Tuesday, May 13, 2008

Oconee Chair Claims Secrecy Saved County Money

Design Change Real Explanation

Oconee County Board of Commissioners Chairman Melvin claims that the decision to conduct in secret the bidding for the upgrade of the Rocky Branch sewage plant saved the county $70,000.

The claim is based on some questionable comparisons, and it is possible the secret bidding procedures cost the county money.

In his Chairman’s Corner Spotlight on Oconee on the County’s web site, (the file is dated March of 2008, but it remains on the site at this writing), Davis summarizes the outcome of the bidding and correctly states that the state Attorney General rejected my contention that the secret meetings violated the state’s Open Meetings Laws.

Davis then offers the following statement:

"The County saved well over $70,000 in design fees from the original round of proposals as a result of the RFP that was generated for the project and the process that followed."

County Attorney Daniel Haygood, at the Jan. 29 BOC meeting, went to great lengths to justify the secret bidding process as a way to save the county money, so Davis’ assertion is hardly a surprise.

The county had the option of conducting the bidding in the open or in secret.

At the Feb. 26 meeting of the BOC, Davis said the County had saved $40,000 by getting the successful bidder to do design work that had not been included in the original Request for Proposal.

According to documents released by the County in response to an open records request I filed, at a closed meeting on Feb. 7, the members of the Selection Committee reviewing the bids told the three top-rated bidders that the Committee wanted the bidders to reduce their costs before the Committee would make a final recommendation of a winner.

The Selection Committee also told the bidders the county wanted to add design features, namely a "septage" treatment system to treat what septic haulers drain out of septic tanks and a "belt press" to compact treatment plant sludge.

When the three bidders came back with their final bids, none had dropped the price. Two, including successful bidder HSF Engineering of Snellville, agreed to add the design features without increasing the price. The single bidder that did increase the price, Brown and Caldwell, added about $40,000.

The winning bid by HSF Engineering employed an alternate design that was $75,000 lower than what it said it would charge for the design specified as the standard in the Request for Proposal. The alternate design was included in the RFP, which was a publicly released document at the time the bidding was initiated.

Davis in his Spotlight column, referred to the "original round of proposals." In fact, the county did have a first round of bidding in the summer of 2007. Davis and his staff tried to get the Board of Commissioners to give the contract to Jordan Jones & Goulding, who submitted a bid of $680,580, or $108,580 higher than the successful final alternate bid by HSF Engineering and $33,580 higher than the bid for the base design submitted by HSF.

HSF didn’t bid in the first round; in the second, it bid $647,000 for the original design, or $75,000 more than its winning bid of $572,000.

JJ&G, who had designed the plant as outlined in the RFP, didn’t bid in the second round.

The first round of bids was evaluated without any secret meetings.

County consultant Precision Planning Inc. of Snellville played a different role in the first round of bidding compared with the second.

In the first round, PPI was involved in the Selection Committee that evaluated the bids, but in the second round, Jimmy Parker from PPI chaired the Committee.

PPI charges the county different fees for its consultancy, based on who is providing the consulting and the nature of the service provided, John Hatcher, Utility Department head, told the BOC at the March 25 meeting. On average, the county pays PPI $100 per hour, he said.

Jimmy Parker attended the secret Dec. 7 meeting of the BOC in Madison, Georgia, at which the Rocky Branch upgrade was discussed. With travel time, that meeting took up nearly a full day.

Parker attended and spoke at BOC meetings on Dec. 18 and Jan. 29. He and fellow PPI staffer and Selection Committee member Jim Sunta also were scheduled to be involved in two secret meetings the Selection Committee held on Jan. 4 and Feb. 7 to review the submitted bids. Since no minutes of those meetings have been released, it isn’t possible to know for sure if they attended.

At the April 1 meeting of the BOC, Hatcher said he expected to pay PPI $42,500 for consulting for the next phase of bidding on construction of the Rocky Branch plant, which would seem to be less involved than the second round of design bids.

There is at least some indication the extensive use of PPI in the evaluation was associated with the decision to conduct the bidding in secret during the second round.

County Attorney Daniel Haygood wrote to me on Feb. 13, 2008, that PPI, not a committee of the Board of Commissioners, was conducting the evaluation of the bids. He copied that letter to the Attorney General’s office, saying there is an "issue of whether the evaluations are actually County records."

The State’s Open Records Laws state clearly that the law does not allow "an agency’s placing or causing such items to be placed in the hands of a private person or entity for the purpose of avoiding disclosure."

At the Feb. 26, 2008, meeting of the BOC, Chairman Melvin Davis acknowledged that the Selection Committee appointed by the BOC, not PPI, was conducting the evaluation of the bids.

Did the county save "well over $70,000 in design fees from the original round of proposals as a result of the RFP that was generated for the project and the process that followed," as Chairman Davis contends?

The change in the RFP resulted in a savings of $75,000, which HSF has said will not adversely affect the quality of water coming out of the plant. The secret "process" did not produce the savings.

The change in the RFP resulted from the rejection by the BOC of Davis’ recommendation from the first round of bids.

Even if the county had gone with the more expensive design, it still would have saved $33,580 simply by ignoring Davis’ recommendation that the contract go to JJ&G in the initial bidding round.

Did the county save $40,000 by negotiating in secret with three of the bidders? One of the three said it would not do the extra work being asked by the county without charging that amount, while two others said they would take on the extra work at no charge.

It is impossible to know if this $40,000 would have been this high had these extras been incorporated in the original RFP, as should have been the case, rather than used as a negotiating tool at the last minute.

Given the fees charged by PPI and the extra work it did as part of the secret bidding process, it is likely that the $40,000 "savings" was offset by the higher fees paid to PPI. It is even possible the secret bidding process cost the county money, rather than saved it.