A Trashy Story

[March 12th, 2008]

The expression “garbage in, garbage out,” has seldom appeared more true than with the City of Portland’s recent attempt to streamline its contracts with trash haulers.

Rather than achieving a lower-priced contract, the city ignored the largest locally owned hauler and ended up paying about twice what Metro paid in a similar circumstance.

The story dates back to October when Jim Van Nest, a contracts coordinator with the city’s Bureau of Purchasing, notified 500 companies that the bureau was seeking bids on a three-year contract to pick up trash at 130 city-owned locations, including parks, City Hall and police stations.

Previously, city bureaus such as parks, police and fire each negotiated their own arrangements with haulers. That practice generated a crazy quilt of contracts, so consolidating all pick-ups under one contract made sense.

Except the Bureau of Purchasing neglected to contact the city’s second-largest garbage hauler, locally owned AGG Enterprises, when it contacted bidders.

George Simons, who along with his wife owns Swan Island-based AGG, says he’s been hauling city trash for more than 20 years and was shocked and angered to be left off the bidder list.

City officials’ explanation has done little to mollify Simons. Bruce Walker, the city’s director of solid waste, says he gave the Purchasing Bureau a list that included AGG.

But Van Nest says AGG never registered to be on the city’s electronic list of bidders and therefore didn’t get notified of the contract opportunity.

Van Nest says he called the company Oct. 11 to make sure it wasn’t interested after AGG didn’t submit a bid. He says he spoke to a woman—whose name he says he did not get—and she confirmed AGG had no interest.

Simons says that’s nonsense. “Everybody who works here knows I make the decisions on whether we bid a job,” he says. “If he talked to somebody, how come he didn’t get a name?”

Van Nest says the city got three bids and in January awarded the contract—worth about $1 million annually—to another local hauler, Trashco.

The city’s award notification gave any registered bidder the opportunity to protest the award within the next seven days. But because Simons didn’t know about the original bid or the award, he didn’t protest. It was not until late January when a city representative asked AGG to remove its drop boxes and other equipment from city parks that AGG learned there had even been a bid.

Simons blew up. “I told [Bureau of Purchasing Director Jeff] Baer, ‘We’ll sue you if you don’t rebid the contract,’” Simons says. “In our business a $1 million contract is a huge contract, and after all the years of doing business with the city, we’re just looking for a fair shake.”

Baer declined to reopen the bidding.

In the meantime, AGG bid another local government contract that Simons says is similar to the city’s contract. In that contract, AGG won Metro’s business last month by offering a haul fee of $52 per drop box. The haul fee is the primary variable in garbage contracts, Simons explains.

Trashco’s winning bid on the city contract included a haul fee of $118 for each drop box, more than twice what Metro is paying AGG.

“Trashco is a good company,” Simons says. “But we would have bid a lot less. The city is paying too much.”

Van Nest says Purchasing has had success combining other contracts such as computers and office supplies. He is unfamiliar with the Metro contract and says price was only 30 percent of the criteria for the city contract.

“I’m not sure it would be an apples to apples comparison,” he says of the Metro contract. “Our contract has a heavy sustainability component with lots of reporting and waste reduction.”

Simons, who says his company’s sustainability credentials are second to none, is still considering legal action. “If this is how the city does business, I guess they’ve got more money than we thought,” he says.