by Bradley Parsons
Staff Writer
Regulations requiring detailed pricing projections for bidders on City contracts will be relaxed in an effort to create a more open and competitive bidding process, the City Council president said Monday.
Lad Daniels said the changes would be made in the next 60 days. At issue is current language which requires bidders to account for overhead costs. The requirements limit overhead costs to 150 percent, but require the overhead rate to be federally audited. Together, the regulations made it impossible for companies like Tetra Tech NUS, Inc., an environmental consulting company, to bid profitably on City projects said a firm engineer.
“Companies are in business to make money,” said Greg Roof. “We couldn’t break even if we followed the language that the City sets out.”
As a Navy contractor, Roof said Tetra Tech’s overhead rates — rates that predict cost overruns — are established by the Defense Contract Audit Agency. Roof said the DCAA rate requires his firm to account for cost runups associated with subcontractors and other direct costs. The City does not allow for such markups, meaning Tetra Tech would have to bid on projects using rates that would cost the company money.
Roof wrote an Aug. 4, e-mail forwarded to Daniels, complaining that “we can not even bid on opportunities with [the City] because of this clause, and it does not seem fair to us or the [City] because it eliminates competitors.”
The elimination of competition was Daniels’ main concern when he took up Tetra Tech’s case to the General Counsel’s Office and the Procurement and Supply Department.
Daniels said an “open and transparent” bidding process was essential to ensure the City receives the best value from contractors.
“We want this process to be as open as we can make it,” said Daniels. “It makes it easier for people to understand our purchasing procedures and ensures a fair and competitive bidding process that provides options to the City and keeps prices low to the City.”
Daniels said the changes were changes in language and not City policy. He said the current restrictions inadvertently put Tetra Tech at odds with with its standard bidding procedure.
“They see it as a fluke in the way the regulations were drafted,” said Daniels. “And that seems to be the case; it is more a question of language. The City doesn’t want to have a policy in place that precludes people from bidding on City contracts.”