CHICAGO — When it comes to Cook County government, money is no object.
Or at least not the main object, when it involves a subset of contracts in the office of Capital Planning and Development.
In fact, only three out of 11 times in 2008 did the county take the lowest competitively bid proposal, a Daily Herald/Better Government Association investigation found. Another three times, there was only one bidder, and another five times, a bid other than the lowest was selected.
Bruce Washington, the head of the Capital Planning and Development Department, says that’s because in the area concerned, professional services, each bid is significantly different from the next, and cheapest doesn’t always mean best.
“You’re not comparing apples with apples,” said Washington.
Critics – while acknowledging that’s sometimes true – say price should be playing a larger role than it appears to be, particularly when the higher bids go to companies who are also political donors. The Daily Herald/BGA study found that political donors were linked to every one of the 11 projects, the only group of county contracts the law does not require to go to the lowest bidder.
“We’re not saying that ‘pay to play’ always results in the wrong firm getting a contract at an inflated price,” said Andy Shaw, BGA executive director. “It simply increases the likelihood of that happening, and when it does, we are once again paying a ‘corruption tax.’” Republican Tim Schneider, a Bartlett Republican, goes even further.
“They (county administrators and commissioners) create or invent their own rationale to support the hiring … of these donors,” said Schneider.
The end result, he said, is the needless spending of extra taxpayer dollars when a cheaper bid would do.
Here’s how it works:
Once a year, the Capital Planning and Development Department issues a request for qualifications in about 20 professional services areas. Companies deemed qualified are then put on a shortlist and when a contract in their area of expertise, like architectural design, comes up, they – and only they – are invited to submit a proposal on the project.
Why not have an open bidding process on every contract?
“There’s a reason for that,” said Washington. “It’d be an awesome task for any one group to try to evaluate hundreds and hundreds of (proposals) on an ongoing basis. It just stops you operationally.”
Additionally, note engineering groups, it’s expensive and labor-intensive to put together the inches-thick proposals. Companies are deterred from doing so if they’re competing against 20 other bidders and the chances of winning are slim. But when there are only five or six other competitors, the chances are better and the economics encourage them to submit a proposal.
Cook County is not alone in the practice. The city of New York recently moved from a process where it gave engineering contracts only to the lowest bidder to a process where quality of proposal, coupled with cost considerations, became the decision criteria.
For projects under $25 million, New York uses a prequalification method similar to Cook County’s, according to its 2008 “Design and Construction Excellence” report.
But unlike Cook County, for New York projects over $25 million, each initial bid is opened to all comers. To keep the companies’ costs down, the initial round seeks only a very generalized proposal. Those who make it through that first round are then asked for the more-expensive detailed plans.
While Cook County is not alone in its bidding process, some see room for improvement in how it puts it into practice. Couple the exclusivity with the fact that the companies who won bids in 2008 have put $208,178 into the campaign coffers of county officials or their relatives, and some see at least the appearance of a quid-pro-quo arrangement.
Of particular concern is the fact that three contracts had only one bidder.
“Now that’s a huge issue,” said Dr. Awad Hanna, chair of Construction Engineering and Management at the University of Wisconsin. “There is no way in the world I would get one contractor and make a decision based on that, because they can dictate their price.”
Shaw was equally blunt.
“Whenever there is only one bid, we smell a lack of transparency in the bidding process or a manipulation of bid specs to steer the deal in one direction – toward the biggest contributor,” he said.
Not so, responds Washington. The department comes up with its own estimate of cost before each project and if bids come back far out of whack, the department can refuse to accept the bid or negotiate it down. Additionally, in the sole-bid cases, several companies were solicited so the sole bidder did not know it would end up being the only bidder, meaning it still was trying to make its bid as competitive as possible.
However, in none of the three cases of sole bids in 2008 did the department reject or negotiate the price down.
And, said another expert, if the purpose of prequalification is to make sure you’re dealing with only qualified companies, then justifying the acceptance of a higher bid becomes tougher.
“There is a burden on the county to explain the process of selection. What is the point of having the (prequalification) process? – They only have to look through a few bids. If it’s not lowest bid, what is it? When they make those changes (taking a higher bid) that needs to be made crystal clear,” said Dr. Scott Fee, former chair of the Construction Management Department at the Minnesota State University, Mankato.
Couple the several questionable bids with the fact that county officials are receiving large campaign donations, and “it looks like a slush fund,” said Fee.
Washington said nothing could be further from the truth. Selection is based solely on objective criteria like a company’s understanding of a project, their design, skill of staff and price.
Cook County Commissioner Tim Schneider, a Bartlett Republican, said under normal circumstances, the county’s professional services bidding practices might be understandable. But given the history of pay-to-play politics, he said, the department should open up project bids to everyone each time and mostly stay with the lowest bidder.
“It’s already difficult enough to become a bidder with the county, and then when you further limit the pool – you cost taxpayers money,” Schneider said. Then he pointed to a recent BGA expose of another Cook County commissioner’s brother shown sleeping at his desk while on the job.
“Perhaps if he (Washington) became overwhelmed (with the number of bids), he could take the highway department guy who was sleeping at his desk – to help assist them in going through these bids,” Schneider said.
Here’s a look at three projects where Cook County bypassed the lowest bid:
Stroger Hospital parking garage expansion
Six bidders vied for this large contract, and the Capital Planning and Development Department eventually awarded it to Parking Garage Partners, a consortium of companies apparently formed solely for the purpose of bidding on the contract.
Bruce Washington, the head of the Capital Planning and Development Department, said the company “rated the highest in their approach to solving the aesthetics of the existing and new structure - and blending of the old and new structure as one parking facility.” But Washington acknowledged that the second-lowest bidder, architectural giant Holabird and Root, “placed in the excellent range in the response categories.”
Holabird has done work in all aspects of architecture, including parking structures it designed for Central DuPage Hospital and the village of Oak Park. Parking Garage Partners’ bid was the highest at $4,583,000, but the county negotiated them down to $3,250,000, a price Washington said was “well below the average of all the fees proposed.”
However, that average price, $3,406,767, was only so high because of Parking Garage Partners exceedingly high initial bid. When its bid is taken out of the equation, Parking Garage Partners’ negotiated contract price was still $78,480 higher than the average of the other five bids ($3,171,520) and $695,400 higher than Holabird and Root’s bid of $2,554,600.
Over the last 12 years, firms and employees associated with Parking Garage Partners have donated $3,250 to Cook County Board President Todd Stroger; $13,450 to his father and predecessor, the late John Stroger, or to Chicago’s 8th Ward campaign fund controlled by Stroger; and $29,240 to county commissioners or their families. Holabird and Root has donated nothing.
Parking lot resurfacing & guard shack, Hawthorne Warehouse
Three companies bid to design a parking lot at a county warehouse on Chicago’s West Side. Capital Planning awarded the $297,911 contract to Infrastructure Engineering, Inc., the most expensive of the three bids and $72,296 higher than the lowest bid of $225,615.
When some commissioners questioned the award, noting the company’s generous campaign contributions, Capital Planning withdrew the item from board consideration in June 2008, only to quietly reintroduce it three months later, when it passed in a contentious 8-7 vote. But when a budget crisis struck months later, commissioners withdrew the funding for the project, effectively killing it.
Washington declined to provide a selection rationale for this story, noting the project was killed. But in the past, he noted that Infrastructure was the most qualified, in part, because its owner was going to be directly involved in the project. The other two bidders also had parking lot design experience.
Infrastructure, its subcontractors and its employees have donated $22,130 to Todd Stroger, $26,800 to his father or the 8th ward and $36,613 to board commissioners or their relatives.
“From an engineering aspect, there is no justification – unless the winning company said I’m going to (have the contractor) put two more inches of asphalt on,” said Dr. Awad Hanna, chair of Construction Engineering and Management at the University of Wisconsin.
Jail intake/medical facility expansion
Long the subject of lawsuits, the Cook County Jail’s inmate intake facility – essentially a basement hallway – is in desperate need of replacement. This project, known as the RTU/RCDC Expansion, was bid on by three companies and awarded to the middle bidder, Roula Associates, at a cost of $4,073,350 – more than 10 percent higher than the low bid of $3,676,957 by HOH of Chicago.
Washington said HOH “in one review – did not garner the minimum of total points to be considered responsive” and “illustrated little experience with correctional facilities.”
In fact, HOH has performed design work on other parts of the Cook County Jail and received several county jobs for non-correctional projects. Roula Associates likewise has designed a maximum-security Cook County jail building that received critical acclaim from architecture critic Blair Kamin.
In its proposal, Roula wrote “Dear Bruce: This project is the ENTRANCE to Cook County’s Correctional System – and here is opportunity to state that, physically and symbolically [sic].”
Roula, its subcontractors or their employees have donated $3,500 to Todd Stroger, $20,850 to his father or the 8th Ward, and $6,685 to county commissioners or their relatives. Roula’s owner, Roula Alakiotu, sat on John Stroger’s transition team in 1995.
As the design for the project has progressed, the Cook County Sheriff’s Office has objected to Roula’s proposed aboveground, enclosed pedestrian walkways between buildings, noting underground tunnels already exist, documents show.