SCS Voice | home
April 7, 2009: Catching up on Council | April 17: You might be a right wing extremist.... | April 17, 2009: Tea parties not about taxes...but about Big Government | April 20: City Council | June 10: Here's what I think | June 16, 2009 The Council Meeting Another no bid contract | June 17 -- Picking our pockets, one no-bid contract at a time | June 22, 2009 SCS Voice is back | June 22, 2009: Retired chief runs for Council. Can we afford him? | June 27, 2009 -- 'Bidding?...We don't need no stinkin' bidding!' | June 30, 2009: EPA Coverup on Climate Change | June 30, Guest Column...Letter Shows Stabenow believes health care a "right" | June 30, 2009: House energy bill a piece of S***T | July 3, 2009: Forget Socialism --we're racing toward Totalitarianism | July 4, 2009: Independence Day | July 6, 2009 Letter to Editor - Climate Change Not Real | July 6, 2009: Seniors Beware! Government run health plan might just kill you | July 10, 2009: Bill Clinton would be proud...it depends on what your definition of a 'bid' is...business as usual in the Shores | July 10, 2009: Minutes of Special City Council -- Ahearn and Activities Committee, 2006 | July 20, 2009: City Council: Sometimes you just get tired of the BS! | July 21, 2009: You decide | July 23, 2009: ‘‘America’s Affordable Health Choices Act of 2009’’ is anything but. | August 3, 2009: VOTE TOMORROW | August 3: Shocking things from Health Care Reform Bill! | August 3: Look at Frederick's property on Elizabeth | August 12, 2009: Bev, get a life! | August 12, 2009: President's rigged town hall | October 11: Teddy Boys' support should be kiss of death | November 3, 2009: Now comes the hard part | November 11, 2009: Wahby distances himself from losers; Veteran's Day and other matters | November 16, 2009 A new day | November 19, 2009: A personal message | November 17, 2009: Socialized medicine failing in Germany | City -- Some Pension Costs, Oct. 2007
June 17 -- Picking our pockets, one no-bid contract at a time
I've just had a chance to watch some of the council meeting that I missed when I wrote my last column (June 16) and to say that there are more questions about how contracts are awarded in this city than there are hairs on a dog would be an understatement. Yes, I do know there is a difference in contracts: Some require bidding and some, like A.E.W and this latest debacle are 'professional contracts' and do not, but are left to the department heads for their recommendations.
But no matter what, it's our money they are playing around with and for way too long we have allowed a culture to exist where once a firm is awarded a contract, they never, ever, never have to worry about it again. It's a life time deal.
In this case, I'm referring to the Insurance for the city -- property, automotive, liability and umbrella policy if you will -- which is currently held by Michigan Municipal Risk Management Authority and which was, up until their latest proposal, costing the city about $540,000 a year. (See Council Packet for June 16 Meeting, starting on page 127 for what Tim Haney presented to council). This contract expires June 30 and represents another case where council is presented with a major issue with little or no time to give the matter the weight it deserves. One would almost think this is a deliberate tactic because too often we see council voting under the shotgun on matters best given some real thought.
I had missed the segment of the council meeting where Jack Tallerico of A. J. Gallagher, a major writer of risk management and other type insurance policies for municipalities all over the nation ($1.6 billion), including the State of Michigan, got up to express his dismay over how a 'proposal' presented by Gallagher to offer the city coverage appears to have been used to allow MMRMA's bid to become "more competitive".
This is a serious matter and violates every business standard and ethic know. One simply does not solicit or accept proposals from would-be competitors and then turn around and use the competitors figures to allow the "Favorite Son" to meet or lower their proposed numbers.
Yet, in looking at Mr. Haney's letter and in listening to Mr. Tallerico, I can only wonder if that is what happened and find Mr. Haney's statement that both companies were allowed to 'amend' their bids requiring the question, were both bidding on the same thing? Since this was not a 'sealed' bid, but a proposal, did both companies have the same standard? It is also interesting to note that Mr. Haney did not include any information he received from A. J. Gallagher in his materials for the council.
But even forgetting that issue, the fact remains that MMRMA came in with an initial bid of $514,531 and yet for some reason decided to 're-price' their bid, which went down to $399,563 and is strikingly near the $348,986 quoted by A. J. Gallagher. Even assuming some of the things in Mr. Haney's letter are applicable, which I find dubious, I doubt the state of Michigan would be using A.J. Gallagher if there were serious issues with the coverages they offer.
Fortunately, Mr. Moffitt who must has realized his error in voting to "renew" the AEW contract, seems to have awakened to the fact that there should be more scrutiny by the council and voted to table this matter, a vote which was approved. This will be brought back at the next council meeting.
Mr. Haney recommended the city retain MMRMA. But, look at the numbers. Just the 'threat' of a competitive proposal by another firm, one who does business nationwide and is good enough to insure the state, appears to have caused MMRMA to lower its cost for our insurance.
What all this leads me to think is that there is either a culture of laziness or maybe plain stupidity among our department heads and that once they award a contract to someone, that contract goes on forever. Those awarded contracts become the "only ones" who know "our system", "our policies", "our way of doing business." They become 'the favorite son' and are forever immune from market competition. They are, we are supposed to believe the "ONLY" ones who know how to do whatever it is.
Well, if this is how the city is doing our business, we need to fire everyone of them. Just as we saw in the Waste Management issue and just as we witnessed in the AEW debate, there seems to be no willingness on the part of those who we entrust with our money to make sure we are getting the most value for our dollars. Those on council who question this way of doing business always meet fierce resistance when they suggest these contacts go out for bids and there is a solid four vote who has seldom seen a contract "renewal" they did not like.
One is left to wonder why.
As a side note, Kip Walby works for A. J. Gallagher and wisely abstained from voting on this matter.
It is apparent that we must change our charter to make sure that professional contacts, which are not now required to be, are bid out. We must take the process out of the hands of department heads and place it in the hands of the council. That way, if we continue to see these type contracts, we'll know who is to blame and can actually 'fire' them come election time.
So, you decide whether it's worth your time to phone or e-mail Mayor and council and let them know how you feel about this "Favorite Son" culture. Remember, it's your money!
This web site is the exclusive property of K. Scruggs who is solely responsible for its content. Original content , including columns and photographs, may not be reproduced without expressed permission by site owner. Copyright 2009 , continuing copyright 2007, 2008