On Tuesday, May 16, Philadelphia voters will be asked to vote YES or NO to the following ballot question: “Shall The Philadelphia Home Rule Charter be amended to allow for the award of certain contracts based on best value to the City?”
The ballot question is vague and confusing, and fails to inform voters that the City of Philadelphia now awards contracts on the basis of “lowest responsible bid,” a method that many believe already results in “best value” contracting for the City.
Nonetheless, the nonpartisan Committee of Seventy recently announced its support for the ballot question. The Committee of Seventy is not typically thought of as proficient on matters of public procurement, so it formed a task force comprised of Board members “with contracting experience in the public- and private-sector” to study the issue.
According to its press release, the Committee of Seventy found the proposed Charter amendment “to be a step in the right direction to modernize the city’s procurement system,” even though the efficiency and integrity of the new process will depend upon yet-to-be-issued regulations.
In response to my recent post on this topic, I was also made aware of other pro-best value commentary by Kate Vitasek in Forbes magazine who argues that best value “will open the city’s marketplace to more opportunity for business than ever before, including minority, women, and disabled-owned business.”
My original post on the City’s best value initiative set forth the actual wording of the proposed amendment to the City Charter.
In December, the Philadelphia Inquirer’s editorial against the best value ballot question argued that flexibility and subjective standards can lead to favoritism and breed suspicion about who will really benefit from best value contracting.
After reading the Committee of Seventy and Forbes commentaries, my position remains the same: if all bidders are equally qualified and competent to perform the contract in question, and if the service or product being contracted for is clearly specified, why isn’t price and cost always the best indicator of best value? What else can be obtained through best value contracting, if you have two equally competent contractors competing for the same contract under the same specifications and requirements?
In its press release, the Committee of Seventy states: “The best value amendment would allow the option to award such contracts using other criteria in addition to cost.” This is a highly misleading statement, as nothing currently prohibits the City from considering “other” criteria in awarding a public contract, provided that such criteria are published prior to receipt of bids and the bidding is conducted on a level playing field.
Further, the notion that best value will allow the City to “weed out” unqualified bidders, or will allow the City to consider “schedule” or “past performance,” or will open up the “marketplace” to other bidders, as suggested by the Committee of Seventy and the Forbes commentator, is wildly overblown. Under its present “lowest responsible bid” procurement rules, the City is perfectly free to consider past performance and can easily eliminate unqualified bidders through a pre-qualification process or by setting forth stringent qualification criteria in the bid specifications. In fact, the Philadelphia Code presently mandates that all City public works bidders be pre-qualified. Moreover, the courts in Pennsylvania have consistently held that public officials have broad discretion to determine who is qualified to perform a public contract, so it is unlikely that any court would second guess a decision by the City to reject an unqualified bidder.
Finally, the suggestion that best value contracting will eliminate change orders is absurd. Change orders occur on public works projects when there are changes to the work, or when unforeseen conditions are encountered. There is no valid reason to believe that change orders will suddenly disappear on a best value contract.
In my considered view, the lowest price obtained from a qualified and competent bidder is the epitome of a “best value” public contract. Changing from low bid to best value, even for just a few contracts, opens the door to arbitrariness, favoritism, collusion, and corruption, all of which were rampant when the “lowest responsible bid” procurement standard was implemented in 1952.
On May 16, I plan to vote NO on the best value ballot question.
Christopher I. McCabe, Esq.
