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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.

If the city decided to install new floor tile throughout City Hall (a project presumably requiring an expenditure of hundreds of thousands of dollars), would that be a public work requiring competitive bidding?

Probably not, Hays amiably answered.
How about painting, the judge wondered. If the entire building needed to be repainted, would the city have to solicit bids?

Of course not. Painters do not need drawings from architects and engineers, Hays thoughtfully theorized.

Carpeting, maybe?
In general, no.
I think you can see where this is leading. Judge Cates did not indicate on Thursday when he would rule on the lawsuit, but if the city's position were found to be correct, bureaucrats could begin passing out millions of dollars in supply and maintenance contracts each year without competitive bidding.

The bureaucrats could just decide that some product they wanted to buy was not a public work, and then recommend a seller to the city council. The contract might go to a competent business that offers good prices. Or it might go to the nearest political bagman, who would charge the city an arm and a leg.

David Jones, the attorney for the company suing the city over the sign contract, obviously has a bias. Still, he made a point rather succinctly the other day:

"The problem is, even if everybody's honest, if you don't use competitive bidding, you open the door to corruption," he said.

@rule:
@body:Jane Morris is an open, genial woman who worked as a project manager for the new City Hall. I can't imagine her having a dishonest bone in her body. I asked her about the two City Hall furniture contracts that were let without competitive bidding. They totaled about $700,000.

Basically, Morris said, the contracts were not bid because the city had to obtain furniture quickly. The time schedule for moving into the new City Hall wouldn't allow competitive bidding, so the city picked two companies that carried the right range of products at good prices.

"This is procurement--things--so the city is not required by law to bid," Morris explained.

But putting the legal technicalities aside, I asked her, isn't the city just asking for trouble--creating the suspicion of corruption, at least--when it lets large contracts without bidding?

Morris told me it was probably best if one of her superiors in the City Manager's Office answered that question. There was no rancor in her response, though; she just seemed to be following the normal chain of command.

So I contacted assistant city manager Sheryl Sculley. Although more formal than Morris, Sculley also responded openly to my inquiries.

Sculley said lack of time, combined with a desire to include more minority-owned and women-owned businesses in the City Hall project, dictated the decision not to bid the sign and furniture contracts.

Although bids were not taken, Sculley said, the city made concerted efforts to cut costs. Surveys were made to establish "benchmark" prices. Besides, she said, all three firms that got contracts are owned by women or minorities, are located in the Phoenix area and are well-known to city officials.

Even so, she acknowledged, the nonbid process could raise questions about favoritism.

"Yes, I understand, and we're very concerned about the perception issue you raised," Sculley said. That is why most city contracts would continue to be awarded through competitive bidding, she said, and, oddly enough, I believed her.

I believed she did not want the city government to look underhanded or corrupt. And I believed she wanted to build a low-cost City Hall that the government and the public could be proud of.

And that is what gives the unbid City Hall contracts, and the city's response when challenged on them, such an Alice in Wonderland flavor. A series of well-meaning public servants--all concerned with the image of the city, all apparently dedicated to cost control and open government--have behaved in ways that make it easy for almost anyone to portray the project as sleazy and wasteful.

They have evaded the intent of anticorruption laws (and that is exactly what competitive-bidding regulations are). They don't see that they have done anything wrong. They want to keep on ducking the law whenever they see the need.

 

And so, even though they appear to be decent people, they will have to live with the suspicions they have created.

@rule:
@body:Let me feed your suspicions. Back to the tables and trash cans.
Under the unbid furniture contracts for the new City Hall, the city paid some prices that will raise more than a few eyebrows.

On the 11th and 12th floors, for example, there are two custom-made, glass coffee tables. The city agreed to pay $3,000 apiece for the tables (the figure was eventually reduced a bit, because the tables had flaws in them). There are also a couple of slightly smaller, $2,300 tables. The tables reside on floors containing offices for the mayor, the city council and the city manager. The tables are quite nice.

I asked Sheryl Sculley, the assistant city manager, about the tables.
"We wanted durable things that would last," she said, "because we are not in the [budgetary] position to replace these things every four or five years."
Meanwhile, on the lower floors of the new City Hall rest seven black, semigloss trash cans from the Network Collection. They cost $317 each. I asked Jane Morris, the project manager, about them.

"You can get a Rubbermaid trash can for a lot less," she acknowledged. "Our concern was for one that would last, that wouldn't get beat up, would look like it belonged in the building."
There are also a passel of $1,000 and $1,500 conference tables in the new City Hall. I didn't bother to ask about them. I assume the same quality and durability arguments would apply.

Ordinarily, I would find those arguments worth considering. I am not the type of troglodyte who thinks public buildings should resemble Soviet-bloc housing. Within reason, a City Hall ought to be a monument, a way of telling future generations what was important to us.

But the actions of the city's pleasant, well-meaning officials have made it impossible to view purchasing for the new City Hall with anything but extreme suspicion.

Why should anyone accept $3,000 tables and $300 wastebaskets when public officials have evaded the open competition that would have guaranteed the tables were bought as cheaply as possible? Why should we accept a no-bid sign contract when a businessman who was not allowed to bid has sworn in court that he would have provided the signs for $20,000 less than the city paid?

There is no way to know whether Judge Cates will put an end to the city's surreal contention that it should be able to hand out huge public contracts without competitive bidding.

But his ruling really shouldn't matter. Whether those pleasant officials at City Hall acted within the law, in a technical sense, is irrelevant. They have acted in ways that violate the intent of major ethics laws. They have given reason for every citizen to suspect that something sleazy has been going on at City Hall.

Those pleasant public servants should, therefore, get exactly the reward they deserve for such activity: a pleasant, but very thorough, investigation by the appropriate law enforcement agency of the entire City Hall construction project.

@topq:"The problem is, even if everybody's honest, if you don't use competitive bidding, you open the door to corruption."

@topname:David Jones
@body:


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