Crimping Competition in the Bidding for Contracts.

This week the engineering and purchasing departments will ask us on the city commission to limit the number of firms invited to bid on certain contracts (those likely to come in under 75k  and subject to other payer requirements.) Our bureaucrats found five firms that they deemed “prequalified”  and so should be protected from the market place. We would be locked into this arrangement for 3 years in an apparent one sided contract with no reciprocal consideration. We give an awful lot and get nothing back.

 

The reasons presented for restricting the numbers of bidders include the claim that burdening bidders with the need to evaluate each proposal or of responding quickly to a request for a bid might discourage many from bidding since they would not be completely confident of having a good shot at success. But why should being in a cage fight with the same 5 competitors instead of two (or even the 16 who actually bid on the RFQ, see below) alter the incentive to submit a low bid?

 

I focused on how these 5 “in group” competitors were selected. The engineering and purchasing departments sent out a request for qualifications in which they solicited 1) the names and skills of key people, 2) detailed descriptions of previous projects, 3) sample reports and 4) subcontractor details of companies that might be interested in bidding on Kentwood engineering contracts. I don’t understand what or why these criteria were selected. Determining the names of owners, the reports written by, etc just moves the questions of one step upstream; how did those in our engineering and buying departments know that owner Jones was better than chief exec Smith? Or that the Digitup Firm had a better writer than did Tearitdown Firm?

Sixteen companies went through all sorts of trouble to reply. They lined up to bid for the Kentwood imprimatur in throngs, collecting and sending in the paperwork imputed to be an formidable burden by our bureaucrats. Many knew it would be futile.

On the Kentwood side, the selection of the lottery winners that our engineering and purchasing department seems sloppy; one right in the middle of the “elect” was Williams and Works, a favorite of the environmental enthusiasts in Grand Rapids and the one that I know to some extent. It seems that the president of Williams and Works had bragged in a Green Party infomercial published by the Grand Rapids Press about how much gas money he was saving because he had bought a Prius. In the comments, I pointed out that his Prius cost $10,000 more than a similar conventional car and would save 100 gallons of four dollar gas yearly. He would break even after 25 years, much of which he’d have to spend drinking coffee in a Prius dealership waiting to replace the expensive batteries in this jalopy. I ask, if the chief officer of Williams and Works can’t do simple math, can our city engineer trust Williams and Works lackeys to know about the radius of a curvature or even the difference between cement and concrete?  

The blunt truth is that the firms selected for special treatment were known to and favorites of the folks in City Hall. I can find no other reason for this outlandish proposal. It’s an attempt to limit competition. Notice that I didn’t say “cooperation,” or even “collusion.”

I’m going to vote against this attempt to rig the markets.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s