This article is an excerpt from the 2020 edition of The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its November 2019 report entitled OIG Final Report Re: Review of Safety Concerns and the County’s Procurement of CNG Buses for the Department of Transportation and Public Works, the Miami-Dade County Office of the Inspector General found a “procurement free-for-all” as the County attempted to piggyback on existing out-of-state contracts in a failed bus procurement scheme. While the Inspector General dismissed safety risk allegations regarding the fleet of new natural gas buses that were acquired through an open competitive bidding process, its report raised concerns over a number of failed attempts by the County to procure additional buses for that new fleet through other questionable means.
Rather than conducting another open competitive bidding process for its additional buses, as it had conducted for its original acquisition of the updated bus fleet, the report detailed how the County attempted to use existing contracts created by other out-of-state institutions to buy more buses. The Inspector General raised concerns over the inappropriateness of using a “piggybacking” strategy in relation to large purchases:
The multi-pronged procurement directive to access and “piggy-back” competitively awarded contracts from other jurisdictions, including a contract expiring within days of the BCC action, introduced a level of expediency that is atypical of multi-million-dollar procurements. This accelerated process to access existing contracts, uninhibited by the rules of the County’s highly regulated competitive bidding process, resulted in a highly charged public contest among CNG bus manufacturers. Not having a “Cone of Silence” in place allowed for unbridled communications between and among a host of parties with vested interest in the outcome of the selection process.
As the report found, the attempts to “piggyback” on existing contracts from other institutions, instead of running an open competitive bidding process, resulted in a loss of control over the process by County staff since the decision-making process became politicized:
F. Procurement in the Political Arena
Without a clear plan articulated by DTPW for future CNG bus procurements, the lack of progress in acquiring new buses created an exigency for the procurement of additional buses on an accelerated level. DTPW’s multi-million capital procurement program was slipping from the department’s control to the political arena.
The Inspector General also raised concerns that the failure to initiate a proper open tendering process meant that that County’s “cone of silence” protocol to protect the process from lobbying and interference was never activated:
Because there was no competitive procurement process in effect—only directives to access other contracts—the County’s Cone of Silence was not in effect. Following the adoption of Resolution R-1262-18 on December 4, 2018, there was a flurry of communications between County staff and the various representatives of bus manufacturers seeking to fulfill the County’s request for new CNG buses.
As the Inspector General determined, what followed was a “procurement-free-for-all”, with different departments working on competing piggybacking proposals based on contracts established by other public institutions. This procurement free-for-all occurred in the absence of any clearly established ground rules, specifications, evaluation criteria, or price calculation protocols enabling an “apples-to-apples” comparison of the competing bus options. Given that these piggybacking schemes failed to result in the award of a contract, the Inspector General recommended that the County engage in a proper planning process to clearly scope its requirements and then proceed with the acquisition of more buses through an open tendering process:
Fortunately, the County has the luxury of existing financial capacity to invest in new buses, with no pressing time constraints attached to the line of credit. Ensuring those dollars are invested strategically is paramount. Given the quantity of new buses introduced to the fleet, the DTPW has effectively reduced the average age of the bus fleet from 11.3 years in 2017 to an average age of 7.5 years now.
A limited pause in bus procurement for a policy review does not put at risk operational performance. Rather, the OIG believes this is a rare opportunity for the BCC to revisit some of its past directives and provide guidance that will maximize optimal system performance for years to come. The policy decisions embedded with the pending procurement of additional CNG buses are much more significant than prior bus acquisitions. Miami-Dade County is at a critical juncture where decisions are being made that will set the course of public transit for a generation. The OIG respectfully urges the BCC to favorably consider the recommendation to pause the procurement process for up to 90-days to allow for appropriate deliberations, with additional information and citizen input.
As this case study illustrates, the rush to cut corners in new acquisitions tends to undermine the legitimacy of any resulting contracting decisions, particularly when that corner-cutting is accompanied by supplier lobbying and politicized decision-making. Purchasing institutions would be well-served to properly plan their major procurements based on rational decision-making and the use of well-established open competitive bidding practices.
