The following letter was published in this week’s issue of the Gazette.
To the editor:
The televised mess at the February 4 Board of Trustees meeting should prompt a review and overhaul of procurement policies in Croton. As a municipal corporation, Croton has more flexibility than other state entities. But this does not mean that the current status is acceptable, let alone protective of the public fisc.
Comments by the Board, the Village Attorney, and the Bicycle-Pedestrian Committee (BPC) indicate at least a cavalier disregard if not outright ignorance of both state law and procurement best practices. In addition, the lack of transparency makes a mockery of the public deliberations since the public is deliberately kept in the dark.
At minimum, the village should post the RFP in the online Board of Trustees agenda supporting documents, and should post the certified bid tabulation form (known as “certified bid tab”). The RFP shows the scope of work and weighting of the criteria, and the certified bid tab shows the scoring and computation.
Properly done, the RFP and certified bid tab constitute application of the “Best Value” standard pursuant to NYS Finance Law 163(1)(j). Posting these documents shows Croton taxpayers (and non-winning vendors) that there has been a “balanced and fair method of award” as required by the NYS Comptroller.
Some of us were puzzled by the remarks from the Village Attorney regarding the lack of requirement to accept the lowest bidder. “Best Value” has never meant lowest price. The RFP should have the technical/cost ratio; indeed in state agency RFPs this ratio is required to be disclosed in the RFP. Even the cost segment is not a mere ranking of lowest to highest price: normally, the low bid is divided by each bid in turn and then multiplied by the maximum allowable points (which is derived from the ratio set out in the RFP).
This sounds complicated but it is actually simple and most state agencies have a spreadsheet template for this purpose. The spreadsheet gives a composite score of the technical and cost factors, and this composite score determines the bid ranking. If Croton does not have an RFP template and certified bid tab template, it should create those now.
Unlike the Board and BPC, members of the public have not seen the RFP nor Superintendent Balbi’s certified bid tab. But even from listening to the public discussion, there is reason to doubt that the dummy light RFP was done in compliance with normal procurement procedure.
Another shock for those familiar with NYS procurement practice was the disclosure by Mr. Pugh that there were additional items (such as charrettes) which will be performed by the winning bidder, and the casual discussion by BPC spokesman Mr. Olsson of expanding the scope of services beyond the RFP. The NYS Comptroller is crystal clear on this: “Costs [sic] components not evaluated must not be in the resulting contract.”
The Feb. 4 meeting came to an awkward stop as Mr. Pugh struggled to respond to Mr. Olsson’s proposal to expand the scope of work to include the Vassallo Parking lot exit. No doubt Mr. Pugh was trying to be polite, but he should have bluntly told Mr. Olsson—on the record—that the Village of Croton-on-Hudson is not going to go against the requirements of the State Comptroller.
Croton loves to do initial awards which understate the work, and then add on work later. This backwards approach is bad practice for three major reasons.
First, it can result in a smaller pool of vendors and hence a higher price to taxpayers. If the village intends to have a true scope of work with a fair market value (FMV) of $150 but issues a stripped-down RFP with a FMV of $100, there may be vendors who would have bid on the $150 contract but who regard the $100 contract as too small.
Second, it is impossible to do a proper technical evaluation. This is particularly true if the expanded scope of work involves skill sets beyond the issued RFP. Oftentimes that additional work is going to be subcontracted, so even if the scoring evaluator (in this instance, Superintendent Balbi) has some idea of the true scope of work it will not be possible to make an accurate technical evaluation.
Third is the potential for corruption. In theory if the RFP’s FMV is $100, most bids should cluster around $100. But if one of the bidders becomes aware that the post-award scope of work is going to be expanded to $150, the bidder can bid $80 secure in the knowledge that the company will ultimately make $150. The RFP value may even exceed the FMV because once the original award is made, the awardee can inflate the additional work to a price above FMV.
Particularly when your winning bidder (in this instance, SIMCO) is under criminal indictment for bribery of public officials, it would seem that the Board of Trustees would be acutely aware of procurement requirements designed in part to reduce the risk of bribery.
I will leave for others to discuss why the Croton Board of Trustees has no procedure in place to detect if a prospective vendor is under criminal indictment. But Croton should institute procedures now, and also review existing contracts to ascertain if the municipality is currently doing business with vendors who are under indictment, convicted, or barred.
I realize that some of this letter has been a bit technical. And most residents would not be aware of the details. But it is troubling that neither the municipal officials conducting procurement nor the Board of Trustees that approves procurement contracts seems to be following common-sense practice.
Our Board of Trustees should stop trying to hide documents. It should not be necessary to FOIL for documents which are being discussed by the BPC spokesman and the Board at a public meeting, and only get those documents long after the decision has been made.
The BPC should stop advocating for changing the scope of work set forth in an RFP after the winning bidder has been announced; this is unwise and possibly exposes the village to legal action by losing bidders.
Croton should consider re-bidding the dummy light RFP if an investigation shows flaws in the RFP process. If Croton does make an award based on the current pool of submissions, it should do so by a means which would be held a “balanced and fair method of award” by someone adjudicating a complaint by a losing bidder.