leaves us with the possibility that we’ll be spending all of our time in Finance Committee in executive session,” said Lindell, who is sponsoring the proposed amendments along with councilors Chris Rivera and Renee Villarreal. “That’s not what I want to be doing.”

City Councilor Chris Rivera

City Councilor Chris Rivera

The new language proposed for the procurement code says that bidders’ proposals and evaluation scores “shall become public after the chief procurement officer reviews and approves a recommended awardee,” before the City Council takes action to award the bid.

That means the public – or participating bidders interested in what their competitors are offering – could not see the bids until after a staff recommendation goes to the City Council. That would appear to prevent a bidder from stealing information from a competitor to revise a bid before an awardee is recommended to the council.

Past practice

In the past, the city has regularly released information on contract bids once a staff committee reviews the bids and makes a recommendation to the City Council for the contract award.

In some cases, there has been public debate over which bidding company should get a city contract, including for major services, such as banking and building security.

A detailed comparison of bids was prepared and made public before the City Council renewed its banking contract with Wells Fargo two years ago, despite the national scandal that had engulfed the financial services giant for creating accounts without customer approval.

On a smaller deal, the contract to operate the restaurant at the city golf course provoked controversy before there was a council vote when evidence emerged that a bidder had plagiarized wording from the incumbent contractor.

But City Attorney Erin McSherry pointed out earlier this year that practice of making bids public before the City Council awards a contract doesn’t follow the language of the city’s procurement code. She has recommended that the council go into closed executive session to discuss awarding professional service agreements.

Lindell has countered that confidentiality could hinder councilors’ efforts to fully vet bids and RFP responses before a contractor is approved.

The state’s Open Meeting Act allows decision-makers to discuss certain topics in closed session, including personnel matters, collective bargaining and “certain purchases.”

The law says that a public body – like a City Council or County Commission – may go into executive session “at that portion of meetings at which the contents of competitive sealed proposals solicited pursuant to the Procurement Code are discussed during the contract negotiation process.”

A vote to award a bid, however, must take place in open session.

Requiring secrecy on bids or RFP offerings before a council vote means that, before City Council meetings, councilors and the mayor would receive a separate packet of materials, containing details of contract proposals, that is made available to the public on the web.

Constraining participation?

City Councilor Mike Harris

City Councilor Mike Harris

City Councilor Mike Harris is against the proposed changes to make bids public when they get to the City Council level.

“I think getting a full and competitive response from the marketplace, and honoring the work that they put into it, outweighs the transparency. People get to see it eventually, and councilors still get to ask questions,” he said.

Harris spent his career in the construction management business, and he agrees with the potential negative consequences of disclosing proposal details prior to a bid being awarded. “There’s a lot of situations where you don’t want that information out there. It may constrain participation,” he said.

The proposed changes to the city’s procurement code wouldn’t be possible if Santa Fe weren’t a home rule city, allowing it to establish its own rules regarding the procurement process instead of following the state government rules. Currently, the city operates under the state procurement code, which does not provide for public disclosure of proposal information until after a bid is awarded.

City Attorney McSherry said in an email to the Journal that it is unclear whether there was ever a consistent past practice that intentionally disclosed the contents of bid and RFP proposals, but she said “some proposals were disclosed in at least the recent past.”

Beginning with a Finance Committee meeting in March, McSherry began advising City Council members not to discuss the details of competitive sealed bids in open meetings. At that meeting, Council Committee retreated into executive session to consider to whom to award more than $1.5 million of taxpayer money on three jobs the city had put out for bid, for engineering and water/wastewater treatment services.

Harris described the imbroglio last year over food and beverage services at the Marty Sanchez Links de Santa Fe golf course as “a real mess,” adding that the contract wasn’t for a lot of money and yet the process had to start from scratch after the plagiarism issue arose.

“The point is that it took a lot of time and energy, and generated a lot of ill will. But if we had talked about it in executive session like attorney McSherry advised us to do, we could have talked about this information, kept it confidential and saved time.”

Santa Fe City Councilor Roman Abeyta

Santa Fe City Councilor Roman Abeyta

City Councilors Roman Abeyta and Carol Romero-Wirth joined Harris in the majority of a 3-2 vote against the proposed changes at last Monday’s council Finance Committee meeting.

“I think that it may cause more problems than intended,” Abeyta said when asked why he opposed the measure.

The councilor said it could open the door for councilors to micromanage work city staff has already done.

“That’s why we have staff and engineers and attorneys; we’re not the experts,” he said.

Romero-Wirth said she was persuaded by the detriments listed in the staff report and, besides, the state adopted its procurement code for a reason.

“I think that the state through the (Open Meetings Act) and state law has evaluated the trade-offs as to when these proposals are brought forward and become public, and I think we should stick with those and evaluate how that works before we start making changes,” she said.

“It all becomes public eventually; nobody’s hiding anything,” she added. “It’s just a question of when (it becomes public).”

Whether it means anything or not, the three councilors who voted against the proposal at the committee level are all in their first terms. The two that voted for it, and are sponsoring it, have been on the council longer.

Councilor Chris Rivera, who along with Lindell voted for the amendment package on Monday, said he supports the measure because it increases transparency – something the city has been accused of lacking.

“I think it’s important to be transparent,” said Rivera, who is in his eighth year on the council. “We’ve tried to have open policy. I think it would be unfortunate if it doesn’t pass and we can’t be more open about proposals. I think it would be a step backward with the city’s transparency policy.”

The council’s Public Works Committee is scheduled to consider the proposed changes on Tuesday. If it’s defeated by that committee, the proposal dies. If if gets through Public Works, the full City Council on Wednesday will consider publishing notice of a public hearing on the proposal for June 26.

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