Solid waste contract on hold due to litigation

Waste Management takes legal action against city of Sammamish for rejecting its solid waste bid

On the surface, there seemed to be a clear contender for the city of Sammamish’s next solid waste contract.

But an alleged math error and the alteration of city forms ruled out Waste Management’s bid as “non-responsive,” according to city documents.

Waste Management, disagreeing with the city’s assessment, took legal action Dec. 1 postponing the solid waste contract decision the Sammamish City Council was scheduled to vote on that evening.

By way of background, the city of Sammamish submitted its request for bids June 29 for the 2017-2025 solid waste contract. The city hopes to unify its solid waste services after the current contracts with Waste Management and Republic Services expire at the end of 2016.

The city asked providers to give an estimate for a base set of services, plus an estimate for five alternatives the city council had the option of including.

Waste Management and Republic Services were the only two to submit a bid for services Oct. 27. (Recology CleanScapes did contact the city Oct. 21 to inform staff the company would not submit a bid.)

Waste Management’s bid of nearly $540,500 seemed the lower option, compared to Republic Services’ bid of nearly $714,700. These estimates include the base price and all five alternatives.

Upon further review, Sammamish staff claimed the Waste Management bid was actually underrepresented by more than $180,000. (A similar review found a “minor and immaterial” $10 error in Republic’s bid, according to city documents.)

Deputy City Manager Lyman Howard wrote Waste Management Nov. 2 to inform the company its bid was being rejected as non-responsive for “materially” altering the city’s request for bid documents “in a way that significantly understates the total cost of the bid.”

Waste Management disagrees. The company would save Sammamish rate payers nearly $6 million over the nine-year contract, Waste Management Senior Manager John Chelminiak said at the Dec. 1 council meeting.

“These assertions are not verifiable given Waste Managements failure to include the cost of contract modifications in its bid, which resulted in two incomparable bids,” according to city documents.

The company maintains it included how it arrived to its prices.

Chelminiak explained in a Nov. 3 response to the city that Waste Management’s bid was indeed the lowest option and that “its calculations were the only meaningful way to show an increase or decrease in costs to all customers,” according to court documents.

“Furthermore, your consultant’s methodology for evaluating the proposals is mathematically absurd,” Chelminiak’s Nov. 3 letter to the city reads.

The city responded to Waste Management Nov. 25, though the waste hauler said it did not receive the letter until Nov. 30.

“We understand that Waste Management preferred a methodology for calculating bids for solid waste services other than the methodology selected by the City and approved by the City Council,” City Manager Ben Yazici wrote Nov. 25. “[T]he City stands by its decision to reject the Waste Management bid as non-responsive.”

The alteration to city formulas and documentation, which led to the alleged understatement, occurred when Waste Management calculated a couple of the service alternatives.

Chelminiak said in a Dec. 1 letter that the alleged alterations to city documents “are irrelevant to the service options” as city staff recommend the council not choose those two alternatives, anyway.

Despite the disagreement on how to calculate its services, Waste Management’s bid is considered non-responsive on the grounds it altered the documentation the city required for the bid submission.

Per the city’s request for bid documentation, the city states it may deem any bid “non-responsive that contains omissions, erasures, alterations or additions of any kind, or prices uncalled for, or obviously unbalanced, or any proposal that in any manner fails to conform to the conditions of this Request for Bids.” Additionally, all bid “forms must be completed, all questions answered, and all information supplied in the format requested.”

Waste Management asked the King County Superior Court to stop the city from entering a solid waste contract with Republic Services and for the court to review the city’s non-responsive determination.

Per the current schedule, the court will review the matter Dec. 22.