BIDDING ADIEU TO COMPETITIONTHAT'S WHY PHOENIX'S NEW CITY HALL HAS SOME VERY EXPENSIVE ACCESSORIES

The City of Phoenix has been trumpeting its new City Hall as a prime example of cost-effective public construction. The "Best Run City in the World" even produced a television program about its new headquarters that ran through April on the city's cable channel.

While it may not rate a month of TV shows, the new City Hall is worth seeing; it sports an impressive array of deco-esque detail, eucalyptus veneer and other tasteful appointments. Even sources outside the city's public relations machine agree that, overall, the city paid a reasonable price ($84.5 million) to build its new, 20-story home.

Those sources, however, have also been muttering about the cost of some components of the building. And after leafing through records on the City Hall project, it's clear to me that the city could have spent less on the tower and its accouterments.

At the very least, city officials might have thought twice about buying $3,000 coffee tables and $300 wastebaskets for such a high-profile project.

But I'll get back to furniture costs later.
The cavalier fashion in which the city staff bought the furnishings is far more insidious to the public interest than overpriced tables and circular files could ever be.

Over the past eight months, city staffers have evaded the intent and, it seems to me, violated the letter of city and state purchasing laws. Three separate city contracts, worth almost $1 million, have been handed out without even a pretense of competitive bidding, a widely accepted method of controlling governmental waste and favoritism.

If the no-bid policy continues, it will open the door to out-and-out corruption. And the city does want to continue passing out no-bid contracts whenever it sees a need.

Now here's the strange part: The city employees involved in managing these no-bid contracts all seem as decent and dedicated and public-spirited as they come. Not a one of them thinks anything unusual has happened.

They all seem to think that because they appear to be good people, we should trust them to do the right thing, no matter what they do.

@rule:
@body:The theory behind seeking bids on large government contracts is simple to understand. First, competition among bidders is expected to reduce costs to the government. Second, if the competition is open to any interested supplier, political weasels inside the government should have a hard time steering lucrative public contracts to their friends and partners.

With competitive bidding, those friends and partners have to submit the best bid before they can suck money from the public trough. To one degree or another, bidding does reduce corruption in government.

So I was surprised a few weeks ago to read a lawsuit claiming the city had passed out a $162,000 contract for signs at the new City Hall without the slightest attempt at competitive bidding. The signs are fairly ordinary; they indicate where city departments are located and where to park in the City Hall garage. That sort of thing. The lawsuit was filed by a company that wanted, but was not allowed, to bid on the sign contract (which eventually totaled more than $190,000).

I was even more surprised to learn the city's position in the case. The city readily acknowledged it had not bothered to seek bids. Even though purchasing regulations and the City Charter say contracts exceeding $5,000 should be open to competition, the city said, in effect, that it did not need no stinkin' bids.

In fact, the city noted, it had bought some City Hall furniture in the same noncompetitive way. About $700,000 worth of furniture.

James Hays, the attorney representing the city in the sign lawsuit, is a pleasant, thoughtful man, and he spent a long time explaining the city's bizarre antibidding position to me. He made it all sound so reasonable and ordinary.

In a nutshell, here's the argument: The city had no obligation to take bids on the $162,000 contract because the signs installed all over the new City Hall--the signs that tell the public how to get where the public wants to go in that public building--are not public works.

The theory behind this amazing claim is complicated. But I think tracing it may show how governments--even governments full of pleasant, decent people--can sometimes get completely lost in a Wonderland of Profligacy.

When the sign contract was let last fall, the city's own purchasing guidelines said contracts of more than $5,000 should be competitively bid. (That amount was recently increased to $20,000.) The City Charter also calls for competitive bidding.

But, Hays argues, a general provision of state law overrules the city's regulations. That state provision requires the city to seek competitive bids only on "public works."

And according to the city's reading of the law, only those construction projects requiring input from an architect or engineer qualify as public works. Because the signs could be installed without architects and engineers, they are not public works. So the contract to install them did not have to be bid--whether it was worth $5,000 or $5 million.

At a hearing on the lawsuit Thursday, Superior Court Judge Jeffrey Cates asked Hays an interesting series of questions. The judge was trying to see how the city's "public works" argument would apply in the real world.

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