What’s $50 Million Between Friends?

(Michael Chamberlain/Nevada Business Coalition) – Especially when it’s not your money.

The Regional Transportation Commission declined to approve a new bus contract that may be as much as $50 million lower than the competing proposal. Some of the Commissioners want to spend even more money to start the whole thing all over again.

The RTC reached an absolute stalemate. Deadlocked 4-4. Twice. On two competing variations of the same issue. It seems they can’t even agree to save money.

They tied on whether to follow the staff recommendation to approve the contract that First Transit has already signed and they tied on a motion by Commissioner Chris Giunchigliani to send the contract out for re-bid. They can’t move forward and they can’t move backward at this point.

Right now, Veolia has the contract to provide bus service to Clark County. The company has had that contract for well over a decade but after a series of extensions and options the RTC reached the point where federal regulations required it to put the contract out for bid. Last year the RTC sent out a request for proposals (RFP) to get competitive bids for a new contract.

When all was said and done, First Transit came in with a bid that was nearly $50 million below that of Veolia. However, the RFP was not a “lowest-price” bid but a “best-value” bid. In a “best-value” bid several factors, including price, are evaluated and each given a score. The scores are totaled and the best one wins.

First Transit had not only the lower price but also a better score using the method dictated by the RFP. In addition, an independent analysis commissioned by the RTC declared that First Transit’s bid was reasonable and responsible.

Sounds like a slam-dunk, right? Not so fast.

Instead of using the system that was ordered by the RFP and instead of simply taking the best price, half of the commission wants to throw everything out and start all over again.

And it’s not as if that doesn’t come with additional costs. This is a huge contract. First Transit’s total bid for all seven years was more than $628 million. So the bidding process was incredibly complex, time-consuming and costly – not just for the bidders but for the RTC, and it’s the taxpayers that foot the RTC’s bills.

Testimony today revealed that the RTC has spent somewhere in the neighborhood of $600,000 of taxpayer money on this RFP so far. Even if the RTC sends out a new RFP there’s no guarantee it won’t be right back in the same spot a year from now – deadlocked and unable to move in any direction. Only the taxpayers will likely be another half-million dollars poorer for the effort.

Does the RTC really want to set the precedent that the rules it sets out in RFP’s don’t really matter? That if some of the commissioners don’t like a result they can get a do-over on the bid? Are some commissioners really prepared to throw out a result that offers a substantial benefit to taxpayers to re-start a process that will cost those taxpayers even more money?

Looks like it. Despite all that only four of the Commission members voted against issuing a new RFP and for approving the staff recommendation to award the contract to First Transit – Kraig Hafen, Roger Tobler, Robert Eliason and Debra March. And it takes five.

They were opposed on both by Chris Giunchigliani, Larry Brown, Steve Ross and Lois Tarkanian. Oh, and the unions.

Dozens of drivers and other union members who work for Veolia were present in the Commission chambers today. Many of them were transported to and from the meeting by the company’s vans and virtually all of them sported white Veolia caps they were given outside the chambers. These union members constituted about 2/3 of those making public comments.

Both sides brought out the big guns to present their cases. Veolia was represented by well-known attorney Chris Kaempfer. Presenting First Transit’s side were former Nevada Governor and U.S. Senator Richard Bryan along with former County Commissioner Bruce Woodbury.

Truly, this is a big deal. Certainly it is for the taxpayers.

The RTC should dispense with this charade and approve the contract that staff has recommended. It would preserve the integrity of the process and best serve the taxpayers. $50 million is hardly something to sneeze at.

(Michael Chamberlain is Executive Director of Nevada Business Coalition.)