Wednesday, August 29, 2012

When Bad Things Happen to Bids

I spoke at a workshop last week (August 21, 2012) in Seattle at the Annual Forum of NIGP (National Institute of Governmental Purchasing).

My topic was "When Bad Things Happen to Bids: Strategies for Ensuring a Successful Public Works Project."

Here's an outline of what I spoke on:

Why Aren't Bidders More Careful?
  • Why do Bidders Make Mistakes?
  • Missing Bid Prices
  • Conflict Between Numbers and Words
  • Bid Calculation Errors
  • Claims of Error
Is Your Bidder Playing Games?
  • Bid is Too Low
  • Unbalanced Bids
  • Conditioned or Qualified Bids 
Will the Real Low Bidder Please Stand Up?
  • Additive and Alternate Bids
  • Tie Bids
  • Responsive Bids
  • Responsible Bidders
  • Local Bid Preferences
  • Bid Protests and Appeals 
What Can You Do to Manage Bidding?
  • What Should be on the Bid Form?
  • When is a Bid Late?
  • When Should You Take a Bid Guaranty? 
Questions:  If you have questions about any of the issues in the presentation, or if you'd like to discuss having me provide the training for your agency, please contact me.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Tuesday, August 28, 2012

The Facts and Feelings of Bid Protests

A bid protest can delay or derail a project.  There are a number of steps a public agency can take to help manage bid protests.

Develop clear bidding documents:  Probably the best deterrent to bid protests is to ensure that the bidding documents and process are clear.  It's important for public agencies to have a good internal review process of the documents to eliminate ambiguities.  Of course, in this difficult economic climate, sometimes protests will be filed even if the bidding documents are clear, as businesses seek to have a proposed award to their competition tossed out, often on a technicality.

Have policies and procedures:  Public agencies should have policies and procedures governing the filing of bid protests.  Often, there are state or local requirements that may apply.  In the interest of transparency, I think it's a good idea for the bid protest process to be included in the bidding documents for all to see. 

Evaluate the facts:  Bid protests may have substance or they may be frivolous.  When a bid protest is filed, it is important to carefully evaluate not only the specific facts and situation relating to the protest, but whether the protester followed the right process.  Recognize that if you accept a bid protest and declare the low bid non-responsive, you may have an appeal from the bidder whose bid you have tossed.  So it's important to objectively evaluate protests and weigh the risks of specific actions you might take. Involve your agency's attorney in responding to bid protests. 

Provide a hearing for the protester:  Some agencies respond to bid protests in writing after having only read the bid protest letter and investigated the facts.  I think it's very important, however, to provide a hearing or meeting for the protester to have the opportunity to personally make their case to the public agency.   Include the firm whose bid is being protested in the hearing.

Feelings matter in bid protests:  If a protester feels that their concerns have been carefully listened to and addressed (even if the final decision doesn't support the protest), the protester may choose to not take the protest to the next level (obtaining a temporary restraining order from the courts).  By creating an open, transparent, and deliberative process, the issues related to the protest can be sorted out.  Agencies should treat both parties fairly and ask critical questions of each.  Protesters want to be treated fairly and to feel that their concerns have been seriously considered.

Questions for public agencies:
  • What state or local regulations govern how your agency handles bid protests?
  • Does your agency have an internal quality control process for bidding documents?
  • Does your agency have a bid protest policy and procedure?
  • Does your agency include bid protest procedures in your bidding documents?
  • What is your agency's practice on how to investigate and respond to bid protests?
  • Does your agency conduct a hearing to evaluate the merits of a bid protest?
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Monday, August 27, 2012

The Growing Use of Purchasing Cooperatives

As public agencies cut procurement staff, many agencies are streamlining their buying activities by purchasing from an ever increasing list of national and regional Purchasing Cooperatives that competitively bid goods and services for use by public agencies.

Requirements vary:  Not all public agencies are permitted to use the solicitations and awards of Purchasing Cooperatives.  Many agencies that do permit the use of Purchasing Cooperatives require that the Cooperative must have solicited and awarded contracts in a manner consistent with the requirements of the agency using the procurement and pricing of the Cooperative.

List of Purchasing Cooperatives:  Purchasing Cooperatives have different methods of operating (lead agency vs. solicitation by the Cooperative), different scope (national vs. regional), and different constituencies (general government, health care, education, etc.).  Here's a list of just some of the Purchasing Cooperatives:
Brent Maas
PowerPoint:  At the NIGP Annual Forum in Seattle in August 2012, Brent Maas, NIGP's Marketing Director, presented a workshop on Evaluating Cooperative Purchasing Program.  Click here to view his PowerPoint presentation.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Sunday, August 26, 2012

When Does a Side Job Become a Conflict with a Government Job?

Many public agencies have a code of ethics governing actions by its employees to prevent conflicts of interest (or the appearance of conflicts of interest) in carrying out official duties - including what side jobs an employee may take.  

Tay Yoshitani
Seattle Port chief criticized:  The head of the Port of Seattle, Tay Yoshitani, was recently criticized for accepting a position on the board of directors of Expeditors, a logistics company that helps customers organize cargo shipments worldwide.  In his new side job, Yoshitani would be paid $30,000 plus $1,000 per day for meetings and work he does for the company.  He is paid $367,000 a year as the port's CEO.  A letter from a group of state legislators to the Port Commission complained that:
It appears to the public that Mr. Yoshitani may directly and personally benefit by giving Expeditors' customers a competitive advantage over other Port of Seattle customers."
The Port's ethics policy:  The Port of Seattle's "Employee Ethics and Conflict of Interest" policy addresses the side job Mr. Yoshitani has taken and would suggest that the job is in conflict with, or appears to be in conflict with, his official duties.  The Port's policy states the following:
Port of Seattle employees are expected to serve the Port with the highest standards of ethical conduct and to avoid situations that create a real or perceived "conflict of interest."  A "conflict of interest" exists when an employee's duty to give undivided loyalty to the Port is influenced, or could be influenced, by personal interest.  The fact of a conflict of interest is not in itself a violation of the policy.  Instead, it is something that should be reported so the Port may ensure that decisions are not made that could be influenced by the conflict of interest, or perceived to have been influenced by it.  Port employees must ensure that any outside activity or personal interest is kept separate from their position at the Port and does not influence their business judgment on the Port's behalf.  Port employees need to use common sense and keep the interests of the Port paramount at all times.  In addition to avoiding actual conflicts of interest, Port employees should avoid situations that could appear to be a conflict of interest.
More Information:  Visit the following links for additional information about Mr. Yoshitani's additional board director position:
Ethics training:  Last week, on August 22, 2012, I conducted a workshop at the 2012 Annual Forum of NIGP (National Institute of Governmental Purchasing) in downtown Seattle.  My topic was "Avoiding the Front Page of the Newspaper:  Why Ethics in Public Contracting Matters." 

Here's an outline of the training I provided:
  • Why Should We Talk About Ethics?
  • Why Do We Have Public Contracting?
  • What Are Appearances Important?
  • 5 Keys to Making Ethical Decisions
  • 5 Areas of Ethical Risk
  • 7 Risks of Ethical Lapses
  • 7 Strategies to Manage Ethical Issues
  • What Ethics Regulations Apply?
Given the recent controversy at the Port of Seattle and at other public agencies throughout the country, it's clear that regular ethics awareness training is very important.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Wednesday, August 22, 2012

When Do Residential Prevailing Wage Rates Apply?

While all public works projects must require contractors to pay prevailing wages based on a worker's classification or trade, public agencies must also appropriately classify the project as subject to either "residential" or "commercial" prevailing wages.  
Definition of residential construction:  Rates for residential construction are generally lower than those for commercial construction, and projects must meet the specific criteria of WAC 296-127-010 (9) to qualify for using residential wage rates:
  • Type of Work: The definition of residential construction establishes that the work must be "construction, alteration, repair, improvement, or maintenance."
  • Type of Building: The definition of residential construction establishes that the work must be performed on "single family dwelllings, duplexes, apartments, condominiums, and other residential structures."
  • Height of Building: The residential structure must "not exceed four stories in height, including basement." An apartment building with four stories of structure above grade and with a basement would not meet the definition for residential construction.
  • Purpose of Building: The residential structures must be "used solely as permanent residences." Thus, a weekly or monthly apartment or hotel type arrangement would not qualify for residential construction prevailing wage rates. Neither would a single family home that was used on a rotating basis by different individuals to be housed in a location based on business needs.
Recent L&I determination on mixed-use project:  The Washington Department of Labor and Industries (L&I) recently released a determination that commercial prevailing wage rates should apply to a four-story residential structure since the first floor was reserved for future commercial development. 

The developer claimed that the project was essentially residential on the grounds that the first floor was simply being set aside and would "remain essentially unfinished" for the time being. In spite of this, L&I ruled that "mixed use" was a more accurate description for the City of Spokane project, which was funded by the U.S. Department of Housing and Urban Development. 

Narrow definition of "residential":  L&I based the opinion on the WAC 296-127-010, which defines "residential construction" as work on "residential structures ... when used solely as permanent residences." 

L&I concluded that since the project contained space for future commercial development, its use was not "solely" for permanent residences.  Click here to read L&I's determination.

Risks of "Residential" determination for agencies:  Deciding that residential prevailing wage rates apply to a project can pose a risk for public agencies.  RCW 39.12.030 not only mandates that public agencies specify in the bidding and contract documents whether residential or commercial wages apply, but requires a public agency to pay the difference if it is later determined that the project, in fact, requires commercial prevailing wage rates instead of residential wages specified. 

Different federal standards:  All of the above applies only to Washington state prevailing wages.  The federal criteria for residential rates is slightly different from Washington state's and is outlined in U.S. Department of Labor All Agency Memorandum No. 130 (pg. 4): 
"Residential projects for Davis-Bacon purposes are those involving the construction, alteration, or repair of single family houses or apartment buildings of no more than four(4) stories in height. This includes all incidental items such as site work, parking areas, utilities, streets and sidewalks."
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Tuesday, August 21, 2012

Dallas Implements a Local Bid Preference Option

At the end of June, the Dallas City Council approved a local bid preference measure that allows them to favor local businesses for certain projects.

Recent changes to state law:  The ordinance takes advantage of recent changes to Texas state law that expands the circumstances where municipal governments are allowed to use local preference.  Last year, the Texas legislature removed population caps restricting the size of cities and counties allowed to implement certain local preferences and raised the maximum amount for purchases using local preference from $100,000 to $500,000.

Different preferences for different contracts:  The new city law gives the city council discretion to award certain contracts to local bidders whose bid is not the lowest, but is within a certain percentage of the low bid. To use local preference on a given project, the city council must make a written determination that it will give the city the best combined benefit considering both project price and economic impact from using a local company. The law allows providing the following percentage advantages to local bidders for contracts of the given types and amounts:

Goods General Services Construction Services
$50,000 - $100,000 5% 5% 5%
$100,000 - $500,000 5% 5% none
above $500,000 3% none none

Additional resources: 
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Monday, August 20, 2012

Job Transitions

Melody Jamieson
Melody Jamieson was appointed as the Purchasing Manager for Tacoma Goodwill.  She started her new job on July 12, 2012.  Melody was previously the Purchasing Coordinator for the City of Ocean Shores and most recently a Procurement Coordinator for Intercity Transit in Olympia.

Sharon Rothwell, formerly a senior buyer for the City of Seattle with some 20 years of procurement and contracting experience, has begun a new job as the Purchasing Manager for the Port of Tacoma.  Sharon started work at the Port of Tacoma on July 23, 2012.

Gisela Ratajski retired on August 3, 2012 as the Procurement Manager for Pierce Transit in Tacoma, Washington.

Wendy Walker
Wendy Walker was hired as a contracts assistant with the Office of State Procurement in the Washington State Department of Enterprise Services (formerly General Administration).  She begins her new job on August 27, 2012.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Sunday, August 19, 2012

Contractor Releases Survey of Architectural Firms

M.A. Mortenson Construction Company has released their Architect Survey: The State of Design and Construction with poll results and quotes from 50 professionals at the 2012 national conference of the American Institute of Architects

Positive Outlook:  The overall mood of architects was optimistic: 
  • Looking forward:  Two thirds of the architects responding predicted an increase in business for their firm during the next year (half said it grew over the past year), and the majority (83%) reported being at least somewhat optimistic about the "challenges and opportunities facing architecture today."  
  • Increasing hiring:  While only a third of survey participants said their architectural firms were hiring a year ago, almost half (46%) reported they are currently hiring, and three quarters predicted they would be hiring a year from now. 
Additional survey topics:  The survey also probes a range of other issues through a mix of response statistics and representative quotes from respondents, including:
  • Enthusiasm for BIM/VDC
  • Faith in Integrated Project Delivery
  • Opinions about traditional project delivery methods
  • Design excellence
  • Sustainability
  • Importance of teamwork
  • Builder involvement during the design phase
  • Working with builders
Full survey:  The full survey is available on Mortenson's website as a PDF.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Thursday, August 16, 2012

Public Private Partnership Conference

Public Private Partnership Conference

When:  February 21-22, 2013

Where:  Dallas, Texas (Sheraton Dallas Downtown Hotel)

What:  The conference highlights the latest development trends and opportunities involving public private partnerships.  The event offers key networking and partnering opportunities with municipal leaders from across the country.

  • Before September 15: $350 for government agencies; $850 for private sector
  • September 15 - December 30: $495 for government agencies; $995 for private sector
  • After December 31: $595 for government agencies; $1,095 for private sector
Information and Registration:   Click here.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Wednesday, August 15, 2012

Unbalanced Bids Cause County to Rebid Project

Eastern Washington's Douglas County was recently forced to rebid a roadwork project after receiving a large number of unbalanced bids that exploited an error in the project specifications. 

Unit price bids:  Projects are vulnerable to unbalanced bids when they use unit price bids, where the overall bid amount must be itemized and include the unit price for each item (e.g. a bid item for 100 widgets that a bidder prices at $1/each means that $100 of their total bid amount is the cost of widgets). This makes determining prices for quantity changes more straightforward (if 50 extra widgets are needed, the contract amount is just increased by 50 x $1 = $50). 

Unbalanced bids:  Sometimes, however, bidders will try to game the system by unbalancing their bid: manipulating a unit price in order to profit from future quantity changes, usually compensating by changing other prices elsewhere in the bid to avoid affecting their overall bid amount. For example:
  • Inflating bid prices:  If a bidder anticipates that the quantity of an item will be increased, they may artificially inflate that item's unit price (if the bidder guesses that 50 extra widgets will be added, they might list widgets at $100/each in hopes of a $5,000 windfall, and then lower the cost of another item to maintain the same overall bid amount).
  • Lowering bid prices:  The opposite technique is also used: artificially lowering the unit price for items the bidder thinks will have their quantity reduced, minimizing the impact those reductions will have on the overall amount the bidder gets paid. 
Risks of unbalanced bids:  Both types of unbalanced bids can of course backfire for the bidder if they guess wrong. They are also detrimental to the public agency, since a low bid that is unbalanced may not end up being the lowest after changes to the project have been made. An unbalanced bid that carries this risk for the public agency is termed materially unbalanced. 

The Douglas County situation:  The county solicited unit price bids for a roadwork project that included a bid item for asphalt, which was estimated to be $75/ton. The county later realized that the specification listed more asphalt than the project needed, among other things. Upon reviewing the bids, they saw that several contractors had also spotted the error and - anticipating a reduction in the amount of asphalt - attempted to take advantage of it by unbalancing their bids. The low bidder, for instance, listed a unit price for asphalt of just $0.01/ton. 
  • County's analysis of bid environment:  County engineer Doug Bramlette attributed the unbalanced bids to contractors in unusually dire need of work, noting that bidders would normally have pointed out the error so the county could correct it. "The bidding climate is so competitive that we’re seeing some unusual things occur here," he said. The project will be rebid, delaying it by four to six weeks. 
Lessons learned:  
  • Accurate specifications:  The county's situation illustrates the importance of accurate specifications: as can be seen, bidders will not always help correct the owner's mistakes and may even seek to use the errors to their own advantage. 
  • Language permitting bid rejection for unbalanced bids:  While most standard specifications include language allowing the public agency to reject all bids and re-advertise a project (as Douglas County had to do), it's important to also include provisions making it clear that unbalanced bids will be rejected as non-responsive, a potentially less time-consuming and costly option than completely rebidding a project. 
Additional resources:
  1. Article on the Douglas County situation from the Wenatchee World
  2. 2-part blog post on unbalanced bids from Seattle construction attorney John P. Ahlers: Part 1 and Part 2
  3. My previous blog entry on unbalanced bids
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Tuesday, August 14, 2012

Fuel Card Problems Lead to Audit Finding

The Washington State Auditor's Office recently released an audit finding on misuse of fuel cards by an employee of the Mt. Pleasant School District in southwest Washington. 

More than $1,000 of personal use:  The audit finding and criminal investigation came after a 27-year employee was found to be using a District fuel card for personal fuel purchases estimated to exceed $1,000. The employee resigned shortly after pleading not guilty to a third-degree theft charge in court.

Systemic problems:  The auditor identified a couple of systemic problems that made the abuses possible:
  • The District did not monitor small purchases and reimbursements
  • Inadequate verification that purchases were actually for the District
  • Failure to require and retain proper documentation before making payments
Audit report:  Click here to read the audit report and finding.

Lessons learned:  Small purchases can often be streamlined through tools such as fuel cards, credit cards, store credit accounts, and petty cash accounts, but use of these methods of procurement can also lead to fraud and waste if they are not adequately monitored. It can be easy to overlook the other side of the equation - verifying and documenting the legitimacy of small purchases - especially if appropriate policies, procedures, and training are not in place.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Monday, August 13, 2012

Feds Implement New Online Debarment Checking System

At the end of July, the website for checking whether a business is debarred or suspended from doing business with the federal government, the Excluded Parties List System (EPLS), was officially replaced by a new System for Award Management (SAM), and the transition has not been without its rough patches. 
Transition from EPLS to SAM:  As of Monday, August 13, 2012, the old EPLS system is still available at, although likely not for long.  Last week, users going to EPLS were automatically redirected to the new system (, and encounted a confusing security error in the process. 

Key changes from EPLS:  The good news is that the new SAM web site is designed to include all the functionality and information formerly found in EPLS, and you can still search for suspended/debarred companies without registering. There are a couple of key differences you'll likely notice when searching, however:
  • Search shows all companies (including those in good standing):  Unlike EPLS, SAM shows a search result for anyone matching your search, whether or not they're suspended/debarred (i.e. have an "exclusion"). Find the specific company you're looking for, click the "View Details" button, verify that it's the same company (comparing addresses works well), and print the more detailed company page for your records.  
  • Search includes individuals:  By default, the search will show individuals that have exclusions along with companies. If you're just looking for companies, you can filter out individuals by selecting the "Entity Management" filter on the left. (There are also additional filters available if you're trying to wade through a lot of results, but use them with care. Remember, with SAM, a search that doesn't turn up the company you're looking for does not necessarily mean that they're in good standing - just that you haven't found their record in the system yet). 
Technical difficulties:  The new SAM web site, developed by IBM, appears to have been experiencing some problems (as others have reported), including delays, site errors, and poor performance. An announcement on the SAM home page warns that the system is "experiencing some performance issues, which may result in a slowness of page loading or maybe even a web page error".

Tips for navigating the new site:  
  • Leave extra time:  Plan to spend some extra time getting familiar with the new site and working around its performance problems. The timeline is unclear for fixing the site's speed and reliability issues, so it might continue to respond slowly for a while.
  • Only open the site in one window:   I experienced some confusion trying to have the site open in multiple windows or tabs at once - sometimes a link you click in one window or tab will also load in another.
  • Try outside of normal business hours:  I had much better luck with the system outside of normal business hours (the home page says the heaviest usage is 11:00 a.m. - 4:00 p.m. Eastern Time).
  • Read the help files:  There is a complete SAM Users Guide that is quite comprehensive (and long, at 350 pages), as well as shorter 1-2 page "Quick Start Guides" for various users. If the site won't let you download the files (it blocked me from accessing them for a while), contact me by email and I would be happy to send you the PDF files.
  • Skipping the EPLS security error:  While it seems to be temporarily available now, EPLS was until recently set to redirect visitors to SAM. If you get a security error when trying to access, it's probably trying to redirect you to  You can avoid the security error by going directly to 
Consolidation of federal databases:  In addition to EPLS, SAM consolidates the Central Contractor Registry (CCR), Federal Agency Registration (Fedreg), Online Representations and Certifications Application, and the Catalog of Federal Domestic Assistance. 

Comments:  Share your tips, observations, and questions about the new system by either leaving a comment on this blog posting, or by contacting me.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Sunday, August 12, 2012

Seattle Construction Business Opportunities Event

Public Works Construction Business Opportunities Event

When:  Wednesday, August 22, 2012 (9:30 a.m. to 12:30 p.m.)

Where:  Seattle City Hall (600 4th Avenue - Bertha Knight Landes Room)

Sponsored by:  Seattle Public Utilities (SPU)

  • Presentations by project managers on upcoming projects
  • Information on the City's contracting processes and working with SPU
  • Women and minority-owned business inclusion plans
  • Meet one-on-one with city staff
Registration:  Register for this free space-limited event by clicking here. 

Questions:  Contact
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Job Opening: Vendor Relations Coordinator

Washington State Supreme Court (Administrative Office of the Courts)
  • Position:  Vendor Relations Coordinator (Information Systems Division)

  • Duration:  This is a temporary position that is expected to last 6 to 9 months
  • Location:  Olympia, Washington
  • Closing Date:  Open until filled.  First review of applications to begin on August 15, 2012
  • Salary:  $60,120 to $78,900 per year depending on qualifications
  • Job Summary:  The individual in this position will plan, organize, and recommend activities of the Administrative Office of the Courts (Information Services Division - ISD) for coordination of vendor relations.  Develops policies, standards, and processes for managing vendor relationships and vendor performance.  Functions as the ISD agent for support, coordination, and tracking of vendor relationships and vendor performance management.
  • For More Information and to Apply:  Click here.  
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Wednesday, August 8, 2012

New Prevailing Wage Rates in Washington State

The Washington State Department of Labor and Industries has published updated prevailing wage rates as of August 1, 2012 that will become effective on August 31, 2012.

Thus, for any public works project with a bid opening date of August 31, 2012 or later, the new prevailing wage rates must be used.

Click on the following link to view the prevailing wage rates:
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Tuesday, August 7, 2012

University of Illinois Voids $4.6 Million Contract Over Conflict of Interest Concerns

Perceptions surrounding a potential conflict of interest and how it was handled have led the University of Illinois to void a $4.6 million contract with BLDD Architects, ending a months-long debate about the situation. 

Straightforward disclosure?  In 2010, BLDD submitted a proposal for the planning phase of the university's $70 million renovation of its historic Natural History Building. As required, the firm disclosed that one of its principals, Bruce Maxey, was married to the university's associate director of planning, Jill Maxey, who had also worked for the firm in the past. Since Jill would normally be involved in the selection process, she recused herself from the project early on. University officials have stated that she was internally isolated from decisions that would affect BLDD. 

Further review requirements neglected:  The problem is whether the disclosure and internal controls were enough. The debate has centered around the issue of whether the potential conflict of interest meant the contract should have been reviewed by the Illinois Procurement Policy Board. As it was, the board didn't learn about the situation until over a year after the initial $368,000 conceptual design contract was signed, and several months after a $4.3 million contract for architectural and engineering services was added. 

The issue of additional review seems to have gotten lost in the midst of university staffing changes and confusion over the requirements for board review, which had only recently been mandated by a newly enacted law. 

Previous debate:  Shortly after discovering the issue, the Procurement Policy Board voted in April 2012 to recommend voiding the contract with BLDD over concerns about the potential conflict, but that decision was overturned by the Illinois Chief Procurement Officer, Ben Bagby, who oversees procurement for higher education in the state. 

Bagby maintained that adequate internal controls were exercised to prevent any misconduct or conflict of interest. Furthermore, he argued that going through a new selection process for the project would be too expensive, while negotiating with the second highest-rated firm would mean using a "stale" proposal from over a year before. 

Final decision:  Last week the Procurement Policy Board voted a second time to throw out the contract, referring it to the university's Board of Trustees. The Board of Trustees agreed with the board and voted on July 19, 2012 to void the contract, which will likely be subject to a new selection process. 

Lessons learned:  Interestingly, the debate seems to have sparked no accusations of actual misconduct. Concern seems to have centered instead on negative appearances and failure to follow proper procedures. This illustrates how critical perception can be (even if there is no actual misconduct) and the importance of following procedures. Small mistakes at the beginning of a project can be amplified as things go on and later escalate into significant delays, additional expense, and/or disciplinary action. 

Practical tips:
  1. Remember appearances:  Even if it seems clear that there is no conflict of interest, consider how the facts might appear to someone unfamiliar with the situation.
  2. Follow procedures:  The University of Illinois situation illustrates how easily important requirements can be misinterpreted or overlooked. If there's any question of whether an issue requires additional reporting or review, ask agency leadership or legal counsel.  As this incident shows, it's usually better to go the extra mile at the beginning of a project rather than try to clean up a mistake later.
  3. Stay current:  Keep on top of new legislation and policy changes, coupled with proper training and effective internal controls.  These are important tools to avoid controversies such as the one faced by the University of Illinois.
Additional resources:
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Monday, August 6, 2012

Job Opening: Contract Administrator - Construction

Port of Seattle
  • Position:  Contract Administrator - Construction
  • Location:  Seattle, Washington
  • Closing Date:  Wednesday, August 22, 2012 at midnight (Pacific Time)
  • Salary:  Minimum $61,191 - Midpoint $76,479
  • Job Summary: The individual in this position will manage the procurement contract process for routine construction contracts at the Port of Seattle Central Procurement Office.
  • For More Information and to Apply:  Click here.  
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Job Opening: Procurement Manager

Pierce Transit
  • Position:  Procurement Manager
  • Location:  Lakewood, Washington
  • Closing Date:  Open until filled
  • Salary:  $72,848 to $88,547 (hiring range); $72,848 to $107,630 (salary range)
  • Job Summary:  The Procurement Manager provides leadership for the procurement, warehousing and inventory functions of the agency.  Manages, plans, develops and evaluates all agency procurement activities of goods, equipment,services, construction, and contract management, and warehousing activities and inventory control for fleet maintenance and facilities.
  • For More Information and to Apply:  Click here.  
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Sunday, August 5, 2012

Miami Beach Corruption Case Develops Over Information Leak

A burgeoning scandal threatens to derail the massive $1 billion redevelopment of the aging Miami Beach Convention Center. 

Previous accusations:  Several months ago, Miami Beach procurement director Gus Lopez was forced to resign over allegations that he was leaking confidential information on the selection process to a prospective developer for the project. Investigators turned up emails from Lopez to developer Walter Garcia revealing information on the project before it was released to other candidates as well as details not available to others. There are even some indications that the two were thinking of assembling their own team to propose on the project. 

Expanding controversy:  The scandal has recently grown to potentially enmesh top developer CMC Group, part of the team vying for the convention center project. The team, Portman-CMC, was the highest scoring developer rated by the evaluation committee. 

The concern centers on a payment of $25,000 from CMC to developer Garcia's company, Peninsula Development. CMC maintains that the payment was for talks and negotiation when Peninsula was being considered for a consulting role on the convention center proposal. 

Start over or forge ahead?  Even though CMC ultimately did not work with Peninsula on the project, some feel that the selection process has been tarnished to the point that it should be restarted completely. 

Commissioner Jonah Wolfson expressed the opinion that the allegations of misconduct are "reason to start the whole thing over." Others, however, are concerned about the implications of current proposals being public and how that would affect response to another RFQ: "Everyone knows everything," said Stuart Blumberg, Chairman of the Miami Beach Convention Center Advisory Board, "It would make it difficult."

Lessons learned:  The Miami Beach story illustrates one of the ways that a perception of bias or favoritism can be destructive to the selection process. Advance or inside information can be a significant advantage to a proposer and can be easily transferred to other proposers, making it hard to track while conveying a potential advantage on any proposer who receives such information. As a rule, information about a project should not be released outside the public agency unless and until it is available to all proposers. 

Additional information:
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

Wednesday, August 1, 2012

Design-Build Conference & Expo

2012 Design-Build Conference & Expo

When:  November 7-9, 2012

Where:  New Orleans, LA 

What:  The 2012 Design-Build Conference & Expo is the largest gathering of the year for the design-build market - market that continues to expand despite the sluggish economy.

Cost:  Varies depending on categories.  Lower registration fees before August 31, 2012

More Information:  Click here.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC