Procurement 101: Vermont E-Cycles Lessons

As the recycling program manager at Massachusetts DEP in the 1990s, I oversaw something like 40 contracts per year (if you include 03 consultant hires).  We went through one of the biggest bid challenges, for the Springfield Materials Recovery Facility, which saved the state about $1 million dollars per year by switching from an incumbent vendor.

We knew that if the incumbent vendor lost, that they were certain to challenge the bid, so I had lots of time with attorneys at MA DEP making sure that each step of our bid evaluation was transparent, and run by standards (National Association of State Procurement Officers).  (Link to Massachusetts Chapter 30B Guidance on Procurement)

The incumbent Springfield MRF vendor did appeal, and they even won an injunction keeping us from awarding the contract to a new vendor.  Even though the state was losing roughly $500,000 during the six month injunction, however, we saw our jobs as making a smooth and continuous transition, and further, to show that Massachusetts DEP did not even want to suffer the APPEARANCE of impropriety.  By NASPO standards, the appearance of shady procurement is just as costly to society as impropriety itself.  Once an injunction is granted, the best thing is to sit down, in full transparency, and let the protester's case be heard.

So we patiently worked with the incumbent vendor, in as professional a manner as we could, until the court hearing.  The court found The Massachusetts DEP's contract procurement process was valid and dismissed the injunction.  But like an appealed referee's call in an NFL game, no one accused anyone of doing anything in bad faith.  And at this time, I'm not making any noise about bad faith in Vermont.

You will see in the news cycle a number of stories about the State of Vermont's E-Cycles ("e-waste") contract procurement, which my company, along with, administered for the past 27 months, with generally rave reviews.   The truth is that before the Vermont electronics recycling law had even passed, my company had already set up the infrastructure, and had a turnkey proposal in place in 2011.

This is not the time or the place to air our concerns about the new 2014 contract, or the merits of the two proposals the state decided between.  But this is a time to look at Vermont Procurement laws, and ask why "safety railings" are not in place to keep vendors and regulators from having it out in the press.  That's what NASPO standards were created to avoid.

"Does the injunction save the state money while providing the public assurance to a fair review of the process?"  If the answers to both questions is "yes", why fight the injunction?  Save tax money, hear the appeal out, and start the new contract when you've won.

Without commenting about the award of the contract itself, at least at this time, I do want to make an important point.    When the state does not have a clear internal bid appeal procedure, or despite a 6 month RFP process does not allow time to hear a bid appeal (BGS did not return any of our messages, and our FOIA request for bid evaluation documents was refused), it sets the state up for a much more expensive and embarrassing court process.  That leads to state officials - like me in the 1990s - feeling embarrassed and defensive, and leads to incumbent vendors looking pouty and desperate.

Whether it's about paving school parking lots, providing health care software, moving snow and salting roads, or recycling used electronics, here's the thing.... Citizens don't really know and don't care as long as the job gets done.  But what they do care about is a transparent and fair process, they want to know that there are umpires out there to make sure business is fair.

Court injunctions are very, very high bars.    They are more difficult than winning a case in court before a jury.  You only need 51% of a jury.   But for a judge to intervene before the case is heard, and to enjoin the new contract, means that something appears wacky, and/or the disappointed vendor will likely be really injured by the mistake.  Judges really don't like enjoining the state executive branch, the perponderance of evidence for reversal has to be quite high.

So, if you are in the state government, and a you didn't have time to hear an appeal, and as a result the contract you are awarding has been enjoined, here's what to do first and foremost - according to what I was taught at Massachusetts DEP... don't take it personally.  If you have been accused of not following your own rules, it's very difficult to lose in front of a judge unless you made a mistake.  Instant replay, slow motion, and multiple angles are your friends.   Rejecting those creates an appearance of imporpriety, which is more costly to the state government over the long run than getting your way in the short term.

End of Part 1

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